Document:

Form of Trust Agreement (Insured)

 Exhibit 4.8 
 AMENDED AND RESTATED TRUST AGREEMENT 
 dated as of [DATE] 
 by and among 
 NOVASTAR MORTGAGE INC.,

 as Sponsor, 
 [NOVASTAR MORTGAGE
FUNDING CORPORATION] 
 [NOVASTAR CERTIFICATES FINANCING CORPORATION] 
 as Depositor, 
 and 
 [                                      
          ], 
 as Owner Trustee 
 NOVASTAR MORTGAGE FUNDING TRUST 200[    ]-[    ] 
 Asset-Backed Notes, Series 200[    ]-[    ] 

 TABLE OF CONTENTS 
  

					
		 	ARTICLE I	  	
		 	DEFINITIONS	  	
	Section 1.01.	 	Capitalized Terms	  	1
	Section 1.02.	 	Other Definitional Provisions	  	5
			
		 	ARTICLE II	  	
		 	ORGANIZATION	  	
			
	Section 2.01.	 	Name	  	6
	Section 2.02.	 	Office	  	6
	Section 2.03.	 	Purposes and Powers	  	6
	Section 2.04.	 	Appointment of Owner Trustee	  	6
	Section 2.05.	 	Initial Capital Contribution of Owner Trust Estate	  	7
	Section 2.06.	 	Declaration of Trust	  	7
	Section 2.07.	 	Liability of the Certificateholders	  	7
	Section 2.08.	 	Title to Trust Property.	  	7
	Section 2.09.	 	Situs of Trust	  	8
	Section 2.10.	 	Representations and Warranties of the Sponsor	  	8
	Section 2.11.	 	Federal Income Tax Treatment of the Issuing Entity	  	9
	Section 2.12.	 	Covenants of the Sponsor	  	9
	Section 2.13.	 	Covenants of the Certificateholders	  	10
	Section 2.14.	 	Representations and Warranties of the Depositor	  	10
	Section 2.15.	 	Covenants of the Depositor	  	11
			
		 	ARTICLE III	  	
		 	[Reserved]	  	
			
		 	ARTICLE IV	  	
		 	CERTIFICATES AND TRANSFER OF INTERESTS	  	
			
	Section 4.01.	 	Initial Ownership	  	12
	Section 4.02.	 	The Certificates	  	12
	Section 4.03.	 	Execution, Authentication and Delivery of Certificates.	  	13
	Section 4.04.	 	Registration of Transfer and Exchange of Certificates	  	13
	Section 4.05.	 	Mutilated, Destroyed, Lost or Stolen Certificates	  	14
	Section 4.06.	 	Persons Deemed Owners	  	14
	Section 4.07.	 	Access to List of Certificateholders’ Names and Addresses	  	14
	Section 4.08.	 	Maintenance of Office or Agency	  	15
	Section 4.09.	 	Restrictions on Transfers of Certificates	  	15
			
		 	ARTICLE V	  	
		 	ACTIONS BY OWNER TRUSTEE	  	
			
	Section 5.01.	 	Prior Notice to the Certificateholders with Respect to Certain Matters	  	17

  

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	 Section 5.02.
	 	Action by Certificateholders with Respect to Bankruptcy	  	19
	 Section 5.03.
	 	Restrictions on Certificateholders’ Power	  	19
	 Section 5.04.
	 	Majority Control	  	19
			
		 	ARTICLE VI	  	
		 	TAX PROVISIONS; CERTAIN DUTIES	  	
			
	 Section 6.01.
	 	Federal Income Tax Provisions.	  	20
	 Section 6.02.
	 	Withholding Taxes	  	20
	 Section 6.03.
	 	Accounting and Reports to the Certificateholders, the Internal Revenue Service and Others	  	20
			
		 	ARTICLE VII	  	
		 	AUTHORITY AND DUTIES OF OWNER TRUSTEE	  	
			
	 Section 7.01.
	 	General Authority	  	21
	 Section 7.02.
	 	General Duties	  	21
	 Section 7.03.
	 	Action upon Instruction	  	22
	 Section 7.04.
	 	No Duties Except as Specified in this Agreement, the Basic Documents or any Instructions.	  	23
	 Section 7.05.
	 	No Action Except under Specified Documents or Instructions	  	23
	 Section 7.06.
	 	Restrictions	  	24
			
		 	ARTICLE VIII	  	
		 	CONCERNING THE OWNER TRUSTEE	  	
			
	 Section 8.01.
	 	Acceptance of Trusts and Duties	  	24
	 Section 8.02.
	 	Furnishing of Documents	  	25
	 Section 8.03.
	 	Representations and Warranties of the Owner Trustee	  	26
	 Section 8.04.
	 	Reliance; Advice of Counsel	  	26
	 Section 8.05.
	 	Not Acting in Individual Capacity	  	27
	 Section 8.06.
	 	Owner Trustee Not Liable for the Certificates or Mortgage Loans	  	27
	 Section 8.07.
	 	Owner Trustee May Own Notes	  	27
	 Section 8.08.
	 	Licenses	  	28
	 Section 8.09.
	 	Legal Proceedings	  	28
			
		 	ARTICLE IX	  	
		 	COMPENSATION OF OWNER TRUSTEE	  	
			
	 Section 9.01.
	 	Owner Trustee’s Fees and Expenses	  	28
	 Section 9.02.
	 	Indemnification	  	28
	 Section 9.03.
	 	Payments to the Owner Trustee	  	29
			
		 	ARTICLE X	  	
		 	TERMINATION OF TRUST AGREEMENT	  	
			
	 Section 10.01.
	 	Termination of Trust Agreement	  	29

  

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		 	ARTICLE XI	  	
		 	SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES	  	
			
	 Section 11.01.
	 	Eligibility Requirements for Owner Trustee	  	30
	 Section 11.02.
	 	Resignation or Removal of Owner Trustee	  	31
	 Section 11.03.
	 	Successor Owner Trustee	  	31
	 Section 11.04.
	 	Merger or Consolidation of Owner Trustee	  	32
	 Section 11.05.
	 	Appointment of Co-Trustee or Separate Trustee.	  	32
			
		 	ARTICLE XII	  	
		 	MISCELLANEOUS	  	
			
	 Section 12.01.
	 	Supplements and Amendments	  	33
	 Section 12.02.
	 	No Legal Title to Owner Trust Estate in Certificateholders	  	34
	 Section 12.03.
	 	Limitations on Rights of Others	  	35
	 Section 12.04.
	 	Notices	  	35
	 Section 12.05.
	 	Severability	  	35
	 Section 12.06.
	 	Separate Counterparts	  	35
	 Section 12.07.
	 	Successors and Assigns	  	35
	 Section 12.08.
	 	No Petition	  	36
	 Section 12.09.
	 	No Recourse	  	36
	 Section 12.10.
	 	Headings	  	36
	 Section 12.11.
	 	GOVERNING LAW	  	36
	 Section 12.12.
	 	Grant of Certificateholder Rights to Note Insurer	  	36
	 Section 12.13.
	 	Third-Party Beneficiaries	  	37
	 Section 12.14.
	 	Suspension and Termination of Note Insurer’s Rights	  	37
	 Section 12.15.
	 	Servicer	  	37
			
		 	EXHIBITS	  	
		
	 Exhibit A    Form of Trust Certificate
	  	
	 Exhibit B    Form of Certificate of Trust
	  	
	 Exhibit C    Form of Investment Letter
	  	
	 Exhibit D    Form of Transferor Certificate
	  	

  

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 This AMENDED AND RESTATED TRUST AGREEMENT, dated as of [DATE], is among NOVASTAR MORTGAGE INC., as
sponsor (the “Sponsor”), [NOVASTAR MORTGAGE FUNDING CORPORATION, a Delaware corporation][NOVASTAR CERTIFICATES FINANCING CORPORATION, a Delaware corporation], as depositor (the “Depositor”) and
[                        ], a
[                    ], as owner trustee (the “Owner Trustee”). 
 NOW, THEREFORE, in consideration of the mutual agreements herein contained, and of other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 Section 1.01.
Capitalized Terms. For all purposes of this Agreement, the following terms shall have the meanings set forth below: 
 “Agreement” shall mean this Trust Agreement, as may be amended and supplemented from time to time. 
 “Authorized Officer” shall have the meaning assigned thereto in Appendix I to the Indenture. 
 “Basic
Documents” shall mean this Agreement, the Sale and Servicing Agreement, the Indenture, the Cap Agreements, the Insurance Agreement and the Indemnification Agreement. 
 “Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal holiday or a day on
which the Note Insurer or banking institutions in the State of New York, the State of [            ], the State of California, or the state in which the Indenture Trustee’s
office from which payments will be made to the Certificateholder, are authorized or obligated by law, regulation or executive order to be closed. 
 “Cap Agreements”: Each of the interest rate cap agreements, dated as of [DATE], between the Owner Trustee, in its capacity as owner trustee, and the Cap Counterparty. 
 “Cap Counterparty”:
[                                        
    ], a
[                                        
    ]. 
 “Capital Account” shall have the meaning assigned thereto in Section 6.01(c)(i).

 “Certificate” shall mean each Trust Certificate. 
 “Certificateholder” shall mean each Person in whose name a Trust Certificate is registered. 
 “Certificate of Trust” shall mean the Certificate of Trust, in the form of Exhibit B, to be filed for the Issuing Entity pursuant
to Section 3810(a) of the Statutory Trust Statute. 
  

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 “Certificate Register” and “Certificate Registrar” shall mean the
register mentioned and the registrar appointed pursuant to Section 4.04. 
 “Class” shall mean either the
Class A-1 Notes or the Class A-2 Notes. 
 “Class A-1 Notes” shall mean the NovaStar Mortgage Funding Trust
200[_]-[_], Asset-Backed Notes, Series 200[_]-[_], Class A-1. 
 “Class A-2 Notes” shall mean the NovaStar Mortgage
Funding Trust 200[_]-[_], Asset-Backed Notes, Series 200[_]-[_], Class A-2. 
 “Code” shall mean the Internal Revenue
Code of 1986, as amended, and, where appropriate in context, Treasury Regulations promulgated thereunder. 
 “Corporate Trust
Office” shall mean, with respect to the Owner Trustee, an office of the Owner Trustee which for purposes of the Agreement is located at
[                                    ], Attention:
[                    ]; or at such other address as the Owner Trustee may designate by notice to the Certificateholders and the Sponsor, or an
office of any successor Owner Trustee (the address of which the successor Owner Trustee will notify the Certificateholders and the Sponsor). 
  “Depositor” shall mean [NovaStar Mortgage Funding Corporation, a Delaware corporation][NovaStar Certificates Financing Corporation, a Delaware corporation]. 
  “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended. 
 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended. 
 “Expenses” shall have the meaning assigned to such term in Section 9.02. 
 “Group I Mortgage Loans” shall mean a pool of fixed- and adjustable-rate mortgage loans, as identified in the related Mortgage Loan
Schedule. 
 “Group II Mortgage Loans” shall mean a pool of fixed- and adjustable-rate mortgage loans, as identified in the
related Mortgage Loan Schedule. 
 “Indemnification Agreement” shall mean the Indemnification Agreement, dated as of [DATE],
between the Note Insurer and the Underwriters. 
 “Indenture” shall mean the Indenture, dated as of [DATE], by and between
the Issuing Entity and the Indenture Trustee. 
 “Indenture Trustee” means
[                    ], as Indenture Trustee under the Indenture. 
  

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 “Insurance Agreement” shall mean the Insurance and Indemnity Agreement dated as of
[DATE], among the Note Insurer, the Issuing Entity, the Servicer, the Depositor, the Sponsor and the Indenture Trustee, including any amendments and supplements thereto. 
 “Investment Letter” shall have the meaning assigned to such term in Section 4.04. 
 “Issuing Entity” shall mean the NovaStar Mortgage Funding Trust 200[_]-[_], the Delaware statutory trust created pursuant to this Agreement. 
 “Loan Group” shall mean either Loan Group I or Loan Group II. 
 “Loan Group
I” shall mean the pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group I. 
 “Loan Group II” shall mean the pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group II. 
 “Mortgage Loans” shall mean the Group I Mortgage Loans and the Group II Mortgage Loans. 
 “Non-U.S. Person” shall mean an individual, corporation, partnership or other person other than a United States Person. 
 “Noteholder” shall have the meaning assigned to such terms in the Indenture. 
 “Note Insurance
Policy” shall mean the financial guaranty insurance policy issued by the Note Insurer for the benefit of the Noteholders. 
 “Note Insurer” shall mean [                    ], a
[                    ]. 
 “Note Insurer Default” shall have the meaning assigned to such term in the Indenture. 
 “Note Principal
Balance” shall have the meaning assigned to such term in the Indenture. 
 “Notes” shall mean the Class A-1
Notes and the Class A-2 Notes. 
 “Outstanding” shall have the meaning assigned to such term in the Indenture.

 “Ownership Interest” means, with respect to any Certificate, any ownership or security interest in such Certificate,
including any interest in such Certificate as the Certificateholder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. 
 “Owner Trust Estate” shall mean the Trust Estate, including the contribution of $1,000 referred to in Section 2.05 hereof.

  

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 “Owner Trustee” shall mean
[                            ], a
[                            ], not in its individual capacity but solely as owner trustee under this
Agreement, and any successor owner trustee hereunder. 
 “Payment Date” shall mean the [25th] day of each month or, if such [25th] day is not a Business Day, the next succeeding Business Day, commencing [DATE]. 
 “Percentage Interest” shall mean with respect to any Certificate, the percentage portion of the Certificates evidenced thereby as stated on the face of such Certificate. 
 “Plan” shall mean (i) an employee benefit plan (within the meaning of Section 3(3) of ERISA) that is subject to Title I of
ERISA, (ii) a plan (within the meaning of Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code or (iii) a governmental plan (within the meaning of Section 3(32) of ERISA) that is subject to any
federal, state or local law that is, to a material extent, similar to Title I of ERISA or Section 4975 of the Code. 
 “Prospective Holder” shall have the meaning set forth in Section 4.09(a). 
 “Rating Agency
Condition” means, with respect to any action to which a Rating Agency Condition applies, that each Rating Agency shall have been given ten (10) days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof
and that each of the Rating Agencies shall have notified the Indenture Trustee, the Sponsor, the Servicer, the Note Insurer, the Owner Trustee and the Issuing Entity in writing that such action will not result in a reduction or withdrawal of the
then current rating of the Notes that it maintains without taking into account the Note Insurance Policy. 
 “Record Date”
shall mean, with respect to the Certificates and any Payment Date, the last Business Day of the month preceding the month in which the related Payment Date occurs. 
 “Sale and Servicing Agreement” shall mean the Sale and Servicing Agreement, dated as of [DATE], among the Sponsor, the Issuing Entity, the Indenture Trustee and the Servicer. 
 “Secretary of State” shall mean the Secretary of State of the State of Delaware. 
 “Servicer” shall mean NovaStar Mortgage Inc., a Virginia corporation, or any successor servicer appointed pursuant to the Sale and
Servicing Agreement. 
 “Sponsor” shall mean NovaStar Mortgage Inc., a Virginia corporation. 
 “Statutory Trust Statute” shall mean Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may
be amended from time to time. 
 “Transfer” means any direct or indirect transfer, sale, pledge, hypothecation or other form
of assignment of any Ownership Interest in a Certificate. 
  

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 “Treasury Regulations” shall mean regulations, including proposed or temporary
regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. 
 “Trust Certificate” shall mean a certificate evidencing the beneficial interest of a Certificateholder in the Issuing Entity,
substantially in the form attached hereto as Exhibit A. 
 “Underwriters” shall mean
[                        ],
[                        ],
[                        ] and
[                        ],. 
 Section 1.02. Other Definitional Provisions. (a) Capitalized terms used herein and not otherwise defined herein have the meanings assigned to them in Appendix I to the Indenture and the Sale and
Servicing Agreement. 
 (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document
made or delivered pursuant hereto unless otherwise defined therein. 
 (c) As used in this Agreement and in any certificate or other document
made or delivered pursuant hereto or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the
extent not defined, shall have the respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terms in this Agreement or in any such certificate or other document are
inconsistent with the meanings of such terms under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. 
 (d) The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term
“including” shall mean “including without limitation.” 
 (e) The definitions contained in this Agreement are applicable
to the singular as well as the plural forms of such terms and to the masculine as well as to the feminine and neuter genders of such terms. 
 (f) Any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented
and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. 
  

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 ARTICLE II 
 ORGANIZATION 
 Section 2.01. Name. The Issuing Entity governed hereby shall be known as
“NovaStar Mortgage Funding Trust 200[_]-[_],” in which name the Owner Trustee may conduct the business of the Issuing Entity, make and execute contracts and other instruments on behalf of the Issuing Entity and sue and be sued on behalf of
the Issuing Entity. 
 Section 2.02. Office. The office of the Issuing Entity shall be in care of the Owner Trustee at the
Corporate Trust Office or at such other address in the State of Delaware as the Owner Trustee may designate by written notice to the Certificateholders, Indenture Trustee, the Note Insurer and the Sponsor. 
 Section 2.03. Purposes and Powers. The purpose of the Issuing Entity is to engage in the following activities: 
 (a) to issue the Notes pursuant to the Indenture and to sell such Notes; 
 (b) with the proceeds of the sale of the Notes and Certificates, to purchase the Mortgage Loans to be included in the Owner Trust Estate
from the Depositor with the balance of such funds pursuant to the Sale and Servicing Agreement; 
 (c) to assign, grant,
transfer, pledge, mortgage and convey the Owner Trust Estate pursuant to the Indenture and to hold, manage and distribute to the Certificateholders any portion of the Owner Trust Estate released from the lien of, and remitted to the Issuing Entity
pursuant to, the Indenture; 
 (d) to enter into and perform its obligations under the Basic Documents to which it is or is to
be a party; 
 (e) to engage in those activities, including entering into agreements, that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected therewith; 
 (f) subject to compliance with the
Basic Documents, to engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions and payments to the Noteholders and the Certificateholders; and 
 (g) to issue the Certificates pursuant to this Agreement. 
 The Issuing Entity is hereby authorized by the initial beneficiary and the Certificateholders to engage in the foregoing activities. The Issuing Entity shall not engage in any activity other than in connection with
the foregoing or other than as required or authorized by the terms of this Agreement or the other Basic Documents. 
 Section 2.04.
Appointment of Owner Trustee. The Sponsor hereby appoints the Owner Trustee as trustee of the Issuing Entity effective as of the date hereof, to have all the rights, powers and duties set forth herein and in the Statutory Trust Statute, and
the Owner Trustee hereby accepts such appointment. 
  

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 The Owner Trustee may engage, in the name of the Issuing Entity or in its own name on behalf of the Issuing Entity, in
the activities of the Issuing Entity, make and execute contracts on behalf of the Issuing Entity and sue on behalf of the Issuing Entity. 
 Section 2.05. Initial Capital Contribution of Owner Trust Estate. The Depositor hereby sells, assigns, transfers, conveys and sets over to the Owner Trustee, as of the date hereof, the sum of $1,000. The Owner Trustee hereby
acknowledges receipt in trust from the Depositor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Owner Trust Estate and shall be deposited in the Payment Account. The Depositor shall pay organizational
expenses of the Issuing Entity as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee. Concurrently with the execution of this Agreement, the Issuing
Entity will enter into the Sale and Servicing Agreement pursuant to which it will purchase the Mortgage Loans, which comprise the remainder of the Owner Trust Estate. Upon the transfer of the Mortgage Loans pursuant to the Sale and Servicing
Agreement, the Owner Trustee shall transfer the initial capital contribution, in the sum of $1,000, to the Depositor. 
 Section 2.06.
Declaration of Trust. The Owner Trustee hereby declares that it will hold the Owner Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Noteholders, the Note Insurer and the
Certificateholders, subject to the obligations of the Issuing Entity under the Basic Documents. 
 It is the intention of the parties hereto
that, solely for income and franchise tax purposes, the Issuing Entity constitutes a statutory trust under the Statutory Trust Statute and that this Agreement constitutes the governing instrument of such statutory trust. It is the intention of the
parties hereto that, solely for income and franchise tax purposes, the Issuing Entity shall be treated as a security arrangement, with the assets of the Issuing Entity being the Loan Groups. The parties agree that, unless otherwise required by
appropriate tax authorities, the Issuing Entity will file or cause to be filed annual or other necessary returns, reports and other forms, if any, consistent with the characterization of the Issuing Entity and each Loan Group as provided in the
preceding sentence for such tax purposes. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute with respect to accomplishing the purposes of the Issuing
Entity. The Owner Trustee shall file the Certificate of Trust with the Secretary of State. 
 Section 2.07. Liability of the
Certificateholders. Subject to Section 2.05, no Certificateholder shall have any personal liability for any liability or obligation of the Issuing Entity. The Certificates shall be fully paid and nonassessable. 
 Section 2.08. Title to Trust Property. 
 (a) Subject to the Indenture, legal title to all of the Owner Trust Estate shall be vested at all times in the Issuing Entity as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner
Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to be vested in the Owner Trustee and/or a separate trustee, as the case may be. 
  

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

 Section 2.09. Situs of Trust. The Issuing Entity will be located in the State of Delaware and administered by the Owner
Trustee in the States of [            ]. The Issuing Entity shall not have any employees; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee
from having employees within or without the State of Delaware. 
 Section 2.10. Representations and Warranties of the Sponsor.
The Sponsor hereby represents and warrants to the Owner Trustee and the Note Insurer that: 
 (a) The Sponsor is duly organized and validly
existing as a corporation in good standing under the laws of the State of California, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted.

 (b) The Sponsor has the power and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery
and performance of this Agreement has been duly authorized by the Sponsor by all necessary corporate action. 
 (c) The consummation of the
transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the
articles of incorporation or by-laws of the Sponsor, or any indenture, agreement or other instrument to which the Sponsor is a party or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to
the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, any order, rule or regulation applicable to the Sponsor of any court or of any Federal or state regulatory body,
administrative agency or other governmental instrumentality having jurisdiction over the Sponsor or its properties. 
 (d) There are no
proceedings or investigations pending or notice of which has been received in writing before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Sponsor or its properties:
(x) asserting the invalidity of this Agreement, (y) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (z) seeking any determination or ruling that should reasonably be expected to
materially and adversely affect the performance by the Sponsor of its obligations under, or the validity or enforceability of, this Agreement. 
 (e) The representations and warranties of the Sponsor in Article III of the Sale and Servicing Agreement are true and correct. 
 (f) The Sponsor has duly executed and delivered this Agreement, and this Agreement constitutes the legal, valid and binding obligation of the Sponsor, enforceable against the Sponsor, in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by the application of equitable principles. 
  

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 (g) The Sponsor is not in default with respect to any order or decree of any court or any order,
regulation or demand of any federal, state, municipal or other governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or otherwise) or operations of the Sponsor or its
properties or might have consequences that would materially and adversely affect its performance hereunder. 
 (h) The Sponsor will hold
itself out to the public under its own name as a separate and distinct entity from the Issuing Entity and conduct its business so as not to mislead others as to the identity of the Issuing Entity. Without limiting the generality of the foregoing, to
the extent that the Sponsor makes on behalf of the Issuing Entity, as administrator of the Issuing Entity, oral and written communications, including without limitation, all letters, invoices, contracts, statements and applications such oral and
written communications will be made solely by the Sponsor, as administrator of the Issuing Entity, in the name of the Issuing Entity if they are made on behalf of the Issuing Entity. 
 Section 2.11. Federal Income Tax Treatment of the Issuing Entity. . [The parties hereto intend that the Depositor, or other entity that is a
REIT or a Qualified REIT Subsidiary, will at all times that the Notes are outstanding own a 100% Percentage Interest in the Trust Certificates; that the Depositor will qualify for taxation as a REIT at all times that it is a Certificateholder; and
that the Issuing Entity will be a Qualified REIT Subsidiary at all times the Notes are outstanding.] 
 Section 2.12. Covenants of
the Sponsor. The Sponsor agrees and covenants for the benefit of each Certificateholder, the Note Insurer and the Owner Trustee, during the term of this Agreement, and to the fullest extent permitted by applicable law, that: 
 (a) it shall not, for any reason, institute proceedings for the Issuing Entity to be adjudicated bankrupt or insolvent, or consent to or join in the
institution of bankruptcy or insolvency proceedings against the Issuing Entity, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Issuing Entity, or
consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Issuing Entity or a substantial part of the property of the Issuing Entity or cause or permit the Issuing Entity to make any
assignment for the benefit of creditors, or admit in writing the inability of the Issuing Entity to pay its debts generally as they become due, or declare or effect a moratorium on the debt of the Issuing Entity or take any action in furtherance of
any such action; 
 (b) it shall obtain from each counterparty to each Basic Document to which it or the Issuing Entity is a party and each
other agreement entered into on or after the date hereof to which it or the Issuing Entity is a party, an agreement by each such counterparty that prior to the occurrence of certain events specified in such agreement, such counterparty shall not
institute against, or join any other Person in instituting against, it or the Issuing Entity, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any
state of the United States; and 
  

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 (c) it shall not, for any reason, withdraw or attempt to withdraw from this Agreement or any other Basic
Document to which it is a party. 
 Section 2.13. Covenants of the Certificateholders. Each Certificateholder by becoming a
beneficial owner of the Certificate or by its acceptance of a Certificate agrees: 
 (a) to be bound by the terms and conditions of the
Certificates of which such Certificateholder is the beneficial owner and of this Agreement and the other Basic Documents, including any supplements or amendments hereto and thereto and to perform the obligations of a Certificateholder as set forth
therein or herein, in all respects as if it were a signatory hereto. This undertaking is made for the benefit of the Issuing Entity, the Owner Trustee, the Note Insurer and all other Certificateholders, present and future; 
 (b) to the appointment of the Owner Trustee as such Certificateholder’s agent and attorney-in-fact to sign any federal income tax information return
filed on behalf of the Issuing Entity and, if requested by the Issuing Entity, to sign such federal income tax information return in its capacity as holder of an interest in the Issuing Entity; 
 (c) not to take any position in such Certificateholder’s tax returns inconsistent with those taken in any tax returns filed by the Issuing Entity;
and 
 (d) not to take any action that would cause the Issuing Entity to become subject to federal income tax or fail to take any action that
would prevent the Issuing Entity from becoming subject to federal income tax.. 
 Section 2.14. Representations and Warranties of the
Depositor. The Depositor hereby represents and warrants to the Owner Trustee and the Note Insurer that: 
 (a) The Depositor is duly
organized and validly existing as a Maryland real estate investment trust in good standing under the laws of the State of Maryland, with power and authority to own its properties and to conduct its business as such properties are currently owned and
such business is presently conducted. 
 (b) The Depositor has the power and authority to execute and deliver this Agreement and to carry out
its terms; the Depositor has full power and authority to transfer and assign the property to be transferred and assigned to and deposited with the Issuing Entity and the Depositor has duly authorized such transfer and assignment and deposit to the
Issuing Entity by all necessary trust action; and the execution, delivery and performance of this Agreement has been duly authorized by the Depositor by all necessary trust action. 
 (c) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the declaration of trust or by-laws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a
party or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any
law or, any order, rule or regulation applicable to the Depositor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties.

  

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 (d) There are no proceedings or investigations pending or notice of which has been received in writing
before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Depositor or its properties: (x) asserting the invalidity of this Agreement, (y) seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or (z) seeking any determination or ruling that should reasonably be expected to materially and adversely affect the performance by the Depositor of its obligations under,
or the validity or enforceability of, this Agreement. 
 (e) The representations and warranties of the Depositor in Article III of the Sale
and Servicing Agreement are true and correct. 
 (f) The Depositor has duly executed and delivered this Agreement, and this Agreement
constitutes the legal, valid and binding obligation of the Depositor, enforceable against the Depositor, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by the application of equitable principles. 
 (g) The Depositor is not in
default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental agency, which default might have consequences that would materially and adversely affect the condition
(financial or otherwise) or operations of the Depositor or its properties or might have consequences that would materially and adversely affect its performance hereunder. 
 (h) The Depositor will hold itself out to the public under its own name as a separate and distinct entity from the Issuing Entity and conduct its business so as not to mislead others as to the identity of the Issuing
Entity. 
 Section 2.15. Covenants of the Depositor. The Depositor agrees and covenants for the benefit of each
Certificateholder, the Note Insurer and the Owner Trustee, during the term of this Agreement, and to the fullest extent permitted by applicable law, that: 
 (a) it shall not, for any reason, institute proceedings for the Issuing Entity to be adjudicated bankrupt or insolvent, or consent to or join in the institution of bankruptcy or insolvency proceedings against the
Issuing Entity, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Issuing Entity, or consent to the appointment of a receiver, liquidator, assignee,
trustee, sequestrator (or other similar official) of the Issuing Entity or a substantial part of the property of the Issuing Entity or cause or permit the Issuing Entity to make any assignment for the benefit of creditors, or admit in writing the
inability of the Issuing Entity to pay its debts generally as they become due, or declare or effect a moratorium on the debt of the Issuing Entity or take any action in furtherance of any such action; 
 (b) it shall obtain from each counterparty to each Basic Document to which it or the Issuing Entity is a party and each other agreement entered into on
or after the date hereof to which it or the Issuing Entity is a party, an agreement by each such counterparty that prior to the 
  

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 occurrence of certain events specified in such agreement, such counterparty shall not institute against, or join any
other Person in instituting against, it or the Issuing Entity, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of the United States; and

 (c) it shall not, for any reason, withdraw or attempt to withdraw from this Agreement or any other Basic Document to which it is a party;
and 
 (d) the Depositor hereby reaffirms the covenants of the Depositor in Section 3.06(h) of the Sale and Servicing Agreement and
those covenants are incorporated herein by this reference. 
 ARTICLE III 
 [RESERVED] 
 ARTICLE IV 
 CERTIFICATES AND TRANSFER OF INTERESTS 
 Section 4.01. Initial Ownership. Upon the formation of the Issuing Entity by the contribution by the Sponsor pursuant to Section 2.05 and the filing of the Certificate of Trust with the Secretary of State and until the
issuance of the Certificates, the Sponsor shall be the sole owner of the Issuing Entity. 
 Section 4.02. The Certificates. The
Certificates shall be issued as a single certificate, substantially in the form of Exhibit A hereto, upon the order of the Owner Trustee, at the direction of the Sponsor, to the Depositor concurrently with the sale and assignment to the Issuing
Entity of the Mortgage Loans by the Depositor, at the direction of the Sponsor, to the Owner Trustee. The Certificates shall represent the entire beneficial interest in the assets of the Issuing Entity subject to the debt represented by the Notes.
The Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Owner Trustee, as evidenced by its execution thereof. The Certificates shall be executed on behalf of the Issuing
Entity by manual or facsimile signature of an Authorized Officer of the Owner Trustee. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign on
behalf of the Issuing Entity, shall be valid, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. 
 A transferee of a Certificate shall become a Certificateholder, and shall be entitled to
the rights and subject to the obligations of a Certificateholder hereunder upon such transferee’s acceptance of a Certificate duly registered in such transferee’s name pursuant to Section 4.04. 
  

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 Section 4.03. Execution, Authentication and Delivery of Certificates. Concurrently with the
initial transfer of the Mortgage Loans to the Issuing Entity pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause the Certificates, representing 100% of the Percentage Interests of the Issuing Entity, to be executed on behalf
of the Issuing Entity, authenticated and delivered, at the written direction of the Sponsor, to the Depositor as initial Certificateholder. No Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any
purpose, unless there shall appear on such Certificate a certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or the Owner Trustee’s authenticating agent, by manual or facsimile
signature; such authentication shall constitute conclusive evidence that such Certificate shall have been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. 
 Section 4.04. Registration of Transfer and Exchange of Certificates. The Certificate Registrar shall keep or cause to be kept, at the office
or agency maintained pursuant to Section 4.08, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and
exchanges of Certificates as herein provided. The Owner Trustee shall be the initial “Certificate Registrar.” 
 Upon surrender for
registration of transfer of any Certificate at the office or agency maintained pursuant to Section 4.08, the Owner Trustee, upon the satisfaction of the conditions set forth in Section 4.09(c), shall execute, authenticate and deliver (or
shall cause its authenticating agent to authenticate and deliver), in the name of the designated transferee or transferees, one or more new Certificates of a like Percentage Interest dated the date of authentication by the Owner Trustee or any
authenticating agent. At the option of a Certificateholder, Certificates may be exchanged for other Certificates of a like Percentage Interest upon surrender of the Certificates to be exchanged at the office or agency maintained pursuant to
Section 4.08. 
 Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written
instrument of transfer in the form of Transferor Certificate set forth as Exhibit D hereto, attached to the form of Certificate attached hereto as Exhibit A, or such other form satisfactory to the Note Insurer, or, upon the occurrence
and continuation of a Note Insurer Default, satisfaction of the Rating Agency Condition, duly executed by the Certificateholder or his attorney duly authorized in writing. 
 No service charge shall be made for any registration of transfer or exchange of Certificates, but the Owner Trustee or the Certificate Registrar may
require payment of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer or exchange of Certificates. 
 The preceding provisions of this Section 4.04 notwithstanding, the Certificate Registrar shall not register transfers or exchanges of Certificates for a period of fifteen (15) days preceding the Payment Date
with respect to the Certificates. 
 Notwithstanding anything contained herein to the contrary, neither the Certificate Registrar nor the
Owner Trustee shall be responsible for ascertaining whether any transfer 
  

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 complies with the registration provisions or exemptions from the Securities Act of 1933, as amended, the Securities Act
of 1934, as amended, applicable state securities law or the Investment Company Act of 1940, as amended; provided, however, that if an Investment Letter is specifically required to be delivered to the Owner Trustee by a purchaser or
transferee of a Certificate, the Owner Trustee shall be under a duty to examine the same to determine whether it conforms to the form of Investment Letter set forth as Exhibit C hereto and shall promptly notify the party delivering the same
if such Investment Letter does not so conform. 
 Section 4.05. Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the destruction, loss or theft of any Certificate and (b) there shall be
delivered to the Certificate Registrar and the Owner Trustee such security or indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Certificate shall have been acquired by a protected purchaser,
the Owner Trustee on behalf of the Issuing Entity shall execute and the Owner Trustee, or the Owner Trustee’s 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 Percentage Interest. In connection with the issuance of any new Certificate under this Section 4.05, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover any
tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of ownership in the Issuing Entity, as if originally issued, whether or not
the lost, stolen or destroyed Certificate shall be found at any time. 
 Section 4.06. Persons Deemed Owners. Each person by
virtue of becoming a Certificateholder in accordance with this Agreement shall be deemed to be bound by the terms of this Agreement. Prior to due presentation of a Certificate for registration of transfer, the Owner Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate shall be registered in the Certificate Register as the owner of such Certificate for the purpose of receiving distributions pursuant to Section 6.02 and for all other purposes
whatsoever, and neither the Owner Trustee nor the Certificate Registrar shall be bound by any notice to the contrary. 
 Section 4.07.
Access to List of Certificateholders’ Names and Addresses. The Certificate Registrar shall furnish or cause to be furnished to the Owner Trustee, the Servicer, the Sponsor and the Indenture Trustee immediately prior to each Payment Date,
a list of the names and addresses of the Certificateholders as of the most recent Record Date. The Certificate Registrar shall notify the Indenture Trustee of any change in the initial Holders of the Certificates. If one or more Certificateholder,
together evidencing Percentage Interests totaling not less than 25%, apply in writing to the Certificate Registrar, and such application states that the applicants desire to communicate with other Certificateholders with respect to their rights
under this Agreement or under the Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Certificate Registrar shall, within five (5) Business Days after the receipt of
such application, afford such applicants access during normal business hours to the current list of Certificateholders. Each Certificateholder, by receiving and holding a Certificate, shall be deemed to have agreed not to hold any of the Sponsor,
the Certificate Registrar or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. 
  

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 Section 4.08. Maintenance of Office or Agency. The Owner Trustee shall maintain an office or
offices or agency or agencies where notices and demands to or upon the Owner Trustee in respect of the Basic Documents may be served, and so long as the Owner Trustee is the Certificate Registrar, where Certificates may be surrendered for
registration of transfer or exchange and notices and demands to or upon the Certificate Registrar in respect of the Certificates, may be served. The Owner Trustee initially designates the Corporate Trust Office as its principal corporate trust
office for such purposes. The Owner Trustee shall give prompt written notice to the Note Insurer, the Indenture Trustee, the Sponsor and the Certificateholders of any change in the location of the Certificate Register or any such office or agency.

 Section 4.09. Restrictions on Transfers of Certificates. (a) Each prospective purchaser and any subsequent transferee of
a Certificate (each, a “Prospective Holder”), other than the Sponsor, shall execute and deliver to the Owner Trustee and the Certificate Registrar and any of their respective successors an Investment Letter in the form of Exhibit C
hereto to the effect that: 
 (i) Such Person is (A) a “qualified institutional buyer” as defined in Rule 144A
under the Securities Act of 1933, as amended (the “Securities Act”), and is aware that the seller of the Certificate may be relying on the exemption from the registration requirements of the Securities Act provided by Rule 144A and
is acquiring such Certificate for its own account or for the account of one or more qualified institutional buyers for whom it is authorized to act, or (B) a Person involved in the organization or operation of the Issuing Entity or an affiliate
of such Person within the meaning of Rule 3a-7 of the Investment Company Act of 1940, as amended (including, but not limited to, the Sponsor). 
 (ii) Such Person understands that the Certificates have not been and will not be registered under the Securities Act and may be offered, sold, pledged or otherwise transferred only to a person whom the seller
reasonably believes is (A) a qualified institutional buyer or (B) a Person involved in the organization or operation of the Issuing Entity or an affiliate of such Person, in a transaction pursuant to an effective registration statement
under the Securities Act and any applicable state securities laws or exempt from the registration requirements of the Securities Act and any such state securities laws. 
 (iii) Such Person understands that the Certificates bear a legend to the following effect: 
 “THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE
SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 
  

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 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES
LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE LAWS OR (II) A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE INVESTMENT
COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT NOT LIMITED TO, NOVASTAR MORTGAGE INC.) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH
LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.” 
 (b) By its acceptance of a
Certificate, each Prospective Holder agrees and acknowledges that no legal or beneficial interest in all or any portion of any Certificate may be transferred directly or indirectly to an entity that holds residual securities as nominee to facilitate
the clearance and settlement of such securities through electronic book-entry changes in accounts of participating organizations (a “Book-Entry Nominee”) and any such purported transfer shall be void and have no effect. 

The Certificates shall bear an additional legend referring to the restrictions contained in preceding paragraph to the following effect: 

THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE
OWNER TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN
ACCOUNTS OF PARTICIPATING ORGANIZATIONS. 
 (c) No transfer of a Certificate or any beneficial interest therein shall be made to any person
unless the Owner Trustee has received a representation letter from the Prospective Holder to the effect that such Prospective Holder is not a Plan and is not, directly or indirectly, purchasing such Certificate or interest therein on behalf of, as
investment manager of, as named fiduciary of, as trustee of, or with the assets of a Plan. 
  

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 (d) The Owner Trustee shall not execute, and shall not countersign and deliver, a Certificate in
connection with any transfer thereof unless the transferor shall have provided to the Owner Trustee an Investment Letter, signed by the transferee, which certificate shall contain the consent of the transferee to any amendments of this Agreement as
may be required to effectuate further the foregoing restrictions on transfer of the Certificates to Book-Entry Nominees, and an agreement by the transferee that it will not transfer a Certificate without providing to the Owner Trustee an Investment
Letter. 
 (e) [Reserved]. 
 (f)
Unless the Prospective Holder delivers a certificate to the Owner Trustee to the effect that it is a United States Person, the Prospective Holder, other than NovaStar Mortgage Inc. or an affiliate of the NovaStar Mortgage Inc., shall obtain and
deliver to the Note Insurer and the Owner Trustee an Opinion of Counsel satisfactory to the Note Insurer to the effect that, as a matter of federal income tax law, the transfer of the Certificate to such Prospective Holder will not result in the
imposition of any U.S. withholding tax on payments in respect of the Mortgage Loans or the Certificate. 
 (g) [No pledge or transfer of the
Certificates shall be effective unless such pledge or transfer is (i) to a single beneficial owner that represents that it qualifies for taxation as a REIT or is a Qualified REIT Subsidiary and (ii) accompanied by an Opinion of Counsel
satisfactory to the Owner Trustee and the Note Insurer, which Opinion of Counsel shall not, unless otherwise agreed, be an expense of the Issuing Entity, the Certificate Registrar, the Servicer, the Note Insurer or the Sponsor, to the effect such
pledge or transfer will not cause the Issuing Entity to be subject to federal income tax.] 
 ARTICLE V 
 ACTIONS BY OWNER TRUSTEE 
 Section 5.01. Prior Notice to the Certificateholders with Respect to Certain Matters. With respect to the following matters, the Owner Trustee shall not take action unless at least thirty (30) days before the taking of such
action, the Owner Trustee shall have notified the Rating Agencies, the Certificateholders (unless the Certificateholders have directed the Owner Trustee to take action) and the Note Insurer in writing of the proposed action and neither the
Certificateholders nor the Note Insurer shall have notified the Owner Trustee in writing prior to the 30th day after
such notice is given that such Certificateholders and/or the Note Insurer have withheld consent or the Certificateholders have provided alternative written direction (any direction by the Certificateholders shall require the prior written consent of
the Note Insurer) and in the case of the Rating Agencies, the Rating Agency Condition shall have been met: 
 (a) the
initiation of any claim or lawsuit by the Issuing Entity (except claims or lawsuits brought in connection with the collection of the Mortgage Loans) and the compromise of any action, claim or lawsuit brought by or against the Issuing Entity (except
with respect to the aforementioned claims or lawsuits for collection of the Mortgage Loans); 
  

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 (b) the election by the Issuing Entity to file an amendment to the Certificate of Trust
(unless such amendment is required to be filed under the Statutory Trust Statute); 
 (c) the amendment or other change to
this Agreement or any Basic Document in circumstances where the consent of any Certificateholder is required; provided, that notwithstanding this Section 5.01, the prior written consent of the Note Insurer must be obtained for any
amendment or change to this Agreement or any other Basic Document; 
 (d) the amendment or other change to this Agreement or
any other Basic Document in circumstances where the consent of any Certificateholder is not required and such amendment materially adversely affects the interest of the Certificateholders; 
 (e) the appointment pursuant to the Indenture of a successor Note Registrar, or Indenture Trustee or pursuant to this Agreement of a
successor Certificate Registrar or the consent to the assignment by the Note Registrar or Indenture Trustee or Certificate Registrar of their respective obligations under the Indenture or this Agreement, as applicable; 
 (f) the consent to the waiver of any default of any Basic Document; 
 (g) the consent to the assignment by the Indenture Trustee or Servicer of their respective obligations under any Basic Document;

 (h) except as provided in Article X hereof, dissolve, terminate or liquidate the Issuing Entity in whole or in part;

 (i) merge or consolidate the Issuing Entity with or into any other entity, or convey or transfer all or substantially all
of the Issuing Entity’s assets to any other entity; 
 (j) cause the Issuing Entity to incur, assume or guaranty any
indebtedness other than as set forth in this Agreement or the other Basic Documents; 
 (k) do any act which would make it
impossible to carry on the ordinary business of the Issuing Entity as described in Section 2.03 hereof; 
 (l) confess a
judgment against the Issuing Entity; 
 (m) possess Issuing Entity assets, or assign the Issuing Entity’s right to
property, for other than an Issuing Entity purpose; 
 (n) cause the Issuing Entity to lend any funds to any entity; or

 (o) change the Issuing Entity’s purpose and powers from those set forth in this Agreement. 
  

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 In addition the Issuing Entity shall not commingle its assets with those of any other entity. The Issuing
Entity shall maintain its financial and accounting books and records separate from those of any other entity. Except as expressly set forth herein, the Issuing Entity shall pay its indebtedness, operating expenses and liabilities from its own funds,
and the Issuing Entity shall not pay the indebtedness, operating expenses and liabilities of any other entity. The Servicer, on behalf of the Issuing Entity, shall maintain appropriate minutes or other records of all appropriate action. The Issuing
Entity shall maintain its office separate from the offices of the Sponsor, the Depositor and the Servicer. 
 Notwithstanding the other
provisions of this Section 5.01, the Owner Trustee shall not have the power, except upon the written direction of the Certificateholders with the prior written consent of the Note Insurer, and to the extent otherwise consistent with the Basic
Documents, to remove or replace the Servicer or the Indenture Trustee. 
 Section 5.02. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to (i) institute proceedings to have the Issuing Entity declared or adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy or insolvency proceedings
against the Issuing Entity, (iii) file a petition or consent to a petition seeking reorganization or relief on behalf of the Issuing Entity under any applicable federal or state law relating to bankruptcy, (iv) consent to the appointment
of a receiver, liquidator, assignee, trustee, sequestrator (or any similar official) of the Issuing Entity or a substantial portion of the property of the Issuing Entity, (v) make any assignment for the benefit of the Issuing Entity’s
creditors, (vi) cause the Issuing Entity to admit in writing its inability to pay its debts generally as they become due, or (vii) take any action, or cause the Issuing Entity to take any action, in furtherance of any of the foregoing (any
of the above, a “Bankruptcy Action”) without the unanimous prior written consent and approval of all Certificateholders and the prior written consent and approval of the Note Insurer and the delivery to the Owner Trustee by each
such Certificateholder of a certification that such Certificateholder reasonably believes that the Issuing Entity is insolvent. So long as the Indenture and the Insurance Agreement remain in effect and no Note Insurer Default exists, no
Certificateholder shall have the power to take, and shall not take, any Bankruptcy Action with respect to the Issuing Entity or direct the Owner Trustee to take any Bankruptcy Action with respect to the Issuing Entity. The terms of this
Section 5.02 shall survive for one year and one day following the termination of this Agreement. 
 Section 5.03. Restrictions
on Certificateholders’ Power. The Certificateholders shall not direct the Owner Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Issuing Entity or the Owner Trustee
under this Agreement or any of the other Basic Documents or would be contrary to Section 2.03, nor shall the Owner Trustee be obligated to follow any such direction, if given. 
 Section 5.04. Majority Control. Except as expressly provided herein, any action that may be taken by the Certificateholders under this
Agreement may be taken by the holders of Certificates evidencing more than 50% of the Percentage Interest in the Issuing Entity and such action shall be binding upon all Certificateholders. Except as expressly provided herein, any written notice of
the Certificateholders delivered pursuant to this Agreement shall be effective if signed by holders of Certificates evidencing more than 50% of the Percentage Interest in the Issuing Entity at the time of the delivery of such notice and such action
shall be binding upon all Certificateholders. 
  

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 ARTICLE VI 
 TAX PROVISIONS; CERTAIN DUTIES 
 Section 6.01. Federal Income Tax Provisions. 
 (a) [The Issuing Entity will be wholly owned by the Certificateholder, which as of the Closing Date is the Depositor. The Depositor has made an election
to be treated as a “real estate investment trust” (a “REIT”) under Section 856 of the Code. As such, the Depositor, as the sole Certificateholder, will be regarded as (i) owning all assets owned by the Issuing Entity
and (ii) having incurred all liabilities incurred by the Issuing Entity, and all transactions between the Issuing Entity and the Depositor will be disregarded. 
 (b) The Depositor covenants that for so long as it is a REIT, it will not Transfer the Ownership Interest in the Issuing Entity.] 
 Section 6.02. Withholding Taxes. In the event that any withholding tax is imposed under federal, state, or local law on the Issuing Entity’s payment (or allocations of income) to a Certificateholder,
such tax shall reduce the amount otherwise distributable to such Certificateholder in accordance with this Section 6.02. The Indenture Trustee, on behalf of the Owner Trustee, is hereby authorized and directed to retain in the Payment Account
from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Issuing Entity (but such authorization shall not prevent the Indenture Trustee from contesting any such tax in
appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). The Sponsor will provide the Indenture Trustee with a statement indicating the amount of any such withholding tax. The
amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by the Indenture Trustee and remitted to the appropriate taxing authority from the
Payment Account at the direction of the Indenture Trustee, on behalf of the Owner Trustee. If there is a possibility that withholding tax is payable with respect to a distribution (such as a distribution to a Certificateholder who is a Non-U.S.
Person), the Indenture Trustee may in its sole discretion withhold such amounts in accordance with this paragraph. In the event that a Certificateholder wishes to apply for a refund of any such withholding tax, the Owner Trustee and the Indenture
Trustee shall reasonably cooperate with such Certificateholder in making such claim so long as such Certificateholder agrees in writing to reimburse the Owner Trustee for any out-of-pocket expenses incurred. 
 Section 6.03. Accounting and Reports to the Certificateholders, the Internal Revenue Service and Others. [The Sponsor shall (a) maintain
(or cause to be maintained) the books of the Issuing Entity on a calendar year basis on the accrual method of accounting, and (b) deliver (or cause to be delivered) to each Certificateholder such information, reports or statements as may be
required by the Code and applicable Treasury Regulations and as may be required to enable each Certificateholder to prepare its respective federal and state income tax returns. Consistent with the Issuing Entity’s (and each Loan Groups’)
characterization for tax purposes as 
  

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 a Qualified REIT Subsidiary, no federal income tax return shall be filed on behalf of the Issuing Entity unless either
(y) the Issuing Entity, the Indenture Trustee or the Certificateholders receive an Opinion of Counsel based on a change in applicable law occurring after the date hereof that the Code requires such a filing or (z) the Internal Revenue
Service shall determine that the Issuing Entity (or a related Loan Group) is required to file such a return. In the event that the Issuing Entity (or a related Loan Group) is required to file tax returns, the Indenture Trustee shall elect under
Section 1278 of the Code to include in income currently any market discount that accrues with respect to the Mortgage Loans. The Sponsor shall prepare or shall cause to be prepared any tax returns required to be filed by the Issuing Entity. The
Depositor, or any other such party required by law, shall promptly sign such returns and deliver such returns after signature to the Sponsor and such returns shall be filed by, or at the direction of, the Sponsor with the appropriate tax
authorities. In no event shall the Depositor or the Sponsor be liable for any liabilities, costs or expenses of the Issuing Entity arising out of the application of any tax law, including federal, state, foreign or local income or excise taxes or
any other tax imposed on or measured by income (or any interest, penalty or addition with respect thereto or arising from a failure to comply therewith), except, for any such liability, cost or expense attributable to the Depositor’s breach of
its obligations under this Agreement.] 
 ARTICLE VII 
 AUTHORITY AND DUTIES OF OWNER TRUSTEE 
 Section 7.01. General Authority. The Owner
Trustee is authorized and directed to execute and deliver or cause to be executed and delivered the Notes, the Certificates and the Basic Documents to which the Issuing Entity is to be a party and each certificate or other document attached as an
exhibit to or contemplated by the Basic Documents to which the Issuing Entity is to be a party and any amendment or other agreement or instrument described in Article IV, in each case, as the Sponsor shall approve, as evidenced conclusively by the
Owner Trustee’s execution thereof. In addition, the Owner Trustee is authorized and directed, on behalf of the Issuing Entity, to execute and deliver to the Authenticating Agent the Trust Request and the Trust Orders referred to in
Section 2.11 of the Indenture, directly to the Authenticating Agent to authenticate and deliver Class A-1 Notes in the Original Note Principal Balance of
$[                    ] and the Class A-2 Notes in the Original Note Principal Balance of
$[                    ]. In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions
required of the Issuing Entity, pursuant to the Basic Documents. 
 Section 7.02. General Duties. (a) It shall be the duty of
the Owner Trustee: 
 (i) to discharge (or cause to be discharged) all of its responsibilities pursuant to the terms of this
Agreement and the Basic Documents to which the Issuing Entity is a party and to administer the Issuing Entity in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the provisions of this Agreement; and

 (ii) to maintain the Issuing Entity’s existence as a statutory trust under the laws of the State of Delaware.

  

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 (b) The Owner Trustee shall not be responsible for taking any action on behalf of the Issuing Entity
under any Basic Document unless specifically directed in writing to do so in accordance with Section 7.03 of this Agreement. 
 (c) The
Owner Trustee shall not be responsible for any matter regarding the Securities Act, the Exchange Act or the Investment Company Act of 1940, as amended, or the rules or regulations thereunder. 
 Section 7.03. Action upon Instruction. (a) Subject to Article V hereof, and in accordance with the terms of the Basic Documents, the
Certificateholders may by written instruction direct the Owner Trustee in the management of the Issuing Entity but only to the extent consistent with the limited purpose of the Issuing Entity. Such direction may be exercised at anytime by written
instruction of the Certificateholders pursuant to Article V hereof. Without limiting the generality of the foregoing, the Owner Trustee shall act as directed in writing by the Certificateholders in connection with Note redemptions requested by the
Certificateholders, and shall take all actions and deliver all documents that the Issuing Entity is required to take and deliver in accordance with Section 4.01 and Article X of the Indenture in order to effect any redemption requested by the
Certificateholders. 
 (b) The Owner Trustee shall not be required to take any action hereunder or under any other Basic Document if the
Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on the part of the Owner Trustee or is contrary to the terms hereof or of any other Basic Document or is
otherwise contrary to law. 
 (c) Subject to Article V hereof, whenever the Owner Trustee is unable to decide between alternative courses of
action permitted or required by the terms of this Agreement or under any other Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders and the Note Insurer
requesting instruction from the Certificateholders as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Certificateholders received, the Owner Trustee
shall not be liable on account of such action to any Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such
notice or may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or inaction. 
 (d) Subject to Article V hereof, in the event
that the Owner Trustee is unsure as to the application of any provision of this Agreement or any other Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision,
or in the event that this Agreement permits any determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may
give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance 
  

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 with any such instruction received, the Owner Trustee shall not be liable, on account of such action or inaction, to any
Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the circumstances)
it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no liability to
any Person for such action or inaction. 
 Section 7.04. No Duties Except as Specified in this Agreement, the Basic Documents or any
Instructions. 
 (a) The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register,
record, sell, dispose of, or otherwise deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, this Agreement or any document contemplated hereby to which the Issuing Entity is a party,
except as expressly provided by the terms of this Agreement, any other Basic Document or in any document or written instruction received by the Owner Trustee pursuant to Section 7.03; and no implied duties or obligations shall be read into this
Agreement or any other Basic Document against the Owner Trustee. The Owner Trustee shall have no responsibility for filing any tax document, 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 prepare or file any Securities and Exchange Commission filing for the Issuing Entity or to record this Agreement or any other Basic Document. The Owner Trustee nevertheless
agrees that it will, at its own cost and expense, promptly take all action as may be necessary to discharge any liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee in its individual capacity
that are not related to the ownership or the administration of the Owner Trust Estate. 
 (b) Notwithstanding anything to the contrary herein
or in any other document, the Owner Trustee shall not be required to execute, deliver or certify on behalf of the Issuing Entity or any other Person any filings, certificates, affidavits or other instruments required under the Sarbanes-Oxley Act of
2002. Notwithstanding any Person’s right to instruct the Owner Trustee, neither the Owner Trustee nor any agent, employee, director or officer of the Owner Trustee shall have any obligation to execute any certificates or other documents
required pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder, and the refusal to comply with any such instructions shall not constitute a default or breach under any Basic Document. 
 Section 7.05. No Action Except under Specified Documents or Instructions. The Owner Trustee shall not manage, control, use, sell, dispose of
or otherwise deal with any part of the Owner Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in accordance with the other Basic Documents
and (iii) in accordance with any document or written instruction delivered to the Owner Trustee pursuant to Section 7.03. 
  

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 Section 7.06. Restrictions. [Neither the Owner Trustee nor the Sponsor shall take any action
(a) that violates or results in a breach of or is inconsistent with the purposes of the Issuing Entity set forth in Section 2.03; (b) that causes or effectuates a Transfer of the Depositor’s Ownership Interest in the Issuing
Entity for so long as the Depositor is a REIT other than as set forth in Section 4.09(g) or (c) that, to the actual knowledge of the Sponsor and the Owner Trustee, would result in the Issuing Entity’s becoming taxable as a corporation
for federal income tax purposes. The Certificateholders shall not direct the Owner Trustee to take action that would violate the provisions of this Section 7.06.] 
 ARTICLE VIII 
 CONCERNING THE OWNER TRUSTEE 
 Section 8.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder
with respect to such trusts, but only upon the terms of this Agreement subject to the other Basic Documents. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the terms of
the other Basic Documents and this Agreement. The Owner Trustee shall not be answerable or accountable hereunder or under any other Basic Document under any circumstances, except (i) for its own willful breach or misconduct or gross negligence
or (ii) in the case of the inaccuracy of any representation or warranty contained in Section 8.03 expressly made by the Owner Trustee in its individual capacity. In particular, but not by way of limitation (and subject to the exceptions
set forth in the preceding sentence): 
 (a) The Owner Trustee shall not be liable for any error of judgment made by a Responsible Officer of
the Owner Trustee; 
 (b) The Owner Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance
with the instructions of the Certificateholders or the Note Insurer given in accordance with this Agreement; 
 (c) No provision of this
Agreement or any other Basic Document shall require the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any other Basic Document if the Owner
Trustee shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it; 
 (d) Under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the
principal of and interest on the Notes; 
 (e) The Owner Trustee shall not be responsible for or in respect of the validity or sufficiency of
this Agreement or for the due execution hereof by the Sponsor or for the form, character, genuineness, sufficiency, value or validity of any of the Owner Trust Estate or for or in respect of the validity or sufficiency of the Basic Documents, other
than the certificate of authentication on the Certificates, and the Owner Trustee shall in no event assume or incur any liability, duty, or obligation to any Noteholder or to any Certificateholders, other than as expressly provided for herein and in
the other Basic Documents; 
  

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 (f) The Owner Trustee shall not be liable for the default or misconduct of the Indenture Trustee or the
Servicer under any of the Basic Documents or otherwise and the Owner Trustee shall have no obligation or liability to perform the obligations of the Issuing Entity under this Agreement or the other Basic Documents that are required to be performed
by the Sponsor, the Indenture Trustee or the Servicer; 
 (g) The Owner Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Agreement, or to institute, conduct or defend any litigation under this Agreement or otherwise or in relation to this Agreement or any Basic Document, at the request, order or direction of the Sponsor, any of the
Certificateholders or the Note Insurer, unless such Certificateholders, the Sponsor or the Note Insurer have offered to the Owner Trustee security or indemnity reasonably satisfactory to it against the costs, expenses and liabilities that may be
incurred by the Owner Trustee therein or thereby. The right of the Owner Trustee to perform any discretionary act enumerated in this Agreement or in any other Basic Document shall not be construed as a duty, and the Owner Trustee shall not be
answerable for other than its gross negligence or willful breach or misconduct in the performance of any such act; and 
 (h) Notwithstanding
anything contained herein to the contrary, neither
[                                ] in its individual capacity nor as Owner Trustee
shall be required to take any action in any jurisdiction other than in the State of Delaware if the taking of such action will (i) require the consent or approval or authorization or order of or the giving of notice to, or the registration with
or the taking of any other action in respect of, any state or other governmental authority or agency of any jurisdiction other than the State of Delaware (ii) result in any fee, tax or other governmental charge under the laws of any
jurisdiction or any political subdivisions thereof in existence on the date hereof other than the State of Delaware becoming payable by
[                                ]; or (iii) subject
[                                ] to personal jurisdiction in any jurisdiction
other than the State of Delaware for causes of action arising from acts unrelated to the consummation of the transactions by
[                                ] in its individual capacity or as Owner Trustee,
as the case may be, contemplated hereby. The Owner Trustee shall be entitled to obtain advice of counsel (which advice shall be an expense of the Sponsor to determine whether any action required to be taken pursuant to this Agreement or the other
Basic Documents results in the consequences described in clauses (i), (ii) and (iii) of the preceding sentence. In the event that said counsel advises the Owner Trustee that such action will result in such consequences, the Owner Trustee
will appoint an additional trustee pursuant to Section 11.05 hereof to proceed with such action. 
 Section 8.02. Furnishing of
Documents. Subject to Section 4.07, the Owner Trustee shall furnish to the Certificateholders promptly upon receipt of a written request therefor, duplicates or copies of all reports, notices, requests, demands, certificates, financial
statements and any other instruments furnished to the Owner Trustee under the Basic Documents. On behalf of the Owner Trustee, the Sponsor shall furnish to Noteholders promptly upon written request therefor, copies of the Sale and Servicing
Agreement and the Indenture. 
  

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 Section 8.03. Representations and Warranties of the Owner Trustee. The Owner Trustee hereby
represents and warrants to the Sponsor, the Note Insurer and the Certificateholders, that: 
 (a) It is a national banking association duly
organized and validly existing in good standing under the laws of the United States of America. It has all requisite power and authority to execute, deliver and perform its obligations under this Agreement. 
 (b) It has taken all action necessary to authorize the execution and delivery by it of this Agreement, and this Agreement will be executed and delivered
by one of its officers who is duly authorized to execute and deliver this Agreement on its behalf. 
 (c) Neither the execution nor the
delivery by it of this Agreement nor the consummation by it of the transactions contemplated hereby nor compliance by it with any of the terms or provisions hereof will contravene any Delaware or Federal law, governmental rule or regulation
governing the banking or trust powers of the Owner Trustee or any judgment or order binding on it, or constitute any default under its charter documents or by-laws. 
 (d) This Agreement has been duly authorized, executed and delivered by the Owner Trustee and constitutes a valid, legal and binding obligation of the Owner Trustee, enforceable against it in accordance with the terms
hereof, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting the enforcement of creditors’ rights generally and to general principles of equity, regardless of whether such enforcement is considered
in a proceeding in equity or at law. 
 (e) The Owner Trustee is not in default with respect to any order or decree of any court or any
order, regulation or demand of any federal, state, municipal or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of the Owner Trustee or its
properties or might have consequences that would materially adversely affect its performance hereunder. 
 (f) No litigation is pending or,
to the best of the Owner Trustee’s knowledge, threatened against the Owner Trustee which would prohibit its entering into this Agreement or performing its obligations under this Agreement. 
 Section 8.04. Reliance; Advice of Counsel. (a) The Owner Trustee shall incur no liability to anyone in acting upon any signature,
instrument, notice, resolution, request, consent, order, certificate, report, opinion, Note, or other document or paper believed by it in good faith to be genuine and believed by it in good faith to be signed by the proper party or parties. The
Owner Trustee may accept a certified copy of a resolution of the board of directors or other governing body of any corporate party as conclusive evidence that such resolution has been duly adopted by such body and that the same is in full force and
effect. As to any fact or matter the method of the determination of which is not specifically prescribed herein, the Owner Trustee may for all purposes hereof rely on a certificate, signed by the president or any vice president or by the treasurer
or other authorized officers of the relevant party, as to such fact or matter and such certificate shall constitute full protection to the Owner Trustee for any action taken or omitted to be taken by it in good faith in reliance thereon. 

 

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 (b) In the exercise or administration of the trusts hereunder and in the performance of its duties and
obligations under this Agreement or the other Basic Documents, the Owner Trustee (i) may, at the expense of the Issuing Entity, act directly or through its agents or attorneys pursuant to agreements entered into with any of them, and the Owner
Trustee shall not be liable for the conduct or misconduct of such agents or attorneys if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care, and (ii) may, at the expense of the Issuing Entity, consult
with counsel, Accountants and other skilled persons to be selected with reasonable care and employed by it. The Owner Trustee shall not be responsible for monitoring the performance of such agents or attorneys or for the failure of others to perform
their duties, even if delegated by the Owner Trustee, if such agents or attorneys shall have been selected by the Owner Trustee with reasonable care. The Owner Trustee shall not be liable for anything done, suffered or omitted in good faith by it in
accordance with the written opinion or advice of any such counsel, Accountants or other such persons and not contrary to this Agreement or any other Basic Document. 
 Section 8.05. Not Acting in Individual Capacity. Except as provided in Section 8.03, in accepting the trusts hereby created,
[                                        ]
acts solely as Owner Trustee hereunder and not in its individual capacity, and all Persons having any claim against the Owner Trustee by reason of the transactions contemplated by this Agreement or any other Basic Document shall look only to the
Owner Trust Estate for payment or satisfaction thereof. 
 Section 8.06. Owner Trustee Not Liable for the Certificates or Mortgage
Loans. The recitals contained herein and in the Certificates (other than the signature and countersignature of the Owner Trustee on the Certificates) shall be taken as the statements of the Issuing Entity, and the Owner Trustee assumes no
responsibility for the correctness thereof. The Owner Trustee makes no representations as to the validity or sufficiency of this Agreement, of any other Basic Document or of the Certificates (other than the signature and countersignature of the
Owner Trustee on the Certificates and as specified in Section 8.03 hereof) or the Notes, or of any Mortgage Loans or related documents. The Owner Trustee shall at no time have any responsibility or liability for or with respect to the legality,
validity and enforceability of any Mortgage Loan, or the perfection and priority of any security interest created by any Mortgage Loan or the maintenance of any such perfection and priority, or for or with respect to the sufficiency of the Owner
Trust Estate or its ability to generate the payments to be distributed to the Certificateholders under this Agreement or the Noteholders under the Indenture, including, without limitation, the existence, condition and ownership of any Mortgaged
Property, the existence and enforceability of any insurance thereon, the existence and contents of any Mortgage Loan on any computer or other record thereof, the validity of the assignment of any Mortgage Loan to the Issuing Entity or of any
intervening assignment, the completeness of any Mortgage Loan, the performance or enforcement of any Mortgage Loan, the compliance by the Sponsor or the Servicer with any warranty or representation made under any Basic Document or in any related
document or the accuracy of any such warranty or representation or any action of the Indenture Trustee or the Servicer or any subservicer taken in the name of the Owner Trustee. 
 Section 8.07. Owner Trustee May Own Notes. The Owner Trustee in its individual or any other capacity may become the owner or pledgee of the
Notes and may deal with the Sponsor, the Depositor, the Indenture Trustee and the Servicer in banking transactions with the same rights as it would have if it were not Owner Trustee. 
  

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 Section 8.08. Licenses. The Sponsor shall cause the Issuing Entity to use its best efforts to
obtain and maintain the effectiveness of any licenses required in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby until such time as the Issuing Entity shall terminate in accordance
with the terms hereof. 
 Section 8.09. Legal Proceedings. As required by Regulation AB, the Owner Trustee will promptly notify
the Servicer, the Depositor and the Issuing Entity of the commencement or, if applicable, the termination of any and all legal proceedings of which any property of the Owner Trustee is the subject, that is material to the Noteholders and any such
proceedings known to be contemplated by governmental authorities. In addition, the Owner Trustee will furnish to the Servicer, the Depositor and the Issuing Entity, in writing, the necessary disclosure describing such proceedings required to be
disclosed under Item 1117 of Regulation AB, for inclusion in reports filed pursuant to the Exchange Act. 
 ARTICLE IX 

COMPENSATION OF OWNER TRUSTEE 
 Section 9.01. Owner Trustee’s Fees and Expenses. The Owner Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Servicer and the
Owner Trustee, and the Owner Trustee shall be entitled to be reimbursed by the Servicer for its other reasonable expenses hereunder as separately agreed (the “Owner Trustee Fee”). 
 Section 9.02. Indemnification. The Sponsor shall be liable as obligor for, and shall indemnify the Owner Trustee (in its individual and trust
capacities) and its successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and suits, and any and all
reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by, or asserted against any
Indemnified Party in any way relating to or arising out of this Agreement, the other Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder, except only that the
Sponsor shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 8.01. The indemnities contained in this
Section 9.02 shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement. In any event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Sponsor will
be entitled to participate therein, with counsel selected by the Sponsor and reasonably satisfactory to the Indemnified Parties, but after notice from an Indemnified Party to the Sponsor of its election to assume the defense thereof, the Sponsor
shall not be liable to the Indemnified Party under this Section 9.02 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense of such action; provided, however, that this
sentence shall not be in effect if (1) the Sponsor shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of commencement of the action,
(2) the Sponsor shall have authorized the employment of counsel for the Indemnified Party at the expense of the Sponsor or (3) in the event any such claim involves a possible imposition of 
  

 28 

 criminal liability or penalty or a material civil penalty on such Indemnified Party, a conflict of interest between such
Indemnified Party and the Sponsor or another indemnitee or the granting of material injunctive relief against such Indemnified Party, and such Indemnified Party informs the Sponsor that such Indemnified Party desires to be represented by separate
counsel, in which case, the reasonable fees and expenses of such separate counsel shall be borne by the Sponsor. If the Sponsor assumes the defense of any such proceeding, the Sponsor shall be entitled to settle such proceeding without any liability
being assessed against any Indemnified Party or, if such settlement provides for release of any such Indemnified Party without any liability being assessed against any Indemnified Party in connection with all matters relating to the proceeding which
have been asserted against such Indemnified Party in such proceeding by the other parties to such settlement, without the prior written consent of such Indemnified Party, but otherwise only with the prior written consent of such Indemnified Party.

 Section 9.03. Payments to the Owner Trustee. Any amounts paid to the Owner Trustee pursuant to this Article IX shall be deemed
not to be a part of the Owner Trust Estate immediately after such payment. 
 ARTICLE X 
 TERMINATION OF TRUST AGREEMENT 
 Section 10.01. Termination of Trust Agreement. (a) This Agreement (other than Article IX) shall terminate and the Issuing Entity shall dissolve and be of no further force or effect on the earlier of: (i) the final
payment or other liquidation of the Mortgage Loans and the disposition of all REO Properties and the remittance of all funds due hereunder with respect to such Mortgage Loans and REP Properties after the satisfaction and discharge of the Indenture
pursuant to Section 4.01 of the Indenture; and (ii) the expiration of 21 years from the death of the last survivor of descendants of Joseph P. Kennedy (the late ambassador of the United States to the Court of St. James). The bankruptcy,
liquidation, dissolution, death or incapacity of the any Certificateholder or the Sponsor shall not (x) operate to terminate this Agreement or the Issuing Entity, nor (y) entitle Certificateholders’ or the Sponsor’s legal
representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Issuing Entity or Owner Trust Estate nor (z) otherwise affect the rights, obligations and
liabilities of the parties hereto. 
 (b) Except as provided in Section 10.01(a) above, none of the Sponsor, the Servicer, the Note
Insurer nor the Certificateholders shall be entitled to revoke or terminate the Issuing Entity. 
 (c) Notice of any termination of the
Issuing Entity, specifying the Payment Date upon which the Certificateholders shall surrender their Certificates to the Indenture Trustee for payment of the final distributions and cancellation, shall be given by the Owner Trustee to the 

 

 29 

 Certificateholders, the Note Insurer, the Rating Agencies and the Indenture Trustee mailed within five (5) Business
Days of receipt by the Owner Trustee from the Servicer of notice of such termination, which notice given by the Owner Trustee shall state (i) the Payment Date upon or with respect to which final payment of the Certificates shall be made upon
presentation and surrender of the Certificates at the office of the Indenture Trustee therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable,
payments being made only upon presentation and surrender of the Certificates at the office of the Indenture Trustee therein specified. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the
Indenture Trustee at the time such notice is given to Certificateholders. Upon presentation and surrender of Certificates, subject to Section 3808 of the Statutory Trust Statute, amounts distributable on such Payment Date pursuant to the terms
of the Indenture. 
 (d) In the event that Certificateholders shall not surrender their Certificates for cancellation within six months after
the date specified in the above mentioned written notice, the Owner Trustee shall give a second written notice to Certificateholders to surrender the Certificates for cancellation and receive the final distribution with respect thereto. If within
one year after the second notice the Ownership Interest shall not have been surrendered for cancellation, the Owner Trustee may take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Certificateholders
concerning surrender of the Certificates, and the cost thereof shall be paid out of the funds and other assets that shall remain subject to this Agreement. Any funds remaining in the Issuing Entity after exhaustion of such remedies shall be
distributed by the Indenture Trustee to the Certificateholders. 
 (e) Upon the winding up of the Issuing Entity in accordance with
Section 3808 of the Statutory Trust Statute and its termination, the Owner Trustee shall cause the Certificate of Trust to be canceled by filing a certificate of cancellation with the Secretary of State in accordance with the provisions of
Section 3810 of the Statutory Trust Statute. 
 ARTICLE XI 
 SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES 
 Section 11.01.
Eligibility Requirements for Owner Trustee. The Owner Trustee shall at all times be a corporation or banking association satisfying the provisions of Section 3807(a) of the Statutory Trust Statute; authorized to exercise trust powers;
having a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by Federal or state authorities; and having (or having a parent that has) a rating of at least “Baa3” by Moody’s and
“A-1” by S&P (or otherwise acceptable to the Rating Agencies) and being acceptable to the Note Insurer. If such entity shall publish reports of condition at least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purpose of this Section 11.01, the combined capital and surplus of such entity shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so
published. In case at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of this Section 11.01, the Owner Trustee shall resign immediately in the manner and with the effect specified in Section 11.02.

  

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 Section 11.02. Resignation or Removal of Owner Trustee. The Owner Trustee may at any time
resign and be discharged from the trusts hereby created by giving written notice thereof to the Issuing Entity, the Sponsor, the Servicer, the Indenture Trustee and the Note Insurer. Upon receiving such notice of resignation, the Note Insurer may
(and, if the Note Insurer fails to do so, the Sponsor shall promptly) appoint a successor Owner Trustee (acceptable to the Note Insurer) by written instrument, in duplicate, one copy of which instrument shall be delivered to the resigning Owner
Trustee and one copy to the successor Owner Trustee. If no successor Owner Trustee shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of resignation, the resigning Owner Trustee or
the Note Insurer may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee. 
 If at any time the
Owner Trustee shall cease to be eligible in accordance with the provisions of Section 11.01 and shall fail to resign after written request therefor by the Certificateholders or the Sponsor, or if at any time the Owner Trustee shall be legally
unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, then the Note Insurer, or the Certificateholders or the Sponsor with the written consent of the Note Insurer, may remove the Owner Trustee. If the Certificateholders or the Sponsor or the Note
Insurer shall remove the Owner Trustee under the authority of the immediately preceding sentence, the Note Insurer, or the Sponsor with the written consent of the Note Insurer, shall promptly appoint a successor Owner Trustee by written instrument
in duplicate, one copy of which instrument shall be delivered to the outgoing Owner Trustee so removed and one copy to the successor Owner Trustee and payment of all fees owed to the outgoing Owner Trustee. 
 Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section 11.02
shall not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 11.03, written approval by the Note Insurer and payment of all fees and expenses owed to the outgoing Owner Trustee. The Servicer
shall provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies, the Indenture Trustee and the Note Insurer. 
 Section 11.03. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to Section 11.02 shall execute, acknowledge and deliver to the Issuing Entity, the Sponsor, the Indenture
Trustee, the Note Insurer and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon, subject to the payment of all fees and expenses owed to the outgoing Owner Trustee, the resignation or
removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee (if acceptable to the Note Insurer), without any further act, deed or conveyance, shall become fully vested with all the rights, powers, duties, and
obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner Trustee all documents and
statements and moneys held by it under this Agreement; and the Sponsor and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and certainly vesting and confirming
in the successor Owner Trustee all such rights, powers, duties, and obligations. 
  

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 No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of
such acceptance such successor Owner Trustee shall be eligible pursuant to Section 11.01. 
 Upon acceptance of appointment by a
successor Owner Trustee pursuant to this Section 11.03, the Sponsor shall mail notice of the successor of such Owner Trustee to the Certificateholders, the Indenture Trustee, the Noteholders, the Note Insurer and the Rating Agencies. If the
Sponsor fails to mail such notice within ten (10) days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Sponsor. 
 Any successor Owner Trustee appointed pursuant to this Section 11.03 shall file an amendment to the Certificate of Trust with the Secretary of State
identifying the name and principal place of business of such successor Owner Trustee in the State of Delaware. 
 Section 11.04.
Merger or Consolidation of Owner Trustee. Any corporation or banking association into which the Owner Trustee may be merged or converted or with which it may be consolidated or any corporation or banking association resulting from any merger,
conversion or consolidation to which the Owner Trustee shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Owner Trustee, shall be the successor of the Owner
Trustee hereunder, provided such corporation or banking association shall be eligible pursuant to Section 11.01, without the execution or filing of any instrument or any further act on the part of any of the parties hereto, except the filing of
an amendment to the Certificate of Trust, if appropriate, anything herein to the contrary notwithstanding; provided, further, that the Owner Trustee shall mail notice of such merger, conversion or consolidation to the Rating Agencies
and; provided, further, that the Owner Trustee shall file an amendment to the Certificate of Trust as required under Section 11.03 above. 
 Section 11.05. Appointment of Co-Trustee or Separate Trustee. 
 (a) Notwithstanding any other
provisions of this Agreement, at any time, for the purpose of meeting any legal requirements of any jurisdiction in which any part of the Owner Trust Estate or any Mortgaged Property may at the time be located, and for the purpose of performing
certain duties and obligations of the Owner Trustee with respect to the Issuing Entity and the Certificates, the Owner Trustee shall have the power and shall execute and deliver all instruments to appoint one or more Persons approved by the Owner
Trustee and acceptable to the Note Insurer to act as co-trustee, jointly with the Owner Trustee, or separate trustee or separate trustees, of all or any part of the Owner Trust Estate, and to vest in such Person, in such capacity, such title to the
Issuing Entity, or any part thereof, and, subject to the other provisions of this Section 11.05, such powers, duties, obligations, rights and trusts as the Note Insurer and the Owner Trustee may consider necessary or desirable. No co-trustee or
separate trustee under this Agreement shall be required to meet the terms of eligibility as a successor trustee pursuant to Section 11.01 and no notice of the appointment of any co-trustee or separate trustee shall be required pursuant to
Section 11.03. 
 (b) Each separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the
following provision and conditions: 
 (i) all rights, powers, duties and obligations conferred or imposed upon the Owner
Trustee shall be conferred upon and exercised or performed by the Owner Trustee and such separate trustee or co-trustee jointly (it being understood that such separate trustee or co-trustee is not authorized to act separately without the Owner
Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed, the Owner Trustee shall be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties, and obligations (including the holding of title to the Issuing Entity or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such separate trustee or co-trustee, but solely at the
direction of the Owner Trustee; 
  

 32 

 (ii) no trustee under this Agreement shall be personally liable by reason of any act or
omission of any other trustee under this Agreement; and 
 (iii) the Owner Trustee may at any time accept the resignation of
or remove any separate trustee or co-trustee. 
 (c) Any notice, request or other writing given to the Owner Trustee shall be deemed to have
been given to the separate trustees and co-trustees, as if given to each of them. Every instrument appointing any separate trustee or co-trustee, other than this Agreement, shall refer to this Agreement and to the conditions of this Article XI. Each
separate trustee and co-trustee, upon its acceptance of appointment, shall be vested with the estates specified in its instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the
provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of, affecting the liability of, or affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner Trustee.

 (d) Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and
authority, to the extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its
estates, properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. 
 ARTICLE XII 
 MISCELLANEOUS 
 Section 12.01. Supplements and Amendments. This Agreement may be amended by the Sponsor, the Depositor and the Owner Trustee, with the prior
written consent of the Note Insurer, and with prior written notice to the Rating Agencies, but without the consent of any of the Noteholders, the Certificateholders or the Indenture Trustee, to cure any ambiguity, to correct or supplement any
provisions in this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders;
provided, however, such action shall not adversely affect in any material respect the interests of any Noteholder or Certificateholder. An amendment described above shall be deemed not to adversely affect in any 
  

 33 

 material respect the interests of any Noteholder if the party requesting the amendment amendment (i) delivers an
Opinion of Counsel, at the expense of the party requesting the change, delivered to the Owner Trustee to such effect, or (ii) satisfies the Rating Agency Condition with respect to such amendment. 
 This Agreement may also be amended from time to time by the Sponsor, the Depositor and the Owner Trustee, with the prior written consent of the Rating
Agencies and with the prior written consent of the Indenture Trustee, the Note Insurer, the Noteholders evidencing more than 50% of the Note Principal Balance of the Outstanding Notes of all of the Classes affected thereby and the Certificateholders
evidencing more than 50% of the Percentage Interests of the Issuing Entity, 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
Noteholders or the Certificateholders; provided, however, no such amendment shall (a) increase or reduce in any manner the amount of, or accelerate or delay the timing of, collections of payments on the Mortgage Loans or
distributions that shall be required to be made for the benefit of the Noteholders, the Certificateholders or the Note Insurer, (b) reduce the aforesaid percentage of the Outstanding Principal Balance of the Notes or the Percentage Interests
required to consent to any such amendment, in either case of clause (a) or (b) without the consent of the holders of all the outstanding Notes affected thereby, the Note Insurer and the Certificateholders of all the outstanding
Certificates. 
 Promptly after the execution of any such amendment or consent, the Sponsor shall furnish written notification of the
substance of such amendment or consent to the Certificateholders, the Indenture Trustee, the Note Insurer and each of the Rating Agencies. 
 It shall not be necessary for the consent of the Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such
consent shall approve the substance thereof. The manner of obtaining such consents (and any other consents of Certificateholders provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution
thereof by Certificateholders shall be subject to such reasonable requirements as the Owner Trustee may prescribe. 
 Promptly after the
execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State. 
 Prior to the execution of any amendment to this Agreement or the Certificate of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or
permitted by this Agreement and that all conditions precedent have been met. The Owner Trustee may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this
Agreement or otherwise. 
 Section 12.02. No Legal Title to Owner Trust Estate in Certificateholders. The Certificateholders
shall not have legal title to any part of the Owner Trust Estate. The Certificateholders shall be entitled to receive distributions with respect to their undivided beneficial ownership interest therein only in accordance with Articles VI and X. No
transfer, by 
  

 34 

 operation of law or otherwise, of any right, title, or interest of the Certificateholders to and in their ownership
interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of legal title to any part of the Owner Trust Estate. 
 Section 12.03. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Owner Trustee, the
Sponsor, the Depositor, the Certificateholders, the Note Insurer and, to the extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any
other Person any legal or equitable right, remedy or claim in the Owner Trust Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 
 Section 12.04. Notices. (a) Unless otherwise expressly specified or permitted by the terms hereof, all communications provided for or
permitted hereunder shall be in writing and shall be deemed to have been given if (1) personally delivered, (2) upon receipt by the intended recipient or three Business Days after mailing if mailed by certified mail, postage prepaid
(except that notice to the Owner Trustee shall be deemed given only upon actual receipt by the Owner Trustee), (3) sent by express courier delivery service and received by the intended recipient or (4) except with respect to notices sent
to the Owner Trustee, transmitted by telex or facsimile transmission (or any other type of electronic transmission agreed upon by the parties and confirmed by a writing delivered by any of the means described in (1), (2) or (3), at the
following addresses: (i) if to the Owner Trustee, at its Corporate Trust Office; (ii) if to the Sponsor, NovaStar Mortgage Inc., 8140 Ward Parkway, Suite 300, Kansas City, Missouri 64114, Attention: Matt Kaltenrieder, (816) 237-7508;
and (iii) if to the Note Insurer, [                                ],
Attention: [                    ]; or, as to each such party, at such other address as shall be designated by such party in a written notice
to each other party. 
 (b) Any notice required or permitted to be given to a Certificateholder shall be given by first-class mail, postage
prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder
receives such notice. 
 Section 12.05. Severability. Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. 
 Section 12.06. Separate Counterparts. This
Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same instrument. 
 Section 12.07. Successors and Assigns. All covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the
Sponsor, the Note Insurer, the Owner Trustee and its successors and each Certificateholder and its successors and permitted assigns, all as herein provided. Any request, notice, direction, consent, waiver or other instrument or action by a
Certificateholder shall bind the successors and assigns of such Certificateholder. 
  

 35 

 Section 12.08. No Petition. The Owner Trustee, by entering into this Agreement, each
Certificateholder, by accepting a Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the Depositor or the Issuing Entity,
or join in any institution against the Depositor or the Issuing Entity of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy law in connection
with any obligations relating to the Certificates, the Notes, this Agreement or any of the other Basic Documents. 
 This Section 12.08
will survive for one year and one day following the termination of this Agreement. 
 Section 12.09. No Recourse. Each
Certificateholder by accepting a Certificate acknowledges that such Certificateholder’s Certificate represents a beneficial interest in the Issuing Entity only and does not represent an interest in or an obligation of the Servicer, the Sponsor,
the Owner Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificates or the other Basic Documents. 
 Section 12.10. Headings. The headings of the various Articles and Sections herein are for convenience of reference only and shall not define
or limit any of the terms or provisions hereof. 
 Section 12.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 Section 12.12. Grant of Certificateholder Rights to Note Insurer. (a) In consideration for the issuance of the Certificates and for the
guarantee of the Notes by the Note Insurer pursuant to the Note Insurance Policy, the Certificateholders hereby grant to the Note Insurer the right to act as the holder of 100% of the outstanding Certificates for the purpose of exercising the rights
hereunder of the Certificateholders under this Agreement without the consent of the Certificateholders, including the voting rights of such Certificateholders hereunder, but excluding those rights requiring the consent of all such
Certificateholders, and any rights of such Certificateholders to distributions under the Indenture and the other Basic Documents; provided, that the preceding grant of rights to the Note Insurer by the Certificateholders shall be subject to
Section 12.14. 
 (b) [Reserved]. 
 (c) The duties and responsibilities of the Owner Trustee shall be limited to those expressly provided for in this Agreement. The parties hereto agree that except for purposes of the foregoing sentence, the Owner Trustee shall have no
management responsibilities or owe any fiduciary duties to the Note Insurer (or the Noteholders in the event they succeed to the Note Insurer’s rights). 
  

 36 

 (d) Whenever in connection with its performance under this Agreement the Owner Trustee receives
inconsistent notices or advice from the Note Insurer and the Certificateholders, the Owner Trustee shall, in the absence of a Note Insurer Default, take the action required by the notices or advice received from the Note Insurer. 
 Section 12.13. Third-Party Beneficiaries. The Indenture Trustee and the Note Insurer are intended third-party beneficiaries of this
Agreement, and this Agreement shall be binding upon and inure to the benefit of the Indenture Trustee and the Note Insurer; provided, that, notwithstanding the foregoing, for so long as a Note Insurer Default is continuing with respect to its
obligations under the Note Insurance Policy, the Certificateholders shall succeed to the Note Insurer’s rights hereunder. Without limiting the generality of the foregoing, all covenants and agreements in this Agreement that expressly confer
rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such covenants to the same extent as if it were a party to this Agreement. 
 Section 12.14. Suspension and Termination of Note Insurer’s Rights. During the continuation of a Note Insurer Default, rights granted or
reserved to the Note Insurer hereunder shall vest instead in the Certificateholders; provided, that the Note Insurer shall be entitled to any distributions of reimbursements to the Note insurer as set forth in the Indenture and the Insurance
Agreement and the Note Insurer shall retain those rights under Section 12.01 to consent to any amendment of this Agreement. 
 At such
time as either (i) the outstanding Note Principal Balance of the Notes has been reduced to zero or (ii) the Note Insurance Policy has been terminated and in either case of (i) or (ii) the Note Insurer has been reimbursed for all
amounts owed under the Note Insurance Policy and the Insurance Agreement (and the Note Insurer no longer has any obligation under the Note Insurance Policy), then the rights and benefits granted or reserved to the Note Insurer hereunder (including
the rights to direct certain actions and receive certain notices) shall terminate and the Certificateholders shall be entitled to the exercise of such rights and to receive such benefits of the Note Insurer following such termination to the extent
that such rights and benefits are applicable to the Certificateholders. 
 Section 12.15. Servicer. The Servicer is authorized to
prepare, or cause to be prepared, execute and deliver on behalf of the Issuing Entity all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Issuing Entity, the Sponsor or Owner Trustee to
prepare, file or deliver pursuant to the Basic Documents. Upon written request, the Owner Trustee shall execute and deliver to the Servicer a limited power of attorney appointing the Servicer the Issuing Entity’s agent and attorney-in-fact to
prepare, or cause to be prepared, execute and deliver all such documents, reports, filings, instruments, certificates and opinions. 
 [Remainder of Page Intentionally Left Blank] 
  

 37 

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

			
	 NOVASTAR MORTGAGE INC., as Sponsor

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	
	
	 [NOVASTAR MORTGAGE FUNDING
 CORPORATION][NOVASTAR
 CERTIFICATES FINANCING CORPORATION], as Depositor

		
	 By:
	 	  

		 	 Name:

		 	 Title:

	 [                                ], not in its
 individual capacity but solely as Owner Trustee
 under the Trust
Agreement

		
	 By:
	 	  

		 	 Name:

		 	 Title:

 [Signature page to Amended and Restated Trust Agreement] 
  

 38 

 EXHIBIT A 
 FORM OF TRUST CERTIFICATE 
 THE EQUITY INTEREST IN THE TRUST REPRESENTED BY THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THIS EQUITY INTEREST MAY BE DIRECTLY OR INDIRECTLY OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF
ONLY TO (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND OF SUCH STATE LAWS OR (II) A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF RULE 3A-7 OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT NOT LIMITED TO,
NOVASTAR MORTGAGE INC.) IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS EQUITY INTEREST
UNDER THE ACT OR ANY STATE SECURITIES LAWS. 
 NO TRANSFER OF THIS CERTIFICATE OR ANY BENEFICIAL INTEREST HEREIN SHALL BE MADE TO ANY PERSON UNLESS THE OWNER
TRUSTEE HAS RECEIVED A REPRESENTATION LETTER FROM THE TRANSFEREE TO THE EFFECT THAT SUCH TRANSFEREE IS NOT (I) AN EMPLOYEE BENEFIT PLAN (WITHIN THE MEANING OF SECTION 3(3) OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED
(“ERISA”)) THAT IS SUBJECT TO TITLE OF ERISA, (II) A PLAN (WITHIN THE MEANING OF SECTION 4975(E)(1) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”)) THAT IS SUBJECT TO SECTION 4975 OF THE CODE OR (III) A
GOVERNMENTAL PLAN (WITHIN THE MEANING OF SECTION 3(32) OF ERISA) THAT IS SUBJECT TO ANY FEDERAL, STATE OR LOCAL LAW THAT IS, TO A MATERIAL EXTENT, SIMILAR TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE (EACH OF THE FOREGOING, A “PLAN”)
AND IS NOT DIRECTLY OR INDIRECTLY PURCHASING THIS CERTIFICATE OR A BENEFICIAL INTEREST HEREIN ON BEHALF OR, AS INVESTMENT MANAGER OF, AS TRUSTEE OF, OR WITH THE ASSETS OF A PLAN. 
 THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT
SUCH TRANSFEREE (A) AGREES TO BE BOUND BY AND TO ABIDE BY THE TRANSFER RESTRICTIONS APPLICABLE TO THIS CERTIFICATE; (B) IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE CLEARANCE AND SETTLEMENT OF SUCH SECURITY
THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS; AND (C) UNDERSTANDS THAT IT MUST TAKE INTO ACCOUNT ITS PERCENTAGE INTEREST OF THE TAXABLE INCOME RELATING TO THIS CERTIFICATE. 

			
	 Certificate No. 1
	 	Percentage Interest: 100%

 THIS CERTIFIES THAT [NovaStar Mortgage Funding Corporation][NovaStar Certificates Financing
Corporation] (the “Certificateholder”) is the registered owner of a 100% Percentage Interest in NovaStar Mortgage Funding Trust 200[_]-[_] (the “Issuing Entity”) existing under the laws of the State of Delaware and
created pursuant to that certain Trust Agreement, dated as of [DATE], as amended and restated on [DATE] (as amended and restated, the “Trust Agreement”), by and among NovaStar Mortgage Inc., as sponsor, [NovaStar Mortgage Funding
Corporation][NovaStar Certificates Financing Corporation], as depositor, and
[                                    ], not its individual
capacity but solely as owner trustee under the Trust Agreement (the “Owner Trustee”). Capitalized terms used but not otherwise defined herein have the meanings assigned to such terms in the Trust Agreement. The Owner Trustee, on
behalf of the Issuing Entity and not in its individual capacity, has executed this Certificate by one of its duly authorized signatories as set forth below. This Certificate is one of the Certificates referred to in the Trust Agreement and is issued
under and is subject to the terms, provisions and conditions of the Trust Agreement to which the Certificateholder by virtue of the acceptance hereof agrees and by which the Certificateholder hereof is bound. Reference is hereby made to the Trust
Agreement for the rights of the Certificateholder, as well as for the terms and conditions of the Issuing Entity created by the Trust Agreement. 
 The recitals contained herein (other than the signature and countersignature of the Owner Trustee) shall be taken as the statements of the Sponsor, and the Owner Trustee assumes no responsibility for the correctness thereof. 
 The Certificateholder, by its acceptance hereof, agrees not to transfer this Certificate except in accordance with terms and provisions of the Trust
Agreement. 
 The Certificateholder, by its acceptance hereof, acknowledges that such Certificateholder’s Certificate represents a
beneficial interest in the Issuing Entity only and does not represent an interest in or an obligation of the Servicer, the Depositor, the Sponsor, the Owner Trustee or any Affiliate thereof and no recourse may be had against such parties or their
assets, except as may be expressly set forth or contemplated herein, in the Trust Agreement or the other Basic Documents. 
 THIS CERTIFICATE
SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

  

 A-2 

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

			
	 NOVASTAR MORTGAGE FUNDING
 TRUST
200[_]-[_]

	
	 [                                      
          ], not in its
 individual capacity but solely as Owner Trustee
 under the Trust Agreement

		
	By:	 	  

		 	Authorized Signatory

 Dated: [DATE] 
 CERTIFICATE OF AUTHENTICATION 
 This is one of the Certificates referred to in
the within-mentioned Trust Agreement. 
  

			
	 [                                      
                      ], not in its
 individual capacity but solely as Owner Trustee
 under the Trust Agreement

		
	By:	 	  

		 	Authorized Signatory

 Dated: [DATE] 
  

 A-3 

 ASSIGNMENT 
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto 
 PLEASE INSERT SOCIAL SECURITY 
 OR OTHER IDENTIFYING NUMBER 
 OF ASSIGNEE 
 
                                        
                                        
                                        
                                        
                                        
                 
 (Please print or type name and address, including
postal zip code, of assignee) 
  
 
                                        
                                        
                                        
                                        
                                        
                 
 the within instrument, and all rights thereunder,
hereby irrevocably constituting and appointing
                                    , Attorney, to transfer
said Instrument on the books of the Certificate Registrar, with full power of substitution in the premises. 
 Dated: 
  

					
	By:	 	                                      
                                     
 */
		 	 Signature Guaranteed:
	 	
		
	By:	 	                                      
                                     
 */

	*/	NOTICE: The signature to this assignment must correspond with the name as it appears upon the face of the within Instrument in every particular, without alteration, enlargement or
any change whatever. Such signature must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. 

  

 A-4 

 EXHIBIT B 
 FORM OF CERTIFICATE OF TRUST 
 CERTIFICATE OF TRUST OF 
 NOVASTAR MORTGAGE FUNDING TRUST 200[  ]-[  ] 
 THIS
CERTIFICATE OF TRUST OF NOVASTAR MORTGAGE FUNDING TRUST 200[  ]-[  ] (the “Issuing Entity”), is being duly executed and filed by the undersigned, as trustee, to form a statutory trust under the
Delaware Statutory Trust Act (12 Del. Code, § 3801 et seq.)(the “Act”). 
 1. Name. The name of the
statutory trust formed hereby is NovaStar Mortgage Funding Trust 200[  ]-[  ]. 
 2.
Delaware Trustee. The name and business address of the trustee of the Issuing Entity in the State of Delaware are
[                                        
        ], Attention:
[                                        
    ]. 
 3. Series. Pursuant to Section 3806(b)(2) of the Act, the Issuing Entity shall
issue one or more series of beneficial interests having the rights and preferences set forth in the Governing instrument of the Issuing Entity, as the same may be amended from time to time (each, a “Series” or
“Sub-Trust”). 
 4. Notice of Limitation of Liabilities of each Series. Pursuant to
Section 3804(a) of the Act, there shall be a limitation on liabilities of each Series such that (a) the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Series shall
be enforceable against the assets of such Series only, and not against the assets of the Issuing Entity generally or the assets of any other Series thereof and (b) none of the debts, liabilities, obligations and expenses incurred, contracted
for or otherwise existing with respect to the Issuing Entity generally or any other Series thereof shall be enforceable against the assets of such Series. 
 5. Effective Date. This Certificate of Trust shall be effective upon filing. 
  

 B-1 

 IN WITNESS WHEREOF, the undersigned, has duly executed this Certificate of Trust in accordance with
Section 3811(a)(1) of the Act. 
  

			
	 [                                      
                          ], not in its
 individual capacity but solely as trustee

		
	By:	 	  

	Name:	 	
	Title:	 	

  

 B-2 

 EXHIBIT C 
 FORM OF INVESTMENT LETTER 
                             ,         

 NovaStar Mortgage Inc. 
 8140 Ward Parkway, Suite 300 
 Kansas City, Missouri 64114 
 [Owner Trustee] 
  

	 	Re:	NovaStar Mortgage Funding Trust 200[  ]-[  ] (the “Issuing Entity”)  

	 	  	Asset-Backed Notes, Series 200[  ]-[  ] 

 Ladies and Gentlemen: 
                                       
                                       (the
“Certificateholder”) has purchased or acquired, or intends to purchase or acquire from
                                        
            , the current Certificateholder (the “Current Certificateholder”), a Trust Certificate representing a 100% Percentage Interest (the
“Certificate”) in the Issuing Entity, which represents an interest in the Issuing Entity created pursuant to that certain Trust Agreement, dated as of [DATE], as amended and restated on [DATE] (the “Trust
Agreement”), by and among NovaStar Mortgage Inc., as Sponsor, [NovaStar Mortgage Funding Corporation][NovaStar Certificates Financing Corporation], as Depositor and
[                                        
            ], as Owner Trustee. Capitalized terms used and not otherwise defined herein have the meanings assigned to such terms in the Trust Agreement. 
 CERTIFICATION 
 The undersigned, as an
authorized officer or agent of the Certificateholder, hereby certifies, represents, warrants and agrees on behalf of the Certificateholder as follows: 
 1. The Certificateholder is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed and is authorized to invest in the Certificate. The person executing this
letter on behalf of the Certificateholder is duly authorized to do so on behalf of the Certificateholder. 
 2. The Certificateholder hereby
acknowledges that no transfer of the Certificate may be made unless such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”); and applicable state securities laws,
or is made in accordance with the Securities Act and such laws. 
 3. The Certificateholder understands that the Certificate has not been and
will not be registered under the Securities Act and may be offered, sold, pledged or otherwise transferred to a person whom the transferor reasonably believes is (A) a qualified institutional buyer (as defined in Rule 144A under the Securities
Act) or (B) a Person involved in the organization or operation of the Issuing Entity or an affiliate of such Person, in a transaction 
  

 C-1 

 pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or
exempt from the registration requirements of the Securities Act and any such state securities laws. The Certifcateholder understands that the Certificate bears a legend to the foregoing effect. 
 4. The Certificateholder is acquiring the Certificate for its own account or for accounts for which it exercises sole investment discretion, and not with
a view to or for sale or other transfer in connection with any distribution of the Certificate in any manner that would violate Section 5 of the Securities Act or any applicable state securities laws, subject nevertheless to any requirement of
law that the disposition of the Certificateholder’s property shall at all times be and remain within its control. 
 5. The
Certificateholder is (A) a “qualified institutional buyer” (a “QIB”) as defined in Rule 144A under the Securities Act, and is aware that the transferor of the Certificate may be relying on an exemption from the
registration requirements of the Securities Act and is acquiring such Certificate for its own account or for the account of one or more qualified institutional buyers for whom it is authorized to act, or (B) a Person involved in the
organization or operation of the Issuing Entity or an affiliate of such Person within the meaning of Rule 3a-7 of the Investment Company Act of 1940, as amended (including, but not limited to, the Sponsor). The Certificateholder is able to bear the
economic risks of such an investment. The Certificateholder is a QIB because [STATE FACTUAL BASIS FOR QIB STATUS]. 
 6. If the
Certificateholder sells or otherwise transfers the registered ownership of such Certificate, the Certificateholder will comply with the restrictions and requirements with respect to the transfer of the ownership of the Certificate under the Trust
Agreement, and the Certificateholder will obtain from any subsequent purchaser or transferee substantially the same certifications, representations, warranties and covenants as required under the Trust Agreement in connection with such subsequent
sale or transfer thereof. 
 7. The Certificateholder is not an entity that will hold a Certificate as nominee (a “Book Entry
Nominee”) to facilitate the clearance and settlement of such security through electronic book-entry changes in Accounts or participating organizations. 
 8. The Certificateholder consents to any amendments of the Trust Agreement as may be required to effectuate further the restrictions on transfer of the Certificates to Book Entry Nominees. 
 9. The Certificateholder is not a Plan and is not, directly or indirectly, purchasing such Certificate on behalf of, as investment manager of, as named
fiduciary of, as trustee of, or with assets of a Plan. 
 10. The Certificateholder hereby agrees to indemnify each of the Issuing Entity,
the Indenture Trustee, the Note Insurer, and the Owner Trustee against any liability that may result if the Certificateholder’s transfer of a Certificate (or any portion thereof) is not exempt from the registration requirements of the
Securities Act and any applicable state securities laws or is not made in accordance with such federal and state laws. Such indemnification of the Issuing Entity, the Indenture Trustee, and the Owner Trustee shall survive the termination of the
related Trust Agreement. 
  

 C-2 

 11. [The Certificateholder qualifies for taxation as a REIT or is a qualified REIT subsidiary.]

 IN WITNESS WHEREOF, the Certificateholder has caused this instrument to be executed on its behalf pursuant to the authority of its Board
of Directors, by its duly authorized signatory this              day of
                        ,         . 
  

			
	[NAME OF CERTIFICATEHOLDER]
		
	By:	 	  

	Name:	 	
	Title:	 	

  

 C-3 

 EXHIBIT D 
 FORM OF TRANSFEROR CERTIFICATE 
                                 ,
             
 NovaStar Mortgage Inc. 
 8140 Ward Parkway, Suite 300 
 Kansas City, Missouri 64114 
 [Owner Trustee] 
  

	 	Re:	NovaStar Mortgage Funding Trust 200[  ]-[  ] (the “Issuing Entity”)  

	 	  	Asset-Backed Notes, Series 200[  ]-[  ] 

 Ladies and Gentlemen: 
 In
connection with our disposition of the above-referenced Asset-Backed Certificates (the “Certificates”) we certify that (i) we understand that the Certificates have not been registered under the Securities Act of 1933, as
amended (the “Act”), and are being transferred by us in a transaction that is exempt from the registration requirements of the Act and (ii) we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action which would result in, a violation of Section 5 of the Act. 
 Dated: 
  

			
	[NAME OF TRANSFEROR]
		
	By:	 	  

		 	 Authorized Officer

  

 D-1Form of Pooling and Servicing Agreement (Insured)

 Exhibit 4.9 
 Form NovaStar Pooling and Servicing Agreement 
  

 [NOVASTAR CERTIFICATES FINANCING CORPORATION] 
 [NOVASTAR MORTGAGE FUNDING CORPORATION,] 
 as Depositor 
 NOVASTAR MORTGAGE, INC., 
 as Servicer and as Seller 
 [                                      
                                  ] 
 as Custodian 
 and 
 [                                      
                                  ] 
 as Trustee 
 POOLING AND SERVICING AGREEMENT

 Dated as of
                        ,      200[  ] 
  

 NovaStar Mortgage Funding Trust,
Series 200[  ]-[  ] 
 NovaStar Home Equity Loan Asset-Backed Certificates, Series 200[  ]-[  ]

  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	 ARTICLE I
	  	 DEFINITIONS
	  	1
			
	 Section 1.01
	  	 Defined Terms.
	  	1
	 Section 1.02
	  	 Accounting.
	  	1
	 Section 1.03
	  	 Allocation of Certain Interest Shortfalls.
	  	1
	 Section 1.04
	  	 Calculation of Interest on Certificates.
	  	2
			
	 ARTICLE II
	  	 CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
	  	2
			
	 Section 2.01
	  	 Conveyance of Mortgage Loans and Other Trust Assets.
	  	2
	 Section 2.02
	  	 Acceptance of Mortgage Loans by Custodian, on behalf of the Trustee.
	  	5
	 Section 2.03
	  	 Repurchase or Substitution of Mortgage Loans by the Seller.
	  	7
	 Section 2.04
	  	 Acknowledgement of Trustee.
	  	9
	 Section 2.05
	  	 Representations, Warranties and Covenants of the Servicer.
	  	9
	 Section 2.06
	  	 Representations and Warranties of the Depositor.
	  	10
	 Section 2.07
	  	 Issuance of Certificates.
	  	11
	 Section 2.08
	  	 Conveyance of the Subsequent Mortgage Loans.
	  	11
	 Section 2.09
	  	 Designation Under REMIC Provisions.
	  	11
			
	 ARTICLE III
	  	 ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
	  	12
			
	 Section 3.01
	  	 Servicer to Assure Servicing.
	  	12
	 Section 3.02
	  	 Subservicing Agreements Between Servicer and Subservicers.
	  	13
	 Section 3.03
	  	 Successor Subservicers.
	  	14
	 Section 3.04
	  	 Liability of the Servicer.
	  	14
	 Section 3.05
	  	 Assumption or Termination of Subservicing Agreements by the Trustee.
	  	15
	 Section 3.06
	  	 Collection of Mortgage Loan Payments.
	  	15
	 Section 3.07
	  	 Withdrawals from the Collection Account.
	  	18
	 Section 3.08
	  	 Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
	  	19
	 Section 3.09
	  	 Access to Certain Documentation and Information Regarding the Mortgage Loans.
	  	20
	 Section 3.10
	  	 [Reserved].
	  	20
	 Section 3.11
	  	 Maintenance of Hazard Insurance and Fidelity Coverage.
	  	20
	 Section 3.12
	  	 Due-on-Sale Clauses; Assumption Agreements.
	  	22
	 Section 3.13
	  	 Realization Upon Defaulted Mortgage Loans.
	  	23
	 Section 3.14
	  	 Custodian to Cooperate; Release of Mortgage Files.
	  	24
	 Section 3.15
	  	 Servicing Compensation.
	  	25
	 Section 3.16
	  	 Annual Statements of Compliance.
	  	25
	 Section 3.17
	  	 Annual Independent Public Accountants’ Servicing Report.
	  	28
	 Section 3.18
	  	 Optional Purchase of Defaulted Mortgage Loans.
	  	28

  

 i 

					
	 Section 3.19
	  	 Information Required by the Internal Revenue Service Generally and Reports of Foreclosures and Abandonments of Mortgaged
Property.
	  	29
	 Section 3.20
	  	 Purchase of Converted Mortgage Loans.
	  	29
	 Section 3.21
	  	 [Reserved].
	  	29
	 Section 3.22
	  	 Servicing and Administration of the MI Policies.
	  	29
	 Section 3.23
	  	 Determination Date Reports.
	  	30
	 Section 3.24
	  	 Advances.
	  	31
	 Section 3.25
	  	 Compensating Interest Payments.
	  	31
	 Section 3.26
	  	 Advance Facility.
	  	32
			
	 ARTICLE IV
	  	 FLOW OF FUNDS
	  	34
			
	 Section 4.01
	  	 Distributions.
	  	34
	 Section 4.02
	  	 Distribution Account.
	  	41
	 Section 4.03
	  	 Statements.
	  	42
	 Section 4.04
	  	 Supplemental Interest Trusts; Excess Cashflow.
	  	46
	 Section 4.05
	  	 Pre-Funding Account.
	  	49
	 Section 4.06
	  	 [Reserved]
	  	51
	 Section 4.07
	  	 The Class A-1 Certificate Insurance Policy.
	  	51
	 Section 4.08
	  	 Effect of Payments by the Class A-1 Insurer; Subrogation.
	  	52
	 Section 4.09
	  	 Allocation of Realized Losses.
	  	53
			
	 ARTICLE V
	  	 THE CERTIFICATES
	  	54
			
	 Section 5.01
	  	 The Certificates.
	  	54
	 Section 5.02
	  	 Registration of Transfer and Exchange of Certificates.
	  	54
	 Section 5.03
	  	 Mutilated, Destroyed, Lost or Stolen Certificates.
	  	58
	 Section 5.04
	  	 Persons Deemed Owners.
	  	59
	 Section 5.05
	  	 Appointment of Paying Agent.
	  	59
	 Section 5.06
	  	 Rights of the Class A-1 Insurer to Exercise Rights of Class A-1 Certificateholders.
	  	59
	 Section 5.07
	  	 Trustee To Act Solely with Consent of the Class A-1 Insurer.
	  	60
	 Section 5.08
	  	 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Class A-1 Insurer and Holders of the Certificates.
	  	60
			
	 ARTICLE VI
	  	 THE SERVICER AND THE COMPANY
	  	61
			
	 Section 6.01
	  	 Liability of the Servicer and the Depositor.
	  	61
	 Section 6.02
	  	 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Depositor.
	  	61
	 Section 6.03
	  	 Limitation on Liability of the Servicer and Others.
	  	61
	 Section 6.04
	  	 Servicer Not to Resign.
	  	62
	 Section 6.05
	  	 Delegation of Duties.
	  	62
	 Section 6.06
	  	 Servicer to Pay Trustee’s Fees and Expenses; Indemnification.
	  	63
			
	 ARTICLE VII
	  	 DEFAULT
	  	64
			
	 Section 7.01
	  	 Servicing Default.
	  	64
	 Section 7.02
	  	 Trustee to Act; Appointment of Successor.
	  	66

  

 ii 

					
	 Section 7.03
	  	 Waiver of Defaults.
	  	67
	 Section 7.04
	  	 Notification to Certificateholders and the Class A-1 Insurer.
	  	67
	 Section 7.05
	  	 Survivability of Servicer Liabilities.
	  	68
			
	 ARTICLE VIII
	  	 THE TRUSTEE
	  	68
			
	 Section 8.01
	  	 Duties of the Trustee.
	  	68
	 Section 8.02
	  	 Rights of Trustee.
	  	69
	 Section 8.03
	  	 Individual Rights of Trustee.
	  	71
	 Section 8.04
	  	 Trustee’s Disclaimer.
	  	71
	 Section 8.05
	  	 Notice of Servicing Default.
	  	71
	 Section 8.06
	  	 [Reserved].
	  	71
	 Section 8.07
	  	 Compensation and Indemnity.
	  	71
	 Section 8.08
	  	 Replacement of Trustee.
	  	71
	 Section 8.09
	  	 Successor Trustee by Merger.
	  	72
	 Section 8.10
	  	 Appointment of Co-Trustee or Separate Trustee.
	  	73
	 Section 8.11
	  	 Eligibility; Disqualification.
	  	74
	 Section 8.12
	  	 [Reserved].
	  	74
	 Section 8.13
	  	 Representations and Warranties.
	  	74
	 Section 8.14
	  	 Directions to Trustee.
	  	74
	 Section 8.15
	  	 The Agents.
	  	75
	 Section 8.16
	  	 Reports by the Trustee; Trust Fiscal Year.
	  	75
	 Section 8.17
	  	 Execution of the Novation Agreements, Swap Agreements and the Cap Agreements.
	  	76
	 Section 8.18
	  	 Reports Filed with Securities and Exchange Commission.
	  	76
			
	 ARTICLE IX
	  	 [Reserved]
	  	82
			
	 ARTICLE X
	  	 REMIC ADMINISTRATION
	  	82
	 Section 10.01
	  	 REMIC Administration.
	  	82
	 Section 10.02
	  	 Prohibited Transactions and Activities.
	  	84
			
	 ARTICLE XI
	  	 TERMINATION
	  	84
			
	 Section 11.01
	  	 Termination.
	  	84
	 Section 11.02
	  	 Additional Termination Requirements.
	  	86
			
	 ARTICLE XII
	  	 MISCELLANEOUS PROVISIONS
	  	87
			
	 Section 12.01
	  	 Amendment.
	  	87
	 Section 12.02
	  	 Recordation of Agreement; Counterparts.
	  	88
	 Section 12.03
	  	 Limitation on Rights of Certificateholders.
	  	88
	 Section 12.04
	  	 Governing Law; Jurisdiction.
	  	89
	 Section 12.05
	  	 Notices.
	  	89
	 Section 12.06
	  	 Severability of Provisions.
	  	91
	 Section 12.07
	  	 Article and Section References.
	  	91
	 Section 12.08
	  	 Further Assurances.
	  	91
	 Section 12.09
	  	 Benefits of Agreement.
	  	91

  

 iii 

					
	 Section 12.10
	  	 Acts of Certificateholders.
	  	92
	 Section 12.11
	  	 The Class A-1 Insurer Default.
	  	92
	 Section 12.12
	  	 Confidentiality.
	  	92

  

					
		
	 APPENDIX A
	  	
		
	 APPENDIX B
	  	
		
	 EXHIBITS:
	  	
			
	 Exhibit A-1
	  	 Form of Class A–1 Certificates
	  	
			
	 Exhibit A-2
	  	 Form of Class A-2 Certificates
	  	
			
	 Exhibit A-3
	  	 Form of Class A-3 Certificates
	  	
			
	 Exhibit A-4
	  	 Form of Class A-4 Certificates
	  	
			
	 Exhibit A-5
	  	 Form of Class A-5 Certificates
	  	
			
	 Exhibit A-6
	  	 Form of Class M-1 Certificates
	  	
			
	 Exhibit A-7
	  	 Form of Class M-2 Certificates
	  	
			
	 Exhibit A-8
	  	 Form of Class M-3 Certificates
	  	
			
	 Exhibit A-9
	  	 Form of Class M-4 Certificates
	  	
			
	 Exhibit A-10
	  	 Form of Class M-5 Certificates
	  	
			
	 Exhibit A-11
	  	 Form of Class B-1 Certificates
	  	
			
	 Exhibit A-12
	  	 Form of Class B-2 Certificates
	  	
			
	 Exhibit A-13
	  	 Form of Class B-3 Certificates
	  	
			
	 Exhibit A-14
	  	 Form of Class I Certificates
	  	
			
	 Exhibit A-15
	  	 Form of Class X Certificates
	  	
			
	 Exhibit A-16
	  	 Form of Class P Certificates
	  	
			
	 Exhibit A-17
	  	 Form of Class O Certificates
	  	
			
	 Exhibit A-18
	  	 Form of Class R Certificates
	  	
			
	 Exhibit B
	  	 Mortgage Loan Schedule
	  	
			
	 Exhibit C
	  	 Form of Addition Notice
	  	
			
	 Exhibit D
	  	 Form of Subsequent Transfer Instrument
	  	
			
	 Exhibit E
	  	 Request for Release
	  	
			
	 Exhibit F-1
	  	 Form of Trustee’s Initial Certification
	  	
			
	 Exhibit F-2
	  	 Form of Trustee’s Final Certification
	  	
			
	 Exhibit G
	  	 Form of Investment Letter
	  	
			
	 Exhibit H
	  	 Form of Residual Certificate Transfer Affidavit
	  	
			
	 Exhibit I
	  	 Form of Transferor’s Certificate
	  	
			
	 Exhibit J
	  	 Form of Notional Amount Test Event Notice
	  	
			
	 Exhibit K
	  	 Form of Designation Under REMIC Provisions
	  	

  

 iv 

 This Pooling and Servicing Agreement is dated as of
                        ,     20[    ] (the “Agreement”), among
[NOVASTAR CERTIFICATES FINANCING CORPORATION] [NOVASTAR MORTGAGE FUNDING CORPORATION,] as depositor (the “Depositor”), NOVASTAR MORTGAGE, INC., as servicer (the “Servicer”) and as seller (the
“Seller”), [                    ], as custodian (the “Custodian”),
[                    ], as trustee (the “Trustee”) and
[                    ] as co-trustee (the “Co-Trustee”). 
 ARTICLE I 
 DEFINITIONS 
 Section 1.01 Defined Terms. 
 Whenever
used in this Agreement, except as otherwise expressly provided herein or unless the context otherwise requires, capitalized terms and phrases used herein shall have the meanings assigned to such terms and phrases in the definitions attached hereto
as Appendix A, which is incorporated herein by reference. Unless the context otherwise requires: 
 (a) a term has the meaning assigned to it;

 (b) an accounting term not otherwise defined has the meaning assigned to it in accordance with generally accepted accounting principles as
in effect from time to time; 
 (c) “or” is not exclusive; 
 (d) “including” means including without limitation; 
 (e) words in the singular include the plural and words in the plural include the singular; 
 (f) any
agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in
the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; and 
 (g) references to a
Person are also to such Person’s permitted successors and assigns. 
 Section 1.02 Accounting. 
 Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or
any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions. 
 Section 1.03 Allocation of Certain Interest Shortfalls. 
 For purposes of calculating the amount of the Monthly Interest Distributable Amount for the Class A Certificates, the Mezzanine Certificates and the Class B Certificates, for any 

 
Distribution Date, (1) the aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act Shortfalls incurred in respect of the Mortgage
Loans for any Distribution Date shall be allocated first to the Excess Cashflow, and second, on a pro rata basis based on, and to the extent of, the gross Monthly Interest Distributable Amount for each such Class, among the Class A
Certificates, the Mezzanine Certificates and the Class B Certificates and (2) the aggregate amount of any Available Funds Cap Carryforward Amounts incurred for any Distribution Date shall be allocated to the Class X Certificates to the extent
of the gross Monthly Interest Distributable Amount for that Class, after deduction of any Net Prepayment Interest Shortfalls and any Relief Act Shortfalls. 
 All Net Prepayment Interest Shortfalls and Relief Act Shortfalls shall be allocated on each Distribution Date among the classes of each of REMIC I, REMIC II, REMIC III and REMIC IV in the proportion that Net
Prepayment Interest Shortfalls and Relief Act Shortfalls are allocated to the related Master REMIC Regular Interests. 
 Section 1.04
Calculation of Interest on Certificates. 
 Unless otherwise specified, all calculations in respect of interest on the Class A
Certificates, the Class B Certificates and the Mezzanine Certificates shall be made on the basis of the actual number of days elapsed in the related Accrual Period on the basis of a 360-day year and all other calculations of interest described
herein shall be made on the basis of a 360-day year consisting of twelve 30-day months. The Class O Certificates and the Class P Certificates are not entitled to distributions in respect of interest and, accordingly, will not accrue interest.

 ARTICLE II 
 CONVEYANCE OF
MORTGAGE LOANS; 
 ORIGINAL ISSUANCE OF CERTIFICATES 
 Section 2.01 Conveyance of Mortgage Loans and Other Trust Assets. 
 The Depositor, concurrently
with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey in trust to the Trustee without recourse for the benefit of the Certificateholders all the right, title and interest of the Depositor, including any
security interest therein for the benefit of the Depositor, in and to (i) each Initial Mortgage Loan identified on the Mortgage Loan Schedule, including the related Cut-off Date Principal Balance, all interest accruing thereon on and after the
Cut-off Date and all collections in respect of interest and principal due after the Cut-off Date; (ii) property which secured each such Mortgage Loan and which has been acquired by foreclosure or deed in lieu of foreclosure; (iii) its
interest in any insurance policies in respect of the Mortgage Loans; (iv) its interest in the MI Policies; (v) the rights of the Depositor under the Purchase Agreement; (vi) its interest in the Swap Agreements and the Cap Agreements;
(vii) all other assets included or to be included in the Trust Fund; and (viii) all proceeds of any of the foregoing. Such assignment includes all interest and principal due to the Depositor or the Servicer after the related Cut-off Date
with respect to the Mortgage Loans. 
 In connection with such transfer and assignment, the Seller, on behalf of the Depositor, does hereby
deliver to, and deposit with the Custodian, as the Trustee’s designated agent, the following 

  

 2 

 
documents or instruments with respect to each Initial Mortgage Loan so transferred and assigned and the Seller, on behalf of the Depositor, shall, in
accordance with Section 2.08, deliver or cause to be delivered to the Custodian, as the Trustee’s designated agent, with respect to each Subsequent Mortgage Loan, the following documents or instruments (with respect to each Mortgage Loan,
a “Mortgage File”): 
 (i) the original Mortgage Note endorsed to “[    
                        ], as Trustee for the NovaStar Home Equity Loan Asset-Backed Certificates, Series
20[    ]-[    ]”; 
 (ii) the original Mortgage with evidence of recording
thereon, or, if the original Mortgage has not yet been returned from the public recording office, a copy of the original Mortgage certified by the Seller or the public recording office in which such original Mortgage has been recorded, and if the
Mortgage Loan is registered on the MERS System, such Mortgage shall include thereon a statement that it is a MOM Loan and shall include the MIN for such Mortgage Loan; 
 (iii) unless the Mortgage Loan is registered on the MERS System, an original assignment (which may be included in one or more blanket
assignments if permitted by applicable law) of the Mortgage endorsed to “[                         ], as
Trustee for the NovaStar Home Equity Loan Asset-Backed Certificates, Series 20[    ]-[    ]”, and otherwise in recordable form; 
 (iv) originals of any intervening assignments of the Mortgage showing an unbroken chain of title from the originator thereof to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS System), and noting the presence of a MIN (if the Mortgage Loan is registered on the MERS System), with evidence of recording thereon, or, if the original of any
such intervening assignment has not yet been returned from the public recording office, a copy of such original intervening assignment certified by the Seller or the public recording office in which such original intervening assignment has been
recorded; 
 (v) the original policy of title insurance (or a commitment for title insurance, if the policy is being held by
the title insurance company pending recordation of the Mortgage); and 
 (vi) a true and correct copy of each assumption,
modification, consolidation or substitution agreement, if any, relating to the Mortgage Loan. 
 If a material defect in any Mortgage File is
discovered which may materially and adversely affect the value of the related Mortgage Loan, or the interests of the Trustee or the Certificateholders in such Mortgage Loan, including if any document required to be delivered to the Custodian has not
been delivered (provided that a Mortgage File will not be deemed to contain a defect for an unrecorded assignment under clause (iii) above for 180 days following submission of the assignment if the Seller has submitted such assignment for
recording pursuant to the terms of the following paragraph), the Seller shall cure such defect or repurchase the related Mortgage Loan at the Repurchase Price or substitute an Eligible Substitute Mortgage Loan for the related Mortgage Loan upon the
same terms and conditions set forth in Section 3.01 of the Purchase Agreement as to 

  

 3 

 
the Initial Mortgage Loans and the Subsequent Mortgage Loans and Section 2.02(c) of the Purchase Agreement as to the Subsequent Mortgage Loans for
breaches of representations and warranties. 
 Promptly after the Closing Date in the case of a Initial Mortgage Loan or, in the case of a
Subsequent Mortgage Loan, promptly after the Subsequent Transfer Date (or after the date of transfer of any Eligible Substitute Mortgage Loan), the Seller at its own expense shall complete and submit for recording in the appropriate public office
for real property records each of the assignments referred to in clause (iii) above, with such assignment completed in favor of the Trustee, excluding any Mortgage Loan that is registered on the MERS System, if MERS is identified on the
Mortgage, or on a properly recorded assignment of Mortgage as the mortgagee of record. While such assignment to be recorded is being recorded, the Custodian shall retain a photocopy of such assignment. If any assignment is lost or returned
unrecorded to the Custodian because of any defect therein, the Seller is required to prepare a substitute assignment or cure such defect, as the case may be, and the Seller shall cause such substitute assignment to be recorded in accordance with
this paragraph. 
 In instances where an original Mortgage or any original intervening assignment of Mortgage is not, in accordance with
clause (ii) or (iv) above, delivered by the Seller to the Custodian, on behalf of the Trustee, prior to or on the Closing Date in the case of a Initial Mortgage Loan or, in the case of a Subsequent Mortgage Loan, promptly after the
Subsequent Transfer Date, the Seller will deliver or cause to be delivered the originals of such documents to the Custodian, on behalf of the Trustee, promptly upon receipt thereof. 
 In connection with the assignment of any Mortgage Loan registered on the MERS System, promptly after the Closing Date in the case of a Initial Mortgage
Loan or, in the case of a Subsequent Mortgage Loan, promptly after the Subsequent Transfer Date (or after the date of transfer of any Eligible Substitute Mortgage Loan), the Seller further agrees that it will cause, at the Seller’s own expense,
the MERS System to indicate that such Mortgage Loan has been assigned by the Seller to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are
repurchased in accordance with this Agreement) in its computer files (a) the applicable Trustee code in the field “Trustee” which identifies the Trustee and (b) the code “NovaStar 20[ ]-[ ]” (or its equivalent) in the
field “Pool” which identifies the series of the Certificates issued in connection with such Mortgage Loans. The Custodian will certify in its final certification whether the MERS System shows the Trustee on behalf of the Certificateholders
as the beneficial owner of the Mortgage Loans registered on the MERS System. If the Custodian, on behalf of the Trustee, finds that the MERS System does not show the Trustee, on behalf of the Certificateholders, as the beneficial owner of the
Mortgage Loans registered on the MERS System, the Custodian, on behalf of the Trustee, shall promptly notify the Seller, the Class A-1 Insurer and the Trustee of such finding and the Seller’s obligation to cure such defect or repurchase or
substitute for the related Mortgage Loan. The Seller further agrees that it will not, and will not permit the Servicer to, and the Servicer agrees that it will not, alter the codes referenced in this paragraph with respect to any such Mortgage Loan
during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement. 
  

 4 

 Effective on the Closing Date, the Trustee, on behalf of the Certificateholders, hereby acknowledges its
acceptance of all right, title and interest to the Initial Mortgage Loans and other property, existing on the Closing Date and thereafter created and conveyed to it pursuant to this Section 2.01. 
 The Trustee, as assignee or transferee of the Depositor, shall be entitled to all scheduled principal payments due after the Cut-off Date, all other
payments of principal due and collected after the Cut-off Date, and all payments of interest on the Initial Mortgage Loans. No scheduled payments of principal due on or before the Cut-off Date and collected after the Cut-off Date shall belong to the
Depositor pursuant to the terms of the Purchase Agreement. Any late payment charges collected in connection with a Mortgage Loan shall be paid to the Servicer as provided in Section 3.15(b) hereof. 
 The parties hereto intend that the transactions set forth herein constitute a sale by the Depositor to the Trust on the Closing Date of all the
Depositor’s right, title and interest in and to the Initial Mortgage Loans and other property as and to the extent described above. In the event the transactions set forth herein shall be deemed not to be a sale, the Depositor hereby grants to
the Trustee, on behalf of the Certificateholders, as of the Closing Date a security interest in all of the Depositor’s right, title and interest in, to and under the Initial Mortgage Loans and such other property, to secure all of the
Depositor’s obligations hereunder and this Agreement shall constitute a security agreement under applicable law and in such event, the parties hereto acknowledge that the Custodian, in addition to holding the Initial Mortgage Loans on behalf of
the Trustee for the benefit of the Certificateholders, holds the Initial Mortgage Loans as designee of the Depositor. The Seller agrees to take or cause to be taken such actions and to execute such documents, including without limitation the filing
of all necessary UCC-1 financing statements in the State of Virginia (which shall have been submitted for filing as of the Closing Date and each Subsequent Transfer Date, as applicable), any continuation statements with respect thereto and any
amendments thereto required to reflect a change in the name or corporate structure of the Seller or the filing of any additional UCC-1 financing statements due to the change in the state of incorporation of the Seller, as are necessary to perfect
and protect the interests of the Trust and its assignees in each Initial Mortgage Loan and the proceeds thereof and the interests of the Trust and its assignees in each Subsequent Mortgage Loan and the proceeds thereof. 
 Section 2.02 Acceptance of Mortgage Loans by Custodian, on behalf of the Trustee. 
 (a) The Custodian, on behalf of the Trustee, acknowledges receipt of, subject to the review described below and any exceptions it notes pursuant to the
procedures described below, the documents (or certified copies thereof) referred to in Section 2.01 hereof and declares that it holds and will continue to hold those documents and any amendments, replacements or supplements thereto and all
other assets of the Trust Fund in trust for the use and benefit of all present and future Certificateholders and the Class A-1 Insurer. No later than 45 days after the Closing Date and each Subsequent Transfer Date (or, with respect to any
Eligible Substitute Mortgage Loan, within 5 Business Days after the receipt by the Custodian, on behalf of the Trustee, thereof and, with respect to any documents received beyond 45 days after the Closing Date, promptly thereafter), the Custodian,
on behalf of the Trustee, agrees, for the benefit of the Certificateholders, to review each Mortgage File delivered to it and to execute and deliver, or cause to be executed and delivered, to the Seller and the Class A-1 Insurer an initial
certification in the form annexed hereto as Exhibit F- 1. 

  

 5 

 
In conducting such review, the Custodian, on behalf of the Trustee, will ascertain whether all required documents described in Section 2.01 hereof have
been executed and received and whether those documents relate, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans it has received, as identified in Exhibit B to this Agreement, as
supplemented (provided, however, that with respect to those documents described in subclause (vii) of such section, the Custodian’s obligations shall extend only to documents actually delivered pursuant to such subclause). In performing
any such review, the Custodian, on behalf of the Trustee, may conclusively rely on the purported due execution and genuineness of any such document and on the purported genuineness of any signature thereon. If the Custodian, on behalf of the
Trustee, finds that any document constituting part of the Mortgage File not to have been executed or received, or to be unrelated to the Mortgage Loans identified in Exhibit B or Attachment B to Exhibit 2 of the Purchase Agreement or to appear to be
defective on its face, the Custodian, on behalf of the Trustee, shall promptly notify the Seller (with a copy to the Class A-1 Insurer) of such finding and the Seller’s obligation to cure such defect or repurchase or substitute for the
related Mortgage Loan. Notwithstanding the foregoing, on the Closing Date and on each Subsequent Transfer Date, the Custodian, on behalf of the Trustee, shall execute and deliver to the Seller and the Class A-1 Insurer, a preliminary
certification in the form of Exhibit F-3. 
 (b) No later than 180 days after the Closing Date, the Custodian, on behalf of the Trustee, will
review, for the benefit of the Certificateholders, the Mortgage Files and will execute and deliver or cause to be executed and delivered to the Seller and the Class A-1 Insurer, a final certification in the form annexed hereto as Exhibit F-2.
In conducting such review, the Custodian, on behalf of the Trustee, will ascertain whether an original of each document described in subclauses (ii)-(iv) of Section 2.01 hereof required to be recorded has been returned from the recording
office with evidence of recording thereon or a certified copy has been obtained from the recording office. If the Custodian, on behalf of the Trustee, finds any document constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal balance and loan number, to the Mortgage Loans identified in Exhibit B or Attachment B to Exhibit 2 of the Purchase Agreement or to appear defective on its face, the
Custodian, on behalf of the Trustee, shall promptly notify the Seller, the Class A-1 Insurer and the Trustee of such finding and the Seller’s obligation to cure such defect or repurchase or substitute for the related Mortgage Loan.

 (c) Upon deposit of the Repurchase Price in the Collection Account and notification of the Trustee, by a certification signed by a
Servicing Officer (which certification shall include a statement to the effect that the Repurchase Price has been deposited in the Collection Account), the Trustee shall cause the Custodian to release to the Seller the related Mortgage File and
shall cause to be executed and delivered all instruments of transfer or assignment, without recourse, furnished to it by the Seller as are necessary to vest in the Seller title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have occurred on the date on which certification of the deposit of the Repurchase Price in the Distribution Account was received by the Trustee. The Custodian, on behalf of the Trustee, shall amend the applicable Mortgage Loan Schedule to
reflect such repurchase and shall promptly notify the Servicer, the Class A-1 Insurer and the Rating Agencies of such amendment. 
  

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 Section 2.03 Repurchase or Substitution of Mortgage Loans by the Seller. 
 (a) Upon discovery or receipt of written notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the
breach by the Seller of any representation, warranty or covenant under the Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders, the
Custodian shall promptly notify the Seller, the Class A-1 Insurer and the Servicer of such defect, missing document or breach and request that the Seller deliver such missing document or cure such defect or breach no later than 90 days from the
date of the discovery or receipt of written notice of such missing document, defect or breach, and if the Seller does not deliver such missing document or cure such defect or breach in all material respects during such period, the Custodian shall
notify the Trustee and the Trustee shall enforce the Seller’s obligation under the Purchase Agreement and cause the Seller to repurchase such Mortgage Loan from the Trust Fund at the Repurchase Price on or prior to the Determination Date
following the expiration of such 90 day period. 
 (b) The Repurchase Price for the repurchased Mortgage Loan shall be deposited in the
Collection Account, and the Trustee, upon receipt of written certification from the Servicer of such deposit, shall cause the Custodian to release to the Seller the related Mortgage File and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Seller shall furnish to it and as shall be necessary to vest in the Seller any Mortgage Loan released pursuant hereto and the Trustee and the Custodian shall have no further
responsibility with regard to such Mortgage File (it being understood that the Custodian shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). In lieu of repurchasing any such Mortgage Loan as
provided above, the Seller may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Eligible Substitute Mortgage Loans in the manner and subject to the
limitations set forth in Section 2.03(d). It is understood and agreed that the obligation of the Seller to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent
document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against the Seller respecting such omission, defect or breach available to the Class A-1 Insurer and the Trustee on behalf of the
Certificateholders. 
 (c) Within 90 days of the earlier of discovery by the Servicer or receipt of notice by the Servicer of the breach of
any representation, warranty or covenant of the Servicer set forth in Section 2.05 which materially and adversely affects the interests of the Certificateholders in any Mortgage Loan or the Class A-1 Insurer, the Servicer shall cure such
breach in all material respects. 
 (d) Any substitution of Eligible Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to
Section 2.03(a) must be effected prior to the last Business Day that is within two years after the Closing Date. As to any Deleted Mortgage Loan for which the Seller substitutes an Eligible Substitute Mortgage Loan or Loans, such substitution
shall be effected by the Seller delivering to the Custodian, for such Eligible Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary
endorsements thereon, as are required by Section 2.01, together with an Officers’ Certificate providing that each such Eligible Substitute Mortgage Loan satisfies the definition 

  

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thereof and specifying the Substitution Adjustment Amount (as described below), if any, in connection with such substitution. The Custodian shall acknowledge
receipt for such Eligible Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, shall review such documents as specified in Section 2.02 and deliver to the Servicer, with respect to such Eligible Substitute Mortgage Loan
or Loans, a certification substantially in the form attached hereto as Exhibit F-1, with any applicable exceptions noted thereon. Within one year of the date of substitution, the Custodian shall deliver to the Servicer a certification substantially
in the form of Exhibit F-2 hereto with respect to such Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution are
not part of the Trust Fund and will be retained by the Seller. For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Deleted Mortgage Loan in the Due Period preceding the
month of substitution and the Seller shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Seller shall give or cause to be given written notice to the Certificateholders that such
substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Eligible Substitute Mortgage Loan or Loans and shall deliver a
copy of such amended Mortgage Loan Schedule to the Custodian. Upon such substitution by the Seller, such Eligible Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this
Agreement and the Purchase Agreement, including all applicable representations and warranties thereof included in the Purchase Agreement as of the date of substitution. 
 For any month in which the Seller substitutes one or more Eligible Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (the “Substitution Adjustment
Amount”), if any, by which the aggregate Repurchase Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such Eligible Substitute Mortgage Loan, of the principal balance thereof as of the date of substitution, together
with one month’s interest on such principal balance at the applicable Net Mortgage Rate. On the date of such substitution, the Seller will deliver or cause to be delivered to the Servicer for deposit in the Collection Account an amount equal to
the Substitution Adjustment Amount, if any, and the Custodian, upon receipt of the related Eligible Substitute Mortgage Loan or Loans and certification by the Servicer of such deposit, shall release to the Seller the related Mortgage File or Files
and the Custodian or the Trustee, as applicable, shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Seller shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage
Loan released pursuant hereto. 
 In addition, the Seller shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel to
the effect that such substitution will not cause (a) any federal tax to be imposed on the Trust Fund, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(l) of the Code or on
“contributions after the startup date” under Section 860G(d)(l) of the Code, or (b) any REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding. If such Opinion of Counsel can not be delivered, then
such substitution may only be effected at such time as the required Opinion of Counsel can be given. 
 (e) Upon discovery by the Seller, the
Servicer, the Custodian, the Class A-1 Insurer or the Trustee that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning 

  

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of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties. In
connection therewith, the Seller or the Depositor, as the case may be, shall repurchase or, subject to the limitations set forth in Section 2.03(d), substitute one or more Eligible Substitute Mortgage Loans for the affected Mortgage Loan within
90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made by the Seller. Any such repurchase or substitution shall be made in the same manner as set forth
in Section 2.03(a). The Custodian, on behalf of the Trustee, shall reconvey to the Seller, the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for
breach of a representation or warranty. 
 Section 2.04 Acknowledgement of Trustee. 
 The Trustee acknowledges that in the event that any of (i) the transfer of the Initial Mortgage Loans and the MI Policies from the Seller to the
Depositor, or from the Depositor to the Trustee on behalf of the Certificateholders, is determined to constitute a financing, or (ii) the transfer of the Subsequent Mortgage Loans from the Seller to the Depositor or from the Depositor to the
Trustee on behalf of the Certificateholders, is determined to constitute a financing, then in each case the Custodian, on behalf of the Trustee, and the Trustee hold the Initial Mortgage Loans, the MI Policies and the Subsequent Mortgage Loans as
the designee and bailee of the Depositor subject, however, in each case, to a prior lien in favor of the Certificateholders pursuant to the terms of this Agreement. 
 Section 2.05 Representations, Warranties and Covenants of the Servicer. 
 The Servicer hereby
represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee, the Certificateholders, the Class A-1 Insurer and to the Depositor that as of the Closing Date or as of such date specifically provided herein:

 (i) The Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of
Virginia and has the corporate power to own its assets and to transact the business in which it is currently engaged. The Servicer 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 properties owned or leased by it requires such qualification and in which the failure to so qualify would have a material adverse effect on the business, properties, assets, or condition (financial or
other) of the Servicer or the validity or enforceability of the Mortgage Loans; 
 (ii) The Servicer has the corporate power
and authority to make, execute, deliver and perform this Agreement and all of the transactions contemplated under this 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 Servicer 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; 
  

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 (iii) The Servicer is not required to obtain the consent of any other Person 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; 
 (iv) The execution and delivery of this Agreement and the performance of the transactions contemplated hereby by the Servicer will not violate any provision of any existing law or regulation or any order or decree of
any court applicable to the Servicer or any provision of the certificate of incorporation or bylaws of the Servicer, or constitute a material breach of any mortgage, indenture, contract or other agreement to which the Servicer is a party or by which
the Servicer may be bound; 
 (v) No litigation or administrative proceeding of or before any court, tribunal or governmental
body is currently pending, or to the knowledge of the Servicer threatened, against the Servicer or any of its properties or with respect to this Agreement or the Certificates which, to the knowledge of the Servicer, has a reasonable likelihood of
resulting in a material adverse effect on the transactions contemplated by this Agreement; 
 (vi) The Servicer is a member of
MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS; and 
 (vii) With respect to the Group I Mortgage Loans, the Servicer will accurately and fully report its borrower credit files to the three
largest credit repositories in a timely manner. 
 (viii) The foregoing representations and warranties shall survive any
termination of the Servicer hereunder. 
 Section 2.06 Representations and Warranties of the Depositor. 
 The Depositor represents and warrants to the Trust and the Trustee on behalf of the Certificateholders and the Class A-1 Insurer as follows:

 (a) The Depositor is duly organized and validly existing as a corporation in good standing under the laws of the State of Delaware, with
power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. 
 (b) The Depositor is duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property
or the conduct of its business shall require such qualifications and in which the failure to so qualify would have a material adverse effect on the business, properties, assets or condition (financial or other) of the Depositor and the ability of
the Depositor to perform hereunder. 
  

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 (c) The Depositor has the power and authority to execute and deliver this Agreement and to carry out its
terms; the Depositor has full power and authority to purchase the property to be purchased from the Seller and the Depositor has duly authorized such purchase by all necessary corporate action; and the execution, delivery and performance of this
Agreement have been duly authorized by the Depositor by all necessary corporate action. When executed and delivered, this Agreement will constitute the legal, valid and binding obligation of the Depositor 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. 
 (d) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any
breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or bylaws of the Depositor, or any indenture, agreement or other instrument to which the Depositor
is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate
any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to the Depositor of any court or of any federal or state regulatory body, administrative agency or other governmental instrumentality having
jurisdiction over the Depositor or its properties. 
 Section 2.07 Issuance of Certificates. 
 The Trustee acknowledges the assignment to the Trustee of the Mortgage Loans and the MI Policy and the delivery to the Custodian, on behalf of the Trustee
of the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02, together with the assignment to it of all other assets included in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with such assignment and delivery
and in exchange therefor, the Trustee, pursuant to the written request of the Depositor executed by an officer of the Depositor, has executed, and authenticated and delivered to or upon the order of the Depositor, the Certificates in authorized
denominations. The interests evidenced by the Certificates, constitute the entire beneficial ownership interest in the Trust Fund. 
 Section 2.08 Conveyance of the Subsequent Mortgage Loans. 
 The Trustee, or the Custodian on behalf of the Trustee,
shall purchase the Subsequent Mortgage Loans as set forth in Section 2.02 of the Purchase Agreement. The Seller shall deliver a Mortgage File (as described in Section 2.01) with respect to such Subsequent Mortgage Loans. 
 Section 2.09 Designation Under REMIC Provisions. 
 The Trustee shall comply with the provisions set forth in Exhibit K. 
  

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 ARTICLE III 
 ADMINISTRATION AND SERVICING 
 OF THE MORTGAGE LOANS 
 Section 3.01 Servicer to Assure Servicing. 
 (a) The Servicer shall service and administer, or take such actions as are necessary to ensure, the servicing and administration of, the Mortgage Loans and any REO Property in accordance with this Agreement and its normal servicing
practices, which generally shall conform to the standards of an institution prudently servicing mortgage loans for its own account and shall have full authority to do anything it reasonably deems appropriate or desirable in connection with such
servicing and administration. The Servicer may perform its responsibilities relating to servicing through other agents or independent contractors, but shall not thereby be released from any of its responsibilities as hereinafter set forth. Subject
to Section 3.06(b), the authority of the Servicer, in its capacity as Servicer, and any Subservicer acting on its behalf, shall include, without limitation, the power to (i) consult with and advise any Subservicer regarding administration
of a related Mortgage Loan, (ii) approve any recommendation by a Subservicer to foreclose on a related Mortgage Loan, (iii) supervise the filing and collection of insurance claims and take or cause to be taken such actions on behalf of the
insured Person thereunder as shall be reasonably necessary to prevent the denial of coverage thereunder, and (iv) effectuate foreclosure or other conversion of the ownership of the Mortgaged Property securing a related Mortgage Loan, including
the employment of attorneys, the institution of legal proceedings, the collection of deficiency judgments, the acceptance of compromise proposals and any other matter pertaining to a delinquent Mortgage Loan. The authority of the Servicer shall
include, in addition, the power on behalf of the Certificateholders, the Trustee, the Class A-1 Insurer or any of them to (i) execute and deliver customary consents or waivers and other instruments and documents, (ii) consent to
transfer of any related Mortgaged Property and assumptions of the related Mortgage Notes and Mortgages (in the manner provided in this Agreement) and (iii) collect any Insurance Proceeds and Liquidation Proceeds. Without limiting the generality
of the foregoing, the Servicer and any Subservicer acting on its behalf may, and is hereby authorized, and empowered by the Trustee when the Servicer believes it is reasonably necessary in its best judgment in order to comply with its servicing
duties hereunder, to execute and deliver, on behalf of itself, the Certificateholders, the Trustee, the Class A-1 Insurer or any of them, any instruments of satisfaction, cancellation, partial or full release, discharge and all other comparable
instruments, with respect to the related Mortgage Loans, the insurance policies and the accounts related thereto, and the Mortgaged Properties. The Servicer may exercise this power in its own name or in the name of a Subservicer. 
 The Servicer, in such capacity, may not consent to the placing of a lien senior to that of the Mortgage on the related Mortgaged Property. 
 The relationship of the Servicer (and of any successor to the Servicer as servicer under this Agreement) to the Trust and the Trustee under this
Agreement is intended by the parties to be that of an independent contractor and not that of a joint venturer, partner or agent. 
 (b)
Notwithstanding the provisions of Subsection 3.01(a), the Servicer shall not take any action inconsistent with the interests of the Trustee, the Class A-1 Insurer or the Certificateholders or with the rights and interests of the Trustee, the
Class A-1 Insurer or the Certificateholders under this Agreement. 
  

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 (c) The Trustee shall furnish the Servicer with any powers of attorney and other documents in form as
provided to it necessary or appropriate to enable the Servicer to service and administer the related Mortgage Loans and REO Property and the Trustee shall not be liable for the actions of the Servicer or any Subservicers under such powers of
attorney. 
 (d) The Servicer further is authorized and empowered by the Trustee, on behalf of the Certificateholders, the Class A-1
Insurer and the Trustee, when the Servicer believes it is appropriate in its best judgment to register any Mortgage Loan on the MERS System, or cause the removal from the registration of any Mortgage Loan on the MERS System, to execute and deliver,
on behalf of the Trustee, the Class A-1 Insurer and the Certificateholders or any of them, any and all instruments of assignment and other comparable instruments with respect to such assignment or re-recording of a Mortgage in the name of MERS,
solely as nominee for the Trustee and its successors and assigns. Any expenses incurred in connection with the actions described in the preceding sentence shall be borne by the Servicer with no right of reimbursement; provided, that if, as a result
of MERS discontinuing or becoming unable to continue operations in connection with the MERS System, it becomes necessary to remove any Mortgage Loan from registration on the MERS System and to arrange for the assignment of the related Mortgages to
the Trustee, then any related expenses shall be reimbursable to the Servicer by the Trust. 
 Section 3.02 Subservicing Agreements Between
Servicer and Subservicers. 
 (a) With the prior consent of the Class A-1 Insurer, the Servicer may enter into Subservicing
Agreements with Subservicers for the servicing and administration of the Mortgage Loans and for the performance of any and all other activities of the Servicer hereunder. Each Subservicer shall be either (i) an institution the accounts of which
are insured by the FDIC or (ii) another entity that engages in the business of originating or servicing mortgage loans comparable to the Mortgage Loans, and in either case shall be authorized to transact business in the state or states in which
the related Mortgaged Properties it is to service are situated, if and to the extent required by applicable law to enable the Subservicer to perform its obligations hereunder and under the Subservicing Agreement. Any Subservicing Agreement entered
into by the Servicer shall include the provision that such Agreement may be immediately terminated (i) (x) with cause and without any termination fee by the Servicer hereunder and/or (y) without cause, in which case the Servicer shall
be solely responsible for any termination fee or penalty resulting therefrom and (ii) at the option of the Trustee upon the termination or resignation of the Servicer hereunder, in which case the Servicer shall be solely responsible for any
termination fee or penalty resulting therefrom. In addition, each Subservicing Agreement shall provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Servicer shall promptly upon execution thereof deliver copies
of each Subservicing Agreement and any amendments thereto to the Trustee and the Class A-1 Insurer. The Servicer and the Subservicers may enter into Subservicing Agreements and make amendments to the Subservicing Agreements or enter into
different forms of Subservicing Agreements providing for, among other things, the delegation by the Servicer to a Subservicer of additional duties regarding the administration of the Mortgage Loans; provided, however, that any such amendments or
different forms shall be consistent with and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which 

  

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could be reasonably expected to be materially adverse to the interests of the Certificateholders, without the consent of the Certificateholders holding at
least 51% of the aggregate Voting Rights and without the consent of the Class A-1 Insurer (so long as no Class A-1 Insurer Default has occurred and is continuing). 
 (b) As part of its servicing activities hereunder, the Servicer, for the benefit of the Trustee, the Class A-1 Insurer and the Certificateholders,
shall enforce the obligations of each Subservicer under the related Subservicing Agreement. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, but shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement only to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loan or
(ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed. 
 Section 3.03 Successor Subservicers. 
 (a) The Servicer shall be entitled to terminate any Subservicing Agreement that may
exist in accordance with the terms and conditions of such Subservicing Agreement and without any limitation by virtue of this Agreement; provided, however, that upon termination, the Servicer may enter into an appropriate contract with a successor
Subservicer reasonably acceptable to the Trustee and the Class A-1 Insurer (so long as no Class A-1 Insurer Default has occurred and is continuing), pursuant to which such successor Subservicer will be bound by all relevant terms of the
related Subservicing Agreement pertaining to the servicing of such Mortgage Loans. 
 Section 3.04 Liability of the Servicer.

 (a) Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer or otherwise, the Servicer shall under all circumstances remain obligated and primarily liable to the Trustee, the Class A-1 Insurer and the Certificateholders for
the servicing and administering of the Mortgage Loans and any REO Property in accordance with this Agreement. The obligations and liability of the Servicer shall not be diminished by virtue of Subservicing Agreements or by virtue of indemnification
of the Servicer by any Subservicer, or any other Person. The obligations and liability of the Servicer shall remain of the same nature and under the same terms and conditions as if the Servicer alone were servicing and administering the related
Mortgage Loans. The Servicer shall, however, be entitled to enter into indemnification agreements with any Subservicer or other Person and nothing in this Agreement shall be deemed to limit or modify such indemnification. For the purposes of this
Agreement, the Servicer shall be deemed to have received any payment on a Mortgage Loan on the date the Subservicer received such payment. 
 (b) Any Subservicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Subservicer in its capacity as such and not as an originator shall be deemed to be between the Subservicer
and the Servicer alone, and the 

  

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Custodian, the Trustee, the Class A-1 Insurer and the Certificateholders shall not be deemed parties thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer, except as set forth in Section 3.05. 
 Section 3.05 Assumption
or Termination of Subservicing Agreements by the Trustee. 
 (a) If the Trustee or its designee as the successor Servicer, shall assume
the servicing obligations of the Servicer in accordance with Section 7.02 below, the Trustee or its designee as the successor Servicer, to the extent necessary to carry out the provisions of Section 7.02 with respect to the Mortgage Loans,
shall (if it so elects) succeed to all of the rights and obligations of the Servicer under each of the Subservicing Agreements. In such event, the Trustee or its designee as the successor Servicer shall be deemed to have assumed all of the
Servicer’s rights and obligations therein and to have replaced the Servicer as a party to such Subservicing Agreements to the same extent as if such Subservicing Agreements had been assigned to the Trustee or its designee as a successor
Servicer, except that the Trustee or its designee as a successor Servicer shall not be deemed to have assumed any obligations or liabilities of the Servicer arising prior to such assumption or as a result of the Trustee’s or its designee’s
terminating any Subservicer upon the Trustee or its designee becoming successor Servicer and the Servicer shall not thereby be relieved of any liability or obligations under such Subservicing Agreements arising prior to such assumption or as a
result of the Trustee’s or its designee’s terminating any Subservicer upon the Trustee or its designee becoming successor Servicer. 
 (b) The Trustee or its designee as the successor Servicer may terminate any Subservicer upon becoming successor Servicer. Any termination fees will be paid by the terminated Servicer. 
 (c) In the event that the Trustee or its designee as successor Servicer assumes the servicing obligations of the Servicer under Section 7.02, upon
the request of the Trustee or such designee as successor Servicer, the Servicer shall at its own expense deliver to the Trustee, or at its written request to such designee, originals or, if originals are not available, photocopies of all documents,
files and records, electronic or otherwise, relating to the Subservicing Agreements and the related Mortgage Loans or REO Property then being serviced and an accounting of amounts collected and held by it, if any, and will otherwise cooperate and
use its reasonable efforts to effect the orderly and efficient transfer of the Subservicing Agreements, or responsibilities hereunder to the Trustee, or at its written request to such designee as successor Servicer. 
 Section 3.06 Collection of Mortgage Loan Payments. 
 (a) The Servicer will coordinate and monitor remittances by Subservicers to it with respect to the Mortgage Loans in accordance with this Agreement. 
 (b) The Servicer shall make its best reasonable efforts to collect or cause to be collected all payments required under the terms and provisions of the
Mortgage Loans and shall follow, and use its best reasonable efforts to cause Subservicers to follow, collection procedures comparable to the collection procedures of prudent mortgage lenders servicing mortgage loans for their own account to the
extent such procedures shall be consistent with this Agreement. Consistent with the foregoing, the Servicer or the related Subservicer may in its discretion (i) waive or permit to be waived any late payment charge, prepayment charge, assumption
fee, or any penalty interest in 

  

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connection with the prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced regular monthly payments for a period
of up to six months, or arrange or permit an arrangement with a Mortgagor for a scheduled liquidation of delinquencies; provided, however, that the Servicer or the related Subservicer may permit the foregoing only if it believes, in good faith, that
recoveries of Monthly Payments will be maximized; provided further, however, with respect to Mortgage Loans insured by an MI Policy, that the Servicer may not without the prior written consent of the MI Insurer permit any waiver, modification or
variance which would (a) reduce or eliminate the coverage provided under the MI Policy, (b) change the loan rate, (c) forgive any payment of principal or interest, (d) lessen the lien priority or (e) extend the final
maturity date of a Mortgage Loan past 12 months after the original maturity date on such Mortgage Loan. In the event the Servicer or related Subservicer shall consent to the deferment of the due dates for payments due on a Mortgage Note, the
Servicer shall nonetheless make an Advance or shall cause the related Subservicer to make an advance to the same extent as if such installment were due, owing and delinquent and had not been deferred through liquidation of the Mortgaged Property;
provided, however, that the obligation of the Servicer or the related Subservicer to make an Advance shall apply only to the extent that the Servicer believes, in good faith, that such advances are not Nonrecoverable Advances. 
 (c) Within five Business Days after the Servicer has determined that all amounts which it expects to recover from or on account of a Liquidated Mortgage
Loan have been recovered and that no further Liquidation Proceeds will be received in connection therewith, the Servicer shall provide to the Trustee a certificate of a Servicing Officer that such Mortgage Loan became a Liquidated Mortgage Loan as
of the date of such determination. 
 (d) The Servicer shall establish a segregated account (the “Collection Account”),
which shall be an Eligible Account, which shall be titled “Collection Account, [                        ], as Trustee
for the registered holders of NovaStar Mortgage Funding Trust 20[ ]-[ ], Home Equity Loan Asset-Backed Certificates, Series 20[ ]-[ ]”, in which the Servicer shall deposit or cause to be deposited any amounts representing payments on and any
collections in respect of the Mortgage Loans received by it after the Cut-Off Date or, with respect to the Subsequent Mortgage Loans, the Subsequent Cut-Off Date (other than in respect of the payments referred to in the following paragraph) within
two Business Days following receipt thereof, including the following payments and collections received or made by it (without duplication): 
 (i) all payments of principal or interest on the Mortgage Loans received by the Servicer from Mortgagors; 
 (ii) the aggregate Repurchase Price of the Mortgage Loans purchased by the Servicer pursuant to Section 3.18 or by the Converted Loan Purchaser, pursuant to Section 3.20; 
 (iii) Net Liquidation Proceeds; 
 (iv) all proceeds of any Mortgage Loans repurchased by the Seller pursuant to the Purchase Agreement, and all Substitution Adjustment Amounts required to be deposited in connection with the substitution of an Eligible
Substitute Mortgage Loan pursuant to the Purchase Agreement; 
  

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 (v) Insurance Proceeds, other than Net Liquidation Proceeds, and MI Insurance Proceeds
resulting from any insurance policy maintained on a Mortgaged Property; 
 (vi) any Advance and any Compensating Interest
payments; and 
 (vii) any other amounts received by the Servicer, including all Foreclosure Profits, assumption fees,
prepayment penalties and any other fees that are required to be deposited in the Collection Account pursuant to this Agreement; 
 provided, however, that
with respect to each Due Period, the Servicer shall be permitted to retain from payments actually collected in respect of interest on the Mortgage Loans, the Servicing Fee for such Due Period. The foregoing requirements respecting deposits to the
Collection Account are exclusive, it being understood that, without limiting the generality of the foregoing, the Servicer need not deposit in the Collection Account late payment charges payable by Mortgagors, as further described in
Section 3.15, or amounts received by the Subservicer for the accounts of Mortgagors for application towards the payment of taxes, insurance premiums, assessments and similar items. In the event any amount not required to be deposited in the
Collection Account is so deposited, the Servicer may at any time (prior to being terminated under this Agreement) withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding. The Servicer shall keep records
that accurately reflect the funds on deposit in the Collection Account that have been identified by it as being attributable to the Mortgage Loans and shall hold all collections in the Collection Account for the benefit of the Trustee, and the
Certificateholders, as their interests may appear. 
 Funds in the Collection Account may be invested in Eligible Investments with a maturity
date no later than the Business Day immediately preceding the Servicer Remittance Date, but shall not be commingled with the Servicer’s own funds or general assets or with funds respecting payments on mortgage loans or with any other funds not
related to the Certificates. All such investments shall be made in the name of the Trustee for the benefit of the Certificateholders, provided, however, that income earned on such Eligible Investments shall be for the account of the Servicer. The
Servicer shall be obligated to cover losses on such Eligible Investments immediately upon realization. 
 (e) The Servicer will require each
Subservicer to hold all funds constituting collections on the Mortgage Loans, pending remittance thereof to the Servicer, in one or more accounts in the name of the Trustee meeting the requirements of an Eligible Account, and such funds shall not be
invested. The Subservicer shall segregate and hold all funds collected and received pursuant to each Mortgage Loan separate and apart from any of its own funds and general assets and any other funds. Each Subservicer shall make remittances to the
Servicer no later than one Business Day following receipt thereof and the Servicer shall deposit into the Collection Account any such remittances received from any Subservicer within one Business Day following receipt by the Servicer. 
  

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 Section 3.07 Withdrawals from the Collection Account. 
 (a) The Servicer shall, from time to time as provided herein, make withdrawals from the Collection Account of amounts on deposit therein pursuant to
Section 3.06 that are attributable to the Mortgage Loans for the following purposes (without duplication): 
 (i) to
deposit in the Distribution Account, by the Servicer Remittance Date prior to each Distribution Date, all collections on the Mortgage Loans required to be distributed from the Distribution Account on a Distribution Date; 
 (ii) to the extent deposited to the Collection Account, to reimburse itself or the related Subservicer for previously unreimbursed
expenses incurred in maintaining individual insurance policies pursuant to Section 3.11, or Liquidation Expenses, paid pursuant to Section 3.13, such withdrawal right being limited to amounts received on particular Mortgage Loans (other
than any Repurchase Price in respect thereof) which represent late recoveries of the payments for which such expenses were paid, or from related Liquidation Proceeds on such Mortgage Loans; 
 (iii) to pay to itself out of each payment received on account of interest on a Mortgage Loan as contemplated by Section 3.15, an
amount equal to the related Servicing Fee (to the extent not retained pursuant to Section 3.06); 
 (iv) to pay to itself
or the Seller, with respect to any Mortgage Loan or property acquired in respect thereof that has been purchased by the Seller, the Servicer or other entity, all amounts received thereon and not required to be distributed to Certificateholders as of
the date on which the related Repurchase Price is determined; 
 (v) to reimburse the Servicer or any Subservicer for any
unreimbursed Advance of its own funds or any unreimbursed advance of such Subservicer’s own funds, the right of the Servicer or a Subservicer to reimbursement pursuant to this subclause (v) being limited to amounts received on a particular
Mortgage Loan (including, for this purpose, the Repurchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Advance
or advance was made; 
 (vi) to reimburse the Servicer or any Subservicer from Insurance Proceeds or Liquidation Proceeds
relating to a particular Mortgage Loan for amounts expended by the Servicer or such Subservicer pursuant to Section 3.13 in good faith in connection with the restoration of the related Mortgaged Property or in connection with the liquidation of
such Mortgage Loan; 
 (vii) to reimburse the Servicer or any Subservicer for any unreimbursed Nonrecoverable Advance
previously made, and otherwise not reimbursed pursuant to this Subsection 3.07(a); 
 (viii) to withdraw any other amount
deposited in the Collection Account that was not required to be deposited therein pursuant to Section 3.06; 
  

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 (ix) to reimburse the Servicer for costs associated with handling the presence of any
toxic or hazardous substance on a Mortgaged Property as set forth in Section 3.13(c); 
 (x) to clear and terminate the
Collection Account upon a termination pursuant to Section 7.08; 
 (xi) to pay to the Servicer income earned on Eligible
Investments in the Collection Account; 
 (xii) to pay to the MI Insurer the monthly MI Premiums due under each MI Policy from
payments received (or Advances made) on account of interest due on the related Mortgage Loan; and 
 (xiii) to make an Advance
with respect to a delinquent Mortgage Loan from funds held in the Collection Account as contemplated by Section 3.24, provided that the amount withdrawn for such an Advance is immediately deposited into the Distribution Account. 
 Withdrawals made pursuant to clause (xii) shall be made on a first priority basis. In connection with withdrawals pursuant to clauses (ii), (iii), (iv),
(v) and (vi), the Servicer’s entitlement thereto is limited to collections or other recoveries on the related Mortgage Loan, and the Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Collection Account pursuant to such clauses. 
 (b) Notwithstanding the provisions of this
Section 3.07, the Servicer may, but is not required to, allow the Subservicers to deduct from amounts received by them or from the related account maintained by a Subservicer, prior to deposit in the Collection Account, any portion to which
such Subservicers are entitled as reimbursement of any reimbursable Advances made by such Subservicers. 
 Section 3.08 Collection of
Taxes, Assessments and Similar Items; Servicing Accounts. 
 (a) The Servicer shall establish and maintain or cause the related
Subservicer to establish and maintain, one or more Servicing Accounts. The Servicer or a Subservicer will deposit and retain therein all collections from the Mortgagors for the payment of taxes, assessments, insurance premiums, or comparable items
as agent of the Mortgagors. 
 (b) The deposits in the Servicing Accounts shall be held in trust by the Servicer or a Subservicer (and its
successors and assigns) in the name of the Trustee. Such Servicing Accounts shall be Eligible Accounts and, if permitted by applicable law, invested in Eligible Investments held in trust by the Servicer or a Subservicer as described above and
maturing, or be subject to redemption or withdrawal, no later than the date on which such funds are required to be withdrawn, and in no event later than 45 days after the date of investment; withdrawals of amounts from the Servicing Accounts may be
made only to effect timely payment of taxes, assessments, insurance premiums, or comparable items, to reimburse the Servicer or a Subservicer for any advances made with respect to such items, to refund to any Mortgagors any sums as may be determined
to be overages, to pay interest, if required, to Mortgagors on balances in the Servicing Accounts or to clear and terminate the Servicing Accounts at or any time after the termination of this Agreement. Amounts received from Mortgagors for deposit
into the Servicing Accounts shall be deposited in 

  

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the Servicing Accounts by the Servicer within two days of receipt. The Servicer shall advance from its own funds amounts needed to pay items payable from the
Servicing Accounts if the Servicer reasonably believes that such amounts are recoverable from the related Mortgagor. The Servicer shall comply with all laws relating to the Servicing Accounts, including laws relating to payment of interest on the
Servicing Accounts. If interest earned by the Servicer on the Servicing Accounts is not sufficient to pay required interest on the Servicing Accounts, the Servicer shall pay the difference from its own funds. The Servicing Accounts shall not be the
property of the Trust. 
 Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage Loans. 
 The Servicer shall provide, and shall cause any Subservicer to provide, to the Trustee, access to the documentation regarding the related Mortgage Loans
and REO Property and to the Certificateholders, the Class A-1 Insurer, the FDIC, and the supervisory agents and examiners of the FDIC (to which the Custodian and Trustee shall also provide) access to the documentation regarding the related
Mortgage Loans required by applicable regulations, such access being afforded without charge but only upon reasonable request and during normal business hours at the offices of the Servicer or the Subservicers that are designated by these entities;
provided, however, that, unless otherwise required by law, the Servicer and any Subservicer shall not be required to provide access to such documentation if the provision thereof would violate the legal right to privacy of any Mortgagor; provided,
further, however, that the Trustee shall coordinate its request for such access so as not to impose an unreasonable burden on, or cause an unreasonable interruption of, the business of the Servicer or any Subservicer. The Servicer, the Subservicers,
the Trustee and the Custodian shall allow representatives of the above entities to photocopy any of the documentation and shall provide equipment for that purpose at a charge that covers their own actual out-of-pocket costs. 
 Section 3.10 [Reserved]. 
 Section 3.11 Maintenance of Hazard Insurance and Fidelity Coverage. 
 (a) The Servicer shall maintain and keep, or cause
each Subservicer to maintain and keep, with respect to each Mortgage Loan and each REO Property, in full force and effect hazard insurance (fire insurance with extended coverage) equal to at least the lesser of the Principal Balance of the Mortgage
Loan or the current replacement cost of the Mortgaged Property, and containing a standard mortgagee clause, provided, however, that the amount of hazard insurance may not be less than the amount necessary to prevent loss due to the application of
any co-insurance provision of the related policy. Unless applicable state law requires a higher deductible, the deductible on such hazard insurance policy may be no more than $1,500 or 1% of the applicable amount of coverage, whichever is less. In
the case of a condominium unit or a unit in a planned unit development, the required hazard insurance shall take the form of a multi-peril policy covering the entire condominium project or planned unit development, in an amount equal to at least
100% of the insurable value based on replacement cost. If the Servicer shall obtain and maintain a blanket policy consistent with its general mortgage servicing activities insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in this Section 3.11(a), it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not
have been maintained on 

  

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the related Mortgaged Property a policy complying with this Section 3.11(a) and there shall have been a loss which would have been covered by such
policy, deposit in the Collection Account the amount not otherwise payable under the blanket policy because of such deductible clause without any right of reimbursement. Any such deposit by the Servicer shall be made on the last Business Day of the
Due Period in the month in which payments under any such policy would have been deposited in the Collection Account. In connection with its activities as servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the Trust,
and the Trustee, claims under any such blanket policy. 
 (b) Any amounts collected by the Servicer or a Subservicer under any such hazard
insurance policy (other than amounts to be applied to the restoration or repair of the Mortgaged Property or amounts released to the Mortgagor in accordance with the Servicer’s or a Subservicer’s normal servicing procedures, the Mortgage
Note, the Mortgage or applicable law) shall be deposited in the Collection Account. 
 (c) Any cost incurred by a Servicer or a Subservicer
in maintaining any such individual hazard insurance policies shall not be added to the amount owing under the Mortgage Loan for the purpose of calculating monthly distributions to Certificateholders, notwithstanding that the terms of the Mortgage
Loan so permit. Such costs of maintaining individual hazard insurance policies shall be recoverable by the Servicer or a Subservicer out of related late payments by the Mortgagor or out of Insurance Proceeds or Liquidation Proceeds or by the
Servicer from the Repurchase Price, to the extent permitted by Section 3.07. 
 (d) No earthquake or other additional insurance is to be
required of any Mortgagor or maintained on property acquired with respect to a Mortgage other than pursuant to such applicable laws and regulations as shall at any time be in force and shall require such additional insurance. When, at the time of
origination of the Mortgage Loan or at any subsequent time, the Mortgaged Property is located in a federally designated special flood hazard area, the Servicer shall ensure that, with respect to such Mortgage Loan or such REO Property, flood
insurance is acquired (to the extent available and in accordance with mortgage servicing industry practice). Such flood insurance shall cover the Mortgaged Property, including all items taken into account in arriving at the Appraised Value on which
the Mortgage Loan was based, and shall be in an amount equal to the lesser of (i) the Principal Balance of the related Mortgage Loan and (ii) the minimum amount required under the terms of coverage to compensate for any damage or loss on a
replacement cost basis, but not more than the maximum amount of such insurance available for the related Mortgaged Property under either the regular or emergency programs of the National Flood Insurance Program (assuming that the area in which such
Mortgaged Property is located is participating in such program). Unless applicable state law requires a higher deductible, the deductible on such flood insurance may not exceed $1,500 or 1% of the applicable amount of coverage, whichever is less.

 (e) If insurance complying with Subsections 3.11 (a) and (d) has not been maintained and there shall have been a loss which
would have been covered by such insurance had it been maintained, the Servicer shall pay, or cause the related Subservicer to pay, for any necessary repairs or loss without any right of reimbursement. 
  

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 (f) The Servicer shall present, or cause the related Subservicer to present, claims under any related
hazard insurance or flood insurance policy. 
 (g) The Servicer shall obtain and maintain at its own expense, and shall cause each
Subservicer to obtain and maintain at its own expense, and for the duration of this Agreement, a blanket fidelity bond and an errors and omissions insurance policy covering the Servicer’s and such Subservicer’s officers, employees and
other persons acting on its behalf in connection with its activities under this Agreement. The amount of coverage shall correspond with the FNMA levels presently maintained by the Servicer. The Servicer shall promptly notify the Trustee of any
material change in the terms of such bond or policy. The Servicer shall provide annually to the Trustee a certificate of insurance that such bond and policy are in effect. If any such bond or policy ceases to be in effect, the Servicer shall, to the
extent possible, give the Trustee ten days’ notice prior to any such cessation and shall use its reasonable best efforts to obtain a comparable replacement bond or policy, as the case may be. Any amounts relating to the Mortgage Loans collected
under such bond or policy shall be deposited in the Collection Account. 
 Section 3.12 Due-on-Sale Clauses; Assumption Agreements.

 (a) In any case in which the Servicer is notified by any Mortgagor or Subservicer that a Mortgaged Property relating to a Mortgage Loan has
been or is about to be conveyed by the Mortgagor, the Servicer shall enforce, or shall instruct such Subservicer to enforce, any due-on-sale clause contained in the related Mortgage to the extent permitted under the terms of the related Mortgage
Note and by applicable law. If the Servicer reasonably believes that such due-on-sale clause cannot be enforced under applicable law or if the Mortgage Loan does not contain a due-on-sale clause, the Servicer is authorized, and may authorize any
Subservicer, to consent to a conveyance subject to the lien of the Mortgage, and, with the consent of the MI Insurer, if applicable, to take or enter into an assumption agreement from or with the Person to whom such property has been or is about to
be conveyed, pursuant to which such Person becomes liable under the related Mortgage Note and unless prohibited by applicable state law, on condition, however, that the related Mortgage Loan shall continue to be covered by a hazard policy. In
connection with any such assumption, no material term of the related Mortgage Note may be changed and the Servicer shall not consent to any assumption unless the Party assuming such Mortgage Loan meets audit requirements similar to the previous
mortgage. The Servicer shall notify the Custodian and Trustee, whenever possible, before the completion of such assumption agreement, and shall forward to the Custodian the original copy of such assumption agreement, which copy shall be added by the
Custodian to the related Mortgage File and which shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof. 
 (b) Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any conveyance by the Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan which the Servicer reasonably
believes it may be restricted by law from preventing, for any reason whatsoever or if the exercise of such right would impair or threaten to impair any recovery under any applicable insurance policy. 
  

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 Section 3.13 Realization Upon Defaulted Mortgage Loans. 
 (a) The Servicer shall, or shall direct the related Subservicer to, foreclose upon or otherwise comparably convert the ownership of properties securing
any Mortgage Loans that come into and continue in default and as to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 3.06, except that the Servicer shall not, and shall not direct the
related Subservicer to, foreclose upon or otherwise comparably convert a Mortgaged Property if there is evidence of toxic waste or other environmental hazards thereon unless the Servicer follows the procedures in Subsection (c) below. In
connection with such foreclosure or other conversion, the Servicer in conjunction with the related Subservicer, if any, shall use its best reasonable efforts to preserve REO Property and to realize upon defaulted Mortgage Loans in such manner as to
maximize the receipt of principal and interest by the Certificateholders, taking into account, among other things, the timing of foreclosure and the considerations set forth in Subsection 3.13(b). The foregoing is subject to the proviso that the
Servicer shall not be required to expend its own funds in connection with any foreclosure or towards the restoration of any property unless it determines in good faith (i) that such restoration or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Certificateholders after reimbursement to itself for such expenses and (ii) that such expenses will be recoverable to it either through Liquidation Proceeds (respecting which it shall have priority for
purposes of reimbursements from the Collection Account pursuant to Section 3.07) or through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall be responsible for all costs and expenses constituting
Liquidation Expenses incurred by it in any such proceedings; provided, however, that it shall be entitled to reimbursement thereof (as well as its normal servicing compensation) as set forth in Section 3.07. Any income from or other funds (net
of any income taxes) generated by REO Property shall be deemed for purposes of this Agreement to be Liquidation Proceeds. 
 Any subsequent
collections with respect to any Liquidated Mortgage Loan shall be deposited to the Collection Account. For purposes of determining the amount of any Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections, the Servicer may take
into account any estimated additional Liquidation Expenses expected to be incurred in connection with the related defaulted Mortgage Loan. 
 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 issued to the Trustee and held by the Custodian, who shall hold the same on behalf of
Trustee and the Trust in accordance with the Agreement. Notwithstanding any such acquisition of title and cancellation of the related Mortgage Loan, such Mortgaged Property shall (except as otherwise expressly provided herein) be considered to be an
outstanding Mortgage Loan held as an asset of the Trust until such time as such property shall be sold. 
 (b) The Servicer shall not acquire
any real property (or any personal property incident to such real property) on behalf of the Trust Fund except in connection with a default or reasonably foreseeable default of a Mortgage Loan. In the event that the Servicer acquires any real
property (or personal property incident to such real property) on behalf of the Trust Fund in connection with a default or imminent default of a Mortgage Loan, such property shall be disposed of by the Servicer on behalf of the Trust Fund as soon as
reasonably practicable, but in no event later than three years after its acquisition on behalf of the Trust Fund. 
  

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 (c) With respect to any Mortgage Loan as to which the Servicer or a Subservicer has received notice of,
or has actual knowledge of, the presence of any toxic or hazardous substance on the Mortgaged Property, the Servicer shall promptly notify the Trustee, and shall act in accordance with any such directions and instructions provided by the Trustee. If
the Trustee has not provided directions and instructions to the Servicer in connection with any such Mortgage Loan within 5 days of a request by the Servicer for such directions and instructions, then the Servicer shall take such action as it deems
to be in the best economic interest of the Trust Fund (other than proceeding against the Mortgaged Property) and is hereby authorized at such time as it deems appropriate to release such Mortgaged Property from the lien of the related Mortgage. The
parties hereto acknowledge that the Servicer shall not obtain on behalf of the Trust a deed as a result or in lieu of foreclosure, and shall not otherwise acquire possession of or title to, or commence any proceedings to acquire possession of or
title to, or take any other action with respect to, any Mortgaged Property, if the Trust could reasonably be considered to be a responsible party for any liability arising from the presence of any toxic or hazardous substance on the Mortgaged
Property. 
 Section 3.14 Custodian to Cooperate; Release of Mortgage Files. 
 (a) Upon payment in full of any Mortgage Loan, the Servicer will immediately notify the Custodian and the Trustee by a certification signed by a Servicing
Officer (which certification shall include a statement to the effect that all amounts received in connection with such payment which are required to be deposited in the Collection Account have been so deposited) and shall request delivery to the
Servicer or Subservicer, as the case may be, of the Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the Trustee, shall promptly cause to be released the related Mortgage File to the Servicer or Subservicer
and the Trustee shall execute and deliver to the Servicer, without recourse, the request for reconveyance, deed of reconveyance or release or satisfaction of mortgage or such instrument releasing the lien of the Mortgage (furnished by the Servicer),
together with the Mortgage Note with written evidence of cancellation thereon. 
 (b) From time to time as is appropriate, for the servicing
or foreclosure of any Mortgage Loan or collection under an insurance policy, the Servicer may deliver to the Trustee and the Custodian a Request for Release signed by a Servicing Officer on behalf of the Servicer in substantially the form attached
as Exhibit E hereto. Upon receipt of the Request for Release, the Custodian, on behalf of the Trustee, shall deliver the Mortgage File or any document therein to the Servicer or Subservicer, as the case may be, as bailee for the Trustee. 

(c) The Servicer shall cause each Mortgage File or any document therein released pursuant to Subsection 3.14(b) to be returned to the Custodian when
the need therefor no longer exists, and in any event within 21 days of the Servicer’s receipt thereof, unless the Mortgage Loan has become a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage Loan have been deposited
in the Collection Account or such Mortgage File is being used to pursue foreclosure or other legal proceedings. Prior to return of a Mortgage File or any document to the Custodian, the Servicer, the related insurer or Subservicer to whom such file
or document was delivered shall retain such file or document in its respective control as bailee for the Custodian, on 

  

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behalf of the Trustee, unless the Mortgage File or such document has been delivered to an attorney, or to a public trustee or other public official as
required by law, to initiate or pursue legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has delivered to the Custodian and the Trustee, a certificate of a Servicing
Officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery. If a Mortgage Loan becomes a Liquidated Mortgage Loan, the Custodian, on behalf of
the Trustee, shall deliver the Request for Release with respect thereto to the Servicer upon deposit of the related Liquidation Proceeds in the Collection Account. 
 (d) The Trustee shall execute and deliver or cause to be executed and delivered to the Servicer any court pleadings, requests for trustee’s sale or other documents necessary (i) for the foreclosure or
trustee’s sale with respect to a Mortgaged Property; (ii) for any legal action brought to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage; (iii) to obtain a deficiency judgment against the Mortgagor; or
(iv) to enforce any other rights or remedies provided by the Mortgage Note or Mortgage or otherwise available at law or equity. Together with such documents or pleadings the Servicer shall deliver to the Trustee a certificate of a Servicing
Officer in which it requests the Trustee to execute or cause to be executed the pleadings or documents. The certificate shall certify and explain the reasons for which the pleadings or documents are required. It shall further certify that the
Trustee’s execution and delivery of the pleadings or documents will not invalidate any insurance coverage under the insurance policies or invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon
completion of the foreclosure or trustee’s sale. 
 Section 3.15 Servicing Compensation. 
 (a) As compensation for its activities hereunder, the Servicer shall be entitled to receive the Servicing Fee from full payments of accrued interest on
each Mortgage Loan. The Servicer shall be solely responsible for paying any and all fees with respect to a Subservicer, and the Trustee and the Trust Fund shall not bear any fees, expenses or other costs directly associated with any Subservicer.

 (b) The Servicer may retain additional servicing compensation in the form of late payment charges, to the extent such charges are
collected from the related Mortgagors and investment earnings on the Collection Account. The Servicer shall be required to pay all expenses it incurs in connection with servicing activities under this Agreement and shall not be entitled in
connection with servicing activities under this Agreement to reimbursement except as provided in this Agreement. Expenses to be paid by the Servicer without reimbursement under this Subsection 3.15(b) shall include payment of the expenses of the
accountants retained pursuant to Section 3.17. 
 Section 3.16 Annual Statements of Compliance. 
 (a) Within 90 days after December 31 of each year, the Servicer at its own expense shall deliver to the Trustee, the Class A-1 Insurer and the
Rating Agencies, an Officers’ Certificate stating, as to the signer thereof, that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made under such
officer’s supervision, (ii) to the best of such officer’s knowledge, based on such review, the 

  

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Servicer has fulfilled its obligations under this Agreement in all material respects for such year, or, if there has been a default in the fulfillment of any
such obligation, specifying each such default known to such officer and the nature and status thereof including the steps being taken by the Servicer to remedy such default; (iii) a review of the activities of each Subservicer during the
Subservicer’s most recently ended calendar year and its performance under its Subservicing Agreement has been made under such officer’s supervision; and (iv) to the best of the Servicing Officer’s knowledge, based on his review
and the certification of an officer of the Subservicer (unless the Servicing Officer has reason to believe that reliance on such certification is not justified), either each Subservicer has performed and fulfilled its duties, responsibilities and
obligations under this Agreement and its Subservicing Agreement in all material respects throughout the year, or, if there has been a default in performance or fulfillment of any such duties, responsibilities or obligations, specifying the nature
and status of each such default known to the Servicing Officer. Copies of such statements shall be provided by the Servicer to the Certificateholders upon request or by the Trustee at the expense of the Servicer should the Servicer fail to provide
such copies. 
 (b) The Servicer and the Trustee will deliver to the Issuing Entity, the Rating Agencies and the Sponsor on or before
March 1st of each year, beginning March 1st, 20[    ], an Officer’s Certificate (an “Annual Statement of Compliance”) stating, as to each signatory thereof, that (a) a review of the
activities of each such party, during the preceding calendar year and of its performance under this Agreement has been made under such officer’s supervision and (b) to the best of such officers’ knowledge, based on such review, each
such party has fulfilled all of its material obligations under this Agreement in all material respects throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its use. In the event that the Trustee or the Servicer has delegated any servicing responsibilities with respect to the
Mortgage Loans to a subservicer or subcontractor that meets the criteria in Item 1108(a)(2)(i) through (iii) of Regulation AB, the Servicer, the Trustee or the related servicer (as the case may be) shall deliver a similar Annual Statement
of Compliance by that subservicer or subcontractor to the Trustee as described above as and when required with respect to the servicer. 
 (c) The Servicer shall service and administer the Mortgage Loans in accordance with all applicable requirements of the Servicing Criteria. Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, [the
Trustee] (the “Attesting Party”) shall deliver to the Servicer on or before March 10th (with a 5 calendar day cure period) of each calendar year beginning in 2007, a report regarding such Attesting Party’s assessment of
compliance (an “Assessment of Compliance”) with the Servicing Criteria during the preceding calendar year. The Assessment of Compliance, as set forth in Regulation AB, must contain the following: 
 (i) A statement by such officer of its responsibility for assessing compliance with the Servicing Criteria applicable to the related
Attesting Party; 
 (ii) A statement by such officer that such Attesting Party used the Servicing Criteria attached as Exhibit
[    ] hereto, and which will also be attached to the Assessment of Compliance, to assess compliance with the Servicing Criteria applicable to the related Attesting Party; 
  

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 (iii) An assessment by such officer of the related Attesting Party’s compliance with
the applicable Servicing Criteria for the period consisting of the preceding calendar year, including disclosure of any material instance of noncompliance with respect thereto during such period, which assessment shall be based on the activities
such Attesting Party performs with respect to asset-backed securities transactions taken as a whole involving the Servicer, that are backed by the same asset type as the Mortgage Loans; 
 (iv) A statement that a registered public accounting firm has issued an attestation report on the related Attesting Party’s
Assessment of Compliance for the period consisting of the preceding calendar year; and 
 (v) A statement as to which of the
Servicing Criteria, if any, are not applicable to such Attesting Party, which statement shall be based on the activities such Attesting Party performs with respect to asset-backed securities transactions taken as a whole involving such Attesting
Party, that are backed by the same asset type as the Mortgage Loans. 
 Such report at a minimum shall address each of the Servicing Criteria
specified on Exhibit [    ] hereto which are indicated as applicable to the related Attesting Party. 
 On or
before March 1st of each calendar year beginning in 20[    ], each Attesting Party specified in this Section shall furnish to the Trustee and the Depositor a report (an “Attestation Report”) by a registered
public accounting firm that attests to, and reports on, the Assessment of Compliance made by the Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation Report must be made in
accordance with standards for attestation reports issued or adopted by the Public Depositor Accounting Oversight Board. 
 The Servicer [or
the Trustee, as the case may be] shall cause any subservicer, and each subcontractor determined by the it to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Trustee and
the Depositor an Assessment of Compliance and Attestation Report as and when provided above along with an indication of what Servicing Criteria are addressed in such assessment. 
 Such Assessment of Compliance, as to any subservicer, shall at a minimum address each of the Servicing Criteria specified on Exhibit
[    ] hereto which are indicated as applicable to any “primary servicer.” The Trustee shall confirm that the assessments, taken as a whole, address all of the Servicing Criteria and taken individually address
the Servicing Criteria for each party as set forth on Exhibit [    ] and notify the Depositor of any exceptions. Notwithstanding the foregoing, as to any subcontractor (as defined in the related servicing agreement), an
Assessment of Compliance is not required to be delivered unless it is required as part of a Form 10-K with respect to the Issuing Entity. 
 [The Trustee shall also provide an Assessment of Compliance and Attestation Report, as and when provided above, which shall at a minimum address each of the Servicing Criteria specified on Exhibit [    ] hereto
which are indicated as applicable to the “Trustee.” In addition, the Trustee shall deliver to the Sponsor and the Depositor an Assessment of Compliance and Attestation Report, as and when provided above, which shall at a minimum address
each of the Servicing Criteria specified on Exhibit [    ] hereto which are indicated as applicable to a “custodian.”] 
  

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 Section 3.17 Annual Independent Public Accountants’ Servicing Report. 
 (a) Within 90 days after December 31 of each year, the Servicer, at its expense, shall cause a firm of independent public accountants who are members
of the American Institute of Certified Public Accountants to furnish a statement to the Servicer, which will be provided to the Trustee, the Class A-1 Insurer and the Rating Agencies, to the effect that, in connection with the firm’s
examination of the Servicer’s financial statements as of the end of such calendar year, nothing came to their attention that indicated that the Servicer was not in compliance with Sections 3.06, 3.07 and 3.08 except for (i) such exceptions
as such firm believes to be immaterial and (ii) such other exceptions as are set forth in such statement. 
 (b) Within 90 days after
December 31 of each year, the Servicer, at its expense, shall, and shall cause each Subservicer to cause, a nationally recognized firm of independent certified public accountants to furnish to the Servicer or such Subservicer, as the case may
be, a report stating that (i) it has obtained a letter of representation regarding certain matters from the management of the Servicer or such Subservicer, as the case may be, which includes an assertion that the Servicer or such Subservicer,
as the case may be, has complied with certain minimum mortgage loan servicing standards identified in the Uniform Single Attestation Program for Mortgage Bankers established by the Mortgage Bankers Association of America with respect to the
servicing of residential mortgage loans during the most recently completed calendar year and (ii) on the basis of an examination conducted by such firm in accordance with standards established by the American Institute of Certified Public
Accountants, such representation is fairly stated in all material respects, subject to such exceptions and other qualifications that may be appropriate. Immediately upon receipt of such report, the Servicer shall or shall cause each Subservicer to
furnish a copy of such report to the Trustee, the Class A-1 Insurer and the Rating Agencies. 
 Section 3.18 Optional Purchase of
Defaulted Mortgage Loans. 
 Subject to the limitations set forth in Section 10.02 hereof, the Servicer shall have the right, but not
the obligation, to purchase any Mortgage Loan which becomes 90 days or more delinquent (or, if earlier, the date on which the Servicer delivers to the Trustee an Officers’ Certificate stating that the Servicer has determined that the Mortgage
Loan is unlikely to become current or that any other default thereunder (other than a payment default) is unlikely to become cured) at a purchase price equal to the Repurchase Price (a) within 29 days after the date the Mortgage Loan becomes 90
days delinquent (or such Officers’ Certificate is delivered) or (b) on the date the Servicer liquidates the related Mortgaged Property. The procedure for such purchase shall be the same as for a repurchase made by the Seller under the
Purchase Agreement. With respect to any Mortgage Loans being repurchased due to delinquency or otherwise, the Servicer shall purchase the most delinquent Mortgage Loans before purchasing other less delinquent Mortgage Loans. The Servicer or the
related Subservicer may repurchase a Mortgage Loan at the Repurchase Price when the Servicer requires acceleration of the Mortgage Loan, but only if the Servicer is satisfied, as evidenced by an Officers’ Certificate delivered to the Trustee,
that such Mortgage Loan is in default or default is reasonably foreseeable. 
  

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 Section 3.19 Information Required by the Internal Revenue Service Generally and Reports of
Foreclosures and Abandonments of Mortgaged Property. 
 The Servicer shall prepare and deliver all federal and state information reports
when and as required by all applicable state and federal income tax laws. In particular, with respect to the requirement under Section 6050J of the Code to the effect that the Servicer or Subservicer shall make reports of foreclosures and
abandonments of any mortgaged property, the Servicer or Subservicer shall file reports relating to each instance occurring during the previous calendar year in which the Servicer (i) acquires an interest in any Mortgaged Property through
foreclosure or other comparable conversion in full or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any Mortgaged Property has been abandoned. The reports from the Servicer or Subservicer shall be in form and
substance sufficient to meet the reporting requirements imposed by Section 6050J, Section 6050H (reports relating to mortgage interest received) and Section 6050P of the Code (reports relating to cancellation of indebtedness).

 Section 3.20 Purchase of Converted Mortgage Loans. 
 Pursuant to the Converted Loan Purchase Agreement, the Converted Loan Purchaser shall be obligated to purchase from the Trust any Converted Mortgage Loans at the Repurchase Price. The Servicer shall promptly notify
the Trustee and the Converted Loan Purchaser of each Mortgage Loan which becomes a Converted Mortgage Loan. If the Converted Loan Purchaser fails to purchase any Converted Loan, the Servicer shall be terminated (subject to the prior written consent
of the Class A-1 Insurer) and the Trustee shall be the Servicer and is obligated to make such purchase under the Converted Loan Purchase Agreement. 
 Section 3.21 [Reserved]. 
 Section 3.22 Servicing and Administration of the MI Policies.

 (a) The Servicer shall take all such actions on behalf of the Trustee as are necessary to service, maintain and administer the MI Policies
and to perform the Trustee’s obligations and enforce the Trustee’s rights under the MI Policies, which actions shall conform to the standards of an institution prudently administering MI Policies for its own account. Except as expressly
set forth herein, the Servicer shall have full authority on behalf of the Trust to do anything it reasonably deems appropriate or desirable in connection with the servicing, maintenance and administration of the MI Policies. The Servicer shall
timely file all insured claims under the MI Policies and collect from the MI Insurer all Insurance Proceeds due to the Trustee under the MI Policies. The Servicer shall not take or omit to take, or permit any subservicer to take or omit to take, any
action which would result in non-coverage under any applicable MI Policy of any loss which, but for the actions of the Servicer or Subservicer, would have been covered thereunder. To the extent coverage is available, the Servicer shall keep or cause
to be kept in full force and effect each such MI Policy for the life of the Mortgage Loan; provided, however, that if a MI Insurer Insolvency Event has occurred and is continuing, the Servicer may terminate the MI Policy on any Mortgage Loan that is
not then past due. The Servicer shall cooperate with the MI Insurer and shall use its best efforts to furnish all reasonable aid, evidence and information in the possession of the Servicer or to which the Servicer has access with respect to any
Mortgage Loan. 
  

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 (b) The Servicer shall deposit into the Collection Account pursuant to Section 3.06(d)(v) hereof all
MI Insurance Proceeds received from the MI Insurer under the terms of the MI Policies. The Servicer shall withdraw from the Collection Account and pay to the MI Insurer pursuant to Section 3.07(a)(xii) hereof, the monthly MI Premiums due to the
MI Insurer in accordance with the terms of the MI Insurance Agreements. In the event that the Trustee has actual knowledge that any MI Premiums have in fact not been paid, the Trustee shall pay such amounts (in such amounts as specified by the MI
Insurer) to the MI Insurer from the Interest Remittance Amount for the related Mortgage Loans, at the same level of priority as the Trustee Fee. 
 (c) Notwithstanding the provisions of Subsection 3.22(a) and (b), the Servicer shall not take any action in regard to the MI Policies inconsistent with the interests of the Trustee or the Certificateholders or with the rights and interests
of the Trustee or the Certificateholders under this Agreement; provided, however, that payments of the monthly MI Premiums to the MI Insurer pursuant to Subsection 3.22(b) above and Section 3.07(a)(xii) hereof shall be deemed not to be
inconsistent with such interests. 
 (d) The Trustee shall furnish the Servicer with any powers of attorney and other documents in form as
provided to it necessary or appropriate to enable the Servicer to service and administer the MI Policies; provided, however, that the Trustee shall not be liable for the actions of the Servicer under such powers of attorney. 
 (e) Following any MI Insurer Insolvency Event (excluding any such event that results solely under subparagraph (C) of the definition thereof), the
Class A-1 Insurer shall consult with the Servicer regarding whether or not to terminate the MI Policy with respect to any Mortgage Loan that is not then past due. Additionally, the Servicer, subject to the prior written consent of the
Class A-1 Insurer, may replace the MI Insurer with an insurer approved by the Class A-1 Insurer. 
 (f) The Servicer shall comply
with all other terms, conditions and obligations set forth in the MI Policies. 
 Section 3.23 Determination Date Reports. 

On the second Business Day following each Determination Date, the Servicer shall deliver to the Trustee a report, prepared as of the close of business
on the Determination Date (the “Determination Date Report”), and shall forward to the Trustee in the form of computer readable electromagnetic tape or disk a copy of such report in a format acceptable to the Trustee. The
Determination Date Report and any written information supplemental thereto shall include such information with respect to the Mortgage Loans that is reasonably available to the Servicer and that is required by the Trustee for purposes of making the
calculations and providing the reports referred to in this Agreement, as set forth in written specifications or guidelines issued by the Trustee from time to time. Such information shall include the aggregate amounts required to be withdrawn from
the Collection Account and deposited into the Distribution Account pursuant to Section 3.07. Such information shall also include (a) the number of Mortgage Loans that prepaid in the previous month; (b) the loan balance of each such
Mortgage Loan; (c) whether a prepayment penalty was applied to such Mortgage Loan; and (d) the amount of prepayment penalty with respect to each such Mortgage Loan. The Servicer agrees to cooperate with the Trustee in providing all
information as is reasonably requested by the Trustee to prepare the reports required under the Agreement. 
  

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 The determination by the Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Trustee shall be fully protected in relying upon the same without any independent check or verification. 
 Section 3.24 Advances. 
 If any
Monthly Payment (together with any advances from the Subservicers) on a Mortgage Loan that was due on the immediately preceding Due Date and delinquent on the Determination Date is delinquent other than as a result of application of the Relief Act,
the Servicer will deposit in the Collection Account not later than the Servicer Remittance Date immediately preceding the related Distribution Date an amount equal to such deficiency net of the related Servicing Fee for such Mortgage Loan, except to
the extent the Servicer determines any such advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments on such Mortgage Loan. Subject to the foregoing and in the absence of such a determination, the Servicer shall
continue to make such advances through the date that the related Mortgaged Property has, in the judgment of the Servicer, been completely liquidated. 
 The Servicer may fund an Advance from its own corporate funds, advances made by any subservicer or funds held in the Collection Account for future payment or withdrawal. 
 Advances made from funds held in the Collection Account may be made by the Servicer from subsequent collections of principal and interest received on
other Mortgage Loans and deposited into the Collection Account. Advances made from the Collection Account are not limited to subsequent collections of principal and interest received on the delinquent Mortgage Loan with respect to which an Advance
is made. If on the Servicer Remittance Date prior to any Distribution Date funds in the Collection Account are less than the amount that would have been paid to the Certificateholders had the Servicer not withdrawn such funds on such Distribution
Date, then the Servicer shall deposit its own funds into the Distribution Account in the amount of the lesser of (i) any unreimbursed Advances previously made by the Servicer with funds held in the Collection Account or (ii) the shortfall
in the Collection Account, provided, however, that in no event shall the Servicer deposit into the Collection Account an amount that is less than any shortfall in the Collection Account attributable to delinquent payments on Mortgage Loans which the
Servicer deems to be recoverable and which has not been covered by an Advance from the Servicer’s own corporate funds or any subservicer’s funds. The Servicer is not entitled to reimbursement of any Advance unless such Advance was paid
from corporate funds or was advanced to it by any Advance Facility. If applicable, on the Servicer Remittance Date preceding each Distribution Date, the Servicer shall present an Officers’ Certificate to the Trustee and the Class A-1
Insurer (i) stating that the Servicer elects not to make an Advance in a stated amount and (ii) detailing the reason it deems the advance to be nonrecoverable. 
 Section 3.25 Compensating Interest Payments. 
 The Servicer shall deposit in the Collection Account
not later than the Servicer Remittance Date preceding the Distribution Date an amount equal to the Compensating Interest related to the related Determination Date. The Servicer shall not be entitled to any reimbursement of any Compensating Interest
payment. 
  

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 Section 3.26 Advance Facility. 
 (a) The Servicer on behalf of the Trust Fund, with the prior written consent of the Class A-1 Insurer is hereby authorized to enter into a facility
(such an arrangement, an “Advance Facility”) with any Person which provides that such Person (an “Advancing Person”) may fund Advances and/or Servicing Advances under this Agreement, although no such facility shall
reduce or otherwise affect the Servicer’s obligation to fund such Advances and/or Servicing Advances. No consent of the Trustee, Certificateholders or any other party (other than the Class A-1 Insurer) shall be required before the Servicer
may enter into an Advance Facility nor shall the Trustee or the Certificateholders be a third party beneficiary of any obligation of an Advancing Person to the Servicer. If the Servicer enters into an Advance Facility, the Servicer and the related
Advancing Person shall deliver to the Trustee at the address set forth in Section 12.05 hereof a written notice (an “Advance Facility Notice”), stating (a) the identity of the Advancing Person and (b) the identity of
the Person (the “Servicer’s Assignee”) that will, subject to Section 3.26(b) hereof, have the right to make withdrawals from the Collection Account pursuant to Section 3.07 hereof to reimburse previously unreimbursed
Advances and/or Servicing Advances (“Advance Reimbursement Amounts”). If the Servicer enters into such an Advance Facility pursuant to this Section 3.26, upon reasonable request of the Advancing Person, the Trustee shall
execute a letter of acknowledgment, as prepared by the Servicer confirming its receipt of written notice of the existence of such Advance Facility. To the extent that an Advancing Person purchases or funds any Advance or any Servicing Advance and
provides the Trustee with written notice acknowledged by the Servicer that such Advancing Person is entitled to reimbursement directly from the Trustee pursuant to the terms of the Advance Facility, such Advancing Person shall be entitled to receive
reimbursement pursuant to this Agreement for such amount to the extent provided in Section 3.26(b). Such notice from the Advancing Person must specify the amount of the reimbursement, the Section of this Agreement that permits the applicable
Advance or Servicing Advance to be reimbursed and the section(s) of the Advance Facility that entitle the Advancing Person to request reimbursement from the Trustee, rather than the Servicer, and include the Servicer’s acknowledgment thereto or
proof of an Event of Default under the Advance Facility. The Trustee shall have no duty or liability with respect to any calculation of any reimbursement to be paid to an Advancing Person and shall be entitled to rely without independent
investigation on the Advancing Person’s notice provided pursuant to this Section 3.26. An Advancing Person whose obligations hereunder are limited to the funding of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Sub-Servicer pursuant to Section 6.06 hereof. 
 (b) Notwithstanding the foregoing, and for the avoidance of doubt,
(i) the Servicer and/or the Servicer’s Assignee shall only be entitled to reimbursement of Advance reimbursement amounts hereunder from withdrawals from the Collection Account pursuant to Section 3.07 of this Agreement and shall not
otherwise be entitled to make withdrawals or receive amounts that shall be deposited in the Distribution Account, and (ii) none of the Trustee or the Certificateholders shall have any right to, or otherwise be entitled to, receive any Advance
reimbursement amounts to which the Servicer or Servicer’s Assignee, as applicable, shall be entitled pursuant to Section 3.07 hereof. An Advance Facility may be terminated by the joint written direction of the Servicer and the related
Advancing Person. Written notice of such termination shall be delivered to the Trustee 

  

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in the manner set forth in Section 12.05 hereof. None of the Depositor or the Trustee shall, as a result of the existence of any Advance Facility, have
any additional duty or liability with respect to the calculation or payment of any Advance reimbursement amount, nor, as a result of the existence of any Advance Facility, shall the Depositor or the Trustee have any additional responsibility to
track or monitor the administration of the Advance Facility or the payment of Advance reimbursement amounts to the Servicer’s Assignee. The Servicer shall indemnify the Depositor, the Trustee, any successor Servicer and the Trust Fund for any
claim, loss, liability or damage resulting from any claim by the related Advancing Person, except to the extent that such claim, loss, liability or damage resulted from or arose out of negligence, recklessness or willful misconduct on the part of
the Depositor, the Trustee or any successor Servicer, as the case may be, or failure by the successor Servicer or the Trustee, as the case may be, to remit funds as required by this Agreement or the commission of an act or omission to act by the
successor Servicer or the Trustee, as the case may be, and the passage of any applicable cure or grace period, such that an Event of Default under this Agreement occurs or such entity is subject to termination for cause under this Agreement. The
Servicer shall maintain and provide to any successor Servicer and, upon request, the Trustee a detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The successor
Servicer shall be entitled to rely on any such information provided by the predecessor Servicer, and the successor Servicer shall not be liable for any errors in such information. 
 (c) If an Advancing Person is entitled to reimbursement for any particular Advance or Servicing Advance as set forth in Section 3.26(a), then the
Servicer shall not be permitted to reimburse itself therefor under Section 3.07, but instead the Servicer shall include such amounts in the applicable remittance to the Trustee made pursuant to Section 3.06(d) to the extent of amounts on
deposit in the Collection Account on the related Servicer Remittance Date. The Trustee is hereby authorized to pay to an Advancing Person reimbursements for Advances and Servicing Advances from the Distribution Account to the same extent the
Servicer would have been permitted to reimburse itself for such Advances and/or Servicing Advances in accordance with Section 3.07, had the Servicer made such Advance or Servicing Advance. 
 (d) All Advances and Servicing Advances made pursuant to the terms of this Agreement shall be deemed made and shall be reimbursed on a “first in
first out” (FIFO) basis. In the event the Servicer’s Assignee shall have received some or all of an Advance reimbursement amount related to Advances and/or Servicing Advances that were made by a Person other than such predecessor Servicer
or its related Advancing Person in error, then such Servicer’s Assignee shall be required to remit any portion of such Advance reimbursement amount to each Person entitled to such portion of such Advance reimbursement amount. Without limiting
the generality of the foregoing, the Servicer shall remain entitled to be reimbursed pursuant to Section 3.07 for all Advances and/or Servicing Advances funded by the Servicer to the extent the related Advance reimbursement amounts have not
been assigned, sold or pledged to such Advancing Person or Servicer’s Assignee. 
 (e) In the event the Servicer is terminated pursuant
to Section 7.01, the Advancing Person shall succeed to the terminated Servicer’s right of reimbursement set forth in Section 7.02 to the extent of such Advancing Person’s financing of Advances or Servicing Advances hereunder then
remaining unreimbursed. 
  

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 (f) Any amendment to this Section 3.26 or to any other provision of this Agreement that may be
necessary or appropriate to effect the terms of an Advance Facility as described generally in this Section 3.26, including amendments to add provisions relating to a successor Servicer, may be entered into by the Trustee, the Depositor and the
Servicer without the consent of any Certificateholder but with the consent of the Class A-1 Insurer, provided such amendment complies with Section 12.01 hereof. All reasonable costs and expenses (including attorneys’ fees) of each
party hereto of any such amendment shall be borne solely by the Servicer. The parties hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing Advances financed by, sold and/or pledged to an Advancing Person under any Advance
Facility are obligations owed to the Servicer payable only from the cash flows and proceeds received under this Agreement for reimbursement of Advances and/or Servicing Advances only to the extent provided herein, and the Trustee and the Trust Fund
are not, as a result of the existence of any Advance Facility, obligated or liable to repay any Advances and/or Servicing Advances financed by the Advancing Person; (b) the Servicer will be responsible for remitting to the Advancing Person the
applicable amounts collected by it as reimbursement for Advances and/or Servicing Advances purchased or funded by the Advancing Person, subject to the provisions of this Agreement; and (c) the Trustee shall not have any responsibility to track
or monitor the administration of the financing arrangement between the Servicer and any Advancing Person. 
 ARTICLE IV 
 FLOW OF FUNDS 
 Section 4.01
Distributions. 
 (a) On each Distribution Date, the Trustee, will first distribute the Prepayment Charges collected on the Group I
Mortgage Loans and on the Group II Mortgage Loans during the prior Prepayment Period to the Holders of the Class P Certificates. After making that distribution, the Trustee shall (based solely on the information provided to the Trustee by the
Servicer pursuant to Section 3.23 hereof) withdraw from the Distribution Account that portion of Available Funds for such Distribution Date consisting of the Interest Remittance Amount for such Distribution Date, and make the following
disbursements and transfers in the order of priority described below, in each case to the extent of the Interest Remittance Amount remaining for such Distribution Date: 
 (i) On each Distribution Date, the Trustee, will distribute, pro rata from the Group I Interest Remittance Amount, the Group II Interest
Remittance Amount, the Trustee Fee and the Custodian Fee which is due on that Distribution Date to the Trustee and Custodian respectively. After making that distribution, the Trustee will then apply the remaining Interest Remittance Amount to the
payment of interest then due on the certificates in the following order of priority: 
 (A) first, on each Distribution
Date on or prior to the Class I Termination Date, payable from the Group I Interest Remittance Amount and the Group II Interest Remittance Amount, to the Holders of the Class I Certificates, the Class I Monthly Interest Distributable Amount;

 (B) second, concurrently, with equal priority of payment: 
  

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 (I) payable solely from the remaining Group I Interest Remittance Amount for that
Distribution Date and, to the extent that such remaining Group I Interest Remittance Amount is less than the sum of the amounts listed in this Section 4.01(a)(i)(B)(I), also from the Group II Interest Cross Collateralization Amount, the
following amounts in the following order of priority: 
 first, to pay any current or previously unpaid insurer
premiums due to the Class A-1 Insurer; 
 second, to pay the Monthly Interest Distributable Amount for the
Class A-1 Certificates; and 
 third, to pay any unreimbursed draws on the Class A-1 Certificate Insurance
Policy in respect of interest and other amounts (other than unreimbursed principal policy draws) due under the Insurance Agreement to the Class A-1 Insurer; and 
 (II) payable solely from the remaining Group II Interest Remittance Amount for that Distribution Date and, to the extent that such
remaining Group II Interest Remittance Amount is less than the related Monthly Interest Distributable Amount for the Group II Class A Certificates, also from the Group I Interest Cross Collateralization Amount, to the Holders of each class of
the Group II Class A Certificates, the Monthly Interest Distributable Amount for the Group II Class A Certificates, pro rata based on the amount of interest each such class is otherwise entitled to on that date; and 
 (C) third, payable from the remaining Group I Interest Remittance Amount and the remaining Group II Interest Remittance Amount, to
the Holders of the Class M-1 Certificates, the Monthly Interest Distributable Amount for the Class M-1 Certificates; 
 (D)
fourth, payable from the remaining Group I Interest Remittance Amount and the remaining Group II Interest Remittance Amount, to the Holders of the Class M-2 Certificates, the Monthly Interest Distributable Amount for the Class M-2
Certificates; 
 (E) fifth, payable from the remaining Group I Interest Remittance Amount and the remaining Group II
Interest Remittance Amount, to the Holders of the Class M-3 Certificates, the Monthly Interest Distributable Amount for the Class M-3 Certificates; 
 (F) sixth, payable from the remaining Group I Interest Remittance Amount and the remaining Group II Interest Remittance Amount, to the Holders of the Class M-4 Certificates, the Monthly Interest Distributable
Amount for the Class M-4 Certificates; 
 (G) seventh, payable from the remaining Group I Interest Remittance Amount
and the remaining Group II Interest Remittance Amount, to the Holders of the Class M-5 Certificates, the Monthly Interest Distributable Amount for the Class M-5 Certificates; 
  

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 (H) eighth, payable from the remaining Group I Interest Remittance Amount and the
remaining Group II Interest Remittance Amount, to the Holders of the Class B-1 Certificates, the Monthly Interest Distributable Amount for the Class B-1 Certificates; 
 (I) ninth, payable from the remaining Group I Interest Remittance Amount and the remaining Group II Interest Remittance Amount, to
the Holders of the Class B-2 Certificates, the Monthly Interest Distributable Amount for the Class B-2 Certificates; 
 (J)
tenth, payable from the remaining Group I Interest Remittance Amount and the remaining Group II Interest Remittance Amount, to the Holders of the Class B-3 Certificates, the Monthly Interest Distributable Amount for the Class B-3
Certificates; 
 (K) eleventh, payable from the remaining Group I Interest Remittance Amount and the remaining Group II
Interest Remittance Amount, to the Holders of the Class X Certificates for the benefit of Supplemental Interest Trust I, the Mortgage Excess Cashflow (net of any amounts distributed pursuant to Section 4.04(d)(i)), to be distributed pursuant to
Section 4.04(d)(ii); and 
 (L) twelfth, payable from the remaining Group I Interest Remittance Amount and the
remaining Group II Interest Remittance Amount, to the Holders of the Class R Certificates, any remainder. 
 (ii) On each
Distribution Date (a) prior to the Crossover Date or (b) on which a Trigger Event is in effect, the Trustee, shall (based solely on the information provided to the Trustee by the Servicer pursuant to Section 3.23 hereof) withdraw from
the Distribution Account that portion of the Available Funds for such Distribution Date consisting of the Group I Principal Distribution Amount and Group II Principal Distribution Amount and make the following disbursements and transfers in the
order of priority described below: 
 (A) first, concurrently, with equal priority of payment: 
 (I) payable solely from the Group I Principal Distribution Amount, plus, to the extent that such amounts are insufficient, the applicable
Group II Principal Cross Collateralization Amount, the following amounts and order of priority: 
 first, to the
Holders of the Class A-1 Certificates, until the Certificate Principal Balance of the Class A-1 Certificates has been reduced to zero; and 
 second, to the Class A-1 Insurer, to pay any unreimbursed draws on the Class A-1 Certificate Insurance Policy in respect of interest or principal, and other amounts due to it under the Insurance
Agreement; 
  

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 (II) payable solely from the Group II Principal Distribution Amount, plus, to the extent
that such amounts are insufficient, the applicable Group I Principal Cross Collateralization Amount, if any, to the Holders of the Group II Class A Certificates, until the aggregate Certificate Principal Balance of the Group II Class A
Certificates has been reduced to zero (except that on the Class P Principal Distribution Date, the Certificate Principal Balance of the Class P Certificates shall first be paid from the Group II Principal Distribution Amount to the Holders of the
Class P Certificates); 
 (B) second, payable from the remaining Group I Principal Distribution Amount and the
remaining Group II Principal Distribution Amount, to the Holders of the Class M-1 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class M-1 Certificates has been reduced
to zero; 
 (C) third, payable from the remaining Group I Principal Distribution Amount and the remaining Group II
Principal Distribution Amount, to the Holders of the Class M-2 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class M-2 Certificates has been reduced to zero; 

(D) fourth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-3 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class M-3 Certificates has been reduced to zero; 
 (E) fifth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-4 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class M-4 Certificates has been reduced to zero; 
 (F) sixth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-5 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class M-5 Certificates has been reduced to zero; 
 (G) seventh, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class B-1 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class B-1 Certificates has been reduced to zero; 
 (H) eighth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class B-2 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class B-2 Certificates has been reduced to zero; 
  

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 (I) ninth, payable from the remaining Group I Principal Distribution Amount and
the remaining Group II Principal Distribution Amount, to the Holders of the Class B-3 Certificates, the entire remaining amount of the Principal Distribution Amount until the Certificate Principal Balance of the Class B-3 Certificates has been
reduced to zero; 
 (J) tenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group
II Principal Distribution Amount, to the Trustee and the Custodian, pro rata, any amounts owed to them under the Basic Documents remaining unpaid; 
 (K) eleventh, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution Amount, to the Servicer, the amount of any reimbursement of indemnification owed
to it by the Trust pursuant to Section 6.03 hereof; 
 (L) twelfth, payable from the remaining Group I Principal
Distribution Amount and the remaining Group II Principal Distribution Amount, and any remaining Available Funds relating to principal, to the Holders of the Class O Certificates, for the benefit of Supplemental Interest Trust I, the entire remaining
Principal Distribution Amount plus any remaining Overcollateralization Release Amount until the Certificate Principal Balance of the Class O Certificates has been paid; and 
 (M) thirteenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, and any remaining Available Funds relating to principal, to the Holders of the Class X Certificates, for the benefit of Supplemental Interest Trust I, any remaining Overcollateralization Release Amount; and 
 (N) fourteenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class R Certificates, for the benefit of Supplemental Interest Trust I, any remainder. 
 (iii)
On each Distribution Date (a) on or after the Crossover Date and (b) on which a Trigger Event is not in effect, the Trustee, shall (based solely on the information provided to the Trustee by the Servicer pursuant to Section 3.23
hereof) withdraw from the Distribution Account that portion of the Available Funds for such Distribution Date consisting of the Group I Principal Distribution Amount and Group II Principal Distribution Amount and make the following disbursements and
transfers in the order of priority described below: 
 (A) first, concurrently, with equal priority of payment:

  

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 (I) payable solely from the Group I Principal Distribution Amount, plus, to the extent
that such amounts are insufficient, the applicable Group II Principal Cross Collateralization Amount, the following amounts and order of priority: 
 first, to the Holders of the Class A-1 Certificates, the Class A-1 Principal Distribution Amount until the Certificate Principal Balance of the Class A-1 Certificates has been reduced to zero;
and 
 second, to the Class A-1 Insurer, to pay any unreimbursed draws on the Class A-1 Certificate
Insurance Policy in respect of interest or principal, and other amounts due to it under the Insurance Agreement; 
 (II)
payable solely from the Group II Principal Distribution Amount, plus, to the extent that such amounts are insufficient, the applicable Group I Principal Cross Collateralization Amount, if any, to the Holders of the Group II Class A
Certificates, the Group II Certificate Principal Distribution Amount, until the aggregate Certificate Principal Balance of the Group II Class A Certificates has been reduced to zero (except that on the Class P Principal Distribution Date, the
Certificate Principal Balance of the Class P Certificates shall first be paid from the Group II Principal Distribution Amount to the Holders of the Class P Certificates); 
 (B) second, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-1 Certificates, the Class M-1 Principal Distribution Amount, until the Certificate Principal Balance of the Class M-1 Certificates has been reduced to zero; 
 (C) third, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-2 Certificates, the Class M-2 Principal Distribution Amount, until the Certificate Principal Balance of the Class M-2 Certificates has been reduced to zero; 
 (D) fourth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-3 Certificates, the Class M-3 Principal Distribution Amount, until the Certificate Principal Balance of the Class M-3 Certificates has been reduced to zero; 
 (E) fifth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-4 Certificates, the Class M-4 Principal Distribution Amount, until the Certificate Principal Balance of the Class M-4 Certificates has been reduced to zero; 
 (F) sixth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class M-5 Certificates, the Class M-5 Principal Distribution Amount, until the Certificate Principal Balance of the Class M-5 Certificates has been reduced to zero; 
 (G) seventh, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class B-1 Certificates, the Class B-1 Principal Distribution Amount, until the Certificate Principal Balance of the Class B-1 Certificates has been reduced to zero; 
  

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 (H) eighth, payable from the remaining Group I Principal Distribution Amount and
the remaining Group II Principal Distribution Amount, to the Holders of the Class B-2 Certificates, the Class B-2 Principal Distribution Amount, until the Certificate Principal Balance of the Class B-2 Certificates has been reduced to zero;

 (I) ninth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal
Distribution Amount, to the Holders of the Class B-3 Certificates, the Class B-3 Principal Distribution Amount, until the Certificate Principal Balance of the Class B-3 Certificates has been reduced to zero; 
 (J) tenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Trustee and the Custodian, pro rata, any amounts owed to them under the Basic Documents remaining unpaid; 
 (K) eleventh, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution Amount, to the Servicer, the amount of any reimbursement of indemnification owed to it by the Trust
pursuant to Section 6.03 hereof; 
 (L) twelfth, payable from the remaining Group I Principal Distribution Amount
and the remaining Group II Principal Distribution Amount, and any remaining Available Funds relating to principal, to the Holders of the Class O Certificates, for the benefit of Supplemental Interest Trust I, the entire remaining Group I Principal
Distribution Amount and Group II Principal Distribution Amount plus any remaining Overcollateralization Release Amount until the Certificate Principal Balance of the Class O Certificates has been paid; 
 (M) thirteenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, and any remaining Available Funds relating to principal, to the Holders of the Class X Certificates, for the benefit of Supplemental Interest Trust I, any remaining Overcollateralization Release Amount; and 
 (N) fourteenth, payable from the remaining Group I Principal Distribution Amount and the remaining Group II Principal Distribution
Amount, to the Holders of the Class R Certificates, for the benefit of Supplemental Interest Trust I, any remainder. 
 (b) Method of
Distribution. The Trustee shall make distributions in respect of a Distribution Date to each Certificateholder of record on the related Record Date (other than as provided in Section 11.01 respecting the final distribution), in the case of
Certificateholders of the Regular Certificates, by wire transfer, or upon written request at least five Business Days prior to the related Distribution Date by check or money order mailed to such Certificateholder at the address appearing in the
Certificate Register. Distributions among Certificateholders shall be made in proportion to the Percentage Interests evidenced by the Certificates held by such Certificateholders. 
  

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 (c) Distributions on Book-Entry Certificates. Each distribution with respect to a Book-Entry
Certificate shall be paid to the Depository, which shall credit the amount of such distribution to the accounts of its Depository Participants in accordance with its normal procedures. Each Depository Participant shall be responsible for disbursing
such distribution to the Certificate Owners that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each brokerage firm shall be
responsible for disbursing funds to the Certificate Owners that it represents. All such credits and disbursements with respect to a Book-Entry Certificate are to be made by the Depository and the Depository Participants in accordance with the
provisions of the Certificates. None of the Custodian, the Trustee, the Depositor, the Servicer or the Seller shall have any responsibility therefor except as otherwise provided by applicable law. 
 (d) All principal amounts distributed to the Group II Class A Certificates shall be distributed pro rata to (a) the Class A-2 Certificates
on the one hand and (b) the Class A-3, Class A-4 and Class A-5 Certificates in the aggregate, on the other hand, such pro rata distribution to be based on (x) the aggregate Certificate Principal Balance of the Class A-2
Certificates and (y) the aggregate Certificate Principal Balance of the Class A-3, Class A-4 and Class A-5 Certificates, respectively. The principal amounts distributed to the Class A-3, Class A-4 and Class A-5
Certificates shall be distributed as follows: 
 (i) first, to the Class A-3 Certificates, until its Certificate
Principal Balance has been reduced to zero; 
 (ii) second, after the Certificate Principal Balance of the
Class A-3 Certificates has been reduced to zero, any remaining amounts to the Class A-4 Certificates until its Certificate Principal Balance has been reduced to zero; and 
 (iii) third, after the Certificate Principal Balance of the Class A-4 Certificates has been reduced to zero, any remaining
amounts to the Class A-5 Certificates until its Certificate Principal Balance has been reduced to zero. 
 Section 4.02 Distribution
Account. 
 (a) No later than the Closing Date, the Trustee, shall establish and maintain a segregated trust account that is an Eligible
Account, which shall be titled “Distribution Account, [                    ], as Trustee for the registered holders of NovaStar Mortgage
Funding Trust 20[    ]-[    ], Home Equity Loan Asset-Backed Certificates, Series 20[    ] -[    ]” (the “Distribution
Account”). The Trustee shall, promptly upon receipt, deposit in the Distribution Account and retain therein the Interest Remittance Amount and the Principal Remittance Amount remitted on each Servicer Remittance Date to the Trustee by the
Servicer. Funds deposited in the Distribution Account shall be held in trust by the Trustee for the Certificateholders for the uses and purposes set forth herein. 
 (b) The Trustee may invest funds deposited in the Distribution Account in Eligible Investments in accordance with the written direction of the Servicer with a maturity date no later 

  

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than the Business Day immediately proceeding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement. All
income or other gain from such investments may be released from the Distribution Account and paid to the Servicer. The Servicer shall be obligated to cover losses on such Eligible Investments immediately upon realization. If the Trustee does not
receive such written investment direction it shall retain the funds uninvested. 
 (c) Amounts on deposit in the Distribution Account shall
be withdrawn by the Trustee as follows: 
 (i) To fund the distributions described in Section 4.01 hereof; 
 (ii) To withdraw any amount not required to be deposited in the Distribution Account or deposited therein in error; 
 (iii) To clear and terminate the Distribution Account upon the termination of this Agreement, with any amounts remaining on deposit
therein being paid to the Holders of the Class R Certificates; and 
 (iv) To distribute any amounts of investment income to
the Servicer. 
 (d) On each Distribution Date, the Trustee shall distribute all amounts on deposit in the Distribution Account (other than
investment income) established by it to Certificateholders in respect of the Certificates and to such other persons in the order of priority set forth in Section 4.01 hereof. 
 Section 4.03 Statements. 
 (a) On each
Distribution Date, based solely on information provided to it by the Servicer in its Determination Date Report, the Trustee shall prepare and make available to each Holder of the Regular Certificates, the Swap Counterparties, the Servicer, the
Class A-1 Insurer and the Rating Agencies, a statement as to the distributions made on such Distribution Date: 
 (i) the
amount of the distribution made on such Distribution Date to the Holders of each Class of Regular Certificates, separately identified, allocable to principal and the amount of the distribution made to the Holders of the Class P Certificates
allocable to Prepayment Charges; 
 (ii) the amount of the distribution made on such Distribution Date to the Holders of each
Class of Regular Certificates (other than the Class P Certificates) allocable to interest, separately identified; 
 (iii) the
Pool Balance of the Group I Mortgage Loans and the Group II Mortgage Loans at the Close of Business at the end of the related Due Period; 
 (iv) the number, aggregate principal balance, and weighted average Mortgage Rate of the Mortgage Loans (identified by Group) as of the related Determination Date and the number and aggregate principal balance of all
Subsequent Mortgage Loans added (identified by Group) during the preceding Prepayment Period; 
  

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 (v) the number and aggregate unpaid principal balance of Mortgage Loans (identified by
Group) that (A) were Delinquent (exclusive of Mortgage Loans in bankruptcy or foreclosure and REO Properties) (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (B) as to which foreclosure proceedings have been
commenced and that (i) are not Delinquent, and (ii) are Delinquent (1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days, (C) related to a REO Property that (i) is not Delinquent and (ii) is Delinquent
(1) 30 to 59 days, (2) 60 to 89 days and (3) 90 or more days and (D) related to a Mortgagor that was subject to a bankruptcy proceeding and that (i) is not Delinquent and (ii) is Delinquent (1) 30 to 59 days,
(2) 60 to 89 days and (3) 90 or more days, in each case on a contractual and bankruptcy legal basis; 
 (vi) the
aggregate amount of Principal Prepayments made during the related Prepayment Period; 
 (vii) the aggregate amount of Realized
Losses incurred during the related Prepayment Period and the cumulative amount of Realized Losses; 
 (viii) the Certificate
Principal Balance of each class of the Class A Certificates, each class of the Mezzanine Certificates, each class of the Class B Certificates and the Class O Certificates, after giving effect to the distributions made on such Distribution Date;

 (ix) the Unpaid Interest Shortfall Amount, if any, with respect to each class of the Class A Certificates, each class
of the Mezzanine Certificates and each class of Class B Certificates for such Distribution Date; 
 (x) the aggregate amount
of any Prepayment Interest Shortfalls for such Distribution Date, to the extent not covered by payments by the Servicer pursuant to Section 3.25; 
 (xi) the Credit Enhancement Percentage for such Distribution Date; 
 (xii) the Available
Funds Cap Carryforward Amount for each class of the Class A Certificates, each class of the Mezzanine Certificates and each class of the Class B Certificates if any, for such Distribution Date and the amount remaining unpaid after
reimbursements therefor on such Distribution Date; 
 (xiii) the respective Pass-Through Rates applicable to each class of the
Class A Certificates, each class of the Mezzanine Certificates and the Class B Certificates for such Distribution Date and the Pass-Through Rate applicable to each class of the Class A Certificates, each class of the Mezzanine Certificates
and each class of the Class B Certificates for the immediately succeeding Distribution Date; 
 (xiv) the Supplemental
Interest Payment for each Class on such Distribution Date; 
 (xv) (x) the aggregate notional amount of the Swap
Agreements and Cap Agreements, (y) the aggregate Certificate Principal Balance of the Underwritten Certificates on such Distribution Date and (z) the difference between (x) and (y); 
  

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 (xvi) the Required Overcollateralization Amount for such Distribution Date; 

(xvii) the Excess Cashflow (separately detailing the Mortgage Excess Cashflow and Swap Excess Cashflow, respectively) for such
Distribution Date; 
 (xviii) the aggregate amount of Scheduled Principal Payments made during the related Due Period;

 (xix) the aggregate amount of Principal Prepayments made during the related Due Period in which the related Mortgagor paid
the related Mortgage Loan in full; 
 (xx) the aggregate amount of Principal Prepayments in part made during the related
Prepayment Period; 
 (xxi) the number and the aggregate principal balance of all Liquidated Mortgage Loans for the related
Prepayment Period; 
 (xxii) the aggregate amount of Net Liquidation Proceeds received during the related Prepayment Period;

 (xxiii) the Group I Class I Monthly Interest Distributable Amount and the Group II Class I Monthly Interest Distributable
Amount; and 
 (xxiv) the dollar amount of claims made, amounts paid by the MI Insurer in respect of claims made, and premiums
due and paid under the MI Policy. 
 In the case of information furnished pursuant to subclauses (i) and (ii) above, the amounts
shall be expressed in a separate section of the report as a dollar amount for each Class for each $1,000 original dollar amount as of the Closing Date. 
 The Trustee may, in the absence of manifest error, conclusively rely upon the Determination Date Report of the Servicer in its preparation of the statement to Certificateholders pursuant to this Section 4.03.

 (b) Within a reasonable period of time after the end of each calendar year, the Trustee shall, upon written request, furnish to each
Person who at any time during the calendar year was a Certificateholder of a Regular Certificate, if requested in writing by such Person, such information as is reasonably necessary to provide to such Person a statement containing the information
set forth in subclauses (i) and (ii) above, aggregated for such calendar year or applicable portion thereof during which such Person was a Certificateholder. Such obligation of the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be prepared and furnished by the Trustee to Certificateholders pursuant to any requirements of the Code as are in force from time to time. 
 (c) On each Distribution Date, the Trustee shall forward to the Residual Certificateholders a copy of the reports forwarded to the Regular
Certificateholders in respect of such Distribution Date with such other information as the Trustee deems necessary or appropriate. 
  

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 (d) Within a reasonable period of time after the end of each calendar year, the Trustee shall deliver to
each Person who at any time during the calendar year was a Residual Certificateholder, if requested in writing by such Person, such information as is reasonably necessary to provide to such Person a statement containing the information provided
pursuant to the previous paragraph aggregated for such calendar year or applicable portion thereof during which such Person was a Residual Certificateholder. Such obligation of the Trustee shall be deemed to have been satisfied to the extent that
substantially comparable information shall be prepared and furnished to Certificateholders by the Trustee pursuant to any requirements of the Code as from time to time in force. 
 (e) On each Distribution Date, the Trustee shall post on its website at
[                        ], which posting shall be accessible to each Certificateholder and the Swap Counterparties, the
statement prepared pursuant to paragraph (a) of this Section 4.03, except that the Trustee shall email a copy of such statement to the Class A-1 Insurer on each Distribution Date to mbsreports@fsa.com. Assistance in using the website
can be obtained by calling the Trustee’s customer service desk at 1-877-722-1095. Such parties that are unable to use the website are entitled to have a paper copy mailed to them via first class mail by providing a written request of such to
the Trustee at is Corporate Trust office. The Trustee shall have the right to change the way such statements are distributed in order to make such distribution more convenient and/or accessible to the above parties and the Trustee shall provide
timely and adequate notification to all above parties regarding any such changes. The Trustee shall not have any responsibility to (i) verify information provided by the Servicer to be included in such statement or (ii) include any
information required to be included in such statement if the Servicer has failed to timely produce such information to the Trustee, as required pursuant hereto. 
 (f) No later than noon on the second Business Day prior to each Distribution Date, the Trustee will verify that no Notional Amount Test Event is scheduled to occur on the related Distribution Date. In the event a
Notional Amount Test Event would otherwise occur on the related Distribution Date, the Trustee will immediately provide notice in the form of Exhibit J to the appropriate NovaStar entity and assign in $10,000,000 increments a portion of the related
notional amount from the affected Swap Agreement or Cap Agreement on the day immediately preceding that Distribution Date until no Notional Amount Test Event will occur on the related Distribution Date. The Trustee shall assign the applicable
notional amount from the Swap Agreement or Cap Agreement, as applicable, in the priority set forth below. Once such Swap Agreement notional amounts have been assigned back to the appropriate NovaStar entity, the related Swap Counterparty will have
no obligation to, nor interest in, any Supplemental Interest Trust with respect to such notional amounts. Once such Cap Agreement notional amounts have been assigned back to the appropriate NovaStar entity, the Cap Counterparty will have no
obligation to any applicable Supplemental Interest Trust with respect to such notional amounts. Furthermore, no distributions will be made from Supplemental Interest Trust I to the related Swap Counterparty in respect of notional amounts assigned
under this Section 4.03 (f). 
 The Trustee will assign portions of the affected Swap Agreements or Cap Agreements as applicable in the
following order of priority: 
 (i) from the Swap Agreement with the earliest maturity (until no Notional Amount Test Event
would have occurred); 
  

 45 

 (ii) in the event that two or more Swap Agreements have the same maturity, from the Swap
Agreement with the lowest fixed rate (until no Notional Amount Test Event would have occurred); and 
 (iii) in the event that
no Swap Agreements are outstanding, from the then outstanding Cap Agreements on a pro rata basis based on the notional amounts of such Cap Agreements (until no Notional Amount Test Event would have occurred). 
 In no event shall the Trustee allow a Notional Amount Test Event to occur on any Distribution Date. 
 Section 4.04 Supplemental Interest Trusts; Excess Cashflow. 
 (a) (i) The parties do hereby create and establish four sub-trusts of the Trust Fund, each of which shall hold an account, which, no later than the Closing Date, the Trustee shall, at the direction of the
Servicer, establish and maintain, as segregated trust accounts that are Eligible Accounts, which shall be titled “Supplemental Interest Trust [I] [II] [III] [IV], [as applicable],
[                        ], as Trustee for the registered holders of NovaStar Mortgage Funding Trust 20[ ]-[ ], Home
Equity Loan Asset-Backed Certificates, Series 20[    ]-[    ].” On the Closing Date, the Trustee shall deposit an amount equal to the Initial Swap Amount (as identified on the settlement
statement provided by the Seller) to Supplemental Interest Trust I. The Trustee shall, promptly upon receipt, deposit in Supplemental Interest Trust I amounts of Mortgage Excess Cashflow, if any, pursuant to Section 4.01(a)(i)(K), each
distribution of the Class I Monthly Interest Distributable Amount pursuant to Section 4.01(a)(i)(A) and any amounts received under any Swap Agreement pursuant to Section 4.04(h). Funds deposited in the Supplemental Interest Trusts shall be
held in trust by the Trustee for the Certificateholders and the applicable Swap Counterparty for the uses and purposes set forth herein. None of the Supplemental Interest Trusts nor the related Supplemental Interest Accounts shall be an asset of any
of the REMICs created hereunder. 
 (ii) (a) On each Distribution Date on or prior to the Class I Termination Date, the
funds in Supplemental Interest Trust I (as reduced from time to time in accordance with this Section 4.04) will equal the sum of (a) any amounts received under any Swap Agreement pursuant to Section 4.04(h), (b) the Class I
Monthly Interest Distributable Amount and (c) any amounts of Mortgage Excess Cashflow (net of any amounts distributed pursuant to Section 4.04(d)(i)). 
 On each Distribution Date after the Class I Termination Date, the funds in Supplemental Interest Trust I (as reduced from time to time in accordance with this Section 4.04) will equal any amounts of Mortgage
Excess Cashflow (net of any amounts distributed pursuant to Section 4.04(d)(i)). 
 (b) The Trustee will invest funds deposited in the
Supplemental Interest Trusts as directed in writing by the Servicer in Eligible Investments with a maturity date (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such
account pursuant to this Agreement, if a Person other than the Trustee or an Affiliate manages or advises such investment, and (ii) no later than the date on which such funds are required to be withdrawn from such account pursuant to this
Agreement, if the Trustee or an 

  

 46 

 
Affiliate manages or advises such investment. All income and gain realized from investment of funds deposited in the applicable Supplemental Interest Trust
shall be credited to such Account, provided, however, that any income and gain realized during the period commencing on the Closing Date and ending on July 25, 2004 will be paid to the Servicer. The Trustee will not be liable for investment
losses on investments selected by the Servicer pursuant to this Section 4.04(b). None of the Supplemental Interest Trusts will be an asset of any of the REMICs created hereunder. 
 (c) On each Distribution Date, the Trustee shall distribute the funds held in Supplemental Interest Trust I as follows: 
 (i) first, on June 25, 2004, to each Swap Counterparty, its related portion of the Initial Swap Amount, and on each
Distribution Date up to and including the Class I Termination Date, to each Swap Counterparty, its related Swap Amount for such Distribution Date; 
 (ii) second, (a) to pay Monthly Interest Distributable Amounts to the Underwritten Certificates to the extent not already fully funded from collections on the Mortgage Loans to be paid according to the
same order of priority as in Section 4.01 and (b) to pay principal in the amount of the Overcollateralization Deficiency Amount, if any, remaining after the application of Mortgage Excess Cashflow, such principal to be included in the
Extra Principal Distribution Amount on such Distribution Date; 
 (iii) third, any remaining amounts to pay, pro rata
based on Certificate Principal Balance of each class of Underwritten Certificates, the Supplemental Interest Payment for each class of Underwritten Certificates; 
 (iv) fourth, to pay each Swap Counterparty its related Swap Termination Payment, if any; and 
 (v) fifth, any remaining amounts, pro rata to the Holders of the Class O and Class X Certificates based on the amounts paid to
Supplemental Interest Trust I on behalf of the Holders of the Class O and Class X Certificates pursuant to Section 4.01(a)(i)(K), Section 4.01(a)(ii)(L), Section 4.01(a)(ii)(M), Section 4.01(a)(iii)(L) and
Section 4.01(a)(iii)(M). 
 (d) On each Distribution Date, the Trustee shall distribute the funds relating to Mortgage Excess Cashflow
as follows: 
 (i) prior to any deposit to Supplemental Interest Trust I, to the Holders of the Class or Classes of
Certificates then entitled to receive distributions in respect of principal and to the Class A-1 Insurer, in an amount equal to any Extra Principal Distribution Amount, distributable to such holders and the Class A-1 Insurer in the same
order of priority as the Group I Principal Distribution Amount and/or the Group II Principal Distribution Amount as described in Section 4.01; 
 (ii) to Supplemental Interest Trust I to distribute in accordance with Section 4.04(c); 
  

 47 

 (e) On each Distribution Date, funds, if any, deposited in Supplemental Interest Trust II will equal any
Cap Agreement I Payments received on such Distribution Date. On each Distribution Date, from the aggregate amounts on deposit in Supplemental Interest Trust II, the Trustee will make the following distributions in the following order of priority:

 (i) first, to pay the Supplemental Interest Payment to the Class A-1 Certificates, to the extent not already
paid out of Supplemental Interest Trust I; 
 (ii) second, to pay, pro rata based on Certificate Principal Balance, the
Supplemental Interest Payment for each Class of Underwritten Certificates (other than the Class A-1 Certificates), to the extent not already paid out of Supplemental Interest Trust I; and 
 (iii) third, any remaining amounts, to the Holders of the Class X Certificates. 
 (f) On each Distribution Date, funds, if any, deposited in Supplemental Interest Trust III will equal any Cap Agreement II Payments received on such
Distribution Date. On each Distribution Date, from the aggregate amounts on deposit in Supplemental Interest Trust III, the Trustee will make the following distributions in the following order of priority: 
 (i) first, to pay, pro rata based on Certificate Principal Balance, the Supplemental Interest Payment to the Group II Class A
Certificates, to the extent not already paid out of Supplemental Interest Trust I and Supplemental Interest Trust II; 
 (ii)
second, to pay, pro rata based on Certificate Principal Balance, the Supplemental Interest Payment for each Class of Underwritten Certificates (other than the Group II Class A Certificates) to the extent not already paid out of
Supplemental Interest Trust I and Supplemental Interest Trust II; and 
 (iii) third, any remaining amounts, to the
Holders of the Class X Certificates. 
 (g) On each Distribution Date, funds, if any, deposited in Supplemental Interest Trust IV will equal
any Cap Agreement III Payments received on such Distribution Date. On each Distribution Date, from the aggregate amounts on deposit in Supplemental Interest Trust IV, the Trustee will make the following distributions in the following order of
priority: 
 (i) first, to pay the Supplemental Interest Payment, pro rata (based on Certificate Principal Balance) to
the Class M and Class B Certificates, to the extent not already paid out of Supplemental Interest Trust I, Supplemental Interest Trust II and Supplemental Interest Trust III; 
 (ii) second, to pay, pro rata based on Certificate Principal Balance, the Supplemental Interest Payment for each Class of
Underwritten Certificates (other than the Class M and B Certificates), to the extent not already paid out of Supplemental Interest Trust I, Supplemental Interest Trust II and Supplemental Interest Trust III; and 
 (iii) third, any remaining amounts, to the Holders of the Class X Certificates. 
  

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 (h) On any Distribution Date on which the Swap Amount for any Swap Agreement is a negative number, the
absolute value of such negative number shall be paid by each related Swap Counterparty to Supplemental Interest Trust I. 
 (i) In the event
that a Swap Counterparty elects to post collateral as provided in the related Swap Agreement, the Trustee shall establish and maintain an Eligible Account with respect to the related Swap Agreement (each, a “Swap Collateral
Account”) for the benefit of such Swap Counterparty and the Certificateholders, as their interests may appear, into which such collateral shall be deposited. The Trustee may or shall (as indicated) make withdrawals from the related Swap
Collateral Account for the purposes of (i) entering into a substitute swap agreement, (ii) funding the amount of any payment due to be made by such Swap Counterparty under the related Swap Agreement following the failure by such Swap
Counterparty to make that payment or (iii) as permitted pursuant to the related Swap Agreement or this Agreement. The Trustee shall make withdrawals from the related Swap Collateral Account and transfer the collateral (i) as required of
the Trustee pursuant to the related Swap Agreement or (ii) if the circumstances which required the posting of collateral no longer exist; and the Trustee is permitted to liquidate any investments held in such Swap Collateral Account for any
such purpose. In the event that additional collateral is required to be posted by a Swap Counterparty under the related Swap Agreement, the Trustee shall promptly make a demand on such Swap Counterparty to post such additional collateral. To the
extent cash makes up all or any portion of the collateral in a Swap Collateral Account, such cash shall be invested in Eligible Investments in accordance with the related Swap Agreement. Any and all interest generated by such investment shall be
transferred to the related Swap Counterparty as provided in the related Swap Agreement, or where unspecified, on each Distribution Date. In connection with the maintenance and administration of a Swap Collateral Account, the Trustee may request and
rely on written instructions from the Servicer, which the Servicer hereby agrees to provide, with respect to the maintenance and administration of such account. For the avoidance of doubt, the Trustee shall not have any right to apply any amounts or
assets in any Swap Collateral Account except in accordance with the enforcement and realization of its security interest pursuant to the related Swap Agreement or otherwise in accordance with the related Swap Agreement. 
 The Trustee may designate an agent to maintain any Swap Collateral Account, provided that the following conditions are satisfied: (i) the agent’s long-term
unsubordinated debt is rated at least “BBB+” by S&P and at least “Baa1” by Moody’s and (ii) the total assets of the agent shall exceed $25,000,000. Under such circumstances, all references to the Trustee in this
subsection (h) shall be to the Trustee’s agent appointed pursuant to this paragraph. 
 Section 4.05 Pre-Funding
Account. 
 (a) No later than the Closing Date, the Trustee, at the direction of the Servicer, shall establish and maintain, a segregated
trust account that is an Eligible Account, which shall be titled “Pre-Funding Account,
[                                       
 ], as Trustee for the registered holders of NovaStar Mortgage Funding Trust 20[    ]-[    ], Home Equity Loan Asset-Backed Certificates, Series
20[    ]-[    ]” (the “Pre-Funding Account”). The Trustee shall, promptly upon receipt, deposit in the Pre-Funding Account and retain therein the Original Pre-Funded Amount remitted on the
Closing Date to the Trustee by the Depositor. Funds deposited in the Pre-Funding Account shall be held in trust by the Trustee for the Certificateholders for the uses and purposes set forth herein. 
  

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 (b) The Trustee will invest funds deposited in the Pre-Funding Account as directed by the Servicer in
Permitted Investments with a maturity date (i) no later than the Business Day immediately preceding the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if a Person other than the Trustee or an
Affiliate manages or advises such investment, and (ii) no later than the date on which such funds are required to be withdrawn from such account pursuant to this Agreement, if the Trustee or an Affiliate manages or advises such investment. For
federal income tax purposes, the Servicer shall be the owner of the Pre-Funding Account and shall report all items of income, deduction, gain or loss arising therefrom. All income and gain realized from investment of funds deposited in the
Pre-Funding Account shall be withdrawn and deposited in the Distribution Account. The Trustee shall treat the Pre-Funding Account as an outside reserve fund within the meaning of Treasury Regulation Section 1.860G-2(h). At no time will the
Pre-Funding Account be an asset of any REMIC created hereunder. The Trustee shall not be liable for investment losses on investments selected by the Servicer pursuant to this Section 4.05(b). 
 (c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by the Trustee as follows: 
 (i) On any Subsequent Transfer Date, the Trustee shall withdraw from the Pre-Funding Account an amount equal to 100% of the Principal
Balances of the Subsequent Mortgage Loans transferred and assigned to the Trustee for deposit in the Mortgage Pool on such Subsequent Transfer Date and pay such amount to or upon the order of the Depositor upon satisfaction of the conditions set
forth in Section 2.08 with respect to such transfer and assignment; if such Subsequent Mortgage Loan is designated for inclusion in Group I, such amount shall reduce (but not below zero) the remaining Original Pre-Funded Amount allocated to
Group I, and, if such Subsequent Mortgage Loan is designated for inclusion in Group II, such amount shall reduce (but not below zero) the remaining Original Pre-Funded Amount allocated to Group II; 
 (ii) If the amount on deposit in the Pre-Funding Account has not been reduced to zero on the day of the termination of the Pre-Funding
Period, the Trustee shall deposit into the Distribution Account on such day any amounts remaining in the Pre-Funding Account relating to Group I for inclusion in the Group I Principal Remittance Amount and relating to Group II for inclusion in the
Group II Principal Remittance Amount for distribution in accordance with the terms hereof; 
 (iii) To withdraw any amount not
required to be deposited in the Pre-Funding Account or deposited therein in error; and 
 (iv) To clear and terminate the
Pre-Funding Account upon the earlier to occur of (A) the Distribution Date immediately following the end of the Pre-Funding Period but not later than September 10, 2004 and (B) the termination of this Agreement, with any amounts
remaining on deposit therein being paid to the Holders of the Certificates then entitled to distributions in respect of principal. 
 Withdrawals from the Pre-Funding Account pursuant to clauses (i), (ii) and (iv) shall be treated as contributions of cash to REMIC I on the date of withdrawal. 
  

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 Section 4.06 [Reserved] 
 Section 4.07 The Class A-1 Certificate Insurance Policy. 
 (a) No later than 12:00 noon New York City time on the second Business Day preceding each Distribution Date, the Trustee shall determine based solely upon the information provided by the Servicer to the Trustee
pursuant to Section 3.23 hereof with respect to the immediately following Distribution Date, the amount to be on deposit in the Distribution Account on such Distribution Date as a result of the (i) Servicer’s remittance of the
Interest Remittance Amount and the Principal Remittance Amount on the related Servicer Remittance Date, and (ii) any transfers to the Distribution Account made from the Collection Account and/or the Pre-Funding Accounts relating to such
Distribution Date pursuant to Section 4.02 hereof, excluding the amount of any Insured Payment. 
 (b) If on any Distribution Date there
is a Class A-1 Deficiency, the Trustee shall complete a Notice in the form of Exhibit A to the Class A-1 Certificate Insurance Policy and submit such notice to the Class A-1 Insurer no later than 12:00 noon New York City time on the
second Business Day preceding such Distribution Date as a claim for an Insured Payment in an amount equal to such Class A-1 Deficiency. 
 (c) The Trustee shall establish a separate Eligible Account for the benefit of Holders of the Class A-1 Certificates and the Class A-1 Insurer, referred to herein as the “Insurance Payment Account,” over which the
Trustee shall have exclusive control and sole right of withdrawal. The Trustee shall deposit upon receipt any amount paid under the Class A-1 Certificate Insurance Policy in the Insurance Payment Account and distribute such amount only for
purposes of payment to the Class A-1 Certificateholders of the Insured Amount and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts paid under the Class A-1
Certificate Insurance Policy, to the extent needed to pay the Insured Amount, shall be transferred to the Distribution Account on the related Distribution Date and disbursed by the Trustee to the Class A-1 Certificateholders in accordance with
Section 4.02. It shall not be necessary for such payments to be made by checks or wire transfers separate from the checks or wire transfers used to pay other distributions to the Class A-1 Certificateholders with other funds available to
make such payment. However, the amount of any payment of principal or of interest on the Class A-1 Certificates to be paid from funds transferred from the Insurance Payment Account shall be noted as provided in paragraph (d) below in the
Certificate Register and in the statement to be furnished to Holders of such Certificates pursuant to Section 4.03(a). Funds held in the Insurance Payment Account shall not be invested. Any funds remaining in the Insurance Payment Account on
the first Business Day following a Distribution Date shall be returned to the Class A-1 Insurer pursuant to the written instructions of the Class A-1 Insurer by 12 noon (New York City time) of such Business Day. If no such written
instructions is received by the Trustee from the Class A-1 Insurer, the Trustee shall continue to retain such funds uninvested. 
 (d)
The Trustee shall keep a complete and accurate record of the amount of interest and principal paid in respect of any Class A-1 Certificate from moneys received under the Class A-1 Certificate Insurance Policy. The Class A-1 Insurer
shall have the right to inspect such records at reasonable times during normal business hours upon one Business Day’s prior notice to the Trustee. 
  

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 (e) In the event that the Trustee has received a certified copy of an order of the appropriate court that
any Insured Payment has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Trustee shall so notify the Class A-1 Insurer, shall comply with the provisions of the Class A-1 Certificate Insurance
Policy to obtain payment by the Class A-1 Insurer of such voided Insured Payment, and shall, at the time it provides notice to the Class A-1 Insurer, notify, by mail to the Class A-1 Certificateholders of the affected Certificates
that, in the event any Class A-1 Certificateholder’s Insured Payment is so recovered, such Class A-1 Certificateholder will be entitled to payment pursuant to the Class A-1 Certificate Insurance Policy, a copy of which shall be
made available through the Trustee, the Class A-1 Insurer or the Class A-1 Insurer’s fiscal agent, if any, and the Trustee shall furnish to the Class A-1 Insurer or its fiscal agent, if any, its records evidencing the payments
which have been made by the Trustee and subsequently recovered from the Class A-1 Certificateholders, and dates on which such payments were made. 
 (f) The Trustee shall promptly notify the Class A-1 Insurer of any proceeding or the institution of any action, of which a Responsible Officer of the Trustee has actual knowledge, seeking the avoidance as a
preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a “Preference Claim”) of any distribution made with respect to the Class A-1 Certificates. Each Class A-1 Certificateholder, by its
purchase of Class A-1 Certificates, the Servicer and the Trustee agree that the Class A-1 Insurer (so long as no Class A-1 Insurer Default exists) may at any time during the continuation of any proceeding relating to a Preference
Claim direct all matters relating to such Preference Claim, including, without limitation, (i) the direction of any appeal of any order relating to such Preference Claim and (ii) the posting of any surety, supersedes or performance bond
pending any such appeal. In addition and without limitation of the foregoing, the Class A-1 Insurer shall be subrogated to, and each Class A-1 Certificateholder, the Servicer and the Trustee hereby delegate and assign to the Class A-1
Insurer, to the fullest extent permitted by law, the rights of the Trustee, the Servicer and each Class A-1 Certificateholder in the conduct of any such Preference Claim, including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with any such Preference Claim. 
 (g) The Trustee shall, once the
Certificate Principal Balance of the Class A-1 Certificates has been reduced to zero (after giving effect to all payments including any payments made under the Class A-1 Certificate Insurance Policy), furnish to the Class A-1 Insurer
a notice of such retirement, and, upon retirement of the Class A-1 Certificates and the expiration of the term of the Class A-1 Certificate Insurance Policy, surrender the Class A-1 Certificate Insurance Policy to the Class A-1
Insurer for cancellation. Such cancellation shall in not way reduce the rights of the Class A-1 Insurer to amounts subrogated to the Class A-1 Insurer or to be reimbursed for any Reimbursement Amounts. 
 Section 4.08 Effect of Payments by the Class A-1 Insurer; Subrogation. 
 Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest on the Class A-1 Certificates which is made
with moneys received pursuant to the terms of the Class A-1 Certificate Insurance Policy shall not be considered payment of the Class A-1 Certificates from the Trust Fund. The Custodian, the Servicer and the Trustee acknowledge, and each
Holder by its acceptance of a Class A-1 Certificate agrees, that without the need for any 

  

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further action on the part of the Class A-1 Insurer, the Custodian, the Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Class A-1 Insurer makes payments, directly or indirectly, on account of principal of or interest on the Class A-1 Certificates to the Holders of such Class A-1 Certificates, the Class A-1 Insurer will be fully subrogated to, and
each Class A-1 Certificateholder, the Servicer and the Trustee hereby delegate and assign to the Class A-1 Insurer, to the fullest extent permitted by law, the rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Class A-1 Certificateholders in respect of securities law violations arising from the offer and sale of the Class A-1 Certificates, and (b) the Class A-1 Insurer shall
be paid such amounts from the sources and in the manner provided herein for the payment of such amounts and as provided in the Insurance and Indemnity Agreement. The Trustee and the Servicer shall cooperate in all respects with any reasonable
request by the Class A-1 Insurer for action to preserve or enforce the Class A-1 Insurer’s rights or interests under this Agreement without limiting the rights or affecting the interests of the Holders as otherwise set forth herein.

 Section 4.09 Allocation of Realized Losses. 
 All Realized Losses on the Mortgage Loans shall be allocated by the Trustee on each Distribution Date as follows: first, to amounts of Excess Cashflow, second, to the Class O Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the Class B-3 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; fourth, to the Class B-2 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; fifth, to the Class B-1 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; sixth, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; seventh, to the Class M-4 Certificates, until the Certificate Principal Balance thereof has been reduced to zero; eighth, to the Class M-3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; ninth, to the Class M-2 Certificates, until the Certificate Principal Balance thereof has been reduced to zero and tenth, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero. All Realized Losses to be allocated to the Certificate Principal Balances of all Classes on any Distribution Date shall be so allocated after the actual distributions to be made on such date as
provided above. All references above to the Certificate Principal Balance of any Class of Certificates shall be to the Certificate Principal Balance of such Class immediately prior to the relevant Distribution Date, before reduction thereof by any
Realized Losses, in each case to be allocated to such Class of Certificates, on such Distribution Date. In no event shall Realized Losses be allocated to the Class A Certificates. 
 Any allocation of Realized Losses to a Class O Certificate, a Class B Certificate, or the Mezzanine Certificate on any Distribution Date shall be made by
reducing the Certificate Principal Balance thereof by the amount so allocated. Any Subsequent Recoveries will be allocated to the Class O Certificates, Class B Certificates, and Mezzanine Certificates in the reverse order of the Realized Loss
allocation set forth in the preceding paragraph, to the extent of the Realized Loss allocated to each related Certificate. 
  

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 ARTICLE V 
 THE CERTIFICATES 
 Section 5.01 The Certificates. 
 Each of the Class A Certificates, the Mezzanine Certificates, the Class B Certificates, the Class X Certificates, the Class I Certificates, the Class
P Certificates, the Class O Certificates and the Residual Certificates shall be substantially in the forms annexed hereto as exhibits, and shall, on original issue, be executed, authenticated and delivered by the Trustee to or upon the order of the
Depositor concurrently with the sale and assignment to the Trust of the Trust Fund. The Underwritten Certificates shall be initially evidenced by one or more Certificates representing a Percentage Interest with a minimum dollar denomination of
$25,000 and integral dollar multiples of $1,000 in excess thereof, except that one Certificate of each such Class of Certificates may be in a different denomination so that the sum of the denominations of all outstanding Certificates of such Class
shall equal the Certificate Principal Balance of such Class on the Closing Date. The Class X Certificates, the Class I Certificates, the Class P Certificates, the Class O Certificates and the Residual Certificates are issuable in any Percentage
Interests; provided, however, that the sum of all such percentages for each such Class totals 100% and no more than ten Certificates of each Class may be issued. 
 The Certificates shall be executed on behalf of the Trust by manual or facsimile signature on behalf of the Trustee by a Responsible Officer. Certificates bearing the manual or facsimile signatures of individuals who
were, at the time when such signatures were affixed, authorized to sign on behalf of the Trustee shall bind the Trust, notwithstanding that such individuals or any of them have ceased to be so authorized prior to the authentication and delivery of
such Certificates or did not hold such offices at the date of such Certificate. No Certificate shall be entitled to any benefit under this Agreement or be valid for any purpose, unless such Certificate shall have been manually authenticated by the
Trustee substantially in the form provided for herein, and such authentication 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. Subject to Section 5.02(c), the Underwritten Certificates and the Class P Certificates shall be Book-Entry Certificates. The other Classes of Certificates shall be Definitive Certificates.

 Section 5.02 Registration of Transfer and Exchange of Certificates. 
 (a) The Certificate Registrar shall cause to be kept at the Corporate Trust Office a Certificate Register in which, subject to such reasonable regulations
as it may prescribe, the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates as herein provided. The Trustee shall initially serve as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein provided. 
 Upon surrender for registration of transfer of
any Certificate at any office or agency of the Certificate Registrar maintained for such purpose pursuant to the foregoing paragraph and, in the case of a Residual Certificate, upon satisfaction of the conditions set forth below, the Trustee on
behalf of the Trust shall execute, authenticate and deliver, in the name of the designated transferee or transferees, one or more new Certificates of the same aggregate Percentage Interest. 
  

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 At the option of the Certificateholders, Certificates may be exchanged for other Certificates in
authorized denominations and the same aggregate Percentage Interests, upon surrender of the Certificates to be exchanged at any such office or agency. Whenever any Certificates are so surrendered for exchange, the Trustee shall execute on behalf of
the Trust and authenticate and deliver the Certificates which the Certificateholder making the exchange is entitled to receive. Every Certificate presented or surrendered for registration of transfer or exchange shall (if so required by the Trustee
or the Certificate Registrar) be duly endorsed by, or be accompanied by a written instrument of transfer satisfactory to the Trustee and the Certificate Registrar duly executed by, the Holder thereof or his attorney duly authorized in writing.

 (b) Except as provided in paragraph (c) below, the Book-Entry Certificates shall at all times remain registered in the name of the
Depository or its nominee and at all times: (i) registration of such Certificates may not be transferred by the Trustee except to another Depository; (ii) the Depository shall maintain book-entry records with respect to the Certificate
Owners and with respect to ownership and transfers of such Certificates; (iii) ownership and transfers of registration of such Certificates on the books of the Depositor shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and expenses from its Depository Participants; (v) the Trustee shall for all purposes deal with the Depository as representative of the Certificate Owners of the
Certificates for purposes of exercising the rights of Holders under this Agreement, and requests and directions for and votes of such representative shall not be deemed to be inconsistent if they are made with respect to different Certificate
Owners; (vi) the Trustee may rely and shall be fully protected in relying upon information furnished by the Depository with respect to its Depository Participants and furnished by the Depository Participants with respect to indirect
participating firms and Persons shown on the books of such indirect participating firms as direct or indirect Certificate Owners; and (vii) the direct participants of the Depository shall have no rights under this Agreement under or with
respect to any of the Certificates held on their behalf by the Depository, and the Depository may be treated by the Trustee, the Trustee and its agents, employees, officers and directors as the absolute owner of the Certificates for all purposes
whatsoever. 
 All transfers by Certificate Owners of Book-Entry Certificates shall be made in accordance with the procedures established by
the Depository Participant or brokerage firm representing such Certificate Owners. Each Depository Participant shall only transfer Book-Entry Certificates of Certificate Owners that it represents or of brokerage firms for which it acts as agent in
accordance with the Depository’s normal procedures. The parties hereto are hereby authorized to execute a Letter of Representations with the Depository or take such other action as may be necessary or desirable to register a Book-Entry
Certificate to the Depository. In the event of any conflict between the terms of any such Letter of Representation and this Agreement, the terms of this Agreement shall control. 
 (c) If (i)(x) the Depository or the Depository advises the Trustee in writing that the Depository is no longer willing or able to discharge properly its
responsibilities as Depository and (y) the Trustee or the Depository is unable to locate a qualified successor or (ii) after the occurrence of a Servicing Default, the Certificate Owners of the Book-Entry Certificates representing not less

  

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than 51% of the Voting Rights advise the Trustee and Depository through the Financial Intermediaries and the Depository Participants in writing that the
continuation of a book-entry system through the Depository to the exclusion of definitive, fully registered certificates (“Definitive Certificates”) to Certificate Owners is no longer in the best interests of the Certificate Owners.
Upon surrender to the Certificate Registrar of the Book-Entry Certificates by the Depository, accompanied by registration instructions from the Depository for registration, the Trustee shall, at the Depositor’s expense, in the case of
(ii) above, or the Seller’s expense, in the case of (i) and (iii) above, execute on behalf of the Trust and authenticate the Definitive Certificates. Neither the Depositor nor the Trustee shall be liable for any delay in delivery
of such instructions and may conclusively rely on, and shall be protected in relying on, such instructions. Upon the issuance of Definitive Certificates, the Trustee, the Certificate Registrar, the Servicer, any Paying Agent and the Depositor shall
recognize the Holders of the Definitive Certificates as Certificateholders hereunder. 
 (d) No transfer, sale, pledge or other disposition
of any Class I Certificate, Class O Certificate, Class X Certificate or Residual Certificate shall be made unless such disposition is exempt from the registration requirements of the Securities Act of 1933, as amended (the “1933
Act”), and any applicable state securities laws or is made in accordance with the 1933 Act and laws. In the event of any such transfer, except with respect to the initial transfers of any Class I Certificate, Class O Certificate, Class X
Certificate or Residual Certificates by the Depositor to NCFC, unless (i) such transfer is made in reliance upon Rule 144A under the 1933 Act and an investment letter, in substantially the form attached hereto as Exhibit G, is delivered by the
Transferee to the Trustee) or (ii) a written Opinion of Counsel (which may be in-house counsel) acceptable to and in form and substance reasonably satisfactory to the Trustee and the Depositor is delivered to them stating that such transfer may
be made pursuant to (x) the 1933 Act, or an exemption thereto, describing the applicable provision or exemption and the basis therefore, and (y) the Investment Company Act of 1940, or an exemption thereto, describing the applicable
provision or exemption and the basis therefore, which Opinion of Counsel shall not be an expense of the Trustee or the Depositor. The Holder of a Class I Certificate, Class O Certificate, Class X Certificate or Residual Certificate desiring to
effect such transfer shall, and the Trustee and the Depositor against any liability that may result if the transfer is not so exempt or is not made in accordance with such federal and state laws. 
 No transfer of a Class I Certificate, Class O Certificate, Class P Certificate, Class X Certificate or Residual Certificate or any interest therein shall
be made to any Plan or to any Person acting, directly or indirectly, on behalf of any such Plan or acquiring such Certificates with “plan assets” of a Plan within the meaning of the Department of Labor regulation promulgated at 29 C.F.R.
§ 2510.3-101 or otherwise (“Plan Assets”). Each Person who acquires any Ownership Interest in such classes of Certificates shall be deemed, by the acceptance or acquisition of such Ownership Interest, to represent that it is
not a Plan and is not acting, directly or indirectly, on behalf of a Plan or acquiring such Ownership Interest with Plan Assets. 
 Prior to
the expiration of the Pre-Funding Period, no transfer of Class A Certificates, Class B Certificates or Mezzanine Certificates or any interest therein shall be made to any Person acquiring such Certificates with Plan Assets. Each Person who
acquires any Ownership Interest in such class of Certificates prior to the expiration of such Pre-Funding Period shall be deemed, by the acceptance or acquisition of such Ownership Interest, to represent that it is not acquiring such Ownership
Interest with Plan Assets. 
  

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 Each Person who has or who acquires any Ownership Interest in a Residual Certificate shall be deemed by
the acceptance or acquisition of such Ownership Interest to have agreed to be bound by the following provisions and to have irrevocably appointed the Depositor or its designee as its attorney-in-fact to negotiate the terms of any mandatory sale
under clause (v) below and to execute all instruments of transfer and to do all other things necessary in connection with any such sale, and the rights of each Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions: 
 (i) Each Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Trustee of any change or impending change in its status as a Permitted Transferee. 
 (ii) No Person shall acquire an Ownership Interest in a Residual Certificate unless such Ownership Interest is a pro rata undivided interest. 
 (iii) In connection with any proposed transfer of any Ownership Interest in a Residual Certificate, the Trustee shall as a condition to
registration of the transfer, require delivery to it, in form and substance satisfactory to it, of each of the following: 
 (A) an affidavit in the form of Exhibit H hereto from the proposed transferee to the effect that such transferee is a Permitted Transferee and that it is not acquiring its Ownership Interest in the Residual Certificate that is the subject
of the proposed transfer as a nominee, Trustee or agent for any Person who is not a Permitted Transferee; and 
 (B) an
affidavit in the form of Exhibit I hereto from the proposed transferor to the effect that no purpose of the transfer is to impede the assessment or collection of any tax. 
 (iv) Any attempted or purported transfer of any Ownership Interest in a Residual Certificate in violation of the provisions of this
Section shall be absolutely null and void and shall vest no rights in the purported transferee. If any purported transferee shall, in violation of the provisions of this Section, become a Holder of a Residual Certificate, then the prior Holder of
such Residual Certificate that is a Permitted Transferee shall, upon discovery that the registration of transfer of such Residual Certificate was not in fact permitted by this Section, be restored to all rights as Holder thereof retroactive to the
date of registration of transfer of such Residual Certificate. The Trustee 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 or for making any
distributions due on such Residual 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 Trustee received the documents specified in clause (iii). The Trustee
shall be entitled to recover from any Holder of a Residual Certificate that was in fact not a Permitted Transferee at the time such distributions were made all distributions made on such Residual Certificate. Any such distributions so recovered by
the Trustee shall be distributed and delivered by the Trustee to the prior Holder of such Residual Certificate that is a Permitted Transferee. 
  

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 (v) If any Person other than a Permitted Transferee acquires any Ownership Interest in a
Residual Certificate in violation of the restrictions in this Section, then the Trustee shall have the right but not the obligation, without notice to the Holder of such Residual Certificate or any other Person having an Ownership Interest therein,
to notify the Depositor to arrange for the sale of such Residual Certificate. The proceeds of such sale, net of commissions (which may include commissions payable to the Depositor or its affiliates in connection with such sale), expenses and taxes
due, if any, will be remitted by the Trustee to the previous Holder of such Residual Certificate that is a Permitted Transferee, except that in the event that the Trustee determines that the Holder of such Residual Certificate may be liable for any
amount due under this Section or any other provisions of this Agreement, the Trustee may withhold a corresponding amount from such remittance as security for such claim. The terms and conditions of any sale under this clause (v) shall be
determined in the sole discretion of the Trustee and it shall not be liable to any Person having an Ownership Interest in a Residual Certificate as a result of its exercise of such discretion. 
 (vi) If any Person other than a Permitted Transferee acquires any Ownership Interest in a Residual Certificate in violation of the
restrictions in this Section, then the Trustee upon receipt of reasonable compensation will provide to the Internal Revenue Service, and to the persons specified in Sections 860E(e)(3) and (6) of the Code, information needed to compute the tax
imposed under Section 860E(e) of the Code on transfers of residual interests to disqualified organizations. 
 The foregoing provisions
of this Section shall cease to apply to transfers occurring on or after the date on which there shall have been delivered to the Trustee, in form and substance satisfactory to the Trustee, (i) written notification from each Rating Agency that
the removal of the restrictions on Transfer set forth in this Section will not cause such Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of Counsel to the effect that such removal will not cause any REMIC created
hereunder to fail to qualify as a REMIC. 
 (e) No service charge shall be made for any registration of transfer or exchange of Certificates
of any Class, 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 transfer or exchange of Certificates. 
 All Certificates surrendered for registration of transfer or exchange shall be cancelled by the Certificate Registrar and disposed of pursuant to its
standard procedures. 
 Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. 
 If (i) any mutilated Certificate is surrendered to the Certificate Registrar or the Certificate Registrar receives evidence to its satisfaction of
the destruction, loss or theft of any Certificate and (ii) there is delivered to the Trustee, the Depositor, the Class A-1 Insurer and the Certificate Registrar such security or indemnity as may be required by them to save each of them
harmless, 

  

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then, in the absence of notice to the Trustee or the Certificate Registrar that such Certificate has been acquired by a bona fide purchaser, the Trustee
shall execute on behalf of the Trust, authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Trustee or the Certificate Registrar 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 Trustee and the Certificate Registrar) in connection therewith. Any duplicate Certificate issued pursuant to this Section, shall constitute complete and indefeasible evidence of ownership in the Trust, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any time. 
 Section 5.04 Persons Deemed Owners.

 The Servicer, the Depositor, the Trustee, the Certificate Registrar, the Class A-1 Insurer, any Paying Agent and any agent of the
Servicer, the Depositor, the Trustee, the Certificate Registrar, the Class A-1 Insurer or any Paying Agent may treat the Person, including a Depositor, in whose name any Certificate is registered as the owner of such Certificate for the purpose
of receiving distributions pursuant to Section 4.01 and for all other purposes whatsoever, and none of the Servicer, the Trust, the Trustee, the Class A-1 Insurer nor any agent of any of them shall be affected by notice to the contrary.

 Section 5.05 Appointment of Paying Agent. 
 (a) The Paying Agent shall make distributions to Certificateholders from the Distribution Account pursuant to Section 4.01 and shall report the amounts of such distributions to the Trustee. The duties of the
Paying Agent may include the obligation to distribute statements prepared by the Trustee pursuant to Section 4.03 and provide information to Certificateholders as required hereunder. The Paying Agent hereunder shall at all times be an entity
duly incorporated and validly existing under the laws of the United States of America or any state thereof, authorized under such laws to exercise corporate trust powers and subject to supervision or examination by federal or state authorities. The
Paying Agent shall initially be the Trustee. The Trustee may appoint a successor to act as Paying Agent, which appointment shall be reasonably satisfactory to the Depositor. 
 (b) The Trustee shall cause the Paying Agent (if other than the Trustee) to execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee that such Paying Agent shall hold all sums, if any, held by it for payment to the Certificateholders in trust for the benefit of the Certificateholders entitled thereto until such sums shall be paid to such
Certificateholders and shall agree that it shall comply with all requirements of the Code regarding the withholding of payments in respect of Federal income taxes due from Certificate Owners and otherwise comply with the provisions of this Agreement
applicable to it. 
 Section 5.06 Rights of the Class A-1 Insurer to Exercise Rights of Class A-1 Certificateholders.

 By accepting its Class A-1 Certificate, each Class A-1 Certificateholder agrees that unless a Class A-1 Insurer Default
exists, the Class A-1 Insurer shall be deemed to be the Class A-1 

  

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Certificateholders for all purposes (other than with respect to the receipt of payment on the Class A-1 Certificates) and shall have the right to
exercise all rights of the Class A-1 Certificateholders under this Agreement and under the Class A-1 Certificates without any further consent of the Class A-1 Certificateholders, including, without limitation: 
 (a) the right to require the Seller to repurchase Mortgage Loans pursuant to Section 2.03 to the extent set forth in such Section; 
 (b) the right to give notices of breach or to terminate the rights and obligations of the Servicer as servicer pursuant to Section 7.01; 

(c) the right to direct the actions of the Trustee during the continuance of a Servicer default pursuant to Sections 3.05, 7.01 and 7.02; 

(d) the right to institute proceedings against the Servicer pursuant to Section 7.01; 
 (e) the right to direct the Trustee to investigate certain matters pursuant to Sections 8.01 and 8.02; 
 (f) the right to remove the Trustee pursuant to Section 8.08; and 
 (g) any rights or remedies expressly given the Class A-1 Certificateholders. 
 In addition, each
Certificateholder agrees that, subject to Section 12.11, unless a Class A-1 Insurer Default exists, the rights specifically enumerated above may only be exercised by the Certificateholders with the prior written consent of the
Class A-1 Insurer. 
 Section 5.07 Trustee To Act Solely with Consent of the Class A-1 Insurer. 
 Unless a Class A-1 Insurer Default exists, the Trustee shall not, without the Class A-1 Insurer’s consent or unless directed by the
Class A-1 Insurer: 
 (a) terminate the rights and obligations of the Servicer as Servicer pursuant to Section 7.01; 
 (b) agree to any amendment pursuant to Section 12.01; or 
 (c) undertake any litigation. 
 The Class A-1 Insurer may, in writing and in its sole discretion
renounce all or any of its rights under this Agreement or any requirement for the Class A-1 Insurer’s consent for any period of time. 
 Section 5.08 Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Class A-1 Insurer and Holders of the Certificates. 
 (a) The Trustee shall hold the Trust Fund and the Custodial Files for the benefit of the Certificateholders and the Class A-1 Insurer and all references in this Agreement and in the Certificates to the benefit of
Holders of the Certificates shall be deemed to include the Class A-1 

  

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Insurer. The Trustee shall follow all reasonable instructions and requests of the Class A-1 Insurer to assist it to take action to preserve or enforce
the Class A-1 Insurer’s rights or interests under this Agreement unless a Class A-1 Insurer Default exists. 
 (b) The
Servicer hereby acknowledges and agrees that it shall service the Mortgage Loans for the benefit of the Certificateholders and for the benefit of the Class A-1 Insurer, and all references in this Agreement to the benefit of or actions on behalf
of the Certificateholders shall be deemed to include the Class A-1 Insurer. 
 ARTICLE VI 
 THE SERVICER AND THE COMPANY 
 Section 6.01 Liability of the Servicer and the Depositor. 
 The Servicer shall be liable in accordance herewith only to
the extent of the obligations specifically imposed upon and undertaken by Servicer herein. The Depositor shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Depositor.

 Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Depositor. 
 Any entity into which the Servicer or Depositor may be merged or consolidated, or any entity resulting from any merger, conversion or consolidation to
which the Servicer or the Depositor shall be a party, or any corporation succeeding to the business of the Servicer or the Depositor, shall be the successor of the Servicer or the Depositor, as the case may be, 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 Servicer shall satisfy all the requirements of Section 7.02 with respect to
the qualifications of a successor Servicer. 
 Section 6.03 Limitation on Liability of the Servicer and Others. 
 Neither the Servicer nor any of the directors or officers or employees or agents of the Servicer shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of any action by the Servicer 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 liability which would otherwise be imposed by reason of its willful misfeasance, bad faith or negligence in the performance of duties of the Servicer or by reason of its reckless disregard of its obligations and duties of the
Servicer hereunder. 
 The Servicer and any director or officer or 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 and any director or officer or employee or agent of the Servicer shall be indemnified by the Trust and held harmless against
any loss, liability or expense incurred in connection with any legal action relating to this Agreement or the Certificates, including any amount paid to the Trustee pursuant to Section 6.06(b), other than 

  

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any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) and any loss, liability or expense incurred by reason of its willful misfeasance, bad faith or negligence in the performance of its duties hereunder or by reason of its reckless disregard of its obligations
and duties 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 in its sole discretion 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 and the interests of the Certificateholders hereunder. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust, and the Servicer shall
be entitled to be reimbursed therefor. The Servicer’s right to indemnity or reimbursement pursuant to this Section 6.03 shall survive any resignation or termination of the Servicer pursuant to Section 6.04 or 7.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or termination (or arising from events that occurred prior to such resignation or termination). Any reimbursements or indemnification to the Servicer from the Trust pursuant to
this Section 6.03 shall be payable in the priority set forth in Section 4.01 hereof. 
 Section 6.04 Servicer Not to
Resign. 
 Subject to the provisions of Section 6.02, the Servicer shall not resign from the obligations and duties hereby imposed on
it except (i) upon determination that the performance of its obligations or duties hereunder are no longer permissible under applicable law or (ii) upon satisfaction of the following conditions: (a) the Servicer has proposed a
successor servicer to the Trustee in writing and such proposed successor servicer is acceptable to the Class A-1 Insurer and reasonably acceptable to the Trustee; and (b) each Rating Agency shall have delivered a letter to the Trustee
prior to the appointment of the successor servicer stating that the proposed appointment of such successor servicer as Servicer hereunder will not result in the reduction or withdrawal of then current rating of the Certificates; provided,
however, that no such resignation by the Servicer shall become effective until such successor servicer or, in the case of (i) above, the Trustee or its designee as successor Servicer shall have assumed the Servicer’s
responsibilities and obligations hereunder or shall have designated a successor servicer in accordance with Section 7.02. Any such resignation shall not relieve the Servicer of responsibility for any of the obligations specified in Sections
7.01 and 7.02 as obligations that survive the resignation or termination of the Servicer. The Servicer shall have no claim (whether by subrogation or otherwise) or other action against any Certificateholder for any amounts paid by the Servicer
pursuant to any provision of this Pooling and Agreement. Any such determination permitting the resignation of the Servicer under clause (i) above shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee. 

Section 6.05 Delegation of Duties. 
 In the ordinary course of business, the Servicer at any time may delegate any of its duties hereunder to any Person, including any of its Affiliates, who agrees to conduct such duties in accordance with the same standards with which the
Servicer complies pursuant to Section 3.01. Such delegation shall not relieve the Servicer of its liabilities and responsibilities with respect to such duties and shall not constitute a resignation within the meaning of Section 6.04.

  

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 Section 6.06 Servicer to Pay Trustee’s Fees and Expenses; Indemnification. 

(a) The Servicer covenants and agrees to pay to the Trustee and any co-trustee of the Trustee from time to time, and the Trustee and any such
co-trustee shall be entitled to, reasonable compensation, including all indemnification payments (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by each of
them in the execution of the trusts created hereunder and in the exercise and performance of any of the powers and duties and the Servicer will pay or reimburse the Trustee and any co-trustee upon request for all reasonable expenses, disbursements
and advances incurred or made by the Trustee or any co-trustee of the Trustee in accordance with any of the provisions of this Agreement except any such expense, disbursement or advance as may arise from its negligence or bad faith. 
 (b) The Servicer agrees to indemnify the Trustee for, and to defend and hold, the Trustee harmless against, any claim, tax, penalty, loss, liability or
expense of any kind whatsoever, incurred without gross negligence or willful misconduct on the part of the Trustee as such and/or in its individual capacity, arising out of, or in connection with, the performance of the Trustee’s duties under
this Agreement or the other Basic Documents, including the reasonable costs and expenses (including reasonable legal fees and expenses) of defending itself against any claim in connection with the exercise or performance of any of its powers or
duties hereunder, provided that: 
 (i) with respect to any such claim, the Trustee shall have given the Servicer written
notice thereof promptly after the Trustee shall have actual knowledge thereof; 
 (ii) while maintaining control over its own
defense, the Trustee shall cooperate and consult fully with the Servicer in preparing such defense; and 
 (iii)
notwithstanding anything in this Agreement to the contrary, the Servicer shall not be liable for settlement of any claim by the Trustee entered into without the prior consent of the Servicer, which consent shall not be unreasonably withheld.

 No termination of this Agreement and resignation and removal of the Trustee shall affect the obligations created by this Section 6.06
of the Servicer to indemnify the Trustee under the conditions and to the extent set forth herein. This section shall survive the termination of this Agreement and resignation and removal of the Trustee. Any amounts to be paid by the Servicer
pursuant to this Subsection may not be paid from the Trust Fund except as provided in Section 6.03. 
 Notwithstanding the foregoing,
the indemnification provided by the Servicer in this Section 6.06 shall not pertain to any loss, liability or expense of the Trustee including the costs and expenses of defending itself against any claim, incurred in connection with any actions
taken by the Trustee at the direction of the Certificateholders, as the case may be, pursuant to the terms of this Agreement. 
 (c) The
Servicer agrees to indemnify the Trust Fund in an amount equal to the amount of any claim made under a MI Policy for which coverage is denied by the MI Insurer because (and if the MI Insurer’s denial of coverage is contested by the Servicer, a
court or arbitrator finally determines that coverage is not available under the MI Policy because) of the Servicer’s failure to abide by the terms of the MI Policy or the MI Insurance Agreement or the Servicer’s failure to abide by the NFI
Underwriting Guidelines or the NFI Servicing Guidelines, as attached to the MI Insurance Agreement. 
  

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 (d) In the event the Trustee becomes the Servicer pursuant to Section 7.02 hereof, the Trustee shall
not be obligated, in its individual capacity, to pay any obligation of the Servicer under clause (a), (b) or (c) above. 
 ARTICLE
VII 
 DEFAULT 
 Section 7.01
Servicing Default. 
 (a) If any one of the following events (a “Servicing Default”) shall occur and be continuing:

 (i) Any failure by the Servicer to deposit in the Collection Account or Distribution Account (A) any Advances and
Compensating Interest or (B) any other Deposit required to be made under the terms of this Agreement, 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
the Servicer by the Trustee or the Class A-1 Insurer or to the Servicer and the Trustee by the Holders of Certificates evidencing at least 25% of the Voting Rights; or 
 (ii) Failure on the part of the Servicer duly to observe or perform in any material respect any other covenants or agreements of the
Servicer set forth in this Agreement, which failure, in each case, materially and adversely affects the interests of Certificateholders or the breach of any representation or warranty of the Servicer in this Agreement which materially and adversely
affects the interests of the Certificateholders, and which in either case continues unremedied for a period of 30 days after the date on which written notice of such failure or breach, requiring the same to be remedied, and stating that such notice
is a “Notice of Default” hereunder, shall have been given to the Servicer by the Trustee or to the Servicer and the Trustee by the Holders of Certificates evidencing at least 25% of the Voting Rights or by the Class A-1 Insurer; or

 (iii) The entry against the Servicer of a decree or order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a trustee, conservator, receiver or liquidator in any insolvency, conservatorship, receivership, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or 
 (iv) The Servicer shall voluntarily go into liquidation, consent to the appointment of a conservator, receiver, liquidator or similar person in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property, or a decree or order of a court, agency or supervisory authority having jurisdiction in the premises for the appointment
of a conservator, receiver, liquidator or similar person in any insolvency, readjustment of debt, 

  

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marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged, unbonded or unstayed for a period of 60 days; or the 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 
 (v) The Cumulative Loss Percentage exceeds (a) with respect to the first 12 Distribution Dates,
[        ]% of the Cut-off Date Aggregate Principal Balance, (b) with respect to the next 12 Distribution Dates, [        ]% of the Cut-off Date
Aggregate Principal Balance, (c) with respect to the next 12 Distribution Dates, [        ]% of the Cut-off Date Aggregate Principal Balance, (d) with respect to the next 12 Distribution
Dates, [        ]% of the Cut-off Date Aggregate Principal Balance, (e) with respect to the next 12 Distribution Dates, [        ]% of the Cut-off
Date Aggregate Principal Balance, (f) and with respect to all Distribution Dates thereafter, [        ]% of the Cut-off Date Aggregate Principal Balance; or 
 (vi) Realized Losses on the Mortgage Loans over any twelve-month period exceeds [        ]%
of the sum of the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded Amount; or 
 (vii) The Rolling 90 Day Delinquency Percentage exceeds [        ]%; or 
 (viii) Any default under the Insurance Agreement. 
 (b) then, and in each and every such case, so long as a
Servicing Default shall not have been remedied within the applicable grace period, (x) with respect solely to clause (i)(A) above, if such Advance is not made by 5:00 P.M., New York time, on the Business Day immediately following the Servicer
Remittance Date (provided the Trustee shall give the Servicer notice of such failure to advance by 5:00 P.M. New York time on the Servicer Remittance Date), the Trustee (with the consent of the Class A-1 Insurer) shall terminate all of the
rights and obligations of the Servicer under this Agreement and the Trustee, or a successor servicer appointed in accordance with Section 7.02, shall assume, pursuant to Section 7.02, the duties of a successor Servicer and (y) in the
case of (i)(B), (ii), (iii), (iv), (v) and (vi) and (vii) above, the Trustee shall, at the direction of the Holders of Certificates evidencing at least 51% of the Voters Rights or at the direction of the Class A-1 Insurer, by
notice then given in writing to the Servicer (and to the Trustee if given by Holders of Certificates), terminate all of the rights and obligations of the Servicer as servicer under this Agreement. Any such notice to the Servicer shall also be given
to the Trustee, each Rating Agency, the Depositor, the Class A-1 Insurer and the Seller. On or after the receipt by the Servicer (and by the Trustee if such notice is given by the Holders) of such written notice, all authority and power of the
Servicer under this Agreement, whether with respect to the Certificates or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee or other Successor Servicer appointed in accordance with Section 7.02. 
  

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 Section 7.02 Trustee to Act; Appointment of Successor. 
 (a) If the Servicer (and the Trustee if notice is sent by the Holders or the Class A-1 Insurer) receives a notice of termination pursuant to
Section 7.01, the Trustee (or such other successor Servicer as is approved in accordance with this Agreement), unless the Class A-1 Insurer shall have named an alternative successor Servicer and given written notice thereof to the Trustee
of at least 30 days prior to the effective date of the transfer of servicing to such successor, subject to and to the extent provided in Section 3.05, shall be the successor in all respects to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be subject to all the responsibilities, duties and liabilities relating thereto placed on the Servicer by the terms and provisions hereof arising on and after its succession.
Notwithstanding the foregoing, the parties hereto agree that the Trustee, in its capacity as successor Servicer, immediately will assume all of the obligations of the Servicer to make Advances; provided however, that the obligation of the Trustee to
make Advances is subject to the standards set forth in Section 3.24 hereof. Notwithstanding the foregoing, the Trustee, in its capacity as successor Servicer, shall not be responsible for the lack of information and/or documents that it cannot
obtain through reasonable efforts. As compensation therefor, the Trustee (or such other successor Servicer) shall be entitled to such compensation as the Servicer would have been entitled to hereunder if no such notice of termination had been given.
Notwithstanding the above, (i) if the Trustee is unwilling to act as successor Servicer or (ii) if the Trustee is legally unable so to act, the Trustee shall appoint or petition a court of competent jurisdiction to appoint, any established
housing and home finance institution, bank or other mortgage loan or home equity loan servicer having a net worth of not less than $10,000,000 as the successor to the Servicer hereunder in the assumption of all or any part of the responsibilities,
duties or liabilities of the Servicer hereunder; provided, that the appointment of any such successor Servicer will not result in the qualification, reduction or withdrawal of the ratings assigned to the Certificates by the Rating Agencies as
evidenced by a letter to such effect from the Rating Agencies and any such successor Servicer shall be acceptable to the Class A-1 Insurer. Pending appointment of a successor to the Servicer hereunder, unless the Trustee is prohibited by law
from so acting, the Trustee shall act in such capacity as hereinabove provided. In connection with such appointment and assumption, the successor shall be entitled to receive compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to Section 3.18 (or such other compensation as the Trustee and such successor shall agree, not to exceed the Servicing Fee). The appointment of a successor Servicer shall
not affect any liability of the predecessor Servicer which may have arisen under this Agreement prior to its termination as Servicer to pay any deductible under an insurance policy pursuant to Section 3.14 or to indemnify the Trustee pursuant
to Section 3.06, nor shall any successor Servicer be liable for any acts or omissions of the predecessor Servicer or for any breach by such Servicer of any of its representations or warranties contained herein or in any related document or
agreement. The Trustee and such successor shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. All Servicing Transfer Costs shall be paid by the predecessor Servicer upon presentation of
reasonable documentation of such costs, and if such predecessor Servicer defaults in its obligation to pay such costs, such costs shall be paid by the successor Servicer or the Trustee (in which case the successor Servicer or the Trustee, as
applicable, shall be entitled to reimbursement therefor from the assets of the Trust). 
  

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 (b) Any successor, including the Trustee, to the Servicer as servicer shall during the term of its
service as servicer continue to service and administer the Mortgage Loans for the benefit of Certificateholders, and maintain in force a policy or policies of insurance covering errors and omissions in the performance of its obligations as Servicer
hereunder and a Fidelity Bond in respect of its officers, employees and agents to the same extent as the Servicer is so required pursuant to Section 3.14. 
 (c) In connection with the termination or resignation of the Servicer hereunder, either (i) the successor Servicer, shall represent and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS, in which case the predecessor Servicer shall cooperate with the successor Servicer in causing
MERS to revise its records to reflect the transfer of servicing to the successor Servicer as necessary under MERS’ rules and regulations, or (ii) the predecessor Servicer shall cooperate with the successor Servicer in causing MERS to
execute and deliver an assignment of Mortgage in recordable form to transfer the Mortgages from MERS to the Trustee and to execute and deliver such other notices, documents and other instruments as may be necessary or desirable to effect a transfer
of such Mortgage Loans or servicing of such Mortgage Loan on the MERS System to the successor Servicer. The predecessor Servicer shall file or cause to be filed any such assignment in the appropriate recording offices. The predecessor Servicer shall
bear any and all fees of MERS, costs of preparing any assignments of Mortgage, and fees and costs of filing any assignments of Mortgage that may be required under this subsection (c). The successor Servicer shall cause assignment to be delivered to
the Trustee promptly upon receipt of the original with evidence of recording thereon or a copy certified by the public recording office in which such assignment was recorded. 
 Section 7.03 Waiver of Defaults. 
 The Majority Certificateholders may, on behalf of all Certificateholders, with the consent of the Class A-1 Insurer waive any events permitting removal of the Servicer as servicer pursuant to this Article VII by delivering written
notice to the Trustee, provided, however, that the Majority Certificateholders may not waive a default in making a required distribution on a Certificate without the consent of the Holder of such Certificate. Upon any waiver of a past default, such
default shall cease to exist and any Servicing 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 thereto
except to the extent expressly so waived. Notice of any such waiver shall be given by the Trustee to the Rating Agencies. 
 Section 7.04 Notification to Certificateholders and the Class A-1 Insurer. 
 (a) Upon any termination or
appointment of a successor Servicer pursuant to this Article VII, the Trustee shall give prompt written notice thereof to the Certificateholders and the Class A-1 Insurer at their respective addresses appearing in the Certificate Register and
each Rating Agency. 
 (b) No later than 60 days (or 10 days with respect to the Class A-1 Insurer) after a Responsible Officer of the
Trustee becomes aware of the occurrence of any event which constitutes or which, with notice or a lapse of time or both, would constitute a Servicing Default, the Trustee shall transmit by mail to all Certificateholders and the Class A-1
Insurer notice of such occurrence, unless such default or Servicing Default shall have been waived or cured 
  

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 Section 7.05 Survivability of Servicer Liabilities. 
 Notwithstanding anything herein to the contrary, upon termination of the Servicer hereunder, any liabilities of the Servicer which accrued prior to such
termination shall survive such termination. 
 ARTICLE VIII 
 THE TRUSTEE 
 Section 8.01 Duties of the Trustee. 
 On the Closing Date, the Trustee will act as disbursement agent and will distribute the proceeds from the sale of the Offered Certificates according to
the closing settlement statement provided by the Seller. If a Servicing Default has occurred and is continuing, the Trustee shall exercise the rights and powers vested in it by this Agreement and use the same degree of care and skill in its exercise
as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. If the Class A-1 Insurer’s consent or direction is required prior to the Trustee taking any particular action, the Trustee
shall be deemed to be acting as a prudent person by waiting for such direction or consent during the continuation of a Servicing Default. 
 (a) Except during the continuance of a Servicing Default: 
 (i) the Trustee undertakes to perform such duties and
only such duties as are specifically set forth in this Agreement with respect to the Trustee and no implied covenants or obligations shall be read into this Agreement against the Trustee; and 
 (ii) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Agreement; provided, however, that the Trustee shall examine the certificates and opinions delivered to it to determine
whether or not they conform to the requirements of this Agreement. 
 (b) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful misconduct, except that: 
 (i) this paragraph does not
limit the effect of paragraph (9) of this Section 8.01; 
 (ii) the Trustee shall not be liable for any error of
judgment made in good faith by its Responsible Officer unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and 
  

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 (iii) the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction received by it from the Majority Certificateholders or the Class A-1 Insurer. 
 The
Trustee shall not be liable for interest on any money received by the Trustee. 
 Money held in trust by the Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this Agreement. 
 No provision of this Agreement shall require
the Trustee to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties hereunder or in the exercise of any of its rights or powers, if it shall have reasonable grounds to believe that repayment of
such funds or adequate indemnity against such risk or liability is not reasonably assured to it. 
 Subject to the other provisions of this
Agreement and without limiting the generality of this Section 8.01, the Trustee shall have no 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, (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 Distribution
Account, or (D) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Trustee believed by the Trustee to be genuine and to have been signed or presented by the proper party or parties. 
 (c) The Trustee shall act as successor to the Servicer to the extent provided in Section 7.02 hereof. 
 (d) For all purposes under this Agreement, the Trustee shall not be deemed to have notice or knowledge of any Servicing Default unless a Responsible
Officer assigned to and working in the Trustee’s corporate trust department has actual knowledge thereof or unless written notice of any event which is in fact such Servicing Default is received by the Trustee at the Corporate Trust Office, and
such notice references the Certificates generally, the Trust, or this Agreement. 
 The Trustee is hereby authorized to execute and shall
execute this Agreement, the Purchase Agreement, and the Converted Loan Purchase Agreement, and shall perform their respective duties and satisfy their respective obligations thereunder. Every provision of this Agreement relating to the conduct or
affecting the liability of or affording protection to the Trustee shall apply to the Trustee’s execution of this Agreement, the Purchase Agreement, and the Converted Loan Purchase Agreement, and the performance of their respective duties and
satisfaction of its obligations hereunder and thereunder. 
 Section 8.02 Rights of Trustee. 
 The Trustee may rely and shall be protected in acting or refraining from acting on any resolution, officers’ certificate, opinion of counsel,
certificate of auditors or other certificate, statement, instrument, or document believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

  

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 Before the Trustee acts or refrains from acting, it may require an Officers’ Certificate or an
Opinion of Counsel reasonably satisfactory in form and substance to the Trustee which Officers’ Certificate or Opinion of Counsel shall not be at the expense of the Trustee or the Trust Fund. The Trustee shall not be liable for any action
either of them takes or omits to take in good faith in reliance on an Officers’ Certificate or Opinion of Counsel. 
 The Trustee may
execute any of its trusts or powers hereunder and the Trustee may perform any of its respective duties hereunder either directly or by or through agents or attorneys or a custodian or nominee and the Trustee shall have no liability for any
misconduct or negligence on the part of such agent, attorney or custodian appointed by the Trustee with due care. 
 The Trustee shall not be
liable for any action it takes or omits to take in good faith which it believes to be authorized or within its rights or powers; provided, however, that the Trustee’s conduct does not constitute willful misconduct, negligence or bad faith.

 The Trustee may consult with counsel chosen by it with due care, and the advice or opinion of counsel with respect to legal matters
relating to this Agreement and the Certificates shall be full and complete authorization and protection from liability in respect to any action taken, omitted or suffered by either of them hereunder in good faith and in accordance with the advice or
opinion of such counsel. 
 The Trustee shall be under no 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 at the request, order or direction of any of the Certificateholders, pursuant to the provisions of this Agreement, unless such Certificateholders shall have offered to
the Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby (which in the case of the Majority Certificateholders will be deemed to be satisfied by a letter agreement with respect
to such costs from such Majority Certificateholders); nothing contained herein shall, however, relieve the Trustee of the obligation, upon the occurrence of a Servicing Default of which a Responsible Officer of the Trustee shall have actual
knowledge (which has not been cured), to exercise such of the rights and powers vested in it by this Agreement, and to 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. 
 The Trustee shall not 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, unless requested in writing to do by the Majority Certificateholders or by the Class A-1 Insurer;
provided, however, that if the payment within a reasonable time to the Trustee 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, not reasonably assured to the
Trustee by the security afforded to it by the terms of this Agreement, the Trustee may require reasonable indemnity against such cost, expense or liability as a condition to taking any such action. The reasonable expense of every such examination
shall be paid by the Servicer or, if paid by the Trustee, shall be repaid by the Servicer upon demand from the Servicer’s own funds. 
  

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 The rights of the Trustee to perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be answerable for other than its negligence or willful misconduct in the performance of such act. 
 The Trustee shall not 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 8.03 Individual Rights of Trustee. 
 The Trustee in its individual or any other capacity
may become the owner or pledgee of Certificates and may otherwise deal with the Seller or its Affiliates with the same rights it would have if it were not Trustee. Any Certificates Registrar, co-registrar or co-paying agent may do the same with like
rights. However, the Trustee must comply with Section 8.11 hereof. 
 Section 8.04 Trustee’s Disclaimer. 
 The Trustee shall not be responsible for and makes no representation as to the validity or adequacy of this Agreement or the Certificates, or of any
Mortgage Loan or related document, or of MERS or the MERS System. The Trustee shall not be accountable for the use of the proceeds from the Certificates, and the Trustee shall not be responsible for any statement of the Trust in this Agreement or in
any document issued in connection with the sale of the Certificates or in the Certificates other than the Trustee’s or the Certificate Registrar’s certificate of authentication. 
 Section 8.05 Notice of Servicing Default. 
 The Trustee shall mail to each Certificateholder notice of the Servicing Default pursuant to Section 7.04(b). Except in the case of a Servicing Default in payment of principal of or interest on any Certificate,
the Trustee may withhold the notice if and so long as it in good faith determines that withholding the notice is in the interests of Certificateholders. 
 Section 8.06 [Reserved]. 
 Section 8.07 Compensation and Indemnity. 
 The amount of the Trustee Fee and Custodian Fee shall be paid to the Trustee and Custodian, respectively, on each Distribution Date pursuant to
Section 4.01(a)(i) of this Agreement, and all amounts owing to the Trustee hereunder in excess of such amount shall be paid solely as provided in this Agreement. The Trustee’s compensation shall not be limited by any law on compensation of
a trustee of an express trust. 
 Section 8.08 Replacement of Trustee. 
 No resignation or removal of the Trustee and no appointment of a successor Trustee shall become effective until the acceptance of appointment by the
successor Trustee pursuant to this Section 8.08. The Trustee may resign at any time by so notifying the Depositor and the Class A-1 Insurer. The Class A-1 Insurer or the Majority Certificateholders with the consent of the
Class A-1 Insurer may at any time remove the Trustee by so notifying the Depositor, the Class A-1 Insurer and the Trustee and the Depositor and may appoint a successor Trustee. The Depositor shall remove the Trustee if: 
 (a) the Trustee fails to comply with Section 8.11 hereof; 
  

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 (b) the Trustee is adjudged a bankrupt or insolvent; 
 (c) a receiver or other public officer takes charge of the Trustee or its respective property; or 
 (d) the Trustee otherwise becomes incapable of acting. 
 If the Trustee resigns or is removed or if a vacancy exists in the office of the Trustee for any reason (the Trustee in such event being referred to herein as the retiring Trustee), the Depositor with the consent of
the Class A-1 Insurer shall promptly appoint a successor Trustee. 
 A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee, the Depositor, the Trustee, the Class A-1 Insurer and the Servicer. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the Trustee or under this Agreement. The successor Trustee shall mail a notice of its succession to the Certificateholders. The retiring Trustee shall promptly transfer all property held by it as Trustee to the successor
Trustee. 
 If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring
Trustee, the Depositor, the Trustee, the Class A-1 Insurer or the Majority Certificateholders may petition any court of competent jurisdiction for the appointment of a successor Trustee. 
 Section 8.09 Successor Trustee by Merger. 
 If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business or assets to, another corporation or banking association, the resulting, surviving or
transferee corporation, without any further act, shall be the successor Trustee; provided, that such corporation or banking association shall be otherwise qualified and eligible under Section 8.11 hereof. 
 If at the time such successor or successors by merger, conversion or consolidation to the Trustee, shall succeed to the trusts created by this Agreement
and any of the Certificates shall have been authenticated but not delivered, any such successor to the Trustee may adopt the certificate of authentication of any predecessor trustee and deliver such Certificates so authenticated; and if at that time
any of the Certificates shall not have been authenticated, any successor to the Trustee may authenticate such Certificates either in the name of any predecessor hereunder or in the name of the successor to the Trustee; and in all such cases such
certificates shall have the full force as the Certificates or this Agreement provide that such certificates of the Trustee shall have. 
  

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 Section 8.10 Appointment of Co-Trustee or Separate Trustee. 
 Notwithstanding any other provisions of this Agreement, at any time, for the purpose of meeting any legal requirement of any jurisdiction in which any
part of the Trust Fund may at the time be located, the Trustee shall have the power and may execute and deliver all instruments to appoint one or more Persons to act as a co-trustee or co-trustees, or separate trustee or separate trustees, of all or
any part of the Trust Fund, and to vest in such Person or Persons, in such capacity and for the benefit of the Certificateholders, such title to the Trust Fund, or any part hereof, and, subject to the other provisions of this Section, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary or desirable. No co-trustee or separate trustee hereunder shall be required to meet the terms of eligibility as a successor trustee under Section 8.11 hereof and
notice to, and no consent of the Certificateholders of the appointment of any co-trustee or separate trustee shall be required. 
 Every
separate trustee and co-trustee shall, to the extent permitted by law, be appointed and act subject to the following provisions and conditions: 
 (a) all 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 or co-trustee jointly (it being understood that such
separate trustee or co-trustee is not authorized to act separately without the Trustee joining in such act), except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations (including the holding of title to the Trust Fund or any portion thereof in any such jurisdiction) shall be exercised and performed
singly by such separate trustee or co-trustee, but solely at the direction of the Trustee; 
 (b) no trustee hereunder shall be personally
liable by reason of any act or omission of any other trustee hereunder; and 
 (c) the Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee. 
 Any notice, request or other writing given to the Trustee shall be deemed to have been given to
each of then separate trustees and co-trustees, as effectively as if given to each of them. Every instrument appointing any separate trustee or co-trustee shall refer to this Agreement and the conditions of this Article VIII. Each separate trustee
and co-trustee, upon its acceptance of the trusts conferred, shall be vested with the estates or property specified in its instrument of appointment, either jointly with the 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.

 Any separate trustee or co-trustee 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 or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. 
  

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 Section 8.11 Eligibility; Disqualification. 
 The Trustee shall be a corporation or association organized and doing business under the laws of a state of the United States. The Trustee is subject to
supervision or examination by federal or state authority. The Trustee shall at all times be reasonably acceptable to the Depositor and authorized to exercise corporate trust powers. The Trustee (i) shall have a combined capital and surplus of
at least $50,000,000 as set forth in its most recent published annual report of condition (ii) have, or its parent shall have, a long-term debt rating of Baa3 or better by Moody’s and BBB or better by Standard & Poor’s and
(iii) shall not be an entity as to which Moody’s or Standard & Poor’s has informed the Depositor is unacceptable to act as Trustee, or whose acting or appointment as Trustee would cause a downgrade in the current rating then
assigned to any Class of Certificates (without regard to the Class A-1 Certificate Insurance Policy). 
 Section 8.12
[Reserved]. 
 Section 8.13 Representations and Warranties. 
 (a) The Trustee hereby represents that: 
 (i) The Trustee is duly organized and validly existing as a New York banking corporation in good standing under the laws of the State of New York with power and authority to own its properties and to conduct its
business as such properties are currently owned and such business is presently conducted; 
 (ii) The Trustee has the power
and authority to execute and deliver this Agreement and to carry out its terms; and the execution, delivery and performance of this Agreement have been duly authorized by the Trustee by all necessary corporate action; 
 (iii) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with,
result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of organization or bylaws of the Trustee or any agreement or other instrument to which the Trustee is a
party or by which it is bound; and 
 (iv) To the Trustee’s best knowledge, there are no proceedings or investigations
pending or threatened before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Trustee or its properties: (A) asserting the invalidity of this Agreement, (B) seeking to
prevent the consummation of any of the transactions contemplated by this Agreement or (C) seeking any determination or ruling that might materially and adversely affect the performance by the Trustee of its obligations under, or the validity or
enforceability of, this Agreement. 
 Section 8.14 Directions to Trustee. 
 The Trustee is hereby directed: 
  

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 (a) to accept the Mortgage Loans and hold the assets of the Trust Fund in trust for the
Certificateholders; 
 (b) to authenticate and deliver the Certificates of each Class substantially in the forms prescribed by Exhibits A-1,
A-2, A-3, A-4, A-5, A-7, A-8, A-9, A-10, A-11, A-12, A-13, A-14, A-15, A-16, A-17 and A-18 in accordance with the terms of this Agreement; and 
 (c) to take all other actions as shall be required to be taken by the terms of this Agreement. 
 Section 8.15 The
Agents. 
 The provisions of this Agreement relating to the limitations of the Trustee’s liability and to its indemnity shall inure
also to the Paying Agent, and the Certificate Registrar. 
 Section 8.16 Reports by the Trustee; Trust Fiscal Year. 

The Trustee, on behalf of the Trust, shall: 
 (a) file with the Commission, on behalf of the Trust, the annual reports and information, documents and other reports (or copies of such portions of any of the foregoing as the Commission may from time to time by rules and regulations
prescribe) that the Trust may be required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act. Such filings shall be as follows: within 15 days after each Distribution Date, the Trustee, on behalf of the Trust, shall
file with the Commission via the Electronic Data Gathering, Analysis and Retrieval System, a Form 8-K with a copy of the statement to Certificateholders for such Distribution Date as an exhibit thereto. Prior to January 31, 200[  ],
the Trustee, shall file a Form 15 Suspension Notification with respect to the Trust Fund, if applicable. Prior to March 31, 200[  ], the Trustee, on behalf of the Trust, shall file a Form 10-K, in substance conforming to industry
standards, with respect to the Trust Fund. The Depositor will prepare and execute any certifications to be filed with the Form 10-K as required under the Sarbanes-Oxley Act of 2002. The Trust hereby grants to the Trustee, a limited power of attorney
to execute and file each such document on behalf of the Trust. Such power of attorney shall continue until the termination of the Trust Fund. The Trustee, on behalf of the Trust, shall deliver to the Seller within three Business Days after filing
any Form 8-K or Form 10-K pursuant to this Section 8.16 a copy of such Form 8-K or Form 10-K, as the case may be; and 
 (b) file with
the Commission (with copies to the Seller and the Depositor) in accordance with rules and regulations prescribed from time to time by the Commission such additional information, documents and reports with respect to compliance by the Trust with the
conditions and covenants of this Agreement as may be required from time to time by such rules and regulations. 
 (c) If required under
Regulation AB, the Trustee will: 
 (i) deliver to the Depositor, the Owner Trustee and the Servicer, a report, dated as of
December 31 of the preceding calendar year, on its assessment of compliance with the minimum servicing criteria regarding cash and collection administration during the preceding calendar year, including disclosure of any material instance of
non-compliance identified by the Trustee, as required by Rule 13a-18 and 15d-18 of the Exchange Act and 

  

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Item 1122 of Regulation AB under the Securities Act, and such additional provisions of Item 1122 as may be agreed among the Depositor, the Servicer
and the Indenture Trustee to comply with the provisions of Regulation AB. 
 (ii) cause a firm of registered public
accountants that is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver to the Depositor and the Servicer an attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18
under the Exchange Act, as applicable, on the assessment of compliance with servicing criteria with respect to the prior calendar year. Such attestation report will be addressed to the board of directors of the Servicer and to the Depositor. Such
attestation report will be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act. The firm may render other services to the Indenture Trustee, but the firm must indicate in each attestation
report that it is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act. 
 (iii) The reports referred to in this Section [    ] will be delivered on or before March 15 of each year in which a Form 10-K is required to be filed, beginning March 15, 200[  ]. 

(d) The Trustee will furnish to the Depositor or the Issuing Entity, in writing, the necessary disclosure describing the legal proceedings required to
be disclosed under Item 1117 of Regulation AB with respect to the Trustee, for inclusion in reports, so long as such reports are required to be filed, pursuant to the Exchange Act. 
 The fiscal year of the Trust shall end on December 31 of each year. 
 Section 8.17 Execution of the Novation Agreements, Swap Agreements and the Cap Agreements. 
 The
Depositor hereby directs the Trustee to enter into and execute the Novation Agreements, the Swap Agreements and the Cap Agreements on the Closing Date on behalf of the Trust. The Seller, the Depositor, the Servicer and the Certificateholders (by
their acceptance of such Certificates) acknowledge that [                    ] is entering into the Novation Agreements, Swap Agreements and
the Cap Agreements solely in its capacity as Trustee of the Trust Fund and not in its individual capacity. 
 Section 8.18 Reports
Filed with Securities and Exchange Commission. 
 (a) (i) (A) Within 15 days after each Distribution Date, the Trustee shall, in
accordance with industry standards, file with the Commission via the Electronic Data Gathering and Retrieval System (“EDGAR”), a Form 10-D, signed by the Servicer, with a copy of the monthly statement to be furnished by the Trustee to the
Noteholders for such Distribution Date and detailing all data elements specified in Item 1121(a) of Regulation AB; provided that the Trustee shall have received no later than five (5) calandar days after the related Distribution Date, all
information required to be provided to the Trustee as described in clause (a)(iv) below. Any disclosure in addition to the Monthly Statement that is required to be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be approved
by the Depositor. 
  

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 Within five (5) calendar days after the related Distribution Date, (i) the parties set forth in
Exhibit [    ] shall be required to provide, pursuant to section             below, to the Trustee and the Depositor, to the extent known, in EDGAR-compatible
format, or in such other form as otherwise agreed upon by the Trustee and the Depositor and such party, the form and substance of any Additional Form 10-D Disclosure, if applicable, and (ii) the Depositor will approve, as to form and substance,
or disapprove, as the case may be, the inclusion of the Additional Form 10-D Disclosure on Form 10-D. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any
Additional Form 10-D Disclosure on Form 10-D pursuant to this Section. 
 (B) After preparing the Form 10-D, the Trustee shall
forward electronically a draft copy of the Form 10-D to the Depositor and the Servicer for review. No later than two (2) Business Days prior to the 15th calendar day after the related Distribution Date, a senior officer of the Servicer in
charge of the servicing function shall sign the Form 10-D and return an electronic or fax copy of such signed Form 10-D (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 10-D cannot be filed on time or if a
previously filed Form 10-D needs to be amended, the Trustee will follow the procedures set forth in Section         . Promptly (but no later than one (1) Business Day) after filing with the
Commission, the Trustee will make available on its internet website a final executed copy of each Form 10-D. The signing party at the Servicer can be contacted as set forth in Section [        ]. The
parties to this Agreement acknowledge that the performance by the Trustee of its duties under Sections          and          related to the timely
preparation and filing of Form 10-D is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under such Sections. The Trustee shall have no liability for any loss, expense, damage, claim arising
out of or with respect to any failure to properly prepare and/or timely file such Form 10-D, where such failure results from the Trustee’s inability or failure to receive, on a timely basis, any information from any other party hereto needed to
prepare, arrange for execution or file such Form 10-D, not resulting from its own negligence, bad faith or willful misconduct. 
 (ii) (A) Within four (4) Business Days after the occurrence of an event requiring disclosure on Form 8-K (each such event, a “Reportable Event”), the Trustee shall prepare and file on behalf of the Issuing Entity
any Form 8-K, as required by the Exchange Act, provided that the Depositor shall file the initial Form 8-K in connection with the issuance of the Notes. Any disclosure or information related to a Reportable Event or that is otherwise required
to be included on Form 8-K (“Form 8-K Disclosure Information”) shall be approved by and prepared at the direction of the Depositor. 
 (B) For so long as the Issuing Entity is subject to the Exchange Act reporting requirements, no later than 12:00 p.m. Eastern Standard time on the 2nd Business Day after the occurrence of a Reportable Event
(i) the parties set forth in Exhibit [    ] shall be required pursuant to Section          below to provide to the Trustee and the Depositor, to the extent known, in
EDGAR-compatible format, or in such other form as otherwise agreed upon by the Trustee and the Depositor and such party, the form and substance of any Form 8-K Disclosure Information, if applicable, and (ii) the Depositor will approve, as to
form and substance, or disapprove, as the case may be, the inclusion of the Form 8-K Disclosure Information on Form 8-K. The Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with
including any Form 8-K Disclosure Information on Form 8-K pursuant to this Section. 
  

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 (C) After preparing the Form 8-K, the Trustee shall forward electronically a draft copy
of the Form 8-K to the Depositor and the Servicer for review. No later than the end of business New York City time on the 3rd Business Day after the Reportable Event, a senior officer of the Servicer in charge of the servicing function shall sign
the Form 8-K and return an electronic or fax copy of such signed Form 8-K (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be amended,
the Trustee will follow the procedures set forth in Section         . Promptly (but no later than 1 Business Day) after filing with the Commission, the Trustee will, make available on its internet
website a final executed copy of each Form 8-K. The signing party at the Servicer can be contacted as set forth in Section [    ]. The parties to this Agreement acknowledge that the performance by the Trustee of its duties
under this Section          related to the timely preparation and filing of Form 8-K is contingent upon such parties strictly observing all applicable deadlines in the performance of their duties under
this Section         . The Trustee shall have no liability for any loss, expense, damage, claim arising out of or with respect to any failure to properly prepare and/or timely file such Form 8-K, where
such failure results from the Trustee’s inability or failure to receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 8-K, not resulting from its own negligence, bad
faith or willful misconduct. 
 (iii) (A) Within 90 days after the end of each fiscal year of the Issuing Entity or such
earlier date as may be required by the Exchange Act (the “10-K Filing Deadline”) (it being understood that the fiscal year for the Issuing Entity ends on December 31st of each year), commencing in
March 20[    ], the Trustee shall prepare and file on behalf of the Issuing Entity a Form 10-K, in form and substance as required by the Exchange Act. Each such Form 10-K shall include the following items, in each
case to the extent they have been delivered to the Trustee within the applicable time frames set forth in this Agreement, (i) an annual compliance statement for the Servicer, each Servicer and any subservicer, as described under Section
        , the annual reports on assessment of compliance with Servicing Criteria for the Servicer, each subservicer and subcontractor participating in the Servicing Function, each Servicing Function
Participant, the Trustee and each custodian, as described under Section         , and (B) if the Servicer’s, or the Trustee’s report on assessment of compliance with servicing criteria
described under Section          identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if the Servicer’s, or the Trustee’s report on
assessment of compliance with Servicing Criteria described under Section          is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such
report is not included, (iii)(A) the registered public accounting firm attestation report for the Servicer, and the Trustee, as described under Section         , and
         if any registered public accounting firm attestation report described under Section          identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any such registered public accounting firm attestation report is not included as an exhibit to such Form 10-K, disclosure that such report is not included and an explanation why such
report is not included, and (iv) a Sarbanes-Oxley Certification (“Sarbanes-Oxley  

  

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Certification”) as described in this Section          below. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form 10-K (“Additional Form 10-K Disclosure”) shall be determined and prepared by and approved by the Depositor. 
 (B) No later than March 1 (with a 10 calendar day cure period) of each year that the Issuing Entity is subject to the Exchange Act
reporting requirements, commencing in [    ], (i) the parties set forth in Exhibit [    ] shall be required to provide pursuant to Section
         below to the Trustee and the Depositor, to the extent known, in EDGAR-compatible format, or in such other form as otherwise agreed upon by the Trustee and the Depositor and such party, the form
and substance of any Additional Form 10-K Disclosure, if applicable, and (ii) the Depositor will approve, as to form and substance, or disapprove, as the case may be, the inclusion of the Additional Form 10-K Disclosure on Form 10-K. The
Depositor will be responsible for any reasonable fees and expenses assessed or incurred by the Trustee in connection with including any Additional Form 10-K Disclosure on Form 10-K pursuant to this Section. 
 (C) After preparing the Form 10-K, the Trustee shall forward electronically a draft copy of the Form 10-K to the Depositor and the
Servicer for review. No later than 12:00 p.m. Eastern Standard time on the 4th Business Day prior to the 10-K Filing Deadline, a senior officer of the Servicer in charge of the servicing function shall sign the Form 10-K and return an electronic or
fax copy of such signed Form 10-K (with an original executed hard copy to follow by overnight mail) to the Trustee. If a Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be amended, the Trustee will follow the procedures
set forth in Section         . Promptly (but no later than 1 Business Day) after filing with the Commission, the Trustee will make available on its internet website a final executed copy of each Form
10-K. The signing party at the Servicer can be contacted as set forth in Section [    ]. The parties to this Agreement acknowledge that the performance by the Trustee of its duties under Sections
         and          related to the timely preparation and filing of Form 10-K is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties under such Section          and Section         . The Trustee shall have no liability for any loss, expense, damage,
claim arising out of or with respect to any failure to properly prepare and/or timely file such Form 10-K, where such failure results from the Trustee’s inability or failure to receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-K, not resulting from its own negligence, bad faith or willful misconduct. 
 (D) Each Form 10-K shall include a certification (the “Sarbanes-Oxley Certification”), required to be included therewith pursuant to the Sarbanes-Oxley Act. The Servicer and the Trustee, shall and the
Servicer shall cause any subservicer or subcontractor engaged by it to, provide to the Person who signs the Sarbanes-Oxley Certification (the “Certifying Person”), by March 10 of each year in which the Issuing Entity is subject
to the reporting requirements of the Exchange Act and otherwise within a reasonable period of time upon request, a certification (each, a “Back-Up Certification”), in the form attached hereto as Exhibit
[    ], upon which the Certifying Person, the entity for which the Certifying Person acts as an officer, and such entity’s officers, directors and Affiliates (collectively 

  

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with the Certifying Person, “Certification Parties”) can reasonably rely. The senior officer of the Servicer shall serve as the Certifying
Person on behalf of the Issuing Entity. Such officer of the Certifying Person can be contacted as set forth in Section [    ]. In the event the Trustee is terminated or resigns pursuant to the terms of this Agreement, the
Trustee shall provide a Back-Up Certification to the Certifying Person pursuant to this Section          with respect to the period of time it was subject to this Agreement. 
 (iv) With respect to any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or any Form 8-K Disclosure Information
(collectively, the “Additional Disclosure”) relating to the Trust Fund, the Trustee’s obligation to include such Additional Information in the applicable Exchange Act report is subject to receipt from the entity that is
indicated in Exhibit [    ] as the responsible party for providing that information, if other than the Trustee, as and when required as described in Section          through
(iii) above. Each of the Servicer, Sponsor, and Depositor hereby agree to notify and provide to the extent known to the Trustee and the Depositor all Additional Disclosure relating to the Trust Fund, with respect to which such party is
indicated in Exhibit [    ] as the responsible party for providing that information. 
 (v)
(A) On or prior to January 30 of the first year in which the Trustee is able to do so under applicable law, the Trustee shall file a Form 15 relating to the automatic suspension of reporting in respect of the Issuing Entity under the
Exchange Act. 
 (B) In the event that the Trustee is unable to timely file with the Commission all or any required portion of
any Form 8-K, 10-D or 10-K required to be filed by this Agreement because required disclosure information was either not delivered to it or delivered to it after the delivery deadlines set forth in this Agreement or for any other reason, the Trustee
will immediately notify the Depositor and the Servicer. In the case of Form 10-D and 10-K, the Depositor, Servicer and Trustee will cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as applicable, pursuant to Rule 12b-25 of the
Exchange Act. In the case of Form 8-K, the Trustee will, upon receipt of all required Form 8-K Disclosure Information and upon the approval and direction of the Depositor, include such disclosure information on the next Form 10-D. In the event that
any previously filed Form 8-K, 10-D or 10-K needs to be amended, the Trustee will notify the Depositor and the Servicer and such parties will cooperate to prepare any necessary 8-KA, 10-DA or 10-KA. Any Form 15, From 12b-25 or any amendment to Form
8-K, 10-D or 10-K shall be signed by a senior officer of the Servicer. The Depositor and Servicer acknowledge that the performance by the Trustee of its duties under this Section          related to the
timely preparation and filing of Form 15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent upon the Servicer and the Depositor performing their duties under this Section. The Trustee shall have no liability for any loss,
expense, damage, claim arising out of or with respect to any failure to properly prepare and/or timely file any such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, where such failure results from the Trustee’s inability or
failure to receive, on a timely basis, any information from any other party hereto needed to prepare, arrange for execution or file such Form 15, Form 12b-25 or any amendments to Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad
faith or willful misconduct. 
  

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 The Depositor agrees to promptly furnish to the Trustee, from time to time upon request, such further
information, reports and financial statements within its control related to this Agreement, the Mortgage Loans as the Trustee reasonably deems appropriate to prepare and file all necessary reports with the Commission. The Trustee shall have no
responsibility to file any items other than those specified in this Section         ; provided, however, the Trustee will cooperate with the Depositor in connection with any additional filings with
respect to the Issuing Entity as the Depositor deems necessary under the Exchange Act. Copies of all reports filed by the Trustee under the Exchange Act shall be sent to: the Depositor c/o
[                    ]. 
 (b) In
connection with the filing of any 10-K hereunder, the Trustee shall sign a certification (a “Form of Back-Up Certification to Form 10-K Certificate,” substantially in the form attached hereto as Exhibit [    ])
for the Depositor regarding certain aspects of the Form 10-K certification signed by the Depositor, provided, however, that the Trustee shall not be required to undertake an analysis of any accountant’s report attached as an exhibit to the Form
10-K. 
 (c) The Trustee shall indemnify and hold harmless the Depositor and its officers, directors and affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach of the Trustee’s obligations under this Section
         or the Trustee’s negligence, bad faith or willful misconduct in connection therewith. 
 The Depositor shall indemnify and hold harmless the Trustee and its officers, directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and
other costs and expenses arising out of or based upon a breach of the obligations of the Depositor under this Section          or the Depositor’s negligence, bad faith or willful misconduct in
connection therewith. 
 The Servicer shall indemnify and hold harmless the Trustee and the Depositor and their respective officers,
directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments and other costs and expenses arising out of or based upon a breach of the obligations of
the Servicer under this Section          or the Servicer’s negligence, bad faith or willful misconduct in connection therewith. 
 If the indemnification provided for herein is unavailable or insufficient to hold harmless the Depositor or the Trustee, as applicable, then the
defaulting party, in connection with a breach of its respective obligations under this Section          or its respective negligence, bad faith or willful misconduct in connection therewith, agrees that
it shall contribute to the amount paid or payable by the other parties as a result of the losses, claims, damages or liabilities of the other party in such proportion as is appropriate to reflect the relative fault and the relative benefit of the
Depositor on the one hand and the Trustee on the other. 
 (d) Notwithstanding the provisions of Section
        , this Section          may be amended without the consent of the Noteholders. 
  

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 ARTICLE IX 
 [RESERVED] 
 ARTICLE X 
 REMIC ADMINISTRATION 
 Section 10.01 REMIC Administration. 
 (a) [Reserved]. 
 (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. 
 (c) The Servicer
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 each 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 Servicer in fulfilling its duties hereunder. The Servicer shall be entitled to reimbursement of expenses to the
extent provided in clause (i) above from the Collection Account. 
 (d) The Trustee shall (a) maintain (or cause to be maintained)
the books of the Trust on a calendar year basis using the accrual method of accounting, (b) deliver (or cause to be delivered) to each Certificateholder as may be required by the Code and applicable Treasury Regulations, including the REMIC
Provisions, such information as may be required to enable each Certificateholder to prepare its federal and state income tax returns, (c) prepare and file or cause to be prepared and filed such Tax Returns relating to the Trust as may be
required by the Code and applicable Treasury Regulations (including timely making elections to treat specified assets of the Trust as one or more REMICs for federal income tax purposes and any other such elections as may from time to time be
required or appropriate under any applicable state or federal statutes, rules or regulations), (d) collect or cause to be collected any required withholding tax with respect to income or distributions to Certificateholders and prepare or cause
to be prepared the appropriate forms relating thereto and (e) maintain records as required by the REMIC Provisions. 
 (e) The Holder of
the Residual Certificate at any time holding the largest Percentage Interest thereof shall be the “tax matters person” as defined in the REMIC Provisions (the “Tax Matters Person”) with respect to each REMIC and shall act
as Tax Matters Person for each REMIC. The Trustee, as agent for the Tax Matters Person, 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 Trustee, as agent for the Tax
Matters Person, shall provide (i) to the Treasury or other governmental authority such information as is necessary for the 

  

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application of any tax relating to the transfer of a Residual Certificate to any Disqualified Organization or non-U.S. Person and (ii) to the
Certificateholders such information or reports as are required by the Code or REMIC Provisions. 
 (f) The Trustee, the Servicer and the
Holders of Certificates shall take any action or cause the REMIC to take any action necessary to create or maintain the status of each 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 Servicer nor the Holder of any Residual Certificate shall take any action, cause any REMIC created hereunder 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 (i) endanger the status of such REMIC as a REMIC or (ii) result in the imposition of a tax upon such REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set forth on Section 860G(d) of the Code) (either such event, an “Adverse REMIC Event”) unless the Trustee and the Servicer have received an
Opinion of Counsel (at the expense of the party seeking to take such action) to the effect that the contemplated action will not endanger such status or result in the imposition of such a tax. In addition, prior to taking any action with respect to
any REMIC created hereunder or the assets therein, or causing such 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 and the Servicer, 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 or the Servicer 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 each REMIC created hereunder by federal or state governmental authorities. To the extent that such Trust 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 the REMICs or, if no such amounts are available, out of other amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of regular interests in the related REMIC. 
 (h) The Trustee, as agent for the Tax Matters Person, shall, for federal
income tax purposes, maintain books and records with respect to each REMIC created hereunder on a calendar year and on an accrual basis. 
 (i) After the Pre-Funding Period, no additional contributions of assets shall be made to any REMIC created hereunder, except as expressly provided in this Agreement with respect to Qualified Replacement Mortgages. 
 (j) Neither of the Trustee nor the Servicer shall enter into any arrangement by which any REMIC created hereunder will receive a fee or other
compensation for services. 
 (k) The Trustee will apply for an Employee Identification Number from the Internal Revenue Service via a Form
SS-4 or other acceptable method for REMIC I, REMIC II, REMIC III and REMIC IV and the Master REMIC. 
  

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 (l) The Trustee shall treat the Supplemental Interest Trusts as outside reserve funds within the meaning
of Treasury Regulation Section 1.860G-2(h) that are owned by the holders of the Class X, Class O and Class R Certificates and that are not an asset of any REMIC. The Trustee shall treat the rights of the holders of the Underwritten Certificates
to receive any interest payments in excess of the REMIC Pass-Through Rate on the Master REMIC Regular Interest corresponding to such Class of Certificates as rights in an interest rate cap contract written by the Class X Certificateholders in favor
of the holders of the Underwritten Certificates. Thus, each Underwritten Certificate shall be treated as representing not only ownership of a regular interest in the Master REMIC, but also ownership of an interest in an interest rate cap contract.
Notwithstanding the priority and sources of payments set forth in Article IV hereof or otherwise, the Trustee shall account for all distributions on the Certificates as set forth in this section. In no event shall any payments provided for in this
section be treated as payments with respect to a “regular interest” in a REMIC within the meaning of Code Section 860G(a)(1). 
 Section 10.02 Prohibited Transactions and Activities. 
 None of the Depositor, the Servicer nor the Trustee shall sell,
dispose of, or substitute for any of the Mortgage Loans, if such disposition, acquisition, substitution, or acceptance would (a) affect adversely the status of any REMIC created hereunder as a REMIC or (b) cause any REMIC created hereunder
to be subject to a tax on prohibited transactions or prohibited contributions pursuant to the REMIC Provisions. 
 ARTICLE XI 
 TERMINATION 
 Section 11.01
Termination. 
 (a) The respective obligations and responsibilities of the Seller, the Servicer, the Depositor and the Trustee created
hereby (other than the obligation of the Trustee to make certain payments to Certificateholders after the final Distribution Date and the obligation of the Servicer to send certain notices as hereinafter set forth and the obligation of the Servicer
to indemnify the Trustee in accordance with Section 6.06) shall terminate upon notice to the Trustee upon the earliest of (i) the Distribution Date on which the Certificate Principal Balances of the Regular Certificates have been reduced
to zero, (ii) the final payment or other liquidation of the last Mortgage Loan in the Trust, (iii) the optional purchase by the Servicer of the Mortgage Loans as described below and (iv) the Distribution Date in September 2034.
Notwithstanding the foregoing, in no event shall the trust created hereby continue beyond the expiration of 21 years from the death of the last survivor of the descendants of Joseph P. Kennedy, the late ambassador of the United States to the Court
of St. James, living on the date hereof. 
 The Servicer may, at its option, terminate this Agreement on any date on which the aggregate of
the Principal Balances of the Mortgage Loans on such date is equal to or less than 10% of the Maximum Collateral Amount, by purchasing, on the next succeeding Distribution Date, all of the outstanding Mortgage Loans and REO Properties at a price
equal to the greater of the Principal Balance of the Mortgage Loans and REO Properties or the market value of the Mortgage Loans and REO Properties, in each case plus accrued and unpaid interest thereon at the weighted 

  

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average of the Mortgage Rates through the end of the Due Period preceding the final Distribution Date plus unreimbursed Servicing Advances, Advances, any
unpaid Servicing Fees allocable to such Mortgage Loans and REO Properties, any accrued and unpaid Available Funds Cap Shortfall Amount and Available Funds Cap Carryforward Amount and any unpaid amount due the Trustee and the Custodian under this
Agreement; provided, however, that in no event shall such price be less than the amount necessary to pay the sum of (i) 100% of the aggregate Certificate Principal Balance of each Class of Certificates, (ii) accrued and
unpaid interest thereon at the related Pass-Through Rate through the date on which the trust is terminated and (iii) any unpaid Administrative Fees (the “Termination Price”); provided, however, that such option may only be
exercised if the Termination Price is sufficient to pay all interest accrued on, as well as amounts necessary to retire the principal balance of, each class of net interest margin notes issued pursuant to the Indenture at the time the option is
exercised. 
 In connection with any such purchase pursuant to the preceding paragraph, the Servicer shall deposit in the Distribution
Account all amounts then on deposit in the Collection Account, which deposit shall be deemed to have occurred immediately preceding such purchase. 
 Any such purchase shall be accomplished by deposit into the Distribution Account on the Distribution Date of the Termination Price. 
 (b) In the event that the Certificate Principal Balances of all of the Class A, Mezzanine and Class B Certificates have not been reduced to zero by the Distribution Date in September 2034, the Trustee, shall (i) sign a plan of
complete liquidation of each REMIC created hereunder meeting the requirements of a “Qualified Liquidation” under Section 860F of the Code and any regulations thereunder, (ii) sell all of the assets of the Trust Fund for cash in a
commercially reasonable manner to maximize the value thereof, pursuant to the terms of the plan of complete liquidation, (iii) distribute the proceeds of the sale to the Certificateholders in accordance with Section 4.01 hereof, and
(iv) terminate the Trust. By their acceptance of Certificates, the Holders thereof hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan of complete liquidation (and the Certificateholders hereby appoint
the Trustee as their attorney in fact to sign such a plan) as appropriate and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation in accordance with the terms
thereof. 
 (c) Notice of any termination, specifying the Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the Trustee for payment of the final distribution and cancellation, shall be given promptly by the Trustee upon the Trustee receiving notice of such date from the Servicer,
by letter to the Certificateholders mailed not earlier than the 15th day and not later than the 25th day of the month next preceding the month of such final distribution specifying (1) the Distribution Date upon which final distribution of the
Certificates will be made upon presentation and surrender of such Certificates at the office or agency of the Trustee therein designated, (2) the amount of any such final distribution and (3) that the Record Date otherwise applicable to
such Distribution Date is not applicable, distributions being made only upon presentation and surrender of the Certificates at the office or agency of the Trustee therein specified. 
 (d) Upon presentation and surrender of the Certificates, the Trustee shall cause to be distributed to the Holders of the Certificates on the Distribution
Date for such final distribution, in 

  

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proportion to the Percentage Interests of their respective Class and to the extent that funds are available for such purpose, an amount equal to the amount
required to be distributed to such Holders in accordance with the provisions of Section 4.01 for such Distribution Date. 
 (e) In the
event that all Certificateholders shall not surrender their Certificates for final payment and cancellation on or before such final Distribution Date, the Trustee shall promptly following such date cause all funds in the Distribution Account not
distributed in final distribution to Certificateholders to be withdrawn therefrom and credited to the remaining Certificateholders by depositing such funds in a separate Servicing Account for the benefit of such Certificateholders, and the Servicer
(if the Servicer has exercised its right to purchase the Mortgage Loans) or the Trustee (in any other case) 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 nine months after the second notice all the Certificates shall not have been surrendered for cancellation, the Residual Certificateholder shall be entitled to all unclaimed funds and other assets
which remain subject hereto, and the Trustee upon transfer of such funds shall be discharged of any responsibility for such funds, and the Certificateholders shall look to the Residual Certificateholder for payment. 
 No purchase under this Section 11.01 will be permitted without the prior written consent of the Class A-1 Insurer, unless no draw on the
Class A-1 Certificate Insurance Policy would be made and no amounts due to the Class A-1 Insurer would remain unreimbursed on the final Distribution Date. 
 Section 11.02 Additional Termination Requirements. 
 (a) In the event that the Servicer exercises
its purchase option as provided in Section 11.01 or the Trustee terminates the Trust, each REMIC shall be terminated in accordance with the following additional requirements, unless the Trustee and the Class A-1 Insurer shall have been
furnished with an Opinion of Counsel to the effect that the failure of the Trust to comply with the requirements of this Section will not (i) result in the imposition of taxes on “prohibited transactions” of the Trust as defined in
Section 860F of the Code or (ii) cause any REMIC constituting part of the Trust Fund to fail to qualify as a REMIC at any time that any Certificates are outstanding: 
 (i) Within 90 days prior to the final Distribution Date, the Servicer shall adopt and the Trustee shall sign a plan of complete
liquidation of each REMIC created hereunder meeting the requirements of a “Qualified Liquidation” under Section 860F of the Code and any regulations thereunder; and 
 (ii) At or after the time of adoption of such a plan of complete liquidation and at or prior to the final Distribution Date, the Trustee
shall sell all of the assets of the Trust Fund to the Servicer for cash pursuant to the terms of the plan of complete liquidation. 
 (b) By
their acceptance of Certificates, the Holders thereof hereby agree to appoint the Trustee as their attorney in fact to: (i) adopt such a plan of complete liquidation (and the Certificateholders hereby appoint the Trustee as their attorney in
fact to sign such plan) as appropriate and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation all in accordance with the terms hereof. 
  

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 ARTICLE XII 
 MISCELLANEOUS PROVISIONS 
 Section 12.01 Amendment. 
 This Agreement may be amended from time to time by the parties hereto, and without the consent of the Certificateholders and the Swap Counterparties and
with the prior written consent of the Class A-1 Insurer (i) to cure any ambiguity, (ii) to correct or supplement any provisions herein which may be defective or inconsistent with any other provisions herein or (iii) to make any
other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the provisions of this Agreement; provided, however, that any such action listed in clause (i) through (iii) above
shall be deemed not to adversely affect in any respect the interests of (A) any Certificateholder, if evidenced by (i) written notice to the Depositor, the Servicer and the Trustee from the Rating Agencies that such action will not result
in the reduction or withdrawal of the rating of any outstanding Class of Certificates with respect to which it is a Rating Agency or (ii) an Opinion of Counsel delivered to the Servicer, the Depositor and the Trustee and (B) any Swap
Counterparty, if evidenced by an Opinion of Counsel delivered to the Servicer, the Depositor, the Trustee and each Swap Counterparty. This Agreement may be amended by the parties hereto without the consent of the Swap Counterparties after the Class
I Termination Date. 
 In addition, this Agreement may be amended from time to time by the parties hereto with the consent of the Majority
Certificateholders and with the prior written consent of the Class A-1 Insurer 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 of Certificates; provided, however, that no such amendment or waiver shall (w) reduce in any manner the amount of, or delay the timing of, payments on the Certificates or distributions which are required to be made on any
Certificate without the consent of the Holder of such Certificate, (x) adversely affect in any material respect the interests of the Holders of any Class of Certificates in a manner other than as described in clause (w) above, without the
consent of the Holders of Certificates of such Class evidencing at least a 66% Percentage Interest in such Class, (y) reduce the percentage of Voting Rights required by clause (x) above without the consent of the Holders of all
Certificates of such Class then outstanding or (z) have a material adverse effect on the interests of the Swap Counterparties without such Swap Counterparties’ consent. Upon approval of an amendment, a copy of such amendment shall be sent
to the Rating Agencies. 
 Notwithstanding any provision of this Agreement to the contrary, the Trustee shall not consent to any amendment to
this Agreement unless it shall have first received an Opinion of Counsel, delivered by (and at the expense of) the Person seeking such Amendment, to the effect that such amendment will not result in the imposition of a tax on any REMIC created
hereunder constituting part of the Trust Fund pursuant to the REMIC Provisions or cause any REMIC created hereunder constituting part of the Trust to fail to qualify as a REMIC at any time that any Certificates are outstanding and that the amendment
is being made in accordance with the terms hereof. Additionally, prior to entering into any amendment, the Trustee shall be entitled to receive from the party requesting such amendment an opinion of counsel stating that such amendment is authorized
any permitted pursuant to the terms of this Agreement. 
  

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 Promptly after the execution of any such amendment the Trustee shall furnish, at the expense of the
Person that requested the amendment if such Person is Seller or the Servicer (but in no event at the expense of the Trustee), otherwise at the expense of the Trust, a copy of such amendment and the Opinion of Counsel referred to in the immediately
preceding paragraph to the Servicer and each Rating Agency. 
 It shall not be necessary for the consent of Certificateholders under this
Section 12.01 to approve the particular form of any proposed amendment; instead 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 Certificateholders shall be subject to such reasonable regulations as the Trustee may prescribe. 
 The Trustee shall
not be obligated to enter into any amendment pursuant to this Section 12.01 that affects its rights, duties and immunities under this Agreement or otherwise. 
 Section 12.02 Recordation of Agreement; Counterparts. 
 To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices for real property records in all the counties or other comparable jurisdictions in which any or all of the properties subject to the Mortgages are situated, and in any
other appropriate public recording office or elsewhere, such recordation to be effected by the Servicer at the expense of the Trust, but only upon direction of Certificateholders accompanied by an Opinion of Counsel to the effect that such
recordation materially and beneficially affects the interests of the Certificateholders. 
 For the purpose of facilitating the recordation
of this Agreement as herein provided and for other purposes, this Agreement may be executed simultaneously in any number of counterparts, each of which counterparts shall be deemed to be an original, and such counterparts shall together constitute
but one and the same instrument. 
 Section 12.03 Limitation on Rights of Certificateholders. 
 The death or incapacity of any Certificateholder shall not (i) operate to terminate this Agreement or the Trust, (ii) entitle such
Certificateholder’s legal representatives or heirs to claim an accounting or to take any action or proceeding in any court for a partition or winding up of the Trust, or (iii) otherwise affect the rights, obligations and liabilities of the
parties hereto or any of them. 
 Except as expressly provided for herein, no Certificateholder shall have any right to vote or in any manner
otherwise control the operation and management of the Trust, 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 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. 
  

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 No Certificateholder shall have any right by virtue 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 default and of the continuance thereof, as hereinbefore provided, and
unless also the Holders of Certificates entitled to at least 25% of the Voting Rights and the Class A-1 Insurer shall 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 costs, expenses and liabilities to be incurred therein or thereby, and the Trustee for 15 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. It is understood and intended, and expressly covenanted by each Certificateholder with every other Certificateholder and the Trustee, that no one or more
Holders of Certificates shall have any right in any manner whatever by virtue of any provision of this Agreement to affect, disturb or prejudice the rights of the Holders of any other of such Certificates, or to obtain or seek to obtain priority
over or preference to any other such Holder, which priority or preference is not otherwise provided for herein, or to enforce any right under this Agreement, except in the manner herein provided and for the equal, ratable and common benefit of all
Certificateholders. For the protection and enforcement of the provisions of this Section 12.03 each and every Certificateholder and the Trustee shall be entitled to such relief as can be given either at law or in equity. 
 Section 12.04 Governing Law; Jurisdiction. 
 This Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights and remedies of the parties hereunder shall be determined in accordance with such laws. With respect
to any claim arising out of this Agreement, each party irrevocably submits to the exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in The City of New York, and
each party irrevocably waives any objection which it may have at any time to the laying of venue of any suit, action or proceeding arising out of or relating hereto brought in any such courts, irrevocably waives any claim that any such suit, action
or proceeding brought in any such court has been brought in any inconvenient forum and further irrevocably waives the right to object, with respect to such claim, suit, action or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process has been made by any lawful means. 
 Section 12.05 Notices.

 All demands, notices, instructions, consents, directions and other communications hereunder shall be in writing and shall be deemed to have
been duly given if personally delivered at or mailed by certified mail, return receipt requested, or sent by reputable overnight courier service to: 
 (a) in the case of the Depositor: 
 [NovaStar Mortgage Funding Corporation] 
 [NovaStar Certificates Financing Corporation] 
 8140 Ward Parkway 
 Suite 300 
 Kansas City, Missouri 64114 
 Attention: Matt Kaltenrieder 
  

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 (b) in the case of the Servicer or the Seller: 
 NovaStar Mortgage, Inc. 
 8140 Ward Parkway 
 Suite 300 
 Kansas City, Missouri 64114 
 Attention: Matt Kaltenrieder 
 (c) in the case of Rating Agencies: 
 Moody’s Investors Service, Inc. 
 99 Church Street 
 New York, New York 10007 
 Attention: Henry Engelken 
 Standard & Poor’s 
 55 Water Street 
 New York, New York 10041 
 Attention: Scott Mason 
 (d) in the case of the Custodian: 
 [Insert Custodian Info] 
 (e)
in the case of the Trustee: 
 [Insert Trustee Info] 
 (f) in the case of Greenwich Capital Derivatives, Inc., as Swap Counterparty: 
 Greenwich Capital Derivatives, Inc. 
 600 Steamboat Road 
 Greenwich, CT 08830 
 Attention: Legal Dept./Credit Dept. 
 Tel: (203) 618-2531/32 
 Fax: (203) 618-2533 
 (g) in the case of Wachovia Bank, N.A., as Swap Counterparty: 
 Wachovia Bank, N.A. 
 201 South College Street, 6th Floor 
 Charlotte, NC 28288-0601 
 Attention: Collateral Management Group 
 Tel: (704) 715-7663 
 Fax: (704) 383-3394 
  

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 (h) in the case of Financial Security Assurance Inc., as Class A-1 Insurer: 
 Financial Security Assurance Inc. 
 350 Park Avenue 
 New York, NY 10022 
 Attention: Survillance 
 Re: NovaStar Mortgage Funding Trust, Series 2004-2 
 or, as to each party, at such other address as shall be designated by
such party in a written notice to each other party. Any notice required or permitted to be mailed to a Certificateholder shall be given by first class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice. Any notice or other document required to be delivered or
mailed by the Trustee to any Rating Agency shall be given on a reasonable efforts basis and only as a matter of courtesy and accommodation and the Trustee shall have no liability for failure to deliver such notice or document to any Rating Agency.

 Section 12.06 Severability of Provisions. 
 If any one or more of the covenants, agreements, provisions or terms of this Agreement shall for any reason whatsoever be 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 12.07 Article and Section References. 
 All article and section references used in this Agreement, unless otherwise provided, are to articles and sections in this Agreement. 
 Section 12.08 Further Assurances. 
 Notwithstanding any other provision of this Agreement, the
Trustee shall not have any obligation to consent to any amendment or modification of this Agreement unless they have been provided reasonable security or indemnity against their out-of-pocket expenses (including reasonable attorneys’ fees) to
be incurred in connection therewith. 
 Section 12.09 Benefits of Agreement. 
 Nothing in this Agreement or in the Certificates, expressed or implied, shall give to any Person, other than the Certificateholders, the Swap
Counterparties, the Class A-1 Insurer and the parties hereto and their successors hereunder, any benefit or any legal or equitable right, remedy or claim under this Agreement. 
  

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 Section 12.10 Acts of Certificateholders. 
 (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided by this Agreement to be given or taken by the
Certificateholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Certificateholders in person or by agent duly appointed in writing, and such action shall become effective when such
instrument or instruments are delivered to the Trustee, the Seller and the Servicer. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “act” of the
Certificateholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Agreement and conclusive in favor of the Trustee and the
Trust, if made in the manner provided in this Section 12.10. 
 (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 a notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Whenever such execution is by a signer acting in a capacity other than his or her individual capacity, such certificate or affidavit shall also constitute sufficient proof of his authority.

 (c) Any request, demand, authorization, direction, notice, consent, waiver or other action by any Certificateholder shall bind every
future Holder of such 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
Trust in reliance thereon, whether or not notation of such action is made upon such Certificate. 
 Section 12.11 The Class A-1
Insurer Default. 
 Any voting rights or consent rights conferred to the Class A-1 Insurer shall be suspended during any period in
which a Class A-1 Insurer Default exists, other than any rights relating to payment (including reimbursements and payment of the Premium), receipts of notices or reports, or consent rights relating to amendments hereto or any other Basic
Documents or consent rights relating to the optional termination provided for in Section 11.01 hereof, all of which rights shall continue during such Class A-1 Insurer Default. At such time as the Class A-1 Certificates are no longer
outstanding hereunder, no amounts owed to the Class A-1 Insurer hereunder remain unpaid and the Policy shall have been cancelled and returned to the Class A-1 Insurer, the Class A-1 Insurer’s rights hereunder (other than rights
designated as surviving such cancellation) shall terminate. 
 Section 12.12 Confidentiality. 
 The Trustee hereby agrees to hold and treat all Confidential Information (as defined below) provided to it in connection with the offering of the
Certificates in confidence and in accordance with this Section 12.11, and will implement and maintain safeguards in accordance with the “Interagency Guidelines Establishing Standards for Safeguarding Customer Information” as required
by Appendix B to 12 CFR, Chapter I, Part 30, to further assure the confidentiality of such Confidential Information. Such Confidential Information will not, without the prior written consent 

  

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of the Servicer, be disclosed or used by the Trustee or by its subsidiaries or, affiliates, or its or their directors, officers, employees, agents or
controlling persons or agents or advisors (collectively, the “Information Recipients”) other than for the purposes of (i) structuring the securitization transaction and the facilitating the issuance of the Certificates, or
(ii) in connection with the performance of its required due diligence on the Mortgage Loans. Disclosure that is not in violation of the Right to Financial Privacy Act of 1978, as amended, the Gramm-Leach-Bliley Act of 1999, as amended, (the
“G-L-B Act”) or other applicable law by the Trustee of any Confidential Information at the request of its outside auditors or governmental regulatory authorities in connection with an examination of the Trustee by any such authority
or for the purposes specified in above shall not constitute a breach of its obligations under this Section 12.11, and shall not require the prior consent of the Servicer. 
 As used herein, “Confidential Information” means non-public personal information (as defined in the G-L-B Act and its enabling regulations
issued by the Federal Trade Commission) regarding obligors on the Mortgage Loans that is identified as such by the Servicer. Confidential Information shall not include information which (i) is or becomes generally available to the public other
than as a result of disclosure by the Trustee or any of its Information Recipients; (ii) was available to the Trustee on a non-confidential basis from a person or entity other than the Servicer; (iii) is requested to be disclosed by a
governmental authority or related governmental, administrative, or regulatory or self-regulatory agencies having or claiming authority to regulate or oversee any aspect of the Trustee’s business or that of its affiliates or is otherwise
required by law or by legal or regulatory process to be disclosed; (iv) becomes available to the Trustee on a non-confidential basis from a person or entity other than the Servicer who, to the best knowledge of the Trustee, is not otherwise
bound by a confidentiality agreement with the Servicer, and is not otherwise prohibited from transmitting the information to the Trustee; (v) the Servicer provides written permission to the Trustee to release, (vi) is independently
developed by employees of the Trustee who did not have access to any or all of the otherwise Confidential Information or (vii) is disclosed to the Trustee’s auditors or counsel or is required to be disclosed to its lenders or rating
agencies, to the extent required for the purpose of consummating the services it is to provide as set forth herein. 
 [Signature page to
follow] 
  

 93 

 IN WITNESS WHEREOF, the Depositor, the Servicer, the Seller, Custodian and the Trustee have caused their names to be
signed hereto by their respective officers thereunto duly authorized, all as of the day and year first above written. 
  

			
	 [NOVASTAR MORTGAGE FUNDING CORPORATION]
 [NOVASTAR CERTIFICATES FINANCING CORPORATION],
 as Depositor

		
	By:	 	  

	Name:	 	Matt Kaltenrieder
	Title:	 	Vice President
	
	 NOVASTAR MORTGAGE, INC.,
 as Servicer and as
Seller

		
	By:	 	  

	Name:	 	Matt Kaltenrieder
	Title:	 	Vice President
	
	[                                      
                                        
      ],
	as Custodian
		
	By:	 	  

	Name:	 	
	Title:	 	
	
	[                                      
                                        
      ],
	as Trustee
		
	By:	 	  

	Name:	 	
	Title:	 	

 [Pooling and Servicing Agreement Signature Page] 
  

 94 

					
	STATE OF MISSOURI	  	)	  	
		  	)	  	ss.:
	COUNTY OF             	  	)	  	

  On the          day of June, 200[  ]
before me, a notary public in and for said State, personally appeared Matt Kaltenrieder known to me (or proved to me on the basis of satisfactory evidence) to be a Vice President of [NovaStar Mortgage Funding Corporation][NovaStar Certificates
Financing Corporation], a Delaware corporation that executed the within instrument, and also known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument. 
  IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal
the day and year in this certificate first above written. 
  

			
		
	Seal	  	  
 Notary
Public

  

 95 

					
	STATE OF MISSOURI	  	)	  	
		  	)	  	ss.:
	COUNTY OF             	  	)	  	

 On the          day of June, 200[  ]
before me, a notary public in and for said State, personally appeared Matt Kaltenrieder known to me (or proved to me on the basis of satisfactory evidence) to be a Vice President of NovaStar Mortgage, Inc., a Virginia corporation that executed the
within instrument, and also known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument. 

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. 
  

			
		
	Seal	  	  
 Notary
Public

  

 96 

					
	STATE OF MISSOURI	  	)	  	
		  	)	  	ss.:
	COUNTY OF             	  	)	  	

 On the          day of June, 200[  ]
before me, a notary public in and for said State, personally appeared
                                 known to me (or proved to me on the basis of
satisfactory evidence) to be a                                  of
[                                ] that executed the within instrument, and also
known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed it on behalf of said corporation, and acknowledged to me that such corporation executed the within instrument. 
 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. 
  

			
		
	Seal	  	  
 Notary
Public

  

 97 

					
	STATE OF MISSOURI	  	)	  	
		  	)	  	ss.:
	COUNTY OF             	  	)	  	

 On the          day of June, 200[  ]
before me, a notary public in and for said State, personally appeared
                                , known to me (or proved to me on the basis of
satisfactory evidence) to be                                  of
[                                ] that executed the within instrument, and also
known to me (or proved to me on the basis of satisfactory evidence) to be the person who executed it on behalf of said association, and acknowledged to me that such corporation executed the within instrument. 
 IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the day and year in this certificate first above written. 
  

			
		
	Seal	  	  
 Notary
Public

  

 98 

 APPENDIX A 
 DEFINITIONS 
 “1933 Act”: The Securities Act of 1933, as amended. 

“Account”: The Collection Account, the Pre-Funding Account, the Interest Coverage Account, the Supplemental Interest Account, and the
Distribution Account. 
 “Accrual Period”: With respect to each Distribution Date, the period commencing on the preceding
Distribution Date (or in the case of the first Accrual Period, commencing on the Closing Date) and ending on the day preceding the applicable Distribution Date. 
 “Addition Notice”: With respect to the transfer of Subsequent Mortgage Loans to the Trust Fund pursuant to Section 2.08, a notice of the Company’s designation of the Subsequent Mortgage
Loans to be sold to the Trust Fund and the aggregate principal balance of such Subsequent Mortgage Loans as of the Subsequent Cut-off Date. The Addition Notice shall be given not later than four Business Days prior to the related Subsequent Transfer
Date and shall be substantially in the form attached hereto as Exhibit C. 
 “Adjustable Rate Mortgage Loan”: A Mortgage
Loan which provides at any period during the life of such loan for the adjustment of the Mortgage Rate payable in respect thereto. The Adjustable Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule. 
 “Adjustment Date”: With respect to each Adjustable Rate Mortgage Loan, each adjustment date, on which the Mortgage Rate of such Mortgage
Loan changes pursuant to the related Mortgage Note. 
 “Administrative Fee”: With respect to each Distribution Date, the sum
of the MI Premium, the Servicing Fee, the Custodian Fee and the Trustee Fee with respect to such Distribution Date. 
 “Administrative Fee Rate”: As to each Distribution Date, the sum of (i) the Trustee Fee Rate, (ii) the Servicing Fee Rate, (iii) the Custodian Fee Rate and (iv) the total MI Premiums due during the
related Due Period, expressed as an annual percentage rate of the Pool Balance as of the beginning of that Due Period. 
 “Advance”: As to any Mortgage Loan, any advance made by the Servicer in respect of any Distribution Date pursuant to Section 3.24. 
 “Adverse REMIC Event”: As defined in Section 10.01(f) hereof. 
 “Affiliate”: With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management
and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing. 

 “Agreement”: This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto. 
 “Allocated Realized Loss Amount”: With respect to any Distribution Date and any Class of Mezzanine
Certificates or the Overcollateralization Amount, the Realized Losses allocated to such Class of Certificates (or, with respect to the Overcollateralization Amount, the Realized Loss allocated to the Overcollateralization Amount) on such
Distribution Date. 
 “Applicable Regulations”: As to any Mortgage Loan, all federal and state laws, statutes, rules and
regulations applicable thereto. 
 “Appraised Value”: The appraised value of a Mortgaged Property based upon the appraisal
made at the time of the origination of the related Mortgage Loan. With respect to a Mortgage Loan the proceeds of which were used to refinance an existing Mortgage Loan, the appraised value of the Mortgaged Property based upon the appraisal with the
lowest appraised value (as reviewed and approved by the Seller) obtained within 12 months of the time of refinancing. 
 “Assignment
of Mortgage”: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law. 
 “Assumed Final Maturity Date”: As to each Class of Certificates, the Distribution Date in January 2036. 
 “Available Funds”: As to each Distribution Date, an amount equal to the amount on deposit in the Distribution Account, representing the
sum of (i) the aggregate amount of scheduled payments on the related Mortgage Loans due on the related Due Date and received on or prior to the related Determination Date, (ii) miscellaneous fees and collections, including prepayment
penalties with respect to the Mortgage Loans (but excluding late fees), (iii) any unscheduled payments and receipts, including Mortgagor prepayments on the related Mortgage Loans, received during the related Prepayment Period and proceeds of
repurchases, and adjustments in the case of substitutions and terminations, Net Liquidation Proceeds and Insurance Proceeds, and proceeds from Subsequent Recoveries to pay certain Certificates amounts in respect of Realized Losses allocated to such
Certificates, (iv) all Advances made and Compensating Interest paid for such Distribution Date in respect of the related Mortgage Loans, (v) on the Distribution Date following the termination of the Pre-Funding Period, the remaining amount
of the Original Pre-Funded Amount on deposit in the Pre-Funding Account at such time and (vi) on the Distribution Date following the termination pursuant to Section 11.01 herein, the Termination Price. 
 “Available Funds Cap”: With respect to each Distribution Date and (a) the Group I Certificates, the Group I Available Funds Cap,
(b) the Group II Certificates, the Group II Available Funds Cap and (c) the Class M Certificates, the Subordinate Available Funds Cap, 

  

 Appendix A-2 

 
each for such Distribution Date. If the aggregate Principal Balance of any Group of Mortgage Loans has been reduced to zero on a prior Distribution Date, the
Available Funds Cap for the related Classes of Class A Certificates will be equal to the Available Funds Cap of the Group of Mortgage Loans with an aggregate Principal Balance greater than zero. 
 “Available Funds Cap Carryforward Amount”: With respect to any Class of Class A Certificates and Mezzanine Certificates and any
Distribution Date, the sum of (i) the positive excess, if any, of (x) the aggregate cumulative amount of Available Funds Cap Shortfall Amounts for such Class on all prior Distribution Dates over (y) the aggregate cumulative amount of
Supplemental Interest Payments actually paid to the Holders of that Class on all prior Distribution Dates pursuant to those clauses of Section 4.04(c), which relate to payments to that Class, plus (ii) interest on the amount described in
clause (i) at a rate equal to the related Formula Rate for such Class and Distribution Date. 
 “Available Funds Cap Shortfall
Amount”: With respect to any Distribution Date and Class of Class A Certificates and Mezzanine Certificates the excess, if any, of (1) the interest due on such Class calculated using the Formula Rate applicable to such Class over
(2) the interest due on such Class, calculated using the Pass-Through Rate applicable to such Class. 
 “Balloon Mortgage
Loan”: A Mortgage Loan that provides for the payment of the unamortized principal balance of such Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding monthly payment.

 “Balloon Payment”: A payment of the unamortized principal balance of a Mortgage Loan in a single payment at the maturity
of such Mortgage Loan that is substantially greater than the preceding Monthly Payment. 
 “Bankruptcy Code”: The Bankruptcy
Reform Act of 1978 (Title 11 of the United States Code), as amended. 
 “Base Prospectus”: The base Prospectus, dated
                        , 20[    ] with respect to the Offered Certificates. 
 “Basic Documents”: This Agreement, the Purchase Agreement, each Subsequent Transfer Instrument, the REMIC Interests Sale Agreement, the
Underwriting Agreement, MI Policy, the Swap Agreements, the Cap Agreements, the Novation Agreements and the other documents and Certificates delivered in connection with any of the above. 
 “Book-Entry Certificates”: Any of the Certificates that shall be registered in the name of the Depository or its nominee, the ownership
of which is reflected on the books of the Depository or on the books of a Person maintaining an account with the Depository (directly, as a Depository Participant, or indirectly, as an indirect participant in accordance with the rules of the
Depository and as described in Section 5.02 hereof). On the Closing Date, the Class A Certificates and the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Certificates shall be Book-Entry
Certificates. 
 “Business Day”: Any day other than (i) a Saturday or a Sunday or (ii) a day on which banking
institutions in the City of New York, the State of Missouri or in the city in which the corporate trust office of the Trustee or Custodian are located, are required or authorized by law to be closed. 
  

 Appendix A-3 

 “Cap Agreement”: Any of the two interest rate Cap Agreements between the Supplemental
Interest Trust and a Cap Counterparty which are deemed to be assets of the Supplemental Interest Trust and not an asset of any one of the REMICs created hereunder. 
 “Cap Amount”: The Cap Amount is subject to the verification and confirmation of the Cap Counterparties who are calculation agents for the Cap Agreements. Cap Amount shall mean, on each Distribution
Date on or prior to the Class I Termination Date, the product of (i) the related fixed rate of interest, (ii) 30 divided by 360 and (iii) the related effective notional amount. 
 “Cap Contract Rights and Obligations”: The rights of the Class A Certificates and Mezzanine Certificates to receive interest
payments in excess of payments at the REMIC Pass-Through Rate on the Master REMIC Regular Interest corresponding to such Class of Certificates as set forth in Exhibit J and the obligations of the Class A Certificates and Mezzanine Certificates
to make certain payments to the Class C Holder to the extent that the amounts allocated at the REMIC Pass-Through Rate on the Master REMIC Regular Interest corresponding to such Class of Certificates exceed the amount of interest distributed on such
Certificates. 
 “Cap Counterparty”: [cap counterparty] 
 “Cash Liquidation”: As to any defaulted Mortgage Loan other than a Mortgage Loan as to which an REO Acquisition occurred, a
determination by the Servicer that it has received all Liquidation Proceeds and other payments or cash recoveries which the Servicer reasonably and in good faith expects to be finally recoverable with respect to such Mortgage Loan. 
 “Certificate”: Any Regular Certificate, Class M-9 DSI Certificate, Class M-10 DSI Certificate, Class M-11 DSI Certificate, Class M-12
DSI Certificate or Class R Certificate. 
 “Certificateholder” or “Holder”: The Person in whose name a
Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual Certificate for any purpose hereof. 
  

 Appendix A-4 

 “Certificate Margin”: With respect to each Class and each Distribution Date prior to the
Rate Step-Up Date: 
  

			
	 Class
	  	 Rate

	 A-1A
	  	
		
	 A-2A
	  	
		
	 A-2B
	  	
		
	 A-2C
	  	
		
	 A-2D
	  	
		
	 M-1
	  	
		
	 M-2
	  	
		
	 M-3
	  	
		
	 M-4
	  	
		
	 M-5
	  	
		
	 M-6
	  	
		
	 M-7
	  	
		
	 M-8
	  	
		
	 M-9
	  	
		
	 M-10
	  	
		
	 M-11
	  	
		
	 M-12
	  	

 With respect to each Class and each Distribution Date on and after the Rate Step-Up Date:

  

			
	 Class
	  	 Rate

	 A-1A
	  	
		
	 A-2A
	  	
		
	 A-2B
	  	
		
	 A-2C
	  	
		
	 A-2D
	  	
		
	 M-1
	  	
		
	 M-2
	  	
		
	 M-3
	  	
		
	 M-4
	  	
		
	 M-5
	  	
		
	 M-6
	  	
		
	 M-7
	  	
		
	 M-8
	  	
		
	 M-9
	  	
		
	 M-10
	  	
		
	 M-11
	  	
		
	 M-12
	  	

  

 Appendix A-5 

 “Certificate Owner”: With respect to each Book-Entry Certificate, any beneficial owner
thereof. 
 “Certificate Principal Balance”: With respect to any Class of Regular Certificates (other than the Class C
Certificates and the Class I Certificates) immediately prior to any Distribution Date, an amount equal to the Initial Certificate Principal Balance thereof reduced by the sum of all amounts actually distributed in respect of principal of such Class
and, in the case of a Mezzanine Certificate, Allocated Realized Loss Amounts applied with respect to that Class on all prior Distribution Dates. The Class C Certificates, Class M-9 DSI Certificate, Class M-10 DSI Certificate, Class M-11 DSI
Certificate, Class M-12 DSI Certificate and the Class I Certificates will not have a Certificate Principal Balance. 
 “Certificate
Register”: The register maintained by the Certificate Registrar in which the Certificate Registrar shall provide for the registration of Certificates and of transfers and exchanges of Certificates. 
 “Certificate Registrar”: Initially, the Trustee, in its capacity as Certificate Registrar, or any successor to the Trustee in such
capacity. 
 “Class”: Collectively, Certificates which have the same priority of payment and bear the same Class designation
and the form of which is identical except for variation in the Percentage Interest evidenced thereby. 
 “Class A
Certificate”: Any Group I Certificate or Group II Certificate. 
 “Class A Principal Distribution Amount”: For any
Distribution Date, the sum of the Group I Certificate Principal Distribution Amount and the Group II Certificate Principal Distribution Amount for such Distribution Date. 
 “Class A-1A Certificate”: Any one of the Class A-1A Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-1,
representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 [“Class A-1 Certificate Insurance Policy”]: The Financial Guaranty Insurance Policy No. [    ] and all endorsements thereto dated the Closing Date, issued by the Class A-1 Insurer for the benefit of
the Class A-1 Certificateholders. 
  

 Appendix A-6 

 “Class A-1 Insurer”: Financial Security Assurance Inc., a monoline stock insurance
company organized and created under the laws of the State of New York, and any successors thereto. 
 “Class A-1 Insurer
Default”: The existence and continuance of any of the following: 
 (a) the Class A-1 Insurer shall have failed to make a
required payment when due under the Class A-1 Insurance Policy; 
 (b) the Class A-1 Insurer shall have (i) filed a petition
or commenced any case or proceeding under any provision or chapter of the United States Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or
reorganization, (ii) made a general assignment for the benefit of its creditors or (iii) had an order for relief entered against it under the United States Bankruptcy Code, the New York State Insurance Law or any other similar federal or
state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization that is final and nonappealable; or 
 (c) a
court of competent jurisdiction, the New York Department of Insurance of any other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, trustee, agent, or receiver for
the Class A-1 Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, trustee, agent, or receiver of the Class A-1 Insurer or of all or any material portion of its
property. 
 “Class A-1 Interest Deficit Amount”: With respect to any Distribution Date, the excess of (i) the Monthly
Interest Distributable Amount related to the Class A-1 Certificates based on the Certificate Balance of the Class A-1 Certificates immediately prior to such Distribution Date after giving effect to all payments, including any
Class A-1 Principal Parity Amounts on all prior Distribution Dates (excluding amounts of interest on the Unpaid Interest Shortfall Amount related to clause (c) of such definition if such Unpaid Interest Shortfall Amount is due to delivery
of a notice to the Class A-1 Insurer that did not comply with the Class A-1 Insurance Policy and excluding any interest accruing from and including the date of payment by the Class A-1 Insurer of such unpaid interest shortfall over
(ii) the Interest Remittance Amount available for the Class A-1 Certificates on such Distribution Date.] 
 “Class A-2A
Certificate”: Any one of the Class A-2A Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-2, representing the right to distributions as set forth
herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class A-2B Certificate”: Any one of the
Class A-2B Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-3, representing the right to distributions as set forth herein and therein and evidencing a
regular interest in the Master REMIC. 
 “Class A-2C Certificate”: Any one of the Class A-2C Certificates executed,
authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-4, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC.

  

 Appendix A-7 

 “Class A-2D Certificate”: Any one of the Class A-2D Certificates executed,
authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-5, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC.

 “Class C Certificate”: Any one of the Class C Certificates executed, authenticated and delivered pursuant to
Section 5.01, substantially in the form annexed hereto as Exhibit A-21, representing the right to distributions as set forth herein and therein and evidencing one or more regular interests in the Master REMIC. 
 “Class I Certificate”: Any Class I-1 Certificate, Class I-2 Certificate or Class I-3 Certificate. 
 “Class I-1 Certificate”: Any one of the Class I-1 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-18, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class I-2 Certificate”: Any one of the Class I-2 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-19, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class I-3 Certificate”: Any one of the Class I-3 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-20, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class I Monthly Interest Distributable Amount”: For any Distribution Date, shall mean the sum of (i) the Group I Class I Monthly
Interest Distributable Amount and (ii) the Group II Class I Monthly Interest Distributable Amount, each for such Distribution Date. 
 “Class IV-Accrual Interest”: Either the Class IV-Accrual1 or Class IV-Accrual2 Interest as applicable. 
 “Class I Termination Date”: The Distribution Date occurring in                      20[    ].

 “Class M Certificate”: Any Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class M-4 Certificate,
Class M-5 Certificate, Class M-6 Certificate, Class M-7 Certificate, Class M-8 Certificate, Class M-9 Certificate, Class M-10 Certificate, Class M-11 Certificate or Class M-12 Certificate. 
 “Class M-1 Certificate”: Any one of the Class M-1 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-6, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
  

 Appendix A-8 

 “Class M-1 Principal Distribution Amount”: For any Distribution Date, an amount equal to
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date) and
(ii) the Certificate Principal Balance of the Class M-1 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the
aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections
of principal received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-2 Certificate”: Any one of the Class M-2 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-7, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-2 Principal Distribution Amount”: For any Distribution Date, an amount equal to the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date) and (iii) the Certificate Principal Balance of the Class M-2 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate principal balance of
the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) minus $[            ]. 
 “Class M-3
Certificate”: Any one of the Class M-3 Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-8, representing the right to distributions as set forth herein
and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-3 Principal Distribution Amount”: For any
Distribution Date, an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after 

  

 Appendix A-9 

 
taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date) and (iv) the Certificate Principal Balance of
the Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal balance of the Mortgage
Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related
Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or
advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-4 Certificate”: Any one of the Class M-4 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-9, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-4 Principal Distribution Amount”: For any Distribution Date, an amount equal to the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), and (v) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus
$[            ]. 
 “Class M-5 Certificate”: Any one of the
Class M-5 Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-10, representing the right to distributions as set forth herein and therein and evidencing a regular
interest in the Master REMIC. 
 “Class M-5 Principal Distribution Amount”: For any Distribution Date, an amount equal to
the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date) (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such date), 

  

 Appendix A-10 

 
(iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on
such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date) and (vi) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal
balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-6 Certificate”: Any one of the Class M-6 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-11, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-6 Principal Distribution Amount”: For any Distribution Date, an amount equal to the excess of (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class
M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of
the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal
Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date) and (vii) the Certificate Principal Balance of the Class M-6 Certificates immediately prior
to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate
principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-7 Certificate”: Any one of the Class M-7 Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-12, representing the right to
distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
  

 Appendix A-11 

 “Class M-7 Principal Distribution Amount”: For any Distribution Date, is an amount equal
to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such Distribution Date),
(ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-2
Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into account the payment of the
Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution Amount on such Distribution
Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the
Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), and (viii) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to that
Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period
(after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate
principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-8 Certificate”: Any one of the Class M-8 Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-13, representing the right to
distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-8 Principal
Distribution Amount”: For any Distribution Date, is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the
Class A Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such
Distribution Date), (iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal
Balance of the Class M-3 Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into
account the payment of the Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution
Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the
Certificate Principal Balance of the Class M-7 

  

 Appendix A-12 

 
Certificates, (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date) and (ix) the Certificate
Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal
balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period,
to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
 “Class M-9 Certificate”: Any one of the Class M-9 Certificates executed, authenticated and delivered pursuant to Section 5.01,
substantially in the form annexed hereto as Exhibit A-14, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-9 DSI Certificates”: Any one of the Class M-9 DSI Certificates executed, authenticated and delivered pursuant to
Section 5.01, substantially in the form annexed hereto as Exhibit A-23, which are notional amount certificates based on the Certificate Principal Balance of the Class M-9 Certificates and which represent the right to receive certain
distributions from the Supplemental Interest Trust. 
 “Class M-9 Principal Distribution Amount”: For any Distribution Date,
is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after
taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal
Distribution Amount on such Distribution Date) and (x) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal 

  

 Appendix A-13 

 
received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus
$[            ]. 
 “Class M-10 Certificate”: Any one of the
Class M-10 Certificates executed, authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-15, representing the right to distributions as set forth herein and therein and evidencing a regular
interest in the Master REMIC. 
 “Class M-10 DSI Certificates”: Any one of the Class M-10 DSI Certificates executed,
authenticated and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-24, which are notional amount certificates based on the Certificate Principal Balance of the Class M-10 Certificates and which represent
the right to receive certain distributions from the Supplemental Interest Trust. 
 “Class M-10 Principal Distribution
Amount”: For any Distribution Date, is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date),
(iii) the Certificate Principal Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3
Certificates (after taking into account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the
Class M-4 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution
Date), (vii) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the
Class M-7 Certificates (after taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment
of the Class M-8 Principal Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the payment of the Class M-9 Principal Distribution Amount on such
Distribution Date) and (xi) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus
$[            ]. 
  

 Appendix A-14 

 “Class M-11 Certificate”: Any one of the Class M-11 Certificates executed, authenticated
and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-16, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-11 DSI Certificates”: Any one of the Class M-11 DSI Certificates executed, authenticated and delivered pursuant to
Section 5.01, substantially in the form annexed hereto as Exhibit A-25, which are notional amount certificates based on the Certificate Principal Balance of the Class M-11 Certificates and which represent the right to receive certain
distributions from the Supplemental Interest Trust. 
 “Class M-11 Principal Distribution Amount”: For any Distribution
Date, is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after
taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal
Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the payment of the Class M-9 Principal Distribution Amount on such Distribution Date, (xi) the
Certificate Principal Balance of the Class M-10 Certificates (after taking into account the payment of the Class M-10 Principal Distribution Amount on such Distribution Date and (xii) the Certificate Principal Balance of the Class M-11
Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the
last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period)
and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
  

 Appendix A-15 

 “Class M-12 Certificate”: Any one of the Class M-12 Certificates executed, authenticated
and delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-17, representing the right to distributions as set forth herein and therein and evidencing a regular interest in the Master REMIC. 
 “Class M-12 DSI Certificates”: Any one of the Class M-12 DSI Certificates executed, authenticated and delivered pursuant to
Section 5.01, substantially in the form annexed hereto as Exhibit A-26, which are notional amount certificates based on the Certificate Principal Balance of the Class M-12 Certificates and which represent the right to receive certain
distributions from the Supplemental Interest Trust. 
 “Class M-12 Principal Distribution Amount”: For any Distribution
Date, is an amount equal to the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the payment of the Class A Principal Distribution Amount on such
Distribution Date), (ii) the Certificate Principal Balance of the Class M-1 Certificates (after taking into account the payment of the Class M-1 Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the payment of the Class M-2 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-3 Certificates (after taking into
account the payment of the Class M-3 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the payment of the Class M-5 Principal Distribution Amount on such Distribution Date), (vii) the Certificate
Principal Balance of the Class M-6 Certificates (after taking into account the payment of the Class M-6 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-7 Certificates (after
taking into account the payment of the Class M-7 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the payment of the Class M-8 Principal
Distribution Amount on such Distribution Date), (x) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the payment of the Class M-9 Principal Distribution Amount on such Distribution Date, (xi) the
Certificate Principal Balance of the Class M-10 Certificates (after taking into account the payment of the Class M-10 Principal Distribution Amount on such Distribution Date, (xii) the Certificate Principal Balance of the Class M-11
Certificates immediately prior to such Distribution Date and (xiii) the Certificate Principal Balance of the Class M-12 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of
(i) [        ]% and (ii) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate principal balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus
$[            ]. 
  

 Appendix A-16 

 “Class R Certificate”: Any one of the Class R Certificates executed, authenticated and
delivered pursuant to Section 5.01, substantially in the form annexed hereto as Exhibit A-22, representing the right to distributions as set forth herein, and evidencing the R-I Interest, the R-II Interest, the R-III Interest, the R-IV Interest
and the R-V Interest, each the sole “residual interest” in REMIC I, REMIC II, REMIC III, REMIC IV and the Master REMIC, respectively. 
 “Close of Business”: As used herein, with respect to any Business Day, 5:00 p.m. (New York time). 
 “Closing Date”:                         , 20[    ]. 
 “Code”: The Internal Revenue Code of 1986 as it may be amended from time to time. 
 “Collection Account”: The account or accounts created and maintained by the Servicer pursuant to Section 3.06(d) hereof, which must
be an Eligible Account. 
 “Commission”: The Securities and Exchange Commission. 
 “Company”: NovaStar Mortgage Funding Corporation, a Delaware corporation, and its successors and assigns. 
 “Compensating Interest”: With respect to any Determination Date, an amount equal to the lesser of (i) the aggregate amount of
Prepayment Interest Shortfalls for the related Prepayment Period and (ii) the Servicing Fee for the related Distribution Date. 
 “Corporate Trust Office”: With respect to the Trustee, the Paying Agent and the Certificate Registrar, the principal corporate trust office at which at any particular time its corporation trust business shall be
administered, which office at the date of execution of this Agreement is located at [Insert Trustee Office Address]. 
 “Corresponding Class of Master REMIC Certificates”: As defined in Exhibit J hereof. 
 “Corresponding
Interest Rate”: As set forth in the Swap/Cap Interest Rate Schedule. 
 “Corresponding Maturity Date”: As set forth
in the Swap/Cap Interest Date Schedule. 
 “Corresponding REMIC II Regular Interest”: As defined in Exhibit J hereof.

 “Credit Enhancement Percentage”: For any Distribution Date, is equal to (i) the sum of the aggregate Certificate
Principal Balances of the Mezzanine Certificates and the Overcollateralization Amount, divided by (ii) the Pool Balance, in each case calculated prior to taking into account the distribution of the Principal Distribution Amount to the Holders
of the Certificates then entitled to distributions of principal on such Distribution Date and prior to taking into account distributions of principal on the Mortgage Loans on such Distribution Date. 
 “Crossover Date”: The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the
Class A Certificates is reduced to zero; and (ii) the later to occur of (x) the Distribution Date occurring in
                         20[    ] and (y) the first 

  

 Appendix A-17 

 
Distribution Date on which the Credit Enhancement Percentage (calculated for this purpose only after taking into account distributions of principal on the
Mortgage Loans but prior to the principal distributions to the certificates) is greater than or equal to [        ]%. 
 “Cumulative Loss Percentage”: As to any Distribution Date, the percentage equivalent of the fraction obtained by dividing (i) the aggregate amount of Realized Losses on the Mortgage Loans (after
giving effect to coverage provided by any MI Policy) from the Cut-off Date through such Distribution Date by (ii) the sum of the aggregate Principal Balance of the Initial Mortgage Loans as of the Cut-off Date plus the Original Pre-Funded
Amount. 
 “Current Interest”: For any Distribution Date and each Class of Class A Certificates and Mezzanine
Certificates the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance of such Class immediately prior to such Distribution Date, in each case, reduced by any Net
Prepayment Interest Shortfalls and any Relief Act Shortfalls allocated to that Class (allocated to each Certificate based on its respective entitlements to interest irrespective of any Net Prepayment Interest Shortfalls or Relief Act Shortfalls for
that Distribution Date). 
 “Custodian”:
[                                ], a national banking association, and any successor
thereto. 
 “Custodian Fee”: With respect to each Distribution Date, the product of (i) $0.20 and (ii) the number
of Mortgage Loans. 
 “Custodian Fee Rate”: The percentage equivalent expressed as a fraction, the numerator of which is
(i) the product of (a) the Custodian Fee and (b) 12 and the denominator of which is (ii) the aggregate principal balance of the Mortgage Loans as of the beginning of the Due Period. 
 “Cut-off Date”: With respect to each Initial Mortgage Loan the later of
(i)                         , 20[    ] and (ii) the date of origination of such Initial
Mortgage Loan. With respect to each Subsequent Mortgage Loan, the later of (i) the first day of the month in which such Subsequent Mortgage Loan is acquired by the Trust and (ii) the date of origination of such Subsequent Mortgage Loan.

 “Cut-off Date Aggregate Principal Balance”: With respect to the Mortgage Pool, the aggregate of the Cut-off Date
Principal Balances of the Initial Mortgage Loans of $[            ] consisting of $[            ] related to Group I and
$[            ] related to Group II. 
 “Cut-off Date Principal
Balance”: With respect to any Mortgage Loan, the unpaid principal balance thereof as of the applicable Cut-off Date or Subsequent Cut-off Date, as the case may be (or as of the applicable date of substitution with respect to an Eligible
Substitute Mortgage Loan). 
 “Debt Service Reduction”: With respect to any Mortgage Loan, a reduction in the scheduled
Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation. 
  

 Appendix A-18 

 “Deferred Interest”: With respect to any REO Property, the current portion of interest
not currently paid by the Mortgagor that is added to the principal balance of such REO Property. 
 “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 Certificates”: The Class C, Class I and Class R Certificates, and such
other Classes of Certificates as become Definitive Certificates pursuant to Section 5.02(c) hereof. 
 “Deleted Mortgage
Loan”: A Mortgage Loan replaced or to be replaced by one or more Eligible Substitute Mortgage Loans. 
 “30-Day Delinquency
Percentage”: As of the last day of any Due Period, the percentage equivalent of a fraction, (i) the numerator of which equals the aggregate Principal Balance of the Mortgage Loans that are 30 or more days contractually delinquent, in
foreclosure or converted to REO Properties, and (ii) the denominator of which is the Pool Balance as of the last day of such Due Period. 
 “60-Day Delinquency Percentage”: As of the last day of any Due Period, the percentage equivalent of a fraction, (i) the numerator of which equals the aggregate Principal Balance of the Mortgage Loans that are 60 or
more days contractually delinquent, in foreclosure or converted to REO Properties, and (ii) the denominator of which is the Pool Balance as of the last day of such Due Period. 
 “90-Day Delinquency Percentage”: As of the last day of any Due Period, the percentage equivalent of a fraction, (i) the numerator
of which equals the aggregate Principal Balance of the Mortgage Loans that are 90 or more days contractually delinquent, in foreclosure or converted to REO Properties and (ii) the denominator of which is the Pool Balance as of the last day of
such Due Period. 
 “Delinquent”: Any Mortgage Loan, the Monthly Payment due on a Due Date which is not made by the Close of
Business on the next scheduled Due Date for such Mortgage Loan. 
 “Depository”: The initial Depository shall be The
Depository Trust Company, whose nominee is Cede & Co., or any other organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of 1934, as amended. The Depository shall initially be
the registered Holder of the Book-Entry Certificates. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York. 
 “Depository Participant”: A broker, dealer, bank or other financial institution or other person for whom from time to time a Depository
effects book-entry transfers and pledges of securities deposited with the Depository. 
 “Derivative Supplemental Interest
Payment”: With respect to each Distribution Date, and the Class M-9, Class M-10, Class M-11 and the Class M-12 Certificates, the dollar amount of the 

  

 Appendix A-19 

 
excess of (i) the Supplemental Interest Payment for the Class M-9, Class M-10, Class M-11 or Class M-12 Certificates, as appropriate, over (ii) the
Non-Derivative Supplemental Interest Payment for the Class M-9, Class M-10, Class M-11 or Class M-12 Certificates, as appropriate. 
 “Determination Date”: With respect to any Distribution Date, the 15th day of the calendar month in which such Distribution Date occurs or, if such 15th day is not a Business Day, the Business Day immediately preceding such
15th day. 
 “Determination Date Report”: The meaning specified in Section 3.23 hereof. 
 “Disqualified Organization”: “Disqualified Organization” shall have the meaning set forth from time to time in the definition
thereof at Section 860E(e)(5) of the Code and applicable to the Trust. 
 “Distribution Account”: The trust account or
accounts created and maintained by the Trustee pursuant to Section 4.02 hereof, which must be an Eligible Account. 
 “Distribution Date”: The 25th day of any calendar month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in
                         20[    ]. 
 “Due Date”: The first day of the month of the related Distribution Date. 
 “Due Period”: With respect to any Mortgage Loan and Due Date, the period commencing on the second day of the month preceding the month
of such Distribution Date and ending on the related Due Date. 
 “Eligible Account”: An account that is either: (A) a
segregated account or accounts maintained with an institution whose deposits are insured by the FDIC, the unsecured and uncollateralized long-term debt obligations of which institution shall be rated “AA” or higher by Standard &
Poor’s, “Aa2” or higher by Moody’s and “AA”/”F-1+” or higher by Fitch and in the highest short-term rating category by each of the Rating Agencies, and which is (i) a federal savings and loan association
duly organized, validly existing and in good standing under the federal banking laws, (ii) an institution duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking
association duly organized, validly existing and in good standing under the federal banking laws, or (iv) a principal subsidiary of a bank holding company or (B) a segregated trust account or accounts maintained with the trust department
of a federal or state chartered depository institution acceptable to each Rating Agency, having capital and surplus of not less than $100,000,000, acting in its fiduciary capacity. 
 “Eligible Investments”: One or more of the following: 
 (i) direct obligations of, and obligations fully guaranteed by, the United States of America, any of the Federal Home Mortgage Corporation, the Federal National Mortgage Association, the Federal Home Loan Banks 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; 
  

 Appendix A-20 

 (ii) (A) demand and time deposits in, Certificates of deposit of, banker’s acceptances issued
by or federal funds sold by any depository institution or trust company (including the Trustee or its agents acting in their respective commercial capacities) incorporated under the laws of the United States of America or any State thereof and
subject to supervision and examination by federal and/or state authorities, so long as at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company has a short-term unsecured
debt rating in the highest available rating category of each of the Rating Agencies and provided that each such investment has an original maturity of no more than 365 days, and (B) any other demand or time deposit or deposit which is fully
insured by the Federal Deposit Insurance Corporation; 
 (iii) repurchase obligations with a term not to exceed 30 days with respect to any
security described in clause (i) above and entered into with a depository institution or trust company (acting as a principal) rated “A-1+” or higher by S&P, “A2” or higher by Moody’s and “F-1+” or higher
by Fitch; provided, however, that collateral transferred pursuant to such repurchase obligation must (A) be valued daily at current market price plus accrued interest, (B) pursuant to such valuation, equal, at all times, 105% of the cash
transferred in exchange for such collateral and (C) be delivered in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities; 
 (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 has a long-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at the time of such investment; 
 (v) commercial paper having an original maturity of less than 365 days and issued by an institution having a short-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at
the time of such investment; 
 (vi) a guaranteed investment contract approved by each of the Rating Agencies and issued by an insurance
company or other corporation having a long-term unsecured debt rating in the highest available rating category of each of the Rating Agencies at the time of such investment; and 
 (vii) money market funds having ratings in the highest available long-term rating category of each of the Rating Agencies at the time of such investment;
any such money market funds which provide for demand withdrawals being conclusively deemed to satisfy any maturity requirement for Eligible Investments set forth in the Agreement, 
 provided, however, that each such instrument shall be acquired in an arm’s-length transaction and no such instrument shall be an
Eligible Investment if it represents, either (1) the right to receive only interest payments with respect to the underlying debt instrument or (2) the right to receive 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 greater than 120% of the yield to maturity at par of such underlying obligations; provided, further, however, that each
such instrument acquired shall not be acquired at a price in excess of par. The Trustee may purchase from or sell to itself or an affiliate, as principal or agent, the Eligible Investments listed above. 
  

 Appendix A-21 

 “Eligible Substitute Mortgage Loan”: A Mortgage Loan substituted by the Seller for a
Deleted Mortgage Loan which must, on the date of such substitution, as confirmed in an Officers’ Certificate delivered to the Trustee, (i) have an outstanding principal balance, after deduction of the principal portion of the monthly
payment due in the month of substitution (or in the case of a substitution of more than one Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after such deduction), not in excess of the outstanding principal
balance of the Deleted Mortgage Loan (the amount of any shortfall to be deposited by the Seller in the Collection Account in the month of substitution); (ii) comply in all material respects with each representation and warranty set forth in
clauses, (ii) through (xcix) of Section 3.01(b) of the Purchase Agreement other than clauses (iii), (v)-(xiv), (xlii), (lv), (lvi)-(lviii), (lxxii), (lxxxix) and (xc); (iii) have a Mortgage Rate and, with respect to an Adjustable
Rate Mortgage Loan, a Gross Margin no lower than and not more than 1% per annum higher than the Mortgage Rate and Gross Margin, respectively, of the Deleted Mortgage Loan as of the date of substitution; (iv) have a Loan-to-Value Ratio, at
the time of substitution no higher than that of the Deleted Mortgage Loan at the time of substitution; (v) have a remaining term to stated maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan;
(vi) not be 30 days or more delinquent; (vii) not be a negative amortization loan; (viii) have a lien priority equal to or superior to the lien priority of the Deleted Mortgage Loan; and (ix) be a Qualified Replacement Mortgage.

 “ERISA”: The Employee Retirement Income Security Act of 1974, as amended. 
 “Excess Cashflow”: For any Distribution Date, is equal to the sum of (i) the Overcollateralization Release Amount and (ii) the
excess of (a) the Interest Remittance Amount over (b) the sum of (w) the Monthly Interest Distributable Amounts for the Class A Certificates and the Mezzanine Certificates, (x) the Class I Monthly Interest Distributable
Amount and (y) the Administrative Fees, each for such Distribution Date. 
 “Extra Principal Distribution Amount”: For
any Distribution Date, is the lesser of (x) the Excess Cashflow for such Distribution Date and (y) the Overcollateralization Deficiency Amount for such Distribution Date. 
 “Expense Adjusted Mortgage Rate”: With respect to any Mortgage Loan, as of any date of determination, a per annum rate of interest equal
to the then applicable Mortgage Rate for such Mortgage Loan minus the Administrative Fee Rate. 
 “Fannie Mae”: Federal
National Mortgage Association or any successor thereto. 
 “FDIC”: Federal Deposit Insurance Corporation or any successor
thereto. 
 “Fitch”: Fitch Ratings, or its successors in interest. 
 “Fixed Rate Mortgage Loan”: A first-lien or second-lien Mortgage Loan which provides for a fixed Mortgage Rate payable with respect
thereto. The Fixed Rate Mortgage Loans are identified as such on the Mortgage Loan Schedule. 
  

 Appendix A-22 

 “Foreclosure Profit”: With respect to a Liquidated Mortgage Loan, the amount, if any, by
which (i) the aggregate of its Net Liquidation Proceeds exceeds (ii) the related Principal Balance (plus accrued and unpaid interest thereon at the applicable Mortgage Rate from the date interest was last paid through the date of receipt
of the final Liquidation Proceeds) of such Liquidated Mortgage Loan immediately prior to the final recovery of its Liquidation Proceeds. 
 “Formula Rate”: For any Distribution Date and the Class A Certificates and the Mezzanine Certificates the lesser of (i) LIBOR plus the related Certificate Margin and
(ii) [        ]%. 
 “Freddie Mac”: The Federal Home Loan Mortgage Corporation,
or any successor thereto. 
 “Gross Margin”: With respect to each Adjustable Rate Mortgage Loan, the fixed percentage set
forth in the related Mortgage Note that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Mortgage Rate for such Mortgage Loan. 
 “Group”: Any of the Group I Mortgage Loans and the Group II Mortgage Loans. 
 “Group I Allocation Percentage”: For any Distribution Date is the percentage equivalent of a fraction, the numerator of which is
(i) the Group I Principal Remittance Amount for such Distribution Date and the denominator of which is (ii) the Principal Remittance Amount for such Distribution Date. 
 “Group I Available Funds Cap”: For each Distribution Date, the percentage equivalent of a fraction equal to (a) an amount equal to
(i) the aggregate Interest Remittance Formula Amount for the Group I Mortgage Loans, less (ii) the Administrative Fees allocable to the Group I Mortgage Loans, and less (iii) the Group I Class I Monthly Interest Distributable Amount,
divided by (b) the product of (i) the actual number of days in the related Accrual Period divided by 360 and (ii) the aggregate principal balance of the Group I Mortgage Loans plus any related amounts on deposit in the Pre-Funding
Account. 
 “Group I Basic Principal Distribution Amount”: With respect to any Distribution Date the excess of (i) the
Group I Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group I Allocation Percentage. 
 “Group I Certificate”: Any Class A-1A Certificate. 
 “Group I Certificate Principal Distribution Amount”: For any Distribution Date, an amount equal to the excess of (x) the Certificate Principal Balance of the Class A-1A Certificates
immediately prior to that Distribution Date over (y) the lesser of (A) the product of (i) [        ]% and (ii) the aggregate Principal Balance of the Group I Mortgage Loans as of the last
day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and
(B) the aggregate Principal Balance of the Group I Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment Period) minus $[            ]. 
  

 Appendix A-23 

 “Group I Class I Monthly Interest Distributable Amount”: For any Distribution Date,
shall mean the sum of (i) the Group I Class I-1 Monthly Interest Distributable Amount, (ii) the Group I Class I-2 Monthly Interest Distributable Amount, each for such Distribution Date and (iii) the Group I Class I-3 Monthly Interest
Distributable Amount, each for such Distribution Date. 
 “Group I Class I Monthly Interest Formula Amounts” shall mean, on
each Distribution Date up to and including the Distribution Date in                          20[    ]
the following: 
 (I) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis)
over LIBOR (on an actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (II) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (III) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (IV) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (V) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (VI) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (VII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (VIII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (IX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group I Class I Percentage for such
Distribution Date; and 
  

 Appendix A-24 

 (X) the product of (x) [        ]% (on a 30/360 basis)
(y) 10 and (z) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group I Class I Percentage for such
Distribution Date. 
 (XI) the product of (x) the excess, if any, of [        ]% (on a 30/360
basis) over LIBOR (on an actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XIII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XIV ) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XV) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XVI) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XVII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group I Class I Percentage for such
Distribution Date; and 
 (XVIII) the product of (x) the excess, if any, of [        ]% (on a
30/360 basis) over LIBOR (on an actual/360 basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XIX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group I Class I Percentage for such Distribution Date; and 
 (XX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group I Class I Percentage for such
Distribution Date; and 
  

 Appendix A-25 

 (XXI) the product of (x) [        ]% (on a 30/360 basis)
(y) 10 and (z) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group I Class I Percentage for such
Distribution Date; and 
 (XXII) the product of (x) the excess, if any, of [        ]% (on a
30/360 basis) over LIBOR (on an actual/360 basis) and $[            ] multiplied by the Group I Class I Percentage for such Distribution Date. 
 “Group I Class I-1 Monthly Interest Distributable Amount” shall mean, commencing on the first Distribution Date through and including
the Distribution Date in                          20[    ], an amount equal to the sum of the amounts
described in clauses (I) through (X) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution
Date in                          20[    ], an amount equal to the sum of the amounts described in
clauses (IV) through (X) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses (IX)
and (X) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ] and each Distribution Date thereafter, the Group I Class I-1 Monthly
Interest Distributable Amount shall be zero. 
 “Group I Class I-2 Monthly Interest Distributable Amount” shall mean,
commencing on the first Distribution Date through and including the Distribution Date in                         
20[    ], an amount equal to the sum of the amounts described in clauses (XI) through (XXI) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XII) through (XXI) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XIV) through (XXI) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XVII) through (XXI) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses (XX)
and (XXI) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ] and each Distribution Date thereafter, the Group I Class I-2 Monthly
Interest Distributable Amount shall be zero. 
  

 Appendix A-26 

 “Group I Class I-3 Monthly Interest Distributable Amount” shall mean, commencing on the
first Distribution Date through and including the Distribution Date in                         
20[    ], an amount equal the amount described in clause (XXII) of the definition of Group I Class I Monthly Interest Formula Amounts. 
 “Group I Class I Percentage”: For any Distribution Date beginning on the first Distribution Date through and including the Distribution Date in
                         20[    ], the percentage equivalent of the fraction (a) the numerator of
which is the sum of (i) the current principal balance of the Group I Loans and (ii) any amount in the related Pre-Funding Account and (b) the denominator of which is the sum of (i) the current principal balance of the Mortgage
Loans and (ii) any amount remaining in the Pre-Funding Accounts. For all Distribution Dates thereafter, 0.00%. 
 “Group I Cross
Collateralization Amount”: For any Distribution Date, the portion of the Group I Interest Remittance Amount remaining after payment of the Monthly Interest Distributable Amount on the Group I Certificates, the Group I Class I Monthly
Interest Distributable Amount and the related proportional amount of the Administrative Fees. 
 “Group I Interest Remittance
Amount”: For any Distribution Date, the portion of the Interest Remittance Amount that was collected or advanced on the Group I Mortgage Loans. 
 “Group I Mortgage Loans”: The Mortgage Loans allocated to Group I which primarily support the Group I Certificates. 
 “Group I Pool Balance”: The Pool Balance relating to the Group I Mortgage Loans. 
 “Group I Principal Distribution Amount”: With respect to any Distribution Date is the sum of (i) the Group I Basic Principal Distribution Amount for such Distribution Date and (ii) the Extra Principal Distribution
Amount for such Distribution Date multiplied by the Group I Allocation Percentage. 
 “Group I Principal Remittance Amount”:
For any Distribution Date, the portion of the Principal Remittance Amount that was collected or advanced on the Group I Mortgage Loans plus, following the Pre-Funding Period, any remaining Pre-Funded Amounts related to the Group I Mortgage
Loans. 
 “Group I Subordinated Amount”: For any Distribution Date, the excess, if any, of the Group I Pool Balance plus any
related Pre-Funded Amount over the aggregate Certificate Principal Balance of the Group I Certificates, for such Distribution Date. 
 “Group II Allocation Percentage”: For any Distribution Date is the percentage equivalent of a fraction, the numerator of which is (i) the Group II Principal Remittance Amount for such Distribution Date and the
denominator of which is (ii) the Principal Remittance Amount for such Distribution Date. 
 “Group II Available Funds
Cap”: For each Distribution Date, the percentage equivalent of a fraction equal to (a) an amount equal to (i) the aggregate Interest Remittance Formula Amount for the Group II Mortgage Loans, less (ii) the Administrative Fees
allocable to the 

  

 Appendix A-27 

 
Group II Mortgage Loans, and less (iii) the Group II Class I Monthly Interest Distributable Amount, divided by (b) the product of (i) the
actual number of days in the related Accrual Period divided by 360 and (ii) the aggregate principal balance of the Group II Mortgage Loans plus any related amounts on deposit in the Pre-Funding Account. 
 “Group II Basic Principal Distribution Amount”: With respect to any Distribution Date the excess of (i) the Group II Principal
Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date multiplied by the Group II Allocation Percentage. 
 “Group II Certificate”: Any of the Class A-2A Certificates, Class A-2B Certificates, Class A-2C Certificates or
Class A-2D Certificates. 
 “Group II Certificate Principal Distribution Amount”: For any Distribution Date, an amount
equal to the excess of (x) the aggregate Certificate Principal Balance of the Group II Certificates immediately prior to that Distribution Date over (y) the lesser of (A) the product of
(i) [        ]% and (ii) the aggregate Principal Balance of the Group II Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the aggregate Principal Balance of the Group II Mortgage Loans as of the last day of the
related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) minus
$[            ]. 
 “Group II Class I Monthly Interest Distributable
Amount”: For any Distribution Date, shall mean the sum of (i) the Group II Class I-1 Monthly Interest Distributable Amount, (ii) the Group II Class I-2 Monthly Interest Distributable Amount, each for such Distribution Date and
(iii) the Group II Class I-3 Monthly Interest Distributable Amount, each for such Distribution Date. 
 “Group II Class I
Monthly Interest Formula Amounts” shall mean, on each Distribution Date up to and including the Distribution Date in
                         20[    ], the following: 
 (I) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (II) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (III) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
  

 Appendix A-28 

 (IV) the product of (x) the excess, if any, of [        ]%
(on a 30/360 basis) over LIBOR (on an actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (V) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (VI) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (VII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (VIII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (IX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group II Class I Percentage for such
Distribution Date; and 
 (X) the product of (x) [        ]% (on a 30/360 basis) (y) 10 and
(z) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group II Class I Percentage for such Distribution Date.

 (XI) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on
an actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XIII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XIV ) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XV) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360
basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
  

 Appendix A-29 

 (XVI) the product of (x) the excess, if any, of [        ]%
(on a 30/360 basis) over LIBOR (on an actual/360 basis) and (y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XVII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and (y) the product of (A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group II Class I Percentage for
such Distribution Date; and 
 (XVIII) the product of (x) the excess, if any, of [        ]% (on
a 30/360 basis) over LIBOR (on an actual/360 basis) and (y) $20,000,000 multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XIX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360 basis) and
(y) $[            ] multiplied by the Group II Class I Percentage for such Distribution Date; and 
 (XX) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an actual/360 basis) and (y) the product of
(A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group II Class I Percentage for such Distribution Date; and 
 (XXI) the product of (x) [        ]% (on a 30/360 basis) (y) 10 and (z) the product of
(A) $[            ] less the related Pre-Funding Swap/Cap Adjustment Amount multiplied by (B) the Group II Class I Percentage for such Distribution Date; and 
 (XXII) the product of (x) the excess, if any, of [        ]% (on a 30/360 basis) over LIBOR (on an
actual/360 basis) and $[            ] multiplied by the Group II Class I Percentage for such Distribution Date. 
 “Group II Class I-1 Monthly Interest Distributable Amount” shall mean, commencing on the first Distribution Date through and including
the Distribution Date in                          20[    ], an amount equal to the sum of the amounts
described in clauses (I) through (X) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the
Distribution Date in                          20[    ], an amount equal to the sum of the amounts
described in clauses (IV) through (X) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution
Date in                          20[    ], an amount equal to the sum of the amounts described in
clauses (IX) and (X) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], and each Distribution Date thereafter, the Group II Class I-1
Monthly Interest Distributable Amount shall be zero. 
 “Group II Class I-2 Monthly Interest Distributable Amount” shall
mean, commencing on the first Distribution Date through and including the Distribution Date in                         
20[    ], an amount equal to the sum of the amounts described in clauses (XI) through (XXI) of the definition of Group II Class I Monthly Interest Formula Amounts. 
  

 Appendix A-30 

 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XII) through (XXI) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XIV) through (XXI) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses
(XVII) through (XXI) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ], an amount equal to the sum of the amounts described in clauses (XX)
and (XXI) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 For the Distribution Date in
                         20[    ] and each Distribution Date thereafter, the Group II Class I-2
Monthly Interest Distributable Amount shall be zero. 
 “Group II Class I-3 Monthly Interest Distributable Amount” shall
mean, commencing on the first Distribution Date through and including the Distribution Date in                         
20[    ], an amount equal the amount described in clause (XXII) of the definition of Group II Class I Monthly Interest Formula Amounts. 
 “Group II Class I Percentage”: For any distribution date beginning on the first distribution date through and including the distribution date in
                         20[    ], the percentage equivalent of the fraction (a) the numerator of
which is the sum of (i) the current principal balance of the Group II Loans and (ii) any amount in the related Pre-Funding Account and (b) the denominator of which is the sum of (i) the current principal balance of the Mortgage
Loans and (ii) any amount remaining in the Pre-Funding Accounts. For all Distribution Dates thereafter, 0.00%. 
 “Group II
Cross Collateralization Amount”: For any Distribution Date, the portion of the Group II Interest Remittance Amount remaining after payment of the Monthly Interest Distributable Amounts on the Group II Certificates, the Group II Class I
Monthly Distributable Amount and the related proportional amount of the Administrative Fees. 
 “Group II Interest Remittance
Amount”: For any Distribution Date, the portion of the Interest Remittance Amount that was collected or advanced on the Group II Mortgage Loans. 
 “Group II Mortgage Loans:” The Mortgage Loans allocated to Group II which primarily support the Group II Certificates. 
 “Group II Principal Distribution Amount”: With respect to any Distribution Date is the sum of (i) the Group II Basic Principal Distribution Amount for such Distribution Date and (ii) the
Extra Principal Distribution Amount for such Distribution Date multiplied by the Group II Allocation Percentage. 
  

 Appendix A-31 

 “Group II Principal Remittance Amount”: For any Distribution Date, the portion of the
Principal Remittance Amount that was collected or advanced on the Group II Mortgage Loans plus, following the Pre-Funding Period, any remaining Pre-Funded Amounts related to the Group II Mortgage Loans. 
 “Group II Subordinated Amount”: For any Distribution Date, the excess, if any, of the Group II Pool Balance plus any related Pre-Funded
Amount over the aggregate Certificate Principal Balance of the Group II Certificates, for such Distribution Date. 
 “Guaranteed
Distributions”: With respect to any Distribution Date and the Class A-1 Certificates, an amount equal to the sum of: 
  

	 	(i)	the Class A-1 Interest Deficit Amount; 

  

	 	(ii)	the Class A-1 Principal Parity Amount, if any, for such Distribution Date; and 

  

	 	(iii)	the Certificate Principal Balance of the Class A-1 Certificates to the extent unpaid on the Assumed Final Maturity Date or, if earlier, the date on which the final distribution
is made to the Class A-1 Certificateholders pursuant to Article XI, in each case after giving effect to all amounts paid to the Class A-1 Certificates (including any Class A-1 Principal Parity Amounts). 

 Guaranteed Distributions shall not include, nor shall coverage be provided under the Class A-1 Certificate Insurance Policy in respect of, any taxes, withholding or
other charge imposed by any government authority due in connection with any payment of any Guaranteed Distribution to Certificateholder. 
 “Hedge Termination Payment”: The termination payment pursuant to a Swap Agreement or Cap Agreement, which would be payable out of the Supplemental Interest Trust if the Supplemental Interest Trust fails to pay the related
Swap Amount or Cap Amount on a prior Distribution Date. 
 “Indenture”: An indenture relating to the issuance of net
interest margin notes secured by the Class C Certificates. 
 “Independent”: When used with respect to any specified Person,
any such Person who (a) is in fact independent of the Company, the Servicer and their respective Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Company or the Servicer or
any Affiliate thereof, and (c) is not connected with the Company or the Servicer or any Affiliate thereof as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions; provided, however, that
a Person shall not fail to be Independent of the Company or the Servicer or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any Class of securities issued by the Company or the Servicer or any Affiliate
thereof, as the case may be. 
  

 Appendix A-32 

 “Index”: With respect to each Adjustable Rate Mortgage Loan and with respect to each
related Adjustment Date, the index as specified in the related Mortgage Note. 
 “Initial Certificate Principal Balance”:
With respect to any Regular Certificate (other than a Class C Certificate or Class I Certificate), the amount designated “Initial Certificate Principal Balance” on the face thereof. 
 “Initial Mortgage Loan”: The Mortgage Loans which are described (with complete statistical information included) in the Prospectus
Supplement and which are included in the Trust Fund on the Closing Date. 
 “Insurance Payment Account”: The separate
Eligible Account created and maintained by the Trustee pursuant to Section 4.07(c) in the name of the Trustee for the benefit of the Class A-1 Certificateholders and the Class A-1 Insurer, and designated
“[                    ], in trust for Financial Security Assurance Inc. and the registered holders of NovaStar Mortgage Funding Trust 2004-2,
Home Equity Loan Asset-Backed Certificates, Series 2004-2.” 
 “Insurance Proceeds”: Proceeds paid by any insurer
pursuant to any insurance policy covering a Mortgage Loan which are required to be remitted to the Servicer, including MI Insurance Proceeds in the case of Mortgage Loans covered under a MI Policy, or amounts required to be paid by the Servicer
hereunder, net of any component thereof (i) covering any expenses incurred by or on behalf of the Servicer in connection with obtaining such proceeds, (ii) that is applied to the restoration or repair of the related Mortgaged Property or
(iii) released to the Mortgagor in accordance with the Servicer’s normal servicing procedures. 
 “Interest Coverage
Account”: The account established and maintained pursuant to Section 4.06, as defined therein, which must be an Eligible Account. 
 “Interest Coverage Amount”: The amount to be paid by the Company to the Trustee for deposit in the Interest Coverage Account on the Closing Date pursuant to Section 4.06, which amount is
$[            ]. 
 “Interest Determination Date”: With respect
to each Accrual Period, the second LIBOR Business Day preceding the commencement of such Accrual Period. 
 “Interest Remittance
Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date allocable to interest (excluding Prepayment Charges). 
 “Interest Remittance Formula Amount”: As of any Distribution Date and any Group is an amount equal to (1) the product of
(x) 1/12 of the Weighted Average Mortgage Rate of the related Group as of the beginning of the prior Due Period and (y) the Pool Balance related to that Group as of the beginning of the prior Due Period minus (2) the aggregate amount
of Relief Act Shortfalls and Net Prepayment Interest Shortfalls for such Group for the prior period. 
  

 Appendix A-33 

 “Issuing Entity”: NovaStar Mortgage Funding Trust
20[    ]-[    ], the trust created hereunder. 
 “Lender Letter”: The lender letter
#LL03-00 dated April 11, 2000 for Fannie Mae Sellers. 
 “LIBOR”: All references to LIBOR herein are references to
LIBOR. With respect to any Accrual Period, the rate determined by the Trustee on the related Interest Determination Date on the basis of the offered rates of the Reference Banks 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 Interest Determination Date. If such rate does not appear on Telerate Page 3750, the rate for that day will be determined on the basis of the rates at which deposits in United States
dollars are offered by the Reference Banks at approximately 11:00 a.m., London time, on that day to prime banks in the London interbank market for a period equal to the relevant Accrual Period (commencing on the first day of such Accrual Period).
The Trustee will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that day will be the arithmetic mean of the quotations. If fewer than
two quotations are provided as requested, the rate for that day will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Trustee, at approximately 11:00 a.m., New York City time, on that day for loans in
United States dollars to leading European banks for a period equal to the relevant Accrual Period (commencing on the first day of such Accrual Period). 
 The establishment of LIBOR on each Interest Determination Date by the Trustee and the Trustee’s calculation of the rate of interest applicable to the Certificates for the related Accrual Period shall (in the
absence of manifest error) be final and binding. 
 “LIBOR Business Day”: Any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the State of New York or in the city of London, England are required or authorized by law to be closed. 
 “Lifetime Rate Cap”: With respect to each Adjustable Rate Mortgage Loan with respect to which the related Mortgage Note provides for a lifetime rate cap, the maximum Mortgage Rate permitted over the
life of such Mortgage Loan under the terms of such Mortgage Note, as set forth on the Mortgage Loan Schedule. 
 “Liquidated Mortgage
Loan”: With respect to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in accordance with the servicing procedures specified in Article III hereof, as of the end of the related Prepayment Period
that substantially all Liquidation Proceeds which it reasonably expects to recover with respect to the disposition of the related Mortgaged Property or REO Property have been recovered. 
 “Liquidation Expenses”: Out-of-pocket expenses (exclusive of overhead) which are incurred by or on behalf of the Servicer in connection
with the liquidation of any Mortgage Loan and not recovered under any insurance policy, such expenses, including, without limitation, legal fees and expenses, any unreimbursed amount expended respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property restoration, preservation or insurance against casualty loss or damage. 
  

 Appendix A-34 

 “Liquidation Proceeds”: Proceeds (including Insurance Proceeds) received in connection
with the liquidation of any Mortgage Loan or related REO Property. 
 “Loan-to-Value Ratio”: With respect to any Mortgage
Loan, as of any date of determination, a fraction expressed as a percentage, the numerator of which is the then current principal amount of the Mortgage Loan, and the denominator of which is the lesser of the purchase price or the Appraised Value of
the related Mortgaged Property. 
 “Loan Year”: With respect to any Mortgage Loan, the one year period commencing on the day
succeeding the origination of such Mortgage Loan and ending on the anniversary date of such Mortgage Loan, and each annual period thereafter. 
 “Majority Certificateholders”: The Holders of Certificates evidencing at least 51% of the Voting Rights. 
 “Master REMIC”: The REMIC established pursuant to Exhibit J hereof. The assets of the Master REMIC shall be the REMIC IV Regular Interests. 
 “Master REMIC Regular Interests”: As defined in Exhibit J hereof. 
 “Maximum
Collateral Amount”: The sum of the Principal Balance as of the Cut-off Date of the Initial Mortgage Loans and the Original Pre-Funded Amount. 
 “Maximum Mortgage Rate”: With respect to each Adjustable Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder. 
 “MERS”: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or
any successor thereto. 
 “MERS System”: The system of recording transfers of Mortgages electronically maintained by MERS.

 “Mezzanine Certificate”: Any Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class M-4 Certificate,
Class M-5 Certificate, Class M-6 Certificate, Class M-7 Certificate, Class M-8 Certificate, Class M-9 Certificate, Class M-10 Certificate, Class M-11 Certificate or Class M-12 Certificate. 
 “MI Insurance Agreement”: A private mortgage insurance agreement issued by the MI Insurer pursuant to which MI Policies are issued on
individual Mortgage Loans. 
 “MI Insurance Proceeds”: Proceeds paid by the MI Insurer pursuant to an MI Policy. 

“MI Insurer”: Each of (i) PMI Mortgage Insurance Co., an Arizona mortgage insurance company, (ii) Radian Guaranty, Inc., a
Pennsylvania mortgage insurance corporation and (iii) Mortgage Guaranty Insurance Corporation, a Wisconsin private mortgage insurance company and their successors and assigns. 
  

 Appendix A-35 

 “MI Insurer Insolvency Event”: (A) The determination by the applicable regulatory
or supervisory agency having jurisdiction over the MI Insurer that such MI Insurer is insolvent or unable to pay its obligations as they mature, (B) following the failure of the MI Insurer to pay under the related MI Policy, the determination
by the Servicer that such MI Insurer is insolvent or unable to pay its obligations as they become due, (C) the long-term rating on the claims paying ability of the MI Insurer shall be lowered by Moody’s below A-2, if such MI Insurer is
then rated by Moody’s, or shall be lowered by S&P below AA, if such MI Insurer is then rated by S&P. 
 “MI
Policy”: A private mortgage insurance policy underwritten by the MI Insurer with respect to an individual Mortgage Loan, issued pursuant to the MI Insurance Agreement. 
 “MI Premium”: The primary mortgage insurance premium for each MI Policy, payable annually to an MI Insurer, as specified in the MI
Insurance Agreement, and with respect to each monthly premium payment, 1/12 of the annual premium. 
 “MIN”: The Mortgage
Identification Number for Mortgage Loans registered with MERS on the MERS System. 
 “Minimum Mortgage Rate”: With respect
to each Adjustable Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder. 
 “MOM Loan”: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.

 “Monthly Interest Distributable Amount”: For any Distribution Date and any Class of Class A Certificates and
Mezzanine Certificates, the sum of (1) the Unpaid Interest Shortfall Amount for that Class and Distribution Date and (2) the Current Interest for that Class and Distribution Date. In the event of a shortfall in the full amount necessary to
pay both the Unpaid Interest Shortfall Amount and the Current Interest for a Class, the money will first be applied to the Unpaid Interest Shortfall Amount and then to the Current Interest. 
 “Monthly Payment”: With respect to any Mortgage Loan (including any REO Property) and any Due Date, the payment of principal and
interest due thereon in accordance with the amortization schedule at the time applicable thereto (after adjustment, if any, for partial Principal Prepayments and for Deficient Valuations occurring prior to such Due Date but before any adjustment to
such amortization schedule by reason of any bankruptcy, other than a Deficient Valuation, or similar proceeding or any moratorium or similar waiver or grace period). 
 “Moody’s”: Moody’s Investors Service, Inc. or its successor in interest. 
 “Mortgage”: The mortgage, deed of trust or other instrument creating a first lien on an estate or fee simple interest in real property securing a Mortgage Note. 
  

 Appendix A-36 

 “Mortgage File”: The mortgage documents listed in Section 2.01 pertaining to a
particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement. 
 “Mortgage Loan Schedule”: With respect to any date, the schedule of Mortgage Loans subject to this Agreement on such date. The schedule of Initial Mortgage Loans as of the Cut-off Date is the schedule set forth in Exhibit B
hereto and the schedule or schedules of Subsequent Mortgage Loans, if any, as of the Subsequent Cut-off Date, which schedules set forth as to each Mortgage Loan: 
 (i) the loan number and name of the Mortgagor; 
 (ii) the street address, city, state and zip code of the
Mortgaged Property; 
 (iii) the Mortgage Rate at origination; 
 (iv) with respect to an Adjustable Rate Mortgage Loan, the Maximum Rate and the Minimum Rate; 
 (v) the
maturity date; 
 (vi) the original Principal Balance; 
 (vii) the first due date; 
 (viii) the type of Mortgaged Property; 
 (ix) the Monthly Payment in effect as of the Cut-off Date (with respect to an Initial Mortgage Loan) or Subsequent Cut-off Date (with respect to a
Subsequent Mortgage Loan); 
 (x) the Principal Balance as of the Cut-off Date (with respect to an Initial Mortgage Loan) or Subsequent
Cut-off Date (with respect to a Subsequent Mortgage Loan); 
 (xi) with respect to an Adjustable Rate Mortgage Loan, the Index, the Gross
Margin; the Lifetime Rate Cap and the Periodic Rate Cap; 
 (xii) with respect to an Adjustable Rate Mortgage Loan, the first Adjustment Date
and next Adjustment Date, if any; 
 (xiii) with respect to an Adjustable Rate Mortgage Loan, the Adjustment Date frequency and Distribution
Date frequency; 
 (xiv) the occupancy status; 
 (xv) the purpose of the Mortgage Loan; 
 (xvi) the Appraised Value of the Mortgaged Property; 
 (xvii) the original term to maturity; 
  

 Appendix A-37 

 (xviii) the paid-through date of the Mortgage Loan; 
 (xix) the Loan-to-Value Ratio; 
 (xx)
whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or a Fixed Rate Mortgage Loan; 
 (xxi) whether or not the Mortgage Loan was
underwritten pursuant to a limited documentation program; 
 (xxii) whether the Mortgage Loan is covered by an MI Policy; 
 (xxiii) if the Mortgage Loan is registered with MERS on the MERS System, the MIN; and 
 (xxiv) whether the Mortgage Loan is in Group I or Group II. 
 The Mortgage Loan Schedule shall set forth the total of the amounts described under (x) above for all of the Mortgage Loans. 
 “Mortgage Loans”: At any time, collectively, all Mortgage Loans that have been transferred and conveyed to the Trust, in each case together with the Related Documents, and that remain subject to the
terms of the Agreement. As applicable, a “Mortgage Loan” shall be deemed to refer to the related REO Property and both Initial Mortgage Loans and Subsequent Mortgage Loans. 
 “Mortgage Note”: The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan. 
 “Mortgage Rate”: With respect to any Mortgage Loan, the annual rate at which interest accrues on such
Mortgage Loan. 
 “Mortgage Pool”: The pool of Mortgage Loans, identified on Exhibit B from time to time, and any REO
Properties acquired in respect thereof and as supplemented by any Subsequent Mortgage Loans identified on each schedule of Subsequent Mortgage Loans attached to a Subsequent Transfer Instrument. 
 “Mortgaged Property”: The underlying property, including real property and improvements thereon, securing a Mortgage Loan. 

“Mortgagor”: The obligor on a Mortgage Note. 
 “Net Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses. 
 “Net Mortgage Rate”: With respect to any Mortgage Loan and any day, the related Mortgage Rate less the Administrative Fee Rate.

  

 Appendix A-38 

 “Net Prepayment Interest Shortfall”: On any Distribution Date, the excess, if any of
(i) any Prepayment Interest Shortfall and (ii) any payments of Compensating Interest made by the Servicer. 
 “Net
WAC”: With respect to any Distribution Date, the weighted average of the Net Mortgage Rates on the Mortgage Loans (weighted by the Principal Balances of the Mortgage Loans). 
 “NCFC”: NovaStar Certificates Financing Corporation, a Delaware corporation, and its successors and assigns. 
 “NCFLLC”: NovaStar Certificates Financing LLC, a Delaware limited liability company, and its successors and assigns. 
 “NFI”: NovaStar Financial, Inc., a Maryland corporation, and its successors and assigns. 
 “NIM Note”: Any of the notes (i) issued pursuant to a structured net interest margin transaction sponsored by NovaStar Financial,
Inc. or its Affiliates and (ii) evidencing debt of the trust formed pursuant to such transaction. For the avoidance of doubt, any subordinate equity interests (or subordinate certificates issued evidencing an equity interest) in such trust
shall not be considered NIM Notes. 
 “Non-Derivative Supplemental Interest Payment”: With respect to each Distribution
Date, and the Class M-9, Class M-10, Class M-11 and the Class M-12 Certificates, the dollar amount of Supplemental Interest Payment which would be distributed to each such Class on such Distribution Date pursuant to Section 4.04(c)(ii) hereof
if the amount received by the Supplemental Interest Trust from each Swap Counterparty and each Cap Counterparty on such Distribution Date was zero. 
 “Non-REMIC Accounts”: The Pre-Funding Account, the Interest Coverage Account and the Supplemental Interest Account held by the Supplemental Interest Trust. 
 “Nonrecoverable Advance”: With respect to any Mortgage Loan: 
 (x) any Advance (i) which was previously made or is proposed to be made by the Servicer; and (ii) which, in the good faith judgment of the
Servicer, will not or, in the case of a proposed Advance, would not, be ultimately recoverable by the Servicer from Liquidation Proceeds, Repurchase Price or future payments on such Mortgage Loan; and 
 (y) the amount, if any, by which an MI Claim Payment Advance made or to be made by the Servicer exceeds, or would exceed, the amount actually received,
or expected to be received as MI Insurance Proceeds from the related MI Insurer on account of the related claim; provided, however that if an MI Insurer Insolvency Event occurs after the MI Claim Payment Advance has been made by the Servicer
and before the full amount thereof has been reimbursed to the Servicer from the related MI Insurance Proceeds, then any remaining, unreimbursed amount shall be considered a Nonrecoverable Advance as of the date of the MI Insurer Insolvency Event.

  

 Appendix A-39 

 “Novation Agreements”: The Novation Agreement, dated as of
                        , 20[    ], among NovaStar Mortgage, Inc., the Supplemental Interest Trust and
[Counterparty]., the Novation Agreement, dated as of                         , 20[    ] among
[Counterparty], the Supplemental Interest Trust and NovaStar Financial, Inc. and the Novation Agreement, dated as of
                        , 20[    ] among [Counterparty], the Supplemental Interest Trust and NovaStar
Financial, Inc. 
 “Offered Certificates”: Collectively, the Class A Certificates and the Class M-1 Certificates, Class
M-2 Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8 Certificates, Class M-9 Certificates and Class M-10 Certificates. 
 “Officers’ Certificate”: A Certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or any
vice president (however denominated), and by the Treasurer, the Secretary, or any assistant treasurer or assistant secretary of the applicable Person. 
 “Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be a salaried counsel for the Company or the Servicer, acceptable to the Trustee, except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with the REMIC Provisions which must be an opinion of Independent counsel. 
 “Optional Termination Date”: The first Distribution Date on which the Servicer may opt to terminate the Trust Fund pursuant to Section 11.01. 
 “Original Pre-Funded Amount”: The amount deposited by the Company in the Pre-Funding Account on the Closing Date, which amount is
$[            ], $[            ] related to the Group I Mortgage Loans and
$[            ] related to the Group II Mortgage Loans). 
 “Original
Value”: Except in the case of a refinanced Mortgage Loan, the lesser of the Appraised Value or sales price of the Mortgaged Property at the time a Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value is the value
of such property set forth in an appraisal acceptable to the Servicer. 
 “Ownership Interest”: As to any Certificate, any
ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. 
 “Overcollateralization Amount”: For any Distribution Date, is equal to (a) the sum of (i) the Pool Balance, after giving
effect to distributions of principal on the Mortgage Loans, and (ii) any outstanding Pre-Funded Amount, minus (b) the aggregate Certificate Principal Balance of the Class A Certificates and Mezzanine Certificates, after giving effect
to principal distributions to be made on the Class A Certificates and Mezzanine Certificates on such Distribution Date. 
 “Overcollateralization Deficiency Amount”: With respect to any Distribution Date equals the amount, if any, by which the Required Overcollateralization Amount exceeds the Overcollateralization Amount on such Distribution
Date (after giving effect to distributions in respect of the Group I Basic Principal Distribution Amount and the Group II Basic Principal Distribution Amount on such Distribution Date). 
  

 Appendix A-40 

 “Overcollateralization Release Amount”: With respect to any Distribution Date, the
lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the excess, if any, of (i) the Overcollateralization Amount for such Distribution Date (assuming that 100% of the Principal Remittance Amount is applied
as a principal payment on such Distribution Date) over (ii) the Required Overcollateralization Amount for such Distribution Date. 
 “Pass-Through Rate”: For any Distribution Date and any of the Class A Certificates and Class M Certificates, the lesser of (1) the Formula Rate for such Class for such Distribution Date and (2) the related
Available Funds Cap for such Distribution Date. 
 “Paying Agent”: Any paying agent appointed pursuant to Section 5.05.

 “Percentage Interest”: With respect to any Class A Certificate or Class M Certificate, a fraction, expressed as a
percentage, the numerator of which is the Initial Certificate Principal Balance represented by such Certificate and the denominator of which is the Initial Certificate Principal Balance of the related Class. With respect to a Class I Certificate,
Class C Certificate, Class M-9 DSI Certificate, Class M-10 DSI Certificate, Class M-11 DSI Certificate, Class M-12 DSI Certificate or Residual Certificate, the portion of the Class evidenced thereby, expressed as a percentage, as stated on the face
of such Certificate; provided, however, that the sum of all such percentages for each such Class totals 100%. 
 “Periodic Rate
Cap”: With respect to each Adjustable Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Mortgage Loan may
increase or decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date from the Mortgage Rate in effect immediately prior to such Adjustment Date. 
 “Permitted Transferee”: Any transferee of a Residual Certificate other than a Disqualified Organization or a non-U.S. Person.

 “Person”: Any individual, corporation, limited liability company, partnership, joint venture, association, joint stock
company, trust, unincorporated organization or government or any agency or political subdivision thereof. 
 “Plan”: Either
(i) an employee benefit plan (as defined in section 3(3) of ERISA) that is subject to the provisions of Title I of ERISA or (ii) a plan (as defined in section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code.

 “Plan Assets”: As defined in Section 5.02(d) hereof. 
 “Pool Balance”: As of any date of determination, the aggregate Principal Balance of the related Mortgage Loans as of such date.

 “Pre-Funded Amount”: With respect to any date of determination, the amount on deposit in the Pre-Funding Account.

  

 Appendix A-41 

 “Pre-Funding Account”: The account established and maintained pursuant to
Section 4.05, as defined herein, and which must be an Eligible Account. 
 “Pre-Funding Period”: The period beginning
on the Closing Date and ending on the earlier to occur of (a) the date upon which (a) the date on which the amount on deposit in the Pre-Funding Account is less than $10,000 and
(b)                         , 20[    ]. 
 “Pre-Funding Swap/Cap Adjustment Amount”: For the Distribution Dates commencing in
                        , 20[    ] through and including the Distribution Date in
                        , 20[    ], an amount determined using the following rule: For every $1 in the
Pre-Funding Account as of the last day of the Pre-Funding Period (if the Pre-Funding Period has not ended, then the related Pre-Funding Swap/Cap Adjustment Amount shall be equal to zero), the related Pre-Funding Swap/Cap Adjustment Amount will
increase by $.[            ] ($.[            ] with respect to clauses XX, IX and XVII) in the following order of priority with
respect to certain clauses in the definition of Group I Class I Monthly Interest Formula Amounts or Group II Class I Monthly Interest Formula Amounts, as applicable: clause XX, IX, XVII, XXI and X until such related Pre-Funding Swap/Cap Adjustment
Amount equals the numerical value set forth in sub-clause (A) of such clause at which point any remaining amounts will be allocated as Pre-Funding Swap/Cap Adjustment Amounts to the subsequent clause in the order of priority. For all other
Distribution Dates, the related Pre-Funding Swap/Cap Adjustment Amount shall be equal to zero. 
 “Premium”: The premium due
to the Class A-1 Insurer as set forth in the Premium Letter. 
 “Premium Letter”: The letter dated as of
[                        ], 200[    ] by and among the Seller, the Depositor and the Class A-1 Insurer.

 “Prepayment Assumption”: As defined in the Prospectus Supplement. 
 “Prepayment Charge”: With respect to any Mortgage Loan, the charges or premiums, if any, due in connection with a full or partial
Principal Prepayment of such Mortgage Loan in accordance with the terms thereof. 
 “Prepayment Interest Shortfall”: As to
any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was the subject of (a) a Principal Prepayment in full during the related Prepayment Period, but in the prior calendar month an amount
equal to the excess of interest accrued during the prior calendar month at the Mortgage Rate (net of the Servicing Fee) on the Principal Balance of such Mortgage Loan over the amount of interest (adjusted to the Mortgage Rate (net of the Servicing
Fee)) paid by the Mortgagor for such Prepayment Period to the date of such Principal Prepayment in full or (b) a partial Principal Prepayment during the prior calendar month, an amount equal to interest accrued during the related prior calendar
month at the Mortgage Rate (net of the Servicing Fee) on the amount of such partial Principal Prepayment. 
 “Prepayment
Period”: For any Distribution Date, the period commencing on the day after the Determination Date in the month preceding the month in which such Distribution Date falls (or, in the case of the first Distribution Date, from the Cut-off Date)
and ending on the Determination Date of the calendar month in which such Distribution Date falls. 
  

 Appendix A-42 

 “Principal Balance”: With respect to any Mortgage Loan or related REO Property, at any
given time, (i) the Principal Balance of the Mortgage Loan as of the Cut-off Date or Subsequent Cut-off Date, as applicable, minus (ii) the sum of (a) the principal portion of the Monthly Payments due with respect to such Mortgage
Loan or REO Property during each Due Period ending prior to the most recent Distribution Date which were received or with respect to which an Advance was made, and (b) all Principal Prepayments with respect to such Mortgage Loan or REO
Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds, to the extent applied by the Servicer as recoveries of principal in accordance with Section 3.13 hereof with respect to such Mortgage Loan or REO Property, and
(c) the principal portion of any Realized Loss with respect thereto for any previous Distribution Date. 
 “Principal Parity
Deficit”: With respect to any Distribution Date, the excess of (i) the aggregate Certificate Principal Balance of the Class A Certificates on the Distribution Date, after taking into account any reduction (and with respect to the
Class A-1 Certificates, as reduced by any Class A-1 Principal Parity Amounts paid by the Class A-1 Insurer prior to such Distribution Date), of those Certificate Principal Balance on that Distribution Date, less the excess of
(a) any Principal Parity Deficits for all prior Distribution Dates over (b) any Class A-1 Principal Parity Amount for all prior Distribution Dates over (ii) the sum of (x) the Pool Balance, after giving effect to
distributions of principal on the Mortgage Loans, and (y) any outstanding Pre-Funded Amount for that Distribution Date. For the first Distribution Date, the Principal Parity Deficit will equal zero. 
 “Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled
Due Date and which is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment. 
 “Principal Remittance Amount”: With respect to any Distribution Date, the sum of (i) each scheduled payment of principal collected
or advanced on the Mortgage Loans by the Servicer that were due during the related Due Period, (ii) the principal portion of all partial and full Principal Prepayments of the Mortgage Loans applied by the Servicer during the related Prepayment
Period, (iii) the principal portion of all related Net Liquidation Proceeds and Insurance Proceeds received during such Prepayment Period, (iv) that portion of the Repurchase Price, representing principal of any repurchased Mortgage Loan,
deposited to the Collection Account during such Prepayment Period, (v) the principal portion of any related Substitution Adjustment Amounts deposited in the Collection Account during such Prepayment Period, (vi) in the case of the
Distribution Date immediately following the end of the Pre-Funding Period, any remaining amounts of the Original Pre-Funded Amount on deposit in the Pre-Funding Account, (vii) on the Distribution Date on which the Trust Fund is to be terminated
pursuant to Section 11.01, that portion of the Termination Price, in respect of principal and (viii) Subsequent Recoveries to pay certain Certificates amounts in respect of Realized Losses allocated to such Certificates. 
  

 Appendix A-43 

 “Prospectus”: The Prospectus Supplement together with the Base Prospectus attached
thereto with respect to the Offered Certificates. 
 “Prospectus Supplement”: That certain Prospectus Supplement dated
                        , 20[    ] relating to the public offering of the Offered Certificates.

 “Purchase Agreement”: The agreement, dated as of
                        , 20[    ], between the Seller, the Company, the Trustee and the Custodian,
regarding the transfer of the Mortgage Loans by the Seller to or at the direction of the Company. 
 “Qualified
Liquidation”: The meaning set forth from time to time in the definition thereof at Section 860F(a)(4) of the Code and applicable to the Trust. 
 “Qualified Mortgage”: The meaning set forth from time to time in the definition thereof at Section 860G(a)(3) of the Code and applicable to the Trust. 
 “Qualified Replacement Mortgage”: A Mortgage Loan substituted for another pursuant to Section 3.01 of the Purchase Agreement and
that satisfies all of the criteria set forth from time to time in the definition thereof at Section 860G(a)(4) of the Code and applicable to the Trust, all as evidenced by an Officers’ Certificate of the Seller delivered to the Trustee
prior to any such substitution. 
 “Qualified Underwriting”: Any public offering or private placement of securities with
respect to which an entity that has received an Underwriter Exemption, is (i) the sole underwriter, (ii) the manager or co-manager of the underwriting syndicate or (iii) a selling or placement agent. 
 “Rate Step-up Date”: The first Distribution Date to occur after the Optional Termination Date has occurred. 
 “Rating Agency”: Any nationally recognized statistical rating organization, or its successor, that rated the Class A Certificates
and Mezzanine Certificates at the request of the Company at the time of the initial issuance of the Class A Certificates and Mezzanine Certificates. Initially such rating agencies shall consist of Moody’s, Standard & Poor’s
and Fitch. If such organization or a successor is no longer in existence, “Rating Agency” shall be such nationally recognized statistical rating organization, or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee. References herein to the highest short-term unsecured rating category of a Rating Agency shall mean “A-1” or better in the case of Standard & Poor’s, “P-1” or better in the
case of Moody’s, “F-1+” or better in the case of Fitch and in the case of any other Rating Agency shall mean such equivalent rating. References herein to the highest long-term rating category of a Rating Agency shall mean
“AAA” in the case of Standard & Poor’s, “Aaa” in the case of Moody’s and “AAA” in the case of Fitch, and in the case of any other Rating Agency, such equivalent rating. 
 “Realized Loss”: With respect to each Mortgage Loan (or REO Property) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Principal Balance of the Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net 

  

 Appendix A-44 

 
Mortgage Rate from the Due Date as to which interest was last paid or advanced to Certificateholders up to the last day of the month in which the Cash
Liquidation (or REO Disposition) occurred on the Principal Balance of such Mortgage Loan (or REO Property) outstanding during each Due Period that such interest was not paid or advanced, minus (iii) Net Liquidation Proceeds (after giving effect
to coverage provided by any MI policy), if any, received with respect to such Cash Liquidation (or REO Disposition), minus the portion thereof reimbursable to the Servicer or any Subservicer with respect to related Advances or expenses as to which
the Servicer or Subservicer is entitled to reimbursement thereunder but which have not been previously reimbursed. With respect to each Mortgage Loan which has become the subject of a Deficient Valuation, the difference between the Principal Balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation and the Principal Balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect to each Mortgage Loan which has become the object of a Debt Service
Reduction, the amount of such Debt Service Reduction. 
 “Record Date”: For as long as there are no definitive notes, with
respect to each Distribution Date, the Close of Business on the Business Day immediately preceding the related Distribution Date. If definitive notes have been issued, the Record Date is the last business day of the month prior to the related
Distribution Date. 
 “Reference Banks”: Deutsche Bank, Barclays Bank PLC, The Bank of Tokyo-Mitsubishi, LTD. and National
Westminster Bank PLC and their successors in interest; provided that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks selected by the Trustee which are engaged in transactions in Eurodollar deposits
in the international Eurocurrency market (i) with an established place of business in London, (ii) not controlling, under the control of or under common control with the Seller or any Affiliate thereof, (iii) whose quotations appear
on the Reuters Screen LIBOR Page on the relevant Interest Determination Date and (iv) which have been designated as such by the Trustee. 
 “Regular Certificate”: Any of the Class A Certificates, Mezzanine Certificates, Class I Certificates or Class C Certificates. 
 “Regulation AB”: Subpart 229,1100 –– Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100-2291123, as such may be amended from time to time, and subject to such
clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as
may be provided by the Commission or its staff from time to time. 
 “Related Documents”: With respect to each Mortgage
Loan, the documents specified in Section 2.01 hereof and any documents required to be added to such documents pursuant to this Agreement, the Purchase Agreement or any Subsequent Transfer Instrument. 
 “Relevant Servicing Criteria”: The Servicing Criteria applicable to the various parties, as set forth on Exhibit
[    ] attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria. With respect to a Servicing Function Participant engaged by the Servicer [and the Indenture
Trustee], the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties. 
  

 Appendix A-45 

 “Relief Act”: The Servicemembers Civil Relief Act, as amended. 
 “Relief Act Shortfall”: As to any Distribution Date and any Mortgage Loan (other than a Mortgage Loan relating to an REO Property), any
shortfalls relating to the Relief Act or similar legislation or regulations. 
 “REMIC”: A “real estate mortgage
investment conduit” within the meaning of Section 860D of the Code. 
 “REMIC Available Funds Cap”: The weighted
average of the pass-through rates on the Class IV-Accrual, Class IV-A1A, Class IV-A2A, Class IV-A2B, Class IV-A2C, Class IV-A2D, Class IV-M1, Class IV-M2, Class IV-M3, Class IV-M4, Class IV-M5, Class IV-M6, Class IV-M7, Class IV-M8, Class IV-M9,
Class IV-M10, Class IV-M11, Class IV-M12 and Class IV-C Interests. 
 “REMIC III Net WAC”: The weighted average of the
pass-through rates on the Class II-A, Class II-B, Class II-C, Class II-D, Class II-E, Class II-F, Class II-G, Class II-H, Class II-K, Class II-L, Class II-M, Class II-O, Class II-Q, Class II-S, Class II-T, Class II-U, Class II-V, Class II-W, Class
II-Y, Class II-Z, Class II-a, Class II-b and Class II-J1 Interests. 
 “REMIC Swap/Cap Adjustment Amount”: An amount equal
to the product of (i) the amount of the Original Pre-Funded Amount not used to purchase Subsequent Mortgage Loans during the Pre-Funding Period and (ii) .[            ].

 “REMIC Interests Sale Agreement”: The REMIC Interests Sale Agreement, dated as
                        , 20[    ], between the Company and NCFC. 
 “REMIC Pass-Through Rate”: As defined in Exhibit J hereof. 
 “REMIC I Pass-Through Rate”: As to each of the respective REMIC I Regular Interests, the applicable “REMIC I
Pass-Through Rate” set forth in Exhibit J hereof. 
 “REMIC II Pass-Through Rate”: As to each of the respective
REMIC II Regular Interests, the applicable “REMIC II Pass-Through Rate” set forth in Exhibit J hereof. 
 “REMIC III Pass-Through Rate”: As to each of the respective REMIC III Regular Interests, the applicable “REMIC III Pass-Through Rate” set forth in Exhibit J hereof. 
 “REMIC IV Pass-Through Rate”: As to each of the respective REMIC IV Regular Interests, the applicable “REMIC IV Pass-Through
Rate set forth in Exhibit J hereof. 
 “REMIC Provisions”: Provisions of the federal income tax law relating to real estate
mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

  

 Appendix A-46 

 “REMIC Regular Interests”: The REMIC I Regular Interests, the REMIC II Regular
Interests, the REMIC III Regular Interests, the REMIC IV Regular Interests and the Master REMIC Regular Interests. 
 “REMIC I
Regular Interests”: As defined in Exhibit J hereof. 
 “REMIC II Regular Interests”: As defined in Exhibit J
hereof. 
 “REMIC III Regular Interests”: As defined in Exhibit J hereof. 
 “REMIC IV Regular Interests”: As defined in Exhibit J hereof. 
 “REO Acquisition”: The acquisition by the Servicer on behalf of the Trustee for the benefit of the Certificateholders of any REO
Property pursuant to Section 3.13 hereof. 
 “REO Disposition”: As to any REO Property, a determination by the Servicer
that it has received substantially all Insurance Proceeds, Liquidation Proceeds, REO Proceeds and other payments and recoveries (including proceeds of a final sale) which the Servicer expects to be finally recoverable from the sale or other
disposition of the REO Property. 
 “REO Imputed Interest”: As to any REO Property, for any period, an amount equivalent to
interest (at the Net Mortgage Rate that would have been applicable to the related Mortgage Loan had it been outstanding net, with respect to a negative amortization loan, of amounts that would have been Deferred Interest, if any) on the unpaid
Principal Balance of the Mortgage Loan as of the date of acquisition thereof for such period as such balance is reduced pursuant to Section 3.13 hereof by any income from the REO Property treated as a recovery of principal and with respect to a
negative amortization loan, as such balance is increased by the addition of Deferred Interest. 
 “REO Proceeds”: Proceeds,
net of expenses, received in respect of any REO Property (including, without limitation, proceeds from the rental of the related Mortgaged Property), which proceeds are required to be deposited into the Collection Account within two days of receipt
by the Servicer. 
 “REO Property”: A Mortgaged Property that is acquired by the Trust by foreclosure or by deed in lieu of
foreclosure. 
 “Repurchase Event”: With respect to any Mortgage Loan, either (i) a discovery that, as of the Closing
Date the related Mortgage was not a valid lien on the related Mortgaged Property subject only to (A) the lien of real property taxes and assessments not yet due and payable, (B) covenants, conditions, and restrictions, rights of way,
easements and other matters of public record as of the date of recording of such Mortgage and such other permissible title exceptions as are permitted and (C) other matters to which like properties are commonly subject which do not materially
adversely affect the value, use, enjoyment or marketability of the related Mortgaged Property or (ii) with respect to any Mortgage Loan as to which the Seller delivers an affidavit certifying that the original Mortgage Note has been lost or
destroyed, a subsequent default on such Mortgage Loan if the enforcement thereof or of the related Mortgage is materially and adversely affected by the absence of such original Mortgage Note. 
  

 Appendix A-47 

 “Repurchase Price”: With respect to any Mortgage Loan (i) required to be
repurchased on any date by the Seller pursuant to the Purchase Agreement or (ii) permitted to be purchased by the Servicer pursuant to Article III hereof, an amount equal to the sum, without duplication, of (i) 100% of the Principal
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid accrued interest at the Mortgage Rate on the outstanding principal balance thereof from the Due Date to which interest was last paid by the Mortgagor (or with
respect to which an Advance was last made by the Servicer) to the first day of the month following the month of purchase plus (iii) the amount of any unreimbursed Servicing Advances or unreimbursed Advances made with respect to such Mortgage
Loan plus (iv) any other amounts owed to the Servicer or the Subservicer pursuant to Section 3.07 hereof and not included in clause (iii) of this definition plus (v) any costs and damages incurred by the Trust Fund in connection
with any violation by any Mortgage Loan of any predatory or abusive lending law or breach of representations and warranties regarding licensing or any predatory or abusive lending law. 
 “Request for Release”: A request for release in substantially the form of Exhibit E hereto. 
 “Required Overcollateralization Amount”: For any Distribution Date is equal to: 
 (i) prior to the Crossover Date, [        ]% of the sum of (i) the aggregate principal balance of the initial
mortgage loans as of the related cut-off date and (ii) the pre-funding amount as of the closing date. 
 (ii) on or after the Crossover
Date, the greater of: 
 (a) [        ]% of the sum of (x) the aggregate principal balance of the
initial mortgage loans as of the related cut-off date and (y) the pre-funding amount as of the closing date; and 
 (b) the lesser of:

 (1) [        ]% of the sum of (x) the aggregate principal balance of the initial mortgage
loans as of the related cut-off date and (y) the pre-funding amount as of the closing date; and 
 (2)
[        ]% of the current aggregate principal balance of the mortgage loans as of the end of the related due period. 
 On any Distribution Date on which a Trigger Event is in effect, the Required Overcollateralization Amount will be equal to the Required Overcollateralization Amount as of the preceding Distribution Date. 

“Residual Certificate”: The Class R Certificates representing beneficial ownership of the Class R-I, Class R-II,
Class R-III, Class R-IV and Class R-V Interests. 
 “Residual Interest”: The sole Class of “residual
interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code. 
 “Responsible Officer”: With respect
to the Trustee, any officer working in the Corporate Trust Office with direct responsibility for the administration of this Agreement and also, with respect to a particular matter, any other officer to whom such matter is referred because of such
officer’s knowledge of and familiarity with the particular subject. 
  

 Appendix A-48 

 “Rolling 60-Day Delinquency Percentage”: For any Distribution Date, the average of the
60-Day Delinquency Percentages for the Mortgage Loans as of the last day of each of the three (or 1 and 2 in the case of the first two Distribution Dates, as applicable) most recently ended Due Periods. 
 “Rolling 90-Day Delinquency Percentage”: For any Distribution Date, the average of the 90-Day Delinquency Percentages for the Mortgage
Loans as of the last day of each of the three (or 1 and 2 in the case of the first two Distribution Dates, as applicable) most recently ended Due Periods. 
 “Scheduled Principal Payment”: Any scheduled payment of principal made on a scheduled Due Date. 
 “Seller”: NovaStar Mortgage, Inc., a Virginia corporation, and its successors and assigns. 
 “Servicer”: NovaStar Mortgage, Inc., a Virginia corporation, and its successors and assigns. 
 “Servicer
Remittance Date”: The third Business Day prior to each Distribution Date. 
 “Servicing Account”: The separate
trust account created and maintained by the Servicer or each Subservicer with respect to the Mortgage Loans or REO Property, which shall be an Eligible Account, for collection of taxes, assessments, insurance premiums and comparable items as
described in Section 3.08 hereof. 
 “Service(s)(ing)”: In accordance with Regulation AB, the act of servicing and
administering the Mortgage Loans or any other assets of the Trust by an entity that meets the definition of “servicer” set forth in Item 1101 of Regulation AB and is subject to the disclosure requirements set forth in 1108 of
Regulation AB. For clarification purposes, any uncapitalized occurrence of this term shall have the meaning commonly understood by participants in the residential mortgage-backed securitization market. 
 “Servicing Advances”: All customary, reasonable and necessary “out of pocket” costs and expenses incurred in connection with a
default, delinquency or other unanticipated event in the performance by the Servicer of its servicing obligations, including, without duplication, but not limited to, the cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of any REO Property, (iv) compliance with the obligations under Section 3.13 hereof, and (v) expenses
incurred in connection with any Mortgage Loan being registered on the MERS System. 
 “Servicing Criteria”: The criteria set
forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time. 
 “Servicing
Default”: The meaning assigned in Section 7.01 hereof. 
  

 Appendix A-49 

 “Servicing Fee”: With respect to the Mortgage Loans and any Distribution Date, the
product of (i) the Servicing Fee Rate divided by 12 and (ii) the Pool Balance as of the first day of the related Due Period. 
 “Servicing Fee Rate”: With respect to any Mortgage Loan, [        ]% per annum. 
 “Servicing Function Participant”: Any sub-servicer, subcontractor or any other Person, other than the Servicer and the Indenture Trustee, that is performing activities addressed by the Servicing Criteria, unless such
Person’s activities relate only to 5% or less of the Mortgage Loans. 
 “Servicing Officer”: Any officer of the
Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Trustee by the Servicer or a Subservicer, as such list may be
amended from time to time. 
 “Servicing Transfer Costs”: Reasonable and necessary costs and expenses incurred, by or on
behalf of the Trustee or successor Servicer in connection with the transfer of servicing in the event of termination of the Servicer as servicer hereunder and the resulting transfer to the successor Servicer. 
 “Sponsor”: NovaStar Mortgage, Inc., a Virginia Corporation, and its successors and assigns. 
 “Standard & Poor’s” or “S&P”: Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., or its successor in interest. 
 “Startup Day”: As defined in Section 10.01(a) hereof.

 “Subordinate Available Funds Cap”: For each Distribution Date, a rate equal to the weighted average of (1) the Group
I Available Funds Cap and (2) the Group II Available Funds Cap, weighted on the basis of the related Subordinated Amount, all for such Distribution Date. 
 “Subordinate REMIC Available Funds Cap”: The weighted average of the pass-through rates on the Class IV-S1 and Class IV-S2 Interests. 
 “Subordinated Amount”: For each Distribution Date, either (i) the Group I Subordinated Amount or (ii) the Group II
Subordinated Amount. 
 “Subordinated Amount Ratio”: The ratio of the Group I Subordinated Amount to the Group II
Subordinated Amount. 
 “Subsequent Cut-off Date”: With respect to those Subsequent Mortgage Loans which are sold to the
Trust pursuant to a Subsequent Transfer Instrument, the later of (i) the first day of the month in which such Subsequent Mortgage Loan was acquired by the Trust and (ii) the date of origination of such Subsequent Mortgage Loan. 

 

 Appendix A-50 

 “Subsequent Mortgage Loan”: A Mortgage Loan sold by the Company to the Trust Fund
pursuant to Section 2.08, such Mortgage Loan being identified on the Mortgage Loan Schedule attached to a Subsequent Transfer Instrument. 
 “Subsequent Recovery”: With respect to any Mortgage Loan that had previously been the subject of a realized loss, any principal amount subsequently received in connection with such Mortgage Loan. 
 “Subsequent Transfer Date”: With respect to each Subsequent Transfer Instrument, the date on which the related Subsequent Mortgage Loans
are sold to the Trust Fund. 
 “Subsequent Transfer Instrument”: Each Subsequent Transfer Instrument, dated as of a
Subsequent Transfer Date, executed by the Trustee and the Company substantially in the form attached hereto as Exhibit D, by which Subsequent Mortgage Loans are transferred to the Trust Fund. 
 “Subservicer”: Any Person with which the Servicer has entered into a Subservicing Agreement and which meets the qualifications of a
Subservicer pursuant to Section 3.02 hereof. 
 “Subservicing Account”: An account established by a Subservicer which
meets the requirements set forth in Section 3.06(e) and is otherwise acceptable to the Servicer. 
 “Subservicing
Agreement”: The written contract between the Servicer and a Subservicer relating to servicing and administration of certain Mortgage Loans as provided in Section 3.02 hereof. 
 “Subservicing Fee”: With respect to each Mortgage Loan and any Distribution Date, the portion of the Servicing Fee paid to a
Subservicer. 
 “Substitution Adjustment Amount”: As defined in Section 2.03 hereof. 
 “Supplemental Interest Account”: An account established by the Trustee pursuant to Section 4.04 and is otherwise acceptable to the
Servicer. 
 “Supplemental Interest Amount Due”: With respect to any of the Class A Certificates and Mezzanine
Certificates and any Distribution Date, the sum of (x) the Available Funds Cap Shortfall Amount for such Group or Class of Certificates and such Distribution Date and (y) the Available Funds Cap Carryforward Amount for such Group or Class
and Distribution Date. 
 “Supplemental Interest Payment”: With respect to any Distribution Date: 
 (iv) for the Class A-1A Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class A-1A Certificates and
(y) the amounts on deposit and available for distribution to the Class A-1A Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (v) for the Class A-2A Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class A-2A Certificates and (y) the amounts on deposit and available for distribution to the
Class A-2A Certificates from the Supplemental Interest Trust on that Distribution Date; 
  

 Appendix A-51 

 (vi) for the Class A-2B Certificates, the lesser of (x) the Supplemental Interest Amount Due
for the Class A-2B Certificates and (y) the amounts on deposit and available for distribution to the Class A-2B Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (vii) for the Class A-2C Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class A-2C Certificates and
(y) the amounts on deposit and available for distribution to the Class A-2C Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (viii) for the Class A-2D Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class A-2D Certificates and (y) the amounts on deposit and available for distribution to the
Class A-2D Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (ix) for the Class M-1 Certificates, the
lesser of (x) the Supplemental Interest Amount Due for the Class M-1 Certificates and (y) the amounts on deposit and available for distribution to the Class M-1 Certificates from the Supplemental Interest Trust on that Distribution Date;

 (x) for the Class M-2 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-2 Certificates and
(y) the amounts on deposit and available for distribution to the Class M-2 Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (xi) for the Class M-3 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-3 Certificates and (y) the amounts on deposit and available for distribution to the Class M-3
Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (xii) for the Class M-4 Certificates, the lesser of
(x) the Supplemental Interest Amount Due for the Class M-4 Certificates and (y) the amounts on deposit and available for distribution to the Class M-4 Certificates from the Supplemental Interest Trust on that Distribution Date; 

(xiii) for the Class M-5 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-5 Certificates and (y) the
amounts on deposit and available for distribution to the Class M-5 Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (xiv) for the Class M-6 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-6 Certificates and (y) the amounts on deposit and available for distribution to the Class M-6 Certificates from the
Supplemental Interest Trust on that Distribution Date; 
 (xv) for the Class M-7 Certificates, the lesser of (x) the Supplemental
Interest Amount Due for the Class M-7 Certificates and (y) the amounts on deposit and available for distribution to the Class M-7 Certificates from the Supplemental Interest Trust on that Distribution Date; 
  

 Appendix A-52 

 (xvi) for the Class M-8 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the
Class M-8 Certificates and (y) the amounts on deposit and available for distribution to the Class M-8 Certificates from the Supplemental Interest Trust on that Distribution Date; 
 (xvii) for the Class M-9 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-9 Certificates and (y) the
amounts on deposit and available for distribution to the Class M-9 Certificates from the Supplemental Interest Trust on that Distribution Date; and 
 (xviii) for the Class M-10 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-10 Certificates and (y) the amounts on deposit and available for distribution to the Class M-10 Certificates from the
Supplemental Interest Trust on that Distribution Date. 
 (xix) For the Class M-11 Certificates, the lesser of (x) the Supplemental
Interest Amount Due for the Class M-11 Certificates and (y) the amounts on deposit and available for distribution to the Class M-11 Certificates from the Supplemental Interest Trust on that Distribution Date. 
 (xx) For the Class M-12 Certificates, the lesser of (x) the Supplemental Interest Amount Due for the Class M-12 Certificates and (y) the
amounts on deposit and available for distribution to the Class M-12 Certificates from the Supplemental Interest Trust on that Distribution Date. 
 “Supplemental Interest Trust”: The supplemental interest trust established and maintained pursuant to Section 4.04 and designated as such. 
 “Swap Agreement”: Any of the [                    ] interest rate Swap Agreements between the
Supplemental Interest Trust and a Swap Counterparty which are deemed to be assets of the Supplemental Interest Trust and not an asset of any one of the REMICs created hereunder. 
 “Swap Amount”: The calculation of the Swap Amount is subject to the verification and confirmation of the Swap Counterparties who are
calculation agents for the Swap Agreements. Swap Amount shall mean, on each Distribution Date on or prior to the Class I Termination Date, the excess of (x) the product of (i) the related fixed rate of interest, (ii) 30 divided by 360
and (iii) the related notional amount over (y) the product of (i) LIBOR, (ii) the actual number of days elapsed in the related Accrual Period divided by 360 and (iii) the related notional amount, (so long as such calculation
results in a positive number). 
 “Swap Counterparty”: [Swap Counterparty]. 
 “Swap/Cap Interest Rate Schedule”: As set forth in Appendix B. 
 “Tax Matters Person”: The tax matters person appointed pursuant to Section 10.01(e) hereof. 
 “Tax Returns”: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC)
Income Tax Return, including 

  

 Appendix A-53 

 
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed by the
Trustee, on behalf of each REMIC, together with any and all other information reports, forms or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing
authority under any applicable provisions of federal, state or local tax laws. 
 “Telerate Page 3750”: The display page
currently so designated on the Moneyline Telerate Service (or such other page as may replace that page on that service for the purpose of displaying comparable rates or prices). 
 “Termination Price”: As defined in Section 11.01(a) of the Pooling and Servicing Agreement. 
 “Treasury Regulations”: Regulations, including proposed or temporary Regulations, promulgated under the Code. References herein to
specific provisions of proposed or temporary regulations shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. 
 “Trigger Event”: A Trigger Event is in effect with respect to any Distribution Date, on or after the Crossover Date, if either (i) the Rolling 60-Day Delinquency Percentage (calculated on a
contractual basis) exceeds [        ]% of the current Credit Enhancement Percentage, or (ii) the Cumulative Loss Percentage for such Distribution Date is greater than the applicable percentage set forth
below with respect to such Distribution Date: 
  

			
	 Distribution Date Occurring
In:
	  	 Percentage

		  	
		  	

  

 Appendix A-54 

 “Trust Fund”: All of the assets of the Trust, which is the trust created hereunder
consisting of the REMIC I, REMIC II, REMIC III, REMIC IV, the Master REMIC, the Pre-Funding Account, the Interest Coverage Account and the Supplemental Interest Trust. 
 “Trustee”: [                    ]
and its successors and assigns or any successor trustee appointed pursuant to the terms of the Agreement. 
 “Trustee Fee”:
With respect to each Distribution Date, the product of (i) the Trustee Fee Rate divided by 12 and (ii) the sum of the Principal Balance of the Mortgage Loans and the Pre-Funded Amount as of the first day of the related Due Period.

 “Trustee Fee Rate”: [        ]% per annum. 
 “Underwriter Exemption”: An individual prohibited transaction exemption, issued by the U.S. Department of Labor, which is described in
PTE 2000-58, 65 Fed. Reg. 67,765 (Nov. 13, 2000). 
 “Underwriters”:
[                    ] and their successors and assigns. 
 “Underwriting Agreement”: The Underwriting Agreement dated
[                        ], 200[    ] among the Underwriters, the Company and the Seller with respect to the
offer and sale of the Underwritten Certificates, as the same may be amended from time to time. 
 “Underwriting Guidelines”:
The underwriting guidelines set forth in the Prospectus Supplement under the heading “Description of the Mortgage Pool—Underwriting Standards for Mortgage Loans”. 
 “Underwritten Certificates” Collectively, the Class A Certificates and the Class M-1 Certificates, Class M-2 Certificates, Class
M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates, Class M-7 Certificates and Class M-8 Certificates. 
  

 Appendix A-55 

 “United States Person” or “U.S. Person”: A citizen or resident of the
United States, a corporation, partnership or other entity treated as a corporation or partnership for federal income tax purposes (other than a partnership that is not treated as a U.S. Person pursuant to any applicable Treasury regulations) created
or organized in, or under the laws of, the United States, any state thereof or the District of Columbia, or an estate the income of which from sources without the United States is includible in gross income for United States federal income tax
purposes regardless of its connection with the conduct of a trade or business within the United States, or 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 persons have authority to control all substantial decisions of the trust. 
 “Unpaid Interest Shortfall
Amount”: With respect to each Class of Class A Certificates and Mezzanine Certificates and (i) the first Distribution Date, zero, and (ii) any Distribution Date after the first Distribution Date, the sum of (a) the
Unpaid Interest Shortfall Amount for that Class as of the prior Distribution Date, (b) the excess of the amount of the Current Interest due with respect to that Class on the prior Distribution Date over the amount actually distributed to the
Holders of that Class on account of the Current Interest on the prior Distribution Date and (c) interest on the sum of (a) and (b) to the extent permitted by law, at the Pass-Through Rate for such Class for the related Accrual Period.

 “Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. At
all times the Class A Certificates and the Mezzanine Certificates shall have 97% of the Voting Rights (allocated among the Holders of the Class A Certificates and the Mezzanine Certificates in proportion to the then outstanding Certificate
Principal Balances of their respective Certificates), the Class C Certificates shall have 1% of the Voting Rights, the Class I Certificates shall have 1% of the Voting Rights and the Class R Certificates shall have 1% of the Voting Rights. The
Voting Rights allocated to any Class of Certificates (other than the Class C Certificates, Class I Certificates and the Class R Certificates) shall be allocated among all Holders of each such Class in proportion to the outstanding Certificate
Principal Balance of such Certificates and the Voting Rights allocated to the Class C Certificates, Class I Certificates and the Class R Certificates shall be allocated among all Holders of each such Class in proportion to such Holders’
respective Percentage Interest; provided, however that when none of the Regular Certificates are outstanding, 100% of the Voting Rights shall be allocated among Holders of the Class R Certificates in accordance with such Holders’ respective
Percentage Interests in the Certificates of such Class. The Class M-9 DSI, Class M-10 DSI, Class M-11 DSI and Class M-12 DSI Certificates do not have Voting Rights. 
 “Weighted Average Mortgage Rate”: With respect to any Distribution Date, the weighted average of the Mortgage Rates of the Mortgage Loans (weighted by the Principal Balances of the Mortgage Loans).

  

 Appendix A-56 

 APPENDIX B 
 Swap/Cap Interest Rate Schedule 
  

					
	 Corresponding REMIC III
 Regular Interest
	  	 Corresponding
 Interest Rate
	  	 Corresponding
 Maturity Date

		  		  	
		  		  	

 EXHIBIT [    ] 
 FORM 10-D, FORM 8-K AND FORM 10-K 
 REPORTING RESPONSIBILITY 
 As to each item described below, the entity indicated as the Responsible Party shall be primarily responsible for reporting the information to the party identified as
responsible for preparing the Securities Exchange Act Reports pursuant to Section [    ] of the Pooling and Servicing Agreement. 
 Under
Item 1 of Form 10-D: a) items marked “[    ] statement” are required to be included in the periodic reports prepared by the Trustee under Section [    ] of the Pooling and Servicing Agreement,
provided by the Trustee based on information received from the Servicer; and b) items marked “Form 10-D report” are required to be in the Form 10-D report but not the [    ] statement, provided by the party indicated.
Information under all other Items of Form 10-D is to be included in the Form 10-D report. All such information and any other Items of Form 8-K and Form 10-K set forth in this exhibit shall be sent to the Trustee and the Depositor. 
  

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

	10-D	  		  		  		  		  		  	
		  	1	  	Distribution and Pool Performance Information	  		  		  		  	
							
		  		  	Item 1121(a) – Distribution and Pool Performance Information	  		  		  		  	
							
		  		  	(1) Any applicable record dates, accrual dates, determination dates for calculating distributions and actual distribution dates for the distribution period.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(2) Cash flows received and the sources thereof for distributions, fees and expenses.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(3) Calculated amounts and distribution of the flow of funds for the period itemized by type and priority of payment, including:	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	 (i) Fees or expenses accrued and paid, with an identification of the general purpose of such fees and the party receiving such fees or expenses.
	  		  	 X
  
 ([    ] Statement)
	  		  	

  

 I-1 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	 (ii) Payments accrued or paid with respect to enhancement or other support identified in Item 1114 of Regulation AB (such as insurance premiums or other
enhancement maintenance fees), with an identification of the general purpose of such payments and the party receiving such payments.
	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	 (iii) Principal, interest and other distributions accrued and paid on the asset-backed securities by type and by class or series and any principal or interest
shortfalls or carryovers.
	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	 (iv) The amount of excess cash flow or excess spread and the disposition of excess cash flow.
	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(4) Beginning and ending principal balances of the asset-backed securities.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(5) Interest rates applicable to the pool assets and the asset-backed securities, as applicable. Consider providing interest rate information for pool assets in appropriate distributional groups
or incremental ranges.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(6) Beginning and ending balances of transaction accounts, such as reserve accounts, and material account activity during the period.	  		  	 X
  
 ([    ] Statement)
	  		  	

  

 I-2 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	(7) Any amounts drawn on any credit enhancement or other support identified in Item 1114 of Regulation AB, as applicable, and the amount of coverage remaining under any such enhancement, if
known and applicable.	  		  	 X
  
 ([    ]
 Statement)
	  		  	
							
		  		  	(8) Number and amount of pool assets at the beginning and ending of each period, and updated pool composition information, such as weighted average coupon, weighted average remaining term, pool
factors and prepayment amounts.	  		  	 X
  
 ([    ] Statement)
	  	Updated pool composition information fields to be as specified by Depositor from time to time	  	
							
		  		  	(9) Delinquency and loss information for the period.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	In addition, describe any material changes to the information specified in Item 1100(b)(5) of Regulation AB regarding the pool assets. (methodology)	  	X	  		  		  	
							
		  		  	(10) Information on the amount, terms and general purpose of any advances made or reimbursed during the period, including the general use of funds advanced and the general source of funds for
reimbursements.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(11) Any material modifications, extensions or waivers to pool asset terms, fees, penalties or payments during the distribution period or that have cumulatively become material over
time.	  	X	  		  	X	  	X

  

 I-3 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	(12) Material breaches of pool asset representations or warranties or transaction covenants.	  	X	  		  	X	  	X
							
		  		  	(13) Information on ratio, coverage or other tests used for determining any early amortization, liquidation or other performance trigger and whether the trigger was met.	  		  	 X
  
 ([    ] Statement)
	  		  	
							
		  		  	(14) Information regarding any new issuance of asset-backed securities backed by the same asset pool,	  		  		  	X	  	X
							
		  		  	Information regarding any pool asset changes (other than in connection with a pool asset converting into cash in accordance with its terms), such as additions or removals in connection with a
prefunding or revolving period and pool asset substitutions and repurchases (and purchase rates, if applicable), and cash flows available for future purchases, such as the balances of any prefunding or revolving accounts, if applicable.	  	X	  		  	X	  	
							
		  		  	Disclose any material changes in the solicitation, credit-granting, underwriting, origination, acquisition or pool selection criteria or procedures, as applicable, used to originate, acquire or
select the new pool assets.	  		  		  	X	  	X
							
		  		  	 Item 1121(b) – Pre-Funding or Revolving Period Information
  
 Updated pool information as required under Item 1121(b).
	  		  		  	X	  	

  

 I-4 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	2	  	Legal Proceedings	  		  		  		  	
							
		  		  	Item 1117 – Legal proceedings pending against the following entities, or their respective property, that is material to Certificateholders, including proceedings known to be contemplated by
governmental authorities:	  		  		  		  	
							
		  		  	Sponsor	  		  		  		  	X
							
		  		  	Depositor	  		  		  	X	  	
							
		  		  	Issuing entity	  		  		  	X	  	
							
		  		  	Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  	
							
		  		  	Trustee	  		  	X	  		  	
							
		  		  	Custodian	  		  	X	  		  	
							
		  	3	  	Sales of Securities and Use of Proceeds	  		  		  		  	
							
		  		  	 Information from Item 2(a) of Part II of Form 10-Q:
  
 With respect to any sale of securities by the sponsor, depositor or issuing entity, that are backed by the same asset pool or are otherwise issued by the issuing entity,
whether or not registered, provide the sales and use of proceeds information in Item 701 of Regulation S-K. Pricing information can be omitted if securities were not registered.
	  		  		  	X	  	

  

 I-5 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	 4
	  	Defaults Upon Senior Securities	  		  		  		  	
							
		  		  	 Information from Item 3 of Part II of Form 10-Q:
  
 Report the occurrence of any Event of Default (after expiration of any grace period and provision of any required notice)
	  		  	X	  	X	  	X
							
		  	 5
	  	Submission of Matters to a Vote of Certificateholders	  		  		  		  	
							
		  		  	Information from Item 4 of Part II of Form 10-Q	  		  	X	  		  	
							
		  	 6
	  	Significant Obligors of Pool Assets	  		  		  		  	
							
		  		  	Item 1112(b) – Significant Obligor Financial Information*	  		  		  	X	  	
							
		  		  	*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.	  		  		  		  	
							
		  	 7
	  	Significant Enhancement Provider Information	  		  		  		  	
							
		  		  	Item 1114(b)(2) – Credit Enhancement Provider Financial Information*	  		  		  		  	
							
		  		  	 Determining applicable disclosure threshold
	  		  		  		  	X
							
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  	X
							
		  		  	Item 1115(b) – Derivative Counterparty Financial Information*	  		  		  		  	
							
		  		  	 Determining current maximum probable exposure
	  		  		  		  	X
							
		  		  	 Determining current significance percentage
	  		  		  		  	X

  

 I-6 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  	X
							
		  		  	*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.	  		  		  		  	
							
		  	8	  	Other Information	  		  		  		  	
							
		  		  	Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported	  		  		  		  	
							
		  	9	  	Exhibits	  		  		  		  	
							
		  		  	Distribution Report	  		  	X	  		  	
							
		  		  	Exhibits required by Item 601 of Regulation S-K, such as material agreements	  		  		  	X	  	
							
	8-K	  		  		  		  		  		  	
							
		  	1.01	  	Entry into a Material Definitive Agreement	  		  		  		  	
							
		  		  	 Disclosure is required regarding entry into or amendment of any definitive agreement that is material to the securitization, even if depositor is not
a party.
  
 Examples: servicing agreement, custodial agreement.
  
 Note: disclosure not required as to definitive agreements that are fully disclosed in the
prospectus
	  	X	  	X	  	X	  	X

  

 I-7 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	1.02	  	Termination of a Material Definitive Agreement	  		  		  		  	
							
		  		  	 Disclosure is required regarding termination of any definitive agreement that is material to the securitization (other than expiration in accordance
with its terms), even if depositor is not a party.
  
 Examples: servicing agreement,
custodial agreement.
	  	X	  	X	  	X	  	X
							
		  	1.03	  	Bankruptcy or Receivership	  		  		  		  	
							
		  		  	 Disclosure is required regarding the bankruptcy or receivership, if known to the Depositor, Trustee, Sponsor or Servicer, with respect to any of the
following:
  
 Sponsor, Depositor, Servicer, affiliated Servicer, other Servicer servicing
20% or more of pool assets at time of report, other material servicers, Trustee, Trustee, significant obligor, credit enhancer (10% or more), derivatives counterparty, custodian
	  	X	  	X	  	X	  	X

  

 I-8 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	2.04	  	Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement	  		  		  		  	
							
		  		  	 Includes an early amortization, performance trigger or other event, including event of default, that would materially alter the payment
priority/distribution of cash flows/amortization schedule.
  
 Disclosure will be made of
events other than waterfall triggers which are disclosed in the [    ] statement
	  		  	X	  		  	
							
		  	3.03	  	Material Modification to Rights of Certificateholders	  		  		  		  	
							
		  		  	Disclosure is required of any material modification to documents defining the rights of Certificateholders, including the Pooling and Servicing Agreement	  		  	X	  	X	  	X
							
		  	5.03	  	Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year	  		  		  		  	
							
		  		  	Disclosure is required of any amendment “to the governing documents of the issuing entity”	  		  		  	X	  	
							
		  	5.06	  	Change in Shell Company Status	  		  		  		  	
							
		  		  	[Not applicable to ABS issuers]	  		  		  	X	  	
							
		  	6.01	  	ABS Informational and Computational Material	  		  		  		  	
							
		  		  	[Not included in reports to be filed under Section 3.19]	  		  		  	X	  	

  

 I-9 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	6.02	  	Change of Servicer or Trustee	  		  		  		  	
							
		  		  	Requires disclosure of any removal, replacement, substitution or addition of any servicer, affiliated servicer, other servicer servicing 10% or more of pool assets at time of report, other
material servicers, or trustee.	  	X	  	X	  	X	  	
							
		  		  	Reg AB disclosure about any new servicer is also required.	  	X	  		  		  	
							
		  		  	Reg AB disclosure about any new trustee is also required.	  		  	X	  		  	
							
		  	6.03	  	Change in Credit Enhancement or Other External Support	  		  		  		  	
							
		  		  	Covers termination of any enhancement in manner other than by its terms, the addition of an enhancement, or a material change in the enhancement provided. Applies to external credit enhancements
as well as derivatives.	  		  	X	  	X	  	X
							
		  		  	Reg AB disclosure about any new enhancement provider is also required.	  		  	X	  	X	  	
							
		  	6.04	  	Failure to Make a Required Distribution	  		  	X	  		  	
							
		  	6.05	  	Securities Act Updating Disclosure	  		  		  		  	
							
		  		  	If any material pool characteristic differs by 5% or more at the time of issuance of the securities from the description in the final prospectus, provide updated Reg AB disclosure about the
actual asset pool.	  		  		  	X	  	
							
		  		  	If there are any new servicers or originators required to be disclosed under Regulation AB as a result of the foregoing, provide the information called for in Items 1108 and 1110
respectively.	  		  		  	X	  	

  

 I-10 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  	7.01	  	7.01 Regulation FD Disclosure	  	X	  	X	  	X	  	X
							
		  	8.01	  	Other Events	  		  		  		  	
							
		  		  	Any event, with respect to which information is not otherwise called for in Form 8-K, that the registrant deems of importance to Certificateholders.	  		  		  	X	  	X
							
		  	9.01	  	Financial Statements and Exhibits	  		  		  		  	
							
	10-K	  		  		  		  		  		  	
							
		  	9B	  	Other Information	  		  		  		  	
							
		  		  	Disclose any information required to be reported on Form 8-K during the fourth quarter covered by the Form 10-K but not reported	  		  		  		  	
							
		  	15	  	Exhibits and Financial Statement Schedules	  		  		  		  	
							
		  		  	Item 1112(b) – Significant Obligor Financial Information	  		  		  	X	  	
							
		  		  	Item 1114(b)(2) – Credit Enhancement Provider Financial Information	  		  		  		  	
							
		  		  	 Determining applicable disclosure threshold
	  		  		  		  	X
							
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  	X
							
		  		  	Item 1115(b) – Derivative Counterparty Financial Information	  		  		  		  	
							
		  		  	 Determining current maximum probable exposure
	  		  		  		  	X

  

 I-11 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	 Determining current significance percentage
	  		  		  		  	X
							
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  	X
							
		  		  	Item 1117 – Legal proceedings pending against the following entities, or their respective property, that is material to Certificateholders, including proceedings known to be contemplated by
governmental authorities:	  		  		  		  	
							
		  		  	Sponsor	  		  		  		  	X
							
		  		  	Depositor	  		  		  	X	  	
							
		  		  	Issuing entity	  		  		  	X	  	
							
		  		  	Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  	
							
		  		  	Trustee	  		  	X	  		  	
							
		  		  	Custodian	  		  	X	  		  	
							
		  		  	Item 1119 – Affiliations and relationships between the following entities, or their respective affiliates, that are material to Certificateholders:	  		  		  		  	
							
		  		  	Sponsor	  		  		  		  	X
							
		  		  	Depositor	  		  		  	X	  	
							
		  		  	Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  	
							
		  		  	Trustee	  		  	X	  		  	
							
		  		  	Custodian	  		  	X	  		  	
							
		  		  	Credit Enhancer/Support Provider	  		  		  	X	  	

  

 I-12 

													
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Trustee
	  	 Depositor
	  	 Sponsor

		  		  	Significant Obligor	  		  		  	X	  	
							
		  		  	Item 1122 – Assessment of Compliance with Servicing Criteria	  	X	  	X	  		  	
							
		  		  	Item 1123 – Servicer Compliance Statement	  	X	  		  		  	

  

 I-13

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