Document:

Ducommun Incorporated 2004 Bonus Plan.

 EXHIBIT 10.13 
  
 DUCOMMUN INCORPORATED 
  
 2004 BONUS PLAN SUMMARY 
  
 PURPOSE: Reward achievement of Annual Operating Plans to build profitability and provide competitive compensation levels for above average results. 
  
 CONCEPT: Formula-based incentive plan driven by net income (corporate), EBITA
(subsidiaries) and cash flow (corporate and subsidiaries). 
  
 PARTICIPANTS:
Five corporate positions, two subsidiary presidents, and fourteen other key subsidiary officers as set forth on Schedules A and D. 
  
 INCENTIVE AWARD RANGES: 0% to 150% of salary predicated on position. 
  
 INCENTIVE AWARD: Based on combination of: 
  
 1. Total Corporate performance to Target. 
  
 2. Subsidiary performance to Target. 
  
 3. Individual manager performance rating. 
  
 All awards to five corporate positions, two subsidiary presidents, and fourteen other key subsidiary officers subject to the approval of the Compensation Committee of the Board of
Directors. All other awards subject to approval of CEO. 
  
 The Compensation Committee, in
its discretion, may award bonus even if incentive plan financial targets are not met. 
  

 DUCOMMUN INCORPORATED 
 2004 BONUS PLAN 
 (in $000s) 
  

					
	 Definitions

	  	 	  	 
	 Net Income
	  	=	  	Ducommun consolidated net income excluding any write-off of goodwill and other intangibles.
			
	 EBITA
	  	=	  	Earning before interest, income taxes, amortization and corporate fee
			
	 Cash Flow
	  	 	  	 
	 (for corporate)
	  	=	  	Cash flow from operating activities minus net capital expenditures, but excluding the effect of any changes from December 31, 2003 to December 31, 2004 in accrued liabilities for (i) the
warranty reserve for 37 Apache main rotor blades ($1,605 @ 12/31/03), and (ii) customer overpayments at DT ($1,856 @ 12/31/03).
			
	 Cash Flow
	  	 	  	 
	 (for operating units)
	  	=	  	Cash flow from operating activities plus corporate fee, plus interest allocation, plus income taxes, minus net capital expenditures, but excluding the effect of any changes
from December 31, 2003 to December 31, 2004 in accrued liabilities for (i) the warranty reserve for 37 Apache main rotor blades ($1,605 @ 12/31/03), and (ii) customer overpayments at DT ($1,856 @ 12/31/03).

  
 General 
  

	n	 	No bonus will be paid to corporate or any subsidiary management unless Ducommun Net Income equals or exceeds 80% of Target; no bonus will be paid to any subsidiary management unless EBITA of
their operating unit equals or exceeds 80% of Target. 

	n	 	Bonus targets for the persons covered by this Plan are expressed as a percentage of average 2004 salaries as set forth on Schedules A and D. 

  

	n	 	Any person added to the Plan during the year must be approved by the CEO of Ducommun, and will be eligible to receive a pro rata bonus for the portion of the year employed.

  

	n	 	To be eligible to receive a bonus award, a person must be employed by Ducommun or a subsidiary at the time of payment of the bonus in the first quarter of 2005, unless a person’s
employment is terminated by Ducommun or a subsidiary without cause during the first quarter of 2005, in which case the person must be employed by Ducommun or a subsidiary on December 31, 2004. 

  

	n	 	All amounts shall be calculated after accrual, and/or allocation of the accrual from corporate, of the bonuses applicable to the particular operating unit. 

  

	n	 	All bonus pool amounts shall be calculated on a linear basis for performance between two data points. 

  

	n	 	All bonus awards to the persons listed on Schedules A and D are subject to the approval and are at the discretion of the Compensation Committee of the Board of Directors of Ducommun. The
Compensation Committee shall make all interpretations of this Plan, and shall have discretion to make exceptions or adjustments as it deems appropriate. 

  
 Corporate 
  

	n	 	Based one-half on Net Income and one-half on Cash Flow relative to Target as set forth on Schedule B. 

  

	n	 	Shortfall in performance on one metric may be offset by over performance on the other metric. (For example, 90% of Target for Cash Flow and 110% of Target for Net Income earns Target bonus.)

 Operating Units 
  

	 	n	 	Based one-half on the operating unit EBITA and one-half on the operating unit Cash Flow relative to Target set forth on Schedule B, subject to limits based on Ducommun Net Income.

  

	n	 	Operating unit bonus awards are subject to the following limitations based on Ducommun Net Income regardless of the specific operating unit performance: 

  

			
	 Ducommun
 Net
Income

	 	 Maximum Bonus
 For Operating Unit

	 Less than 80% of Target
	 	None
	 80 – 99% of Target
	 	Target Bonus
	 100 – 124% of Target
	 	2 x Target Bonus
	 125% + of Target
	 	3 x Target Bonus

  

	n	 	Shortfall in performance on one metric may be offset by over performance on the other metric.Code of Ethics

 EXHIBIT 10(a)(1) 
  
 Code of Ethics for Persons Acting in Capacity of 
 CEO and Financial Executives of 
 Allstate Assurance Company Separate Account B 
  
 In my role as Chairman of the Board of Managers of Allstate Assurance Company Separate
Account B (the “Separate Account”) acting as the Chief Executive Officer, the Chief Financial Officer, or certain of the Chief Financial Officer’s direct reports, I certify that I will seek to adhere to the following principles and
responsibilities, which are in addition to any other applicable requirements set forth in Allstate Assurance Company Separate Account B Code of Ethics applicable to every director, officer, general partner, Portfolio Manager, or Advisory Person of
the Separate Account, and Adviser or any other Separate Account policy statements as amended from time to time: 
  

	1.	Acting ethically and with honesty in my work on behalf of the Separate Account and avoiding conflicts of interest in my personal and professional relationships, and expecting
those that work with and for me to do likewise. 

  

	2.	Disclosing information that is full, fair, accurate, timely and understandable in all SEC filings and public communications. 

  

	3.	Complying with applicable laws, rules, and regulations of the countries, states, local governments, agencies, and stock exchanges that regulate the business of the Separate
Account. 

  

	4.	Promptly reporting violations of this Code of Ethics, or any other applicable Separate Account policy statements, to the Office of Business Practices and Ethics or any other
appropriate Separate Account officer, auditor, director or regulator.  

  

	5.	Assuming personal accountability for adherence to this Code of Ethics, and understanding that I am subject to disciplinary action, up to and possibly including termination, for
failure to do so. 

  
 I understand that I may choose to remain
anonymous in reporting any violation of this Code of Ethics and that any questions regarding this Code of Ethics should be directed to the Office of Business Practices and Ethics. I understand that any waivers of this Code of Ethics can only be made
by the Separate Account’s Board of Managers and must be reported by the Separate Account to the SEC. 
  

			
	 By:
	 	  

		
	 Name:
	 	 
		
	 Date:INDENTURE,DATED AS OF FEBRUARY 1,2004

 Exhibit 4.1 
  

EXECUTION COPY 
  
 INDENTURE 
  
 dated as of February 1, 2004 
  
  

by and between 
  
  
 ACCREDITED MORTGAGE LOAN TRUST 2004-1, 
  
 as Issuer 
  
 and 
  
  
 DEUTSCHE BANK NATIONAL TRUST COMPANY 
  
 as Indenture Trustee 
  

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page

	 ARTICLE I
	  	 
		
	 DEFINITIONS
	  	 
			
	 Section 1.01.
	  	General Definitions	  	4
		
	 ARTICLE II
	  	 
		
	 THE NOTES
	  	 
			
	 Section 2.01.
	  	Forms Generally	  	4
	 Section 2.02.
	  	Form of Certificate of Authentication	  	4
	 Section 2.03.
	  	General Provisions with Respect to Principal and Interest Payment	  	4
	 Section 2.04.
	  	Denominations	  	5
	 Section 2.05.
	  	Execution, Authentication, Delivery and Dating	  	5
	 Section 2.06.
	  	Registration, Registration of Transfer and Exchange	  	5
	 Section 2.07.
	  	Mutilated, Destroyed, Lost or Stolen Notes	  	7
	 Section 2.08.
	  	Payments of Principal and Interest	  	8
	 Section 2.09.
	  	Persons Deemed Owner	  	9
	 Section 2.10.
	  	Cancellation	  	10
	 Section 2.11.
	  	Authentication and Delivery of Notes	  	10
	 Section 2.12.
	  	Book-Entry Note	  	12
	 Section 2.13.
	  	Termination of Book Entry System	  	12
		
	 ARTICLE III
	  	 
		
	 COVENANTS, REPRESENTATIONS AND WARRANTIES
	  	 
			
	 Section 3.01.
	  	Payment of Notes	  	13
	 Section 3.02.
	  	Maintenance of Office or Agency	  	13
	 Section 3.03.
	  	Money for Note Payments to Be Held in Trust	  	13
	 Section 3.04.
	  	Existence of Trust	  	15
	 Section 3.05.
	  	Protection of Trust Estate	  	16
	 Section 3.06.
	  	Opinions as to the Trust Estate	  	16
	 Section 3.07.
	  	Performance of Obligations	  	17
	 Section 3.08.
	  	Investment Company Act	  	17
	 Section 3.09.
	  	Negative Covenants	  	17
	 Section 3.10.
	  	Annual Statement as to Compliance	  	18
	 Section 3.11.
	  	Restricted Payments	  	18
	 Section 3.12.
	  	Treatment of Notes as Debt for Tax Purposes	  	19
	 Section 3.13.
	  	Notice of Events of Default	  	19
	 Section 3.14.
	  	Further Instruments and Acts	  	19
	 Section 3.15.
	  	Representation and Warranties of the Issuer.	  	19
		
	 ARTICLE IV
	  	 
		
	 SATISFACTION AND DISCHARGE
	  	 
			
	 Section 4.01.
	  	Satisfaction and Discharge of Indenture	  	20

  

 i 

					
	 	  	 	  	Page

	 Section 4.02.
	  	Application of Trust Money	  	22
	 Section 4.03.
	  	Subrogation and Cooperation.	  	22
		
	 ARTICLE V.
	  	 
		
	 DEFAULTS AND REMEDIES
	  	 
			
	 Section 5.01.
	  	Event of Default	  	23
	 Section 5.02.
	  	Acceleration of Maturity; Rescission and Annulment	  	24
	 Section 5.03.
	  	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	  	25
	 Section 5.04.
	  	Remedies	  	25
	 Section 5.05.
	  	Indenture Trustee May File Proofs of Claim	  	26
	 Section 5.06.
	  	Indenture Trustee May Enforce Claims Without Possession of Notes	  	26
	 Section 5.07.
	  	Application of Money Collected	  	26
	 Section 5.08.
	  	Limitation on Suits	  	28
	 Section 5.09.
	  	Unconditional Rights of Noteholders to Receive Principal and Interest	  	29
	 Section 5.10.
	  	Restoration of Rights and Remedies	  	29
	 Section 5.11.
	  	Rights and Remedies Cumulative	  	29
	 Section 5.12.
	  	Delay or Omission Not Waiver	  	29
	 Section 5.13.
	  	Control by Noteholders	  	30
	 Section 5.14.
	  	Waiver of Past Defaults	  	30
	 Section 5.15.
	  	Undertaking for Costs	  	30
	 Section 5.16.
	  	Waiver of Stay or Extension Laws	  	31
	 Section 5.17.
	  	Sale of Trust Estate	  	31
	 Section 5.18.
	  	Action on Notes	  	32
	 Section 5.19.
	  	No Recourse	  	33
	 Section 5.20.
	  	Application of the Trust Indenture Act	  	33
	 Section 5.21.
	  	Suspension and Termination of Note Insurer’s Rights	  	33
		
	 ARTICLE VI
	  	 
		
	 THE INDENTURE TRUSTEE
	  	 
			
	 Section 6.01.
	  	Duties of Indenture Trustee	  	33
	 Section 6.02.
	  	Notice of Default	  	35
	 Section 6.03.
	  	Rights of Indenture Trustee	  	36
	 Section 6.04.
	  	Not Responsible for Recitals, Issuance of Notes or Mortgage Loans	  	37
	 Section 6.05.
	  	May Hold Notes	  	37
	 Section 6.06.
	  	Money Held in Trust	  	37
	 Section 6.07.
	  	Eligibility, Disqualification	  	38
	 Section 6.08.
	  	Indenture Trustee’s Capital and Surplus	  	38
	 Section 6.09.
	  	Resignation and Removal; Appointment of Successor	  	38
	 Section 6.10.
	  	Acceptance of Appointment by Successor Indenture Trustee	  	39
	 Section 6.11.
	  	Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee	  	40
	 Section 6.12.
	  	Preferential Collection of Claims Against Trust	  	40
	 Section 6.13.
	  	Co-Indenture Trustees and Separate Indenture Trustees	  	40

  

 ii 

					
	 	  	 	  	Page

	 Section 6.14.
	  	Authenticating Agents	  	41
	 Section 6.15.
	  	Review of Mortgage Files	  	42
	 Section 6.16.
	  	Indenture Trustee Fees and Expenses Indemnification	  	43
		
	 ARTICLE VII
	  	 
		
	 NOTEHOLDERS’ LISTS AND REPORTS
	  	 
			
	 Section 7.01.
	  	Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders	  	44
	 Section 7.02.
	  	Preservation of Information: Communications to Noteholders	  	44
	 Section 7.03.
	  	Reports by Indenture Trustee	  	45
	 Section 7.04.
	  	Reports by Trust	  	45
		
	 ARTICLE VIII
	  	 
		
	 ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
	  	 
			
	 Section 8.01.
	  	Accounts; Investment; Collection of Moneys	  	45
	 Section 8.02.
	  	Payments; Statements	  	48
	 Section 8.03.
	  	Claims against the Note Insurance Policy	  	50
	 Section 8.04.
	  	General Provisions Regarding the Payment Accounts and Mortgage Loans	  	52
	 Section 8.05.
	  	Releases of Deleted Mortgage Loans	  	53
	 Section 8.06.
	  	Reports by Indenture Trustee to Noteholders; Access to Certain Information	  	53
	 Section 8.07.
	  	Release of Trust Estate	  	54
	 Section 8.08.
	  	Amendment to Sale and Servicing Agreement	  	54
	 Section 8.09.
	  	Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement	  	54
	 Section 8.10.
	  	Master Servicer as Agent	  	55
	 Section 8.11.
	  	Termination of Master Servicer	  	55
	 Section 8.12.
	  	Opinion of Counsel	  	55
	 Section 8.13.
	  	Appointment of Collateral Agents	  	55
	 Section 8.14.
	  	Rights of the Note Insurer to Exercise Rights of Noteholders	  	55
	 Section 8.15.
	  	Trust Estate and Accounts Held for Benefit of the Note Insurer	  	56
		
	 ARTICLE IX
	  	 
		
	 SUPPLEMENTAL INDENTURES
	  	 
			
	 Section 9.01.
	  	Supplemental Indentures Without Consent of Noteholders	  	56
	 Section 9.02.
	  	Supplemental Indentures with Consent of Noteholders	  	57
	 Section 9.03.
	  	Execution of Supplemental Indentures	  	59
	 Section 9.04.
	  	Effect of Supplemental Indentures	  	59
	 Section 9.05.
	  	Conformity With Trust Indenture Act	  	59
	 Section 9.06.
	  	Reference in Notes to Supplemental Indentures	  	59
	 Section 9.07.
	  	Amendments to Governing Documents	  	59

  

 iii 

					
	 	  	 	  	Page

	 ARTICLE X
	  	 
		
	 REDEMPTION OF NOTES
	  	 
			
	 Section 10.01.
	  	Redemption of Notes	  	60
	 Section 10.02.
	  	Form of Redemption Notice	  	61
	 Section 10.03.
	  	Notes Payable on Optional Redemption	  	61
	 Section 10.04.
	  	Auction Sale	  	62
		
	 ARTICLE XI
	  	 
		
	 MISCELLANEOUS
	  	 
			
	 Section 11.01.
	  	Compliance Certificates and Opinions	  	62
	 Section 11.02.
	  	Form of Documents Delivered to Indenture Trustee	  	63
	 Section 11.03.
	  	Acts of Noteholders	  	64
	 Section 11.04.
	  	Notices, etc., to Indenture Trustee, the Note Insurer and Trust	  	64
	 Section 11.05.
	  	Notices and Reports to Noteholders; Waiver of Notices	  	66
	 Section 11.06.
	  	Rules by Indenture Trustee	  	66
	 Section 11.07.
	  	Conflict with Trust Indenture Act	  	66
	 Section 11.08.
	  	Effect of Headings and Table of Contents	  	67
	 Section 11.09.
	  	Successors and Assigns	  	67
	 Section 11.10.
	  	Separability	  	67
	 Section 11.11.
	  	Benefits of Indenture	  	67
	 Section 11.12.
	  	Legal Holidays	  	67
	 Section 11.13.
	  	Governing Law	  	67
	 Section 11.14.
	  	Counterparts	  	67
	 Section 11.15.
	  	Recording of Indenture	  	67
	 Section 11.16.
	  	Trust Obligation	  	68
	 Section 11.17.
	  	No Petition	  	68
	 Section 11.18.
	  	Inspection	  	69
	 Section 11.19.
	  	Usury	  	69
	 Section 11.20.
	  	Note Insurer Default	  	69
	 Section 11.21.
	  	Third-Party Beneficiary	  	69

  
 APPENDICES, SCHEDULES
AND EXHIBITS 
  

			
	 Appendix 1
	  	Defined Terms
		
	 Schedule 1
	  	Mortgage Loan Schedule
		
	 Exhibit A
	  	Form of Note

  

 iv 

 This INDENTURE, dated as of February 1, 2004 (as amended or supplemented from time to time as permitted
hereby, this “Indenture”), is between ACCREDITED MORTGAGE LOAN TRUST 2004-1, a Delaware statutory trust (together with its permitted successors and assigns, the “Trust” or the “Issuer”), and
DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as Indenture Trustee (together with its permitted successors in the trusts hereunder, the “Indenture Trustee”). 
  
 Preliminary Statement 
  
 The Trust has duly authorized the execution and delivery of this Indenture to
provide for its Asset-Backed Notes, Series 2004-1 (the “Notes”), issuable as provided in this Indenture. All covenants and agreements made by the Trust herein are for the benefit and security of the Holders of the Notes and the Note
Insurer. The Trust is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. 
  
 All things necessary to make this Indenture a valid agreement of the Trust in
accordance with its terms have been done. 
  
 Granting Clause

  
 Subject to the terms of this Indenture, the Trust hereby
Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Class A-1 Noteholders and the Note Insurer, all of the Trust’s right, title and interest in and to: (i) the Trust Estate relating to Loan Group 1;
(ii) all right, title and interest of the Trust in the Sale and Servicing Agreement with respect to the Group 1 Mortgage Loans (including the Trust’s right to cause the Sponsor to repurchase Group 1 Mortgage Loans from the Trust under certain
circumstances described therein); (iii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing, each with respect to Loan Group 1; (iv) all funds on deposit from time to time in (a) the Collection Account relating to Loan Group 1 and (b) the Payment Account relating to Loan Group 1; (v) all other property
of the Trust relating to Loan Group 1 from time to time; and (vi) any and all proceeds of the foregoing (collectively with respect to Loan Group 1, the “Group 1 Collateral”). 
  
 The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any other amounts owing in respect of, the Class A-1 Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

  
 Subject to the terms of this Indenture, the Trust hereby
Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Class A-2 Noteholders and the Note 
  

 2 

 Insurer, all of the Trust’s right, title and interests in and to: (i) the Trust Estate relating to Loan Group 2;
(ii) all right, title and interest, of the Trust in the Sale and Servicing Agreement with respect to the Group 2 Mortgage Loans (including the Trust’s right to cause the Sponsor to repurchase Group 2 Mortgage Loans from the Trust under certain
circumstances described therein); (iii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in
respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper,
checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in
the proceeds of any of the foregoing, each with respect to Loan Group 2; (iv) all funds on deposit from time to time in (a) the Collection Account relating to Loan Group 2 and (b) the Payment Account relating to Loan Group 2; (v) all other property
of the Trust relating to Loan Group 2 from time to time; and (vi) any and all proceeds of the foregoing (collectively with respect to Loan Group 2, the “Group 2 Collateral”. 
  
 The foregoing Grant is made in trust to secure the payment of principal of
and interest on, and any), other amounts owing in respect of, the Class A-2 Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture.

  
 Subject to the terms of this Indenture, the Trust hereby
Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Class A-1 Noteholders, and the Class A-2 Noteholders and the Note Insurer, all of the Trust’s right, title and interest in and to both Reserve
Accounts; provided, however, that with respect to the Class A-1 Net WAC Cap Carry-Forward Amount, only amounts on deposit in the related Reserve Account are available to pay the Class A-1 Net Cap WAC Carry-Forward Amount; provided, further, that
with respect to the Class A-2 Net WAC Cap Carry Forward Amount, only amounts on deposit in the related Reserve Account and the Yield Maintenance Account are available to pay the Class A-2 Net WAC Cap Carry-Forward Amount. 
  
 The foregoing Grants shall inure to the benefit of the Note Insurer in
respect of draws made on the Note Insurance Policy and amounts owing from time to time pursuant to the Insurance Agreement, and such Grants shall continue in full force and effect for the benefit of the Note Insurer until all such amounts owing to
it have been repaid in full. 
  
 The Indenture Trustee, as
Indenture Trustee on behalf of the holders of each Group of Notes, acknowledges the foregoing Grants, accepts the trusts hereunder in good faith and without notice of any adverse claim or liens and agrees to perform its duties required in this
Indenture as specifically set forth herein to the end that the interests of the holders of the related Notes and the Note Insurer may be adequately and effectively protected. The Indenture Trustee agrees and acknowledges that each item of Collateral
that is physically delivered to the Indenture Trustee will be held by the Indenture Trustee in California. The Indenture Trustee agrees that it will hold the Note Insurance Policy in trust and that it will hold any proceeds of any claim upon the
Note Insurance Policy, solely for the use and benefit of the Noteholders in accordance with the terms hereof and the Note Insurance Policy. 
  

 3 

 ARTICLE I 
  

DEFINITIONS 
  
 Section 1.01. General Definitions. Except as otherwise specified or as the context may otherwise require, the terms defined in Appendix I have the
respective meanings set forth in such Appendix I for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine
genders of such terms. Whenever reference is made herein to an Event of Default or a Default known to the Indenture Trustee or of which the Indenture Trustee has notice or knowledge, such reference shall be construed to refer only to an Event of
Default or Default of which the Indenture Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms used herein that are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference
therein, have the meanings assigned to them therein. 
  
 ARTICLE
II 
  
 THE NOTES 
  
 Section 2.01. Forms Generally. The Notes shall be substantially in the
form set forth as Exhibit A attached hereto. Each Note may have such letters, numbers or other marks of indemnification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on
which the Notes may be listed, or as may, consistently herewith, be determined by the Trust, as evidenced by its execution thereof. Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate reference on the face
of the Note. 
  
 The Definitive Notes may be produced in any
manner determined by the Trust, as evidenced by its execution thereof. 
  
 Section 2.02. Form of Certificate of Authentication. The form of the Authenticating Agent’s certificate of authentication is as set forth on the signature page of the form of the Note attached hereto as Exhibit A.

  
 Section 2.03. General Provisions with Respect to Principal
and Interest Payment. The Notes shall be designated generally as the “Accredited Mortgage Loan Trust 2004-1, Asset-Backed Notes, Series 2004-1”. 
  

The Notes shall be issued in the form specified in Section 2.01 hereof. The Notes shall be issued in two Classes, the Class A-1 Notes, and Class A-2
Notes. The aggregate Original Note Principal Balance of Notes that may be authenticated and delivered under the Indenture is limited to $250,121,000 of Class A-1 Notes and $254,879,000 of Class A-2 Notes, except for the Notes authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture. 
  

 4 

 Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.02 of this Indenture, the principal of each
Class of Notes shall be payable in installments ending no later than the related Final Stated Maturity Date, unless the unpaid principal of such Notes become due and payable at an earlier date by declaration of acceleration or call for redemption or
otherwise. 
  
 All payments made with respect to any Note shall be
applied first to the interest then due and payable on such Note and then to the principal thereof. All computations of interest accrued on any Note shall be made on the basis of a year of 360 days and the actual number of days elapsed in the related
Accrual Period. 
  
 Notwithstanding any of the foregoing
provisions with respect to payments of principal of and interest on the Notes, if the Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and
annulled, then payments of principal of and interest on the Notes shall be made in accordance with Section 5.07 hereof. 
  
 Section 2.04. Denominations. The Notes shall be issuable only as registered Notes in the denominations equal to the Authorized Denominations.

  
 Section 2.05. Execution, Authentication, Delivery and
Dating. The Notes shall be executed on behalf of the Trust by an Authorized Officer of the Owner Trustee, acting at the direction of the Certificateholders. The signature of such Authorized Officer of the Owner Trustee on the Notes may be manual
or by facsimile. 
  
 Notes bearing the manual or facsimile
signature of an individual who was at any time an Authorized Officer of the Owner Trustee shall bind the Trust, notwithstanding that such individual has ceased to be an Authorized Officer of the Owner Trustee prior to the authentication and delivery
of such Notes or was not an Authorized Officer of the Owner Trustee at the date of such Notes. 
  
 At any time and from time to time after the execution and delivery of this Indenture, the Trust may deliver Notes executed on behalf of the Trust to the Authenticating Agent for authentication, and the Authenticating
Agent shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. 
  
 Each Note authenticated on the Closing Date shall be dated the Closing Date. All other Notes that are authenticated after the Closing Date for any other
purpose hereunder shall be dated the date of their authentication. 
  
 No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for in Section 2.02 hereof,
executed by the Authenticating Agent by the manual signature of one of its Authorized Officers or employees, and such certificate of authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly
authenticated and delivered hereunder. 
  
 Section 2.06.
Registration, Registration of Transfer and Exchange. The Trust shall cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations 
  

 5 

 as it may prescribe, the Trust shall provide for the registration of Notes and the registration of transfers of Notes.
The Indenture Trustee is hereby initially appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Indenture Trustee shall remain the Note Registrar throughout the term hereof.
Upon any resignation of the Indenture Trustee, the Master Servicer, on behalf of the Trust, shall promptly appoint a successor, with the approval of the Note Insurer, or, in the absence of such appointment, the Master Servicer, on behalf of the
Trust, shall assume the duties of Note Registrar. 
  
 If a Person
other than the Indenture Trustee is appointed by the Trust as Note Registrar, the Trust will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note
Register, and the Indenture Trustee shall have the right to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note
Registrar by an Authorized Officer thereof as to the names and addresses of the Holders of the Notes and the principal amounts and number of such Notes. 
  
 Upon surrender for registration of transfer of any Note at the office or agency of the Trust to be maintained as provided in Section 3.02 hereof, the
Owner Trustee on behalf of the Trust, acting at the direction of the Certificateholders, shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees; one or more new Notes of
any authorized denominations and of a like aggregate initial Note Principal Balance. 
  
 At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations, and of a like aggregate Note Principal Balance, upon surrender of the Notes to be exchanged at such office or
agency. Whenever any Notes are so surrendered for exchange, the Owner Trustee shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making the exchange is entitled to receive. 
  
 All Notes issued upon any registration of transfer or exchange of Notes shall
be the valid obligations of the Trust, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. 
  
 Every Note presented or surrendered for registration of transfer or exchange
shall be duly endorsed, or be accompanied by a written instrument of transfer in the form included in Exhibit A attached hereto, duly executed by the Holder thereof or its attorney duly authorized in writing, with such signature guaranteed by
an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other
“signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. 
  
 No service charge shall be made for any registration of transfer or exchange of Notes, but the Note Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge as may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.07 or Section 9.06 hereof not involving any
transfer or any exchange made by the Note Insurer. 
  

 6 

 The Note Registrar shall not register the transfer of a Note unless the Note Registrar has received a
representation letter from the transferee to the effect that either (i) the transferee is a Plan and is not, directly or indirectly, acquiring the Note or any interest therein on behalf of, as investment manager of, as named fiduciary of, as trustee
of, or with the assets of a Plan or (ii) the acquisition and holding of the Note by the transferee qualifies for exemptive relief under a United States Department of Labor prohibited transaction class exemption (or, if the transferee is a
Governmental Plan, will not result in a violation of applicable law). Each Beneficial Owner of a Note which is a Book-Entry Note shall be deemed to make one of the foregoing representations. 
  
 Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any
mutilated Note is surrendered to the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered to the Note Registrar such security or indemnity as may be
required by the Note Registrar to save each of the Trust, the Owner Trustee, the Note Insurer and the Note Registrar harmless, then, in the absence of notice to the Note Registrar that such Note has been acquired by a bona fide purchaser, the Owner
Trustee on behalf of the Trust, acting at the direction of the Certificateholders, shall execute and upon its delivery of a Trust Request the Authenticating Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Note, a new Note or Notes of the same tenor and aggregate initial principal amount bearing a number not contemporaneously outstanding. If, after the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents for payment such original Note, the note Registrar, shall be entitled to recover such new Note from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and
shall be entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Trust, the Owner Trustee, the Note Insurer or the Note Registrar in connection therewith. If any such
mutilated, destroyed, lost, or stolen Note shall have become or shall be about to become due and payable, or shall have become subject to redemption in full, instead of issuing a new Note, the Trust may pay such Note without surrender thereof,
except that any mutilated Note shall be surrendered. 
  
 Upon the
issuance of any new Note under this Section 2.07, the Note 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 reasonable expenses (including the
fees and expenses of the Trust, the Indenture Trustee or the Note Registrar) connected therewith. 
  
 Every new Note issued pursuant to this Section 2.07 in lieu of any destroyed, lost or stolen Note shall constitute an original contractual obligation of
the Trust, whether or not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder.

  
 The provisions of this Section 2.07 are exclusive and shall
preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. 
  

 7 

 Section 2.08. Payments of Principal and Interest. (a) Payments on Notes issued as Book-Entry Notes
will be made by or on behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any installment of interest or principal payable on any Definitive Notes that is punctually paid or duly provided for by the Trust on the applicable Payment
Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Class of Notes and such Payment Date by either (i) wire transfer of immediately available
funds to the account of a Noteholder, if such Noteholder (a) is the registered holder of Definitive Notes having an initial principal amount of at least $1,000,000 and (b) has provided the Indenture Trustee with wiring instructions in writing by
five (5) Business Days prior to the related Record Date or has provided the Indenture Trustee with such instructions for any previous Payment Date or (ii) check mailed to such Person’s address as it appears in the Note Register on such Record
Date, except for the final installment of principal payable with respect to such Note, which shall be payable as provided in subsection (b) of this Section 2.08. A fee may be charged by the Indenture Trustee to a Holder of Definitive Notes for any
payment made by wire transfer. Any installment of interest or principal not punctually paid or duly provided for shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07 applies, pursuant to
Section 5.07. 
  
 Payments on Certificates will be made by or on
behalf of the Indenture Trustee to or at the direction of the Person in whose name such Certificate is registered by either (i) wire transfer of immediately available funds to the account directed by a Certificateholder, if such Certificateholder
(A) is Accredited Home Lenders, Inc. or its affiliate and (B) has provided the Indenture Trustee with wiring instructions in writing by five (5) Business Days prior to the related payment Date or has provided the Indenture Trustee with such
instructions for any previous Payment Date or (ii) check mailed to such Person’s address as it appears in the Certificate Register on such Record Date. A fee may be charged by the Indenture Trustee to a Certificateholder for any payment made by
wire transfer. The Indenture Trustee shall be entitled to rely on information provided by the Owner Trustee as Certificate Registrar as to all matters related to the Certificate Registrar and the Certificates. 
  
 (b) All reductions in the Note Principal Balance of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final installment of principal of each Note shall be payable only upon presentation and surrender thereof on or after the Payment Date therefor at the designated office of the Indenture Trustee
located within the United States of America pursuant to Section 3.02. 
  
 Whenever the Indenture Trustee expects that the entire unpaid Note Principal Balance of any Note will become due and payable on the next Payment Date, other than pursuant to a redemption pursuant to Article X, it shall, no later than two
(2) Business Days prior to such Payment Date, mail to each Person in whose name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a notice to the effect that: 
  
 (i) the Indenture Trustee expects that funds sufficient to
pay such final installment will be available in the related Payment Account on such Payment Date; and 
  

 8 

 (ii) if such funds are available, (a) such final installment will be payable on such
Payment Date, but only upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice) and (b) no interest shall
accrue on such Note after such Payment Date. 
  
 A copy of such
form of notice shall be sent to the Note Insurer by the Indenture Trustee. 
  
 Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with Section 10.02 hereof. 
  
 (c) Subject to the foregoing provisions of this Section 2.08, each Note delivered under this Indenture upon registration of transfer of or in exchange for
or in lieu of any other Note shall carry the rights to unpaid principal and interest that were carried by such other Note. Any checks mailed pursuant to paragraph (a) of this Section 2.08 and returned undelivered shall be held in accordance with
Section 3.03 hereof. 
  
 (d) The Indenture Trustee’s
Remittance Report, shall be prepared by the Indenture Trustee based on the loan level data provided in the Servicer Remittance Report delivered to the Indenture Trustee pursuant to the Sale and Servicing Agreement. The Indenture Trustee shall not
have any responsibility to recalculate, verify or recompute information contained in any tape, electronic data file or disk or Servicer Remittance Report delivered to the Indenture Trustee pursuant to the Sale and Servicing Agreement except to the
extent necessary to satisfy all obligations under this Section 2.08(d). 
  
 Within thirty (30) days after the end of each calendar year, the Indenture Trustee will be required to furnish to each Person who at any time during the calendar year was a Noteholder, if requested in writing by such person, a statement
containing the information set forth in subclauses (a), (b) and (c) in the definition of “Indenture Trustee’s Remittance Report,” aggregated for such calendar year. Such obligation will be deemed to have been satisfied to the extent
that substantially comparable information is provided pursuant to any requirements of the Code as are from time to time in force. 
  
 From time to time (but no more than once per calendar month), upon the written request of the Seller, the Sponsor, the Master Servicer, the Backup
Servicer or the Note Insurer, the Indenture Trustee shall report to the Seller, the Sponsor, the Master Servicer, the Backup Servicer and the Note Insurer the amount then held in each Account (including investment earnings accrued) held by the
Indenture Trustee and the identity of the investments included therein. From time to time, at the request of the Note Insurer, the Indenture Trustee shall report to the Note Insurer with respect to the actual knowledge of a Responsible Officer,
without independent investigation, of any breach of any of the representations or warranties relating to individual Mortgage Loans set forth in Section 4.01 of the Sale and Servicing Agreement. The Indenture Trustee shall also provide the Note
Insurer such other information within its control as may be reasonably requested by the Note Insurer. 
  
 Section 2.09. Persons Deemed Owner. Prior to due presentment for registration of transfer of any Note, any agent on behalf of the Trust including
but not limited to the Indenture 
  

 9 

 Trustee, or the Note Insurer, may treat the Person in whose name any Note is registered as the owner of such Note (a) on
the applicable Record Date for the purpose of receiving payments of the principal of and interest on such Note and (b) on any other date for all other purposes whatsoever, and none of the Trust, the Indenture Trustee or any other agent of the Trust,
or the Note Insurer shall be affected by notice to the contrary. 
  
 Section 2.10. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and shall be
promptly canceled by it. The Owner Trustee, on behalf of the Trust, shall deliver to the Note Registrar for cancellation any Note previously authenticated and delivered hereunder which the Owner Trustee, on behalf of the Trust may have acquired in
any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.10, except as expressly permitted by
this Indenture. All canceled Notes held by the Note Registrar shall be held by the Note Registrar in accordance with its standard retention policy, unless the Owner Trustee, on behalf of the Trust shall direct within 5 Business Days of receipt of
the cancelled note by a Trust Order that they be destroyed or returned to it. 
  
 Section 2.11. Authentication and Delivery of Notes. The Notes shall be executed by an Authorized Officer of the Owner Trustee, on behalf of the Trust; and delivered to the Authenticating Agent for
authentication, and thereupon the same shall be authenticated and delivered by the Authenticating Agent, upon a Trust Request and upon receipt by the Authenticating Agent of all of the following: 
  
 (a) A Trust Order authorizing the execution, authentication and delivery of
the Notes and specifying the Note Principal Balance and the Percentage Interest of such Notes to be authenticated and delivered. 
  
 (b) A Trust Order authorizing the execution and delivery of this Indenture and the Sale and Servicing Agreement. 
  
 (c) One or more Opinions of Counsel (which opinion shall not be at the
expense of the Indenture Trustee or the Trust) addressed to the Authenticating Agent and the Note Insurer or upon which the Authenticating Agent and the Note Insurer are expressly permitted to rely, complying with the requirements of Section 11.01,
reasonably satisfactory in form and substance to the Authenticating Agent and the Note Insurer. 
  
 In rendering the opinions set forth above, such counsel may rely upon Officer’s Certificates of the Trust, the Owner Trustee, the Seller, the
Sponsor, the Master Servicer, the Backup Servicer and the Indenture Trustee, without independent confirmation or verification with respect to factual matters relevant to such opinions. In rendering the opinions set forth above, such counsel need
express no opinion as to (a) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests that arise by operation of law and that do not require any filing or similar action in order to
take priority over a perfected security interest or (b) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of tile United States or any agency or instrumentality thereof (including federal tax
liens and liens arising under Title IV of ERISA). 
  

 10 

 The acceptability to the Note Insurer of the Opinion of Counsel delivered to the Authenticating Agent and
the Note Insurer at the Closing Date shall be conclusively evidenced by the delivery on the Closing Date of the Note Insurance Policy. 
  
 (d) An Officer’s Certificate of the Trust complying with the requirements of Section 11.01 and stating that: 
  
 (i) the Trust is not in Default under this Indenture and the
issuance of the Notes will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, the Trust’s Certificate of Trust or any indenture, mortgage, deed of trust or other agreement or instrument to
which the Trust is a party or by which it is bound, or any order of any court or administrative agency entered in any proceeding to which the Trust is a party or by which it may be bound or to which it may be subject, and that all conditions
precedent provided in this Indenture relating to the authentication and delivery of the Notes have been complied with; 
  
 (ii) the Trust is the owner of each Mortgage Loan, free and clear of any lien, security interest or charge, has not assigned any interest
or participation in any such Mortgage Loan (or, if any such interest or participation has been assigned, it has been released), and has the right to Grant each such Mortgage Loan to the Indenture Trustee; 
  
 (iii) the information set forth in the Mortgage Loan
Schedule attached as Schedule 1 to this Indenture is correct; 
  
 (iv) the Trust has Granted to the Indenture Trustee all of its right, title and interest in each Mortgage Loan; and 
  
 (v) as of the Closing Date, no lien in favor of the United States described in Section 6321 of the Code, or lien in favor of the Pension
Benefit Guaranty Corporation described in Section 4068(a) of the ERISA, has been filed as described in subsections 6323(f) and 6323(g) of the Code upon any property belonging to the Trust. 
  
 (e) An executed counterpart of the Sale and Servicing Agreement. 

 
 (f) An executed counterpart of the Cap Agreement. 
  
 (g) An executed counterpart of the Trust Agreement. 
  
 (h) An executed copy of the Insurance Agreement. 
  
 (i) An original executed copy of the Note Insurance Policy 
  
 (j) A copy of a letter from Moody’s that is has assigned a rating of
“Aaa” to each Class of the Notes and a copy of a letter from S&P that it has assigned a rating of “AAA” to each Class of the Notes. 
  

 11 

 (k) Evidence of the establishment of the Accounts. 
  
 Section 2.12. Book-Entry Note. The Notes will be issued initially as
one or more certificates in the name of Cede & Co., as nominee for the Clearing Agency maintaining book-entry records with respect to ownership and transfer of such Notes, and registration of the Notes may not be transferred by the Note
Registrar except upon the termination of the book-entry system as described in Section 2.13. In such case, the Note Registrar shall deal with the Clearing Agency as representative of the Beneficial Owners of such Notes for purposes of exercising the
rights of Noteholders hereunder. Each payment of principal of and interest on a Book-Entry Note shall be paid to the Clearing Agency, which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance
with its normal procedures. Each Clearing Agency Participant shall be responsible for disbursing such payments to the Beneficial Owners of the Book-Entry Notes 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 Beneficial Owners of the Book-Entry Notes that it represents. All
such credits and disbursements are to be made by the Clearing Agency and the Clearing Agency Participants in accordance with the provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if any, the Trust or the Note Insurer shall
have any responsibility therefor except as otherwise provided by applicable law. Requests and directions from, and votes of, such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners.

  
 Section 2.13. Termination of Book Entry System. (a) The
book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated upon the happening of any of the following: 
  
 (i) The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depository with respect to the Notes and a qualified successor Clearing Agency satisfactory to the Master Servicer is not located, on behalf of the Trust; 
  
 (ii) The Certificateholders, on behalf of the Trust, in their sole discretion, elect to terminate the
book-entry system by notice to the Clearing Agency and the Indenture Trustee; or 
  
 (iii) After the occurrence of an Event of Default (at which time the Indenture Trustee shall use all reasonable efforts to promptly notify
each Beneficial Owner through the Clearing Agency of such Event of Default), the Beneficial Owners of no less than 51% of the Note Principal Balance of the Book-Entry Notes advise the Indenture Trustee in writing, through the related Clearing Agency
Participants and the Clearing Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any Definitive Notes being issued to any person other than the Clearing Agency or its nominee is no longer in the best
interests of the Beneficial Owners. 
  
 (b) Upon the occurrence of
any event described in subsection (a) of this Section 2.13, the Indenture Trustee shall use all reasonable efforts to notify all Beneficial Owners, through the Clearing Agency, of the occurrence of such event and of the availability of 

 

 12 

 Definitive Notes to Beneficial Owners requesting the same, in an aggregate outstanding Note Principal Balance
representing the interest of each, making such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous calls for redemption. Definitive Notes shall be issued only upon surrender to the Indenture Trustee
of the global Note by the Clearing Agency, accompanied by registration instructions for the Definitive Notes. Neither the Trust nor the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on,
and shall be protected in relying on, such instructions. Upon issuance of the Definitive Notes, all references herein to obligations imposed upon or to be performed by the Clearing Agency shall cease to be applicable and the provisions relating to
Definitive Notes shall be applicable. 
  
 ARTICLE III

  
 COVENANTS, REPRESENTATIONS AND WARRANTIES

  
 Section 3.01. Payment of Notes. The Trust will pay
or cause to be duly and punctually paid the principal of, and interest on, the Notes in accordance with the terms of the Notes and this Indenture. The Notes shall be non-recourse obligations of the Trust and shall be limited in right of payment to
amounts available from the Trust Estate as provided in this Indenture and the Trust shall not otherwise be liable for payments on the Notes. No person shall be personally liable for any amounts payable under the Notes. If any other provision of this
Indenture conflicts or is deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control. 
  
 Section 3.02. Maintenance of Office or Agency. The Indenture Trustee will always maintain an office at a location in the United States of America
where Notes may be surrendered for registration of transfer or exchange, which as of the Closing Date shall be located c/o DTC Transfer Agent Services, 55 Water Street, Jeanette Park Entrance, New York New York 10041. Notices and demands to or upon
the Trust in respect of the Notes and this Indenture may be delivered at the Corporate Trust Office of the Indenture Trustee. 
  
 The Owner Trustee, at the direction of the Certificateholders, on behalf of the Trust may also from time to time, at the expense of the
Certificateholders, designate one or more other offices or agencies within the United States of America where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided,
however, any designation of an office or agency for payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at the direction of the Certificateholders, on behalf of the Trust will give prompt written notice to the Indenture
Trustee and the Note Insurer of any such designation or rescission and of any change in the location of any such other office or agency. 
  
 Section 3.03. Money for Note Payments to Be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be made
from amounts withdrawn from the related Payment Account pursuant to Sections 5.07 or 8.02 hereof shall be made on behalf of the Trust by the Indenture Trustee, and no amounts so withdrawn from the related Payment Account for payments on the Notes
shall be paid over to the Trust under any circumstances except as provided in this Section 3.03 or in Sections 5.07 or 8.02 hereof. 
  

 13 

 With respect to Definitive Notes, if the Trust shall have a Note Registrar that is not also the Indenture
Trustee, such Note Registrar shall furnish, no later than the fifth (5th) calendar day after each Record Date, a list, in such form as such Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes and of the
number of Individual Notes held by each such Holder. 
  
 Whenever
the Trust shall have a Paying Agent other than the Indenture Trustee, the Master Servicer, on behalf of the Trust, will, on or before the Business Day next preceding each Payment Date, direct the Indenture Trustee to deposit with such Paying Agent
an aggregate sum sufficient to pay the amounts then becoming due (to the extent funds are then available for such purpose in the related Payment Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any moneys
deposited with a Paying Agent in excess of an amount sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Trust Order, be paid over by such Paying Agent to the Indenture Trustee for
application in accordance with Article VIII hereof. 
  
 Subject to
the prior written consent of the Note Insurer, any Paying Agent other than the Indenture Trustee, may be appointed by Trust Order and at the expense of the Trust. The Trust shall not appoint any Paying Agent (other than the Indenture Trustee) that
is not, at the time of such appointment, a depository institution or trust company whose obligations would be Permitted Investments pursuant to clause (b) of the definition of the term “Permitted Investments”. The Master Servicer, on
behalf of the Trust, will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee and the Owner Trustee, on behalf of the Trust, an instrument in which such Paying Agent shall agree with the Indenture
Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying Agent will: 
  

(a) allocate all sums received for payment to the Holders of Notes on each Payment Date among such Holders in the proportion specified in the
applicable Indenture Trustee’s Remittance Report, in each case to the extent permitted by applicable law; 
  
 (b) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; 
  
 (c) if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it
in trust for the payment of the Notes if at any time the Paying Agent ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its appointment; 
  
 (d) if such Paying Agent is not the Indenture Trustee, give the Indenture Trustee notice of any Default by the Trust (or any
other obligor upon the Notes) in the making of any payment required to be made with respect to any Notes for which it is acting as Paying Agent; 
  

 14 

 (e) if such Paying Agent is not the Indenture Trustee, at any time during the continuance of any Default
by the Trust (or any other obligor upon the Notes), upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; and 
  
 (f) comply with all requirements of the Code, and all regulations thereunder,
with respect to withholding from any payments made by it on any Notes of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith; provided, however, that with
respect to withholding and reporting requirements applicable to original issue discount (if any) on any of the Notes, the Master Servicer, on behalf of the Trust, has provided the calculations pertaining thereto to the Indenture Trustee and the
Paying Agent. 
  
 The Trust may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or any other purpose, by Trust Order direct any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture Trustee all sums held in trust by such Paying Agent, such sums to
be held by the Indenture Trustee in the same trusts as such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further liability with respect to such
money. 
  
 Any money held by the Indenture Trustee or any Paying
Agent in trust for the payment of any amount due with respect to any Note and remaining unclaimed for two and one-half years after such amount has become due and payable to the Holder of such Note (or if earlier, three months before the date on
which such amount would escheat to a governmental entity under applicable law) shall be discharged from such trust and paid to the Trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Trust for
payment thereof (but only to the extent of the amounts so paid to the Trust), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Indenture Trustee may adopt and employ, at the
expense of the Trust, any reasonable means of notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or
interest in moneys due and payable but not claimed is determinable from the records of the Indenture Trustee or an), Paying Agent, at the last address of record for each such Holder). 
  
 Section 3.04. Existence of Trust. (a) Subject to paragraphs (b) and (c) of this Section 3.04, the Trust will keep in
full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware or under the laws of any other state of the United States of America, and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the other Basic Documents. 
  
 (b) Subject to Section 3.09(g) hereof, and with the prior written consent of the Note Insurer, any entity into which the
Trust may be merged or with which it may be consolidated, or any entity resulting from any merger or consolidation to which the Trust shall be 
  

 15 

 a party, shall be the successor issuer under this Indenture without the execution or filing of any paper, instrument or
further act to be done on the part of the parties hereto, anything in any agreement relating to such merger or consolidation, by which any such Trust may seek to retain certain powers, rights and privileges therefore obtaining for any period of time
following such merger or consolidation to the contrary notwithstanding (other than Section 3.09(g)). 
  
 (c) Upon any consolidation or merger of or other succession to the Trust in accordance with this Section 3.04, the Person formed by or surviving such
consolidation or merger (if other than the Trust) may exercise every right and power of, and shall have all of the obligations of, the Trust under this Indenture with the same effect as if such Person had been named as the issuer herein. 

 
 Section 3.05. Protection of Trust Estate. (a) The Trust will, from
time to time, execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or
advisable to: 
  
 (i) Grant more effectively all
or any portion of the Trust Estate as made by this Indenture; 
  
 (ii) maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof; 
  
 (iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; 
  
 (iv) enforce any of the Mortgage Loans or the Sale and
Servicing Agreement; or 
  
 (v) preserve and
defend title to the Trust Estate and the rights of the Indenture Trustee, the Noteholders and the Note Insurer in the Mortgage Loans and the other property held as part of the Trust Estate against the claims of all Persons and parties. 

 
 (b) The Indenture Trustee shall not remove any portion of the Trust Estate
that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the Closing Date (provided that the Indenture Trustee may allow for the release of the Indenture Trustee’s
Mortgage File as provided in tile Sale and Servicing Agreement) or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of book-entry securities to be recorded on the books of a Person located in a different
jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture
with respect to such property will continue to be maintained after giving effect to such action or actions. 
  
 Section 3.06. Opinions as to the Trust Estate. On or before March 15th in each calendar year, beginning in 2005, the Master Servicer, on behalf of
the Trust, shall furnish to the Backup Servicer, the Indenture Trustee and the Note Insurer an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee and the Note Insurer either stating 
  

 16 

 that, in the opinion of such counsel, such action has been taken as is necessary to maintain the lien and security
interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe all such
action, if any, that will, in the opinion of such counsel, be required to be taken to maintain the lien and security interest of this Indenture with respect to the Trust Estate until February 1st in the following calendar year. 
  
 Section 3.07. Performance of Obligations. (a) The Trust shall
punctually perform and observe all of its obligations under this Indenture and the other Basic Documents. 
  
 (b) The Trust shall not take any action and will use its Best Efforts not to permit any action to be taken by others that would release any Person from
any of such Person’s covenants or obligations under any of the Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the other Basic Documents or such document included in the Mortgage File or other instrument or
unless such action will not adversely affect the interests of the Noteholders and the Note Insurer. 
  
 (c) If the Master Servicer or the Owner Trustee, on behalf of the Trust, shall have knowledge of the occurrence of a Servicer Event of Default, the Master
Servicer or the Owner Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note Insurer and the Rating Agencies thereof, and, in the case of the Master Servicer, shall specify in such notice the action, if any, the Master
Servicer is taking with respect to such default. 
  
 (d) Upon any
termination of the Master Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify the Note Insurer and the Rating Agencies. As soon as any successor Master Servicer is appointed,
the Indenture Trustee shall notify the Note Insurer and the Rating Agencies, specifying in such notice the name and address of such successor Master Servicer. 
  

Section 3.08. Investment Company Act. The Trust shall at all times conduct its operations so as not to be subject to, or shall comply with, the
requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder. 
  
 Section 3.09. Negative Covenants. The Trust shall not: 
  
 (a) sell, transfer, exchange or otherwise dispose of any portion of the Trust Estate, except as expressly permitted by this Indenture and the other Basic
Documents; 
  
 (b) claim any credit on, or make any deduction
from, the principal of, or interest on, any of the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of the payment of any taxes levied or assessed
upon any portion of the Trust Estate; 
  
 (c) engage in any
business or activity other than as permitted by the Trust Agreement or other than in connection with, or relating to, the issuance of the Notes pursuant to this Indenture, or amend the Trust Agreement, as in effect on the Closing Date, other than in
accordance with Section 12.01 of the Trust Agreement; 
  

 17 

 (d) incur, issue, assume or otherwise become liable for any indebtedness other than the Notes;

  
 (e) incur, assume, guaranty or agree to indemnify any Person
with respect to any indebtedness of any Person, except for such indebtedness as may be incurred by the Trust in connection with the issuance of the Notes pursuant to this Indenture; 
  
 (f) subject to Article X of the Trust Agreement, dissolve or liquidate in whole or in part (until the Notes are paid in
full); 
  
 (g) (i) permit the validity or effectiveness of this
Indenture or any Grant to be impaired, or permit the lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this Indenture,
except as may be expressly permitted hereby, (ii) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the Trust Estate or
any pall thereof or any interest therein or the proceeds thereof; or (iii) permit the lien of this Indenture not to constitute a valid perfected first priority (other than with respect to any such tax, mechanics’ or other lien) security
interest in the Trust Estate; or 
  
 (h) take any other action
that should reasonably be expected to, or fail to take any action if such failure should reasonably be expected to, cause the Trust to be taxable as (x) an association pursuant to Section 7701 of the Code and the corresponding regulations or (y) a
taxable mortgage pool pursuant to Section 7701(i) of the Code and the corresponding regulations. 
  
 Section 3.10. Annual Statement as to Compliance. On or before March 15, 2005, and each March 1 thereafter, the Master Servicer, on behalf of the
Trust, shall deliver to the Backup Servicer, the Indenture Trustee, the Note Insurer and the Sponsor a written statement, signed by an Authorized Officer of the Master Servicer, on behalf of the Trust, stating that: 
  
 (i) a review of the fulfillment by the Trust during such
year of its obligations under this Indenture has been made under such Authorized Officer’s supervision; and 
  
 (ii) to the best of such Authorized Officer’s knowledge, based on such review, the Trust has complied with all conditions and
covenants under this Indenture throughout such year, or, if there has been a Default in the fulfillment of any such covenant or condition, specifying each such Default known to such Authorized Officer and the nature and status thereof. 

 
 Section 3.11. Restricted Payments. The Trust shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Trust or otherwise
with respect to any ownership or equity interest or security in or of the Trust or to the Master Servicer, (ii) redeem, purchase, retire or otherwise acquire for value 
  

 18 

 any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such
purpose; provided, however, that the Trust may make, or cause to be made, distributions to the Master Servicer, the Backup Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer, the Noteholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under this Indenture and the other Basic Documents and the Trust will not, directly or indirectly, make or cause to be made payments to or distributions from any Payment Account
except in accordance with this Indenture. 
  
 Section 3.12.
Treatment of Notes as Debt for Tax Purposes. For purposes of federal, state and local income, franchise and any other income taxes, the Trust will treat the Notes as indebtedness, and hereby instructs the Indenture Trustee, Payee Agent, the
Master Servicer and the Backup Servicer, on behalf of the Trust to treat the Notes as indebtedness for all applicable tax reporting purposes. 
  
 Section 3.13. Notice of Events of Default. The Master Servicer, on behalf of the Trust, shall give the Backup Servicer, the Indenture Trustee, the
Note Insurer, the Rating Agencies and the Sponsor prompt written notice of each Event of Default hereunder of which it has knowledge, each default on the part of the Master Servicer of its obligations under the Sale and Servicing Agreement and each
default on the part of the Sponsor of its obligations under the Sale and Servicing Agreement. 
  
 Section 3.14. Further Instruments and Acts. Upon written request of the Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the Trust, will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. 
  
 Section 3.15. Representation and Warranties of the Issuer. 
  
 (a) The Issuer represents and warrants that the Issuer is duly authorized under applicable law and the Trust Agreement to
create and issue the Notes, to execute and deliver this Indenture, the other documents referred to herein to which it is a party and all instruments included in the Collateral which it has executed and delivered, and that all Trust action and
governmental consents, authorizations and approvals necessary or required therefor have been duly and effectively taken or obtained. The Notes, when issued, will be, and this Indenture and such other documents are, valid and legally binding
obligations of the Issuer enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance or other similar laws affecting the enforcement of
creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or in law. 
  
 (b) The Issuer represents and warrants that, immediately prior to its Grant of the Collateral provided for herein, it had
good title to, and was the sole owner of, the Mortgage Loans, free and clear of any pledge, lien, encumbrance or security interest. 
  
 (c) The Issuer represents and warrants that the Indenture Trustee has a valid and enforceable first priority security interest in the Collateral, subject
only to exceptions permitted hereby. 
  

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 (d) The Issuer represents and warrants it is not required to be registered as an “investment
company” under the 1940 Act. 
  
 (e) This Agreement shall
constitute a security agreement under applicable law and shall be deemed to create valid and continuing security interests (as defined in the applicable UCC) in the Collateral in favor of the Indenture Trustee, which security interest is prior to
all other Liens, and is enforceable as such as against creditors of and purchasers from the Issuer; 
  
 (f) Other than the security interest granted to the Indenture Trustee pursuant to this Agreement, the Issuer has not pledged, assigned, sold, granted a
security interest in, or otherwise conveyed any of the Collateral, has not authorized the filing of and is not aware of any financing statements against the Collateral that includes a description of collateral covering the Collateral other than any
financing statements relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated. The Issuer is not aware of any judgment or tax lien filings against the Issuer; 
  
 (g) The Issuer owns and has good and marketable title to the Collateral free
and clear of any Lien, claim or encumbrance of any Person; 
  
 (h)
The Issuer has caused or will have caused, within ten days, the filing of all appropriate financing statements in the appropriate filing offices under applicable law in order to perfect the security interest in the Collateral granted to the
Indenture Trustee hereunder. All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee (or any subsequent assignee, without limitation) in connection herewith describing the Collateral contain a statement to
the following effect, “A purchase of, or security interest in, any collateral described in this financing statement will violate the rights of the secured party;” and 
  
 (i) The Mortgage Loans constitute instruments within the meaning of the applicable UCC. 
  
 (j) The Issuer shall, to the extent consistent with this Agreement, take such
additional reasonable actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans and the other assets of the Collateral, such security interest would be a perfected security interest
of first priority under applicable law and will be maintained as such throughout the life of this Agreement. 
  
 ARTICLE IV 
  
 SATISFACTION AND DISCHARGE 
  
 Section 4.01.
Satisfaction and Discharge of Indenture. Whenever the following conditions shall have been satisfied: 
  
 (a) either; 
  
 (i) all Notes theretofore authenticated and delivered (other than (x) Notes that have been destroyed, lost or stolen and that have been
replaced or paid as provided in Section 2.07 hereof, and (y) Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Trust, as provided in Section 3.03 hereof) have been delivered to the Note Registrar for
cancellation; or 
  

 20 

 (ii) all Notes not theretofore delivered to the Note Registrar for cancellation, (a) have
become due and payable, or (b) will become due and payable at the Final Stated Maturity Date within one (1) year, or (c) are to be called for redemption pursuant to Section 10.01 hereof within one (1) year under irrevocable arrangements satisfactory
to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Sponsor, 
  
 and the Sponsor, in the case of clause ii(c), or Master Servicer, in the case of clauses (ii)(a) or (ii)(b) above, has irrevocably deposited or caused to be deposited
with the Indenture Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire unpaid Note Principal Balance of such Notes not theretofore delivered to the Indenture Trustee for cancellation, for principal and interest
to the Final Stated Maturity Date or to the applicable Redemption Date, as the case may be, and in the case of Notes that were not paid at the Final Stated Maturity Date of their entire unpaid Note Principal Balance, for all overdue principal and
all interest payable on such Notes to the next succeeding Payment Date therefor; 
  
 (b) the Master Servicer, on behalf of the Trust, has paid or caused to be paid all other sums payable hereunder by the Trust (including, without limitation, amounts due the Note Insurer); 
  
 (c) the Master Servicer, on behalf of the Trust, has delivered to the
Indenture Trustee and the Note Insurer an Officer’s Certificate and an Opinion of Counsel satisfactory in form and substance to the Indenture Trustee and the Note Insurer each stating that all conditions precedent herein providing for the
satisfaction and discharge of this Indenture have been complied with. 
  
 then,
upon a Trust Request, this Indenture and the lien, rights and interests created hereby and thereby shall cease to be of further effect, and the Indenture Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall,
at the expense of the Trust, execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and shall pay, or assign or transfer and deliver, to the Trust or upon Trust Order all cash,
securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in paragraphs (a) and (b) above. 
  

Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Indenture Trustee and any Paying Agent to the Trust and the
Holders of Notes under Section 3.03 hereof, the obligations of the Indenture Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes, registration
of transfers of Notes and rights to receive payments of principal of and interest on the Notes shall survive. 
  

 21 

 Section 4.02. Application of Trust Money. All money deposited with the Indenture Trustee pursuant
to Sections 3.03 and 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the Indenture Trustee may determine, to the
Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Indenture Trustee. 
  
 Section 4.03. Subrogation and Cooperation. 
  
 (a) The Trust and the Indenture Trustee acknowledge that (i) to the extent the Note Insurer makes payments under the Note Insurance Policy on account of
principal of or interest on the Notes the Note Insurer will be fully subrogated to the rights of the Noteholders to receive such principal of and interest on the Notes, and (ii) the Note Insurer shall be paid such principal and interest only from
the sources and in the manner provided herein and in the Insurance Agreement for the payment of such principal and interest. 
  
 (b) The Indenture Trustee shall cooperate in all respects with any reasonable written request or direction by the Note Insurer for action to preserve or
enforce the Note Insurer’s rights or interest under this Indenture, the Sale and Servicing Agreement or the Insurance Agreement, consistent with this Indenture and without limiting the rights of the Noteholders as otherwise set forth in the
Indenture, including without limitation upon the occurrence and continuance of a Default, a request to take any one or more of the following actions: 
  
 (i) institute proceedings for the collection of all amounts then payable on the Notes or under this Indenture in respect to the Notes and
all amounts payable under the Insurance Agreement and to enforce any judgment obtained and collect from the Trust monies adjudged due; 
  
 (ii) sell any Trust Estate or any portion thereof or rights or interest therein, at one or more public or private sales called and
conducted in any manner permitted by law; 
  
 (iii) cause the Sponsor to record all assignments that have not previously been recorded; 
  
 (iv) institute proceedings from time to time for the complete or partial foreclosure of this Indenture; and 
  
 (v) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and remedies of the Note Insurer hereunder. 
  
 (c) Following the payment in full of the Notes, the Note Insurer shall continue to have all rights and privileges provided to it under this Section 4.03
and in all other provisions of this Indenture, until all amounts owing to the Note Insurer have been paid in full. 
  

 22 

 ARTICLE V 
  

DEFAULTS AND REMEDIES 
  
 Section 5.01. Event of Default. “Event of Default”, wherever used herein, means, with respect to Notes issued hereunder, any one
of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body): 
  
 (a) if the Trust
shall fail to distribute or cause to be distributed to the Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Payment Date, any Interest Payment Amount due and payable on such Payment Date or (y) on the applicable Final
Stated Maturity Date for each of the Class A-1 Notes and Class A-2 Notes, any remaining Class A-1 Net WAC Cap Carry-Forward Amount or any remaining Class A-2 Net WAC Cap Carry-Forward Amount, as applicable; 
  
 (b) if the Trust shall fail to distribute or cause to be distributed to the
Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Payment Date, (other than the Final Stated Maturity Date) an amount equal to the Base Principal Payment Amount due on the Notes on such Payment Date, to the extent that
sufficient funds are on deposit in the Collection Account or (y) on the Final Stated Maturity Date for either Class of Notes, the aggregate outstanding Note Principal Balance of such Class of Notes; 
  
 (c) if the Trust shall breach or default in the due observance of any one or
more of the covenants hereof; 
  
 (d) if the Trust shall consent
to the appointment of a custodian, receiver, trustee or liquidator (or other similar official) of itself, or of a substantial part of its property, or shall admit in writing, its inability to pay its debts generally as they come due, or a court of
competent jurisdiction shall determine that the Trust is generally not paying its debts as they come due, or the Trust shall make a general assignment for the benefit of creditors; 
  
 (e) if the Trust shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization
in a proceeding under any bankruptcy laws (as now or hereafter in effect) or an answer admitting the material allegation of a petition filed against the Trust in any, such proceeding, or the Trust shall, by voluntary petition, answer or consent,
seek relief under the provisions of any now existing or future bankruptcy or other similar law providing for the reorganization or winding-up of debtors, or providing for an agreement, composition, extension or adjustment with its creditors;

  
 (f) if an order, judgment or decree shall be entered in any
proceeding by any court of competent jurisdiction appointing, without the consent (express or legally implied) of the Trust, a custodian, receiver, trustee or liquidator (or other similar official) of the Trust or any substantial part of its
property, or sequestering any substantial part of its respective property, and any such order, judgment or decree or appointment or sequestration shall remain in force undismissed, unstayed or unvacated for a period of ninety (90) days after the
date of entry thereof; 
  

 23 

 (g) if a petition against the Trust in a proceeding under applicable bankruptcy laws or other insolvency
laws, as now or hereafter in effect, shall be filed and shall not be stayed, withdrawn or dismissed within ninety (90) days thereafter, or if, under the provisions of any law providing for reorganization or winding-up of debtors which may apply to
the Trust, any court of competent jurisdiction shall assume jurisdiction, custody or control of the Trust or any substantial part of its property, and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or
unterminated for a period of ninety (90) days; or 
  
 (h) an event
of default under the Insurance Agreement. 
  
 Section 5.02.
Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then and in every such case, but with the consent of the Note Insurer in the absence of a Note Insurer Default, the Indenture Trustee may,
and at the written direction of the Note Insurer, in the absence of a Note Insurer Default, or, with the prior written consent of the Note Insurer, at the direction of Holders of Notes representing at least 51% of the Note Principal Balance of the
Outstanding Notes of both Classes, shall, declare all the Notes to be immediately due and payable by a notice in writing to the Trust (and to the Indenture Trustee if given by Noteholders), and upon any such declaration such Notes, in an amount
equal to the entire unpaid Note Principal Balance of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration, shall become immediately due and payable, all subject to the prior written consent of the Note
Insurer in the absence of a Note Insurer Default. 
  
 At any time
after such a declaration of acceleration of maturity of the Notes has been made and before a judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Note Insurer, in
the absence of a Note Insurer Default, or the Holders of Notes representing at least 51% of the Note Principal Balance of the Outstanding Notes of all both Classes, with the prior written consent of the Note Insurer in the absence of a Note Insurer
Default, by written notice to the Trust and the Indenture Trustee, may rescind and annul such declaration and its consequences if: 
  
 (a) the Trust has paid or deposited with the Indenture Trustee a sum sufficient to pay: 
  
 (i) all payments of principal of, and interest on, all Outstanding Notes and all other amounts that would
then be due hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and 
  
 (ii) all sums paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of
the Indenture Trustee, its agents and counsel; and 
  
 (b) all
Events of Default, other than the nonpayment of the principal of Notes that have become due solely by such acceleration, have been cured or waived as provided in Section 5.14 hereof. 
  

 24 

 No such rescission shall affect any subsequent Default or impair any right consequent thereon.

  
 Section 5.03. Collection of Indebtedness and Suits for
Enforcement by Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the following sentence, if an Event of Default occurs and is continuing, the Indenture Trustee may, with the prior written consent of the Note Insurer, and
shall at the written direction of the Note Insurer or of the Holders of Notes representing not less than 50% of the Note Principal Balance of the Outstanding Notes of all of both Classes, with the consent of the Note Insurer, proceed to protect and
enforce its rights and the rights of the Noteholders and the Note Insurer by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or enforce any other proper remedy. Any Proceedings brought by the Indenture Trustee; on behalf of the Noteholders and the Note Insurer, or any Noteholder against the Trust shall be
limited to the preservation, enforcement and foreclosure of the liens; assignments, rights and security interests under the Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any assets, properties
or funds of the Trust, other than the Trust Estate relative to the Notes in respect of which such Event of Default has occurred. If there is a foreclosure of any such liens, assignments, rights and security interests under this Indenture, by private
power of sale or otherwise, no judgment for any deficiency upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any Noteholder against the Trust. The Indenture Trustee shall be entitled to recover the
costs and expenses expended by it pursuant to this Article V including reasonable compensation, expenses, or disbursements incurred of the Indenture Trustee, its agents and counsel from the Trust Estate. 
  
 Section 5.04. Remedies. If an Event of Default shall have occurred and
be continuing and the Notes been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof, to the extent
applicable) shall, for the benefit of the Noteholders and the Note Insurer, do one or more of the following: 
  
 (a) institute Proceedings for the collection of all amounts then payable on the Notes, or under this Indenture, whether by declaration or otherwise,
enforce any judgment obtained, and collect from the Trust moneys adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03 hereof; 
  
 (b) in accordance with Section 5.17 hereof, sell the Trust Estate or any portion thereof or rights or interest therein, at one or more public or private
Sales called and conducted in any manner permitted by law; 
  
 (c)
institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; 
  
 (d) exercise any remedies of a secured party under the Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and
remedies of the Indenture Trustee or the Holders of the Notes and the Note Insurer hereunder; and 
  

 25 

 (e) refrain from selling the Trust Estate and apply all funds on deposit in each of the Accounts pursuant
to Section 5.07 hereof. 
  
 Section 5.05. Indenture Trustee May
File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, composition or other judicial Proceeding relative to the Trust or any other obligor upon any of the Notes or the
property of the Trust or of such other obligor or their creditors, the Indenture Trustee irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture
Trustee shall have made any demand on the Trust for the payment of any overdue principal or interest shall, with the prior written consent of the Note Insurer be entitled and empowered, by intervention in such Proceeding or otherwise to: 

 
 (a) file and prove a claim for the whole amount of principal and interest
owing and unpaid in respect of the Notes and file such other papers or documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and
advances of the Indenture Trustee, its agents and counsel), the Noteholders and the Note Insurer allowed in such Proceeding, and 
  
 (b) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee,
trustee, liquidator, or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each Noteholder and the Note Insurer to make such payments to the Indenture Trustee and, in the event that the Indenture Trustee shall
consent to the making of such payments directly to the Noteholders and the Note Insurer, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents
and counsel. 
  
 Nothing herein contained shall be deemed to
authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder or the Note Insurer any plan of reorganization, arrangement, adjustment or composition affecting any of the Notes or the rights of any Holder
thereof, or the Note Insurer, or to authorize the Indenture Trustee to vote in respect of the claim of any Noteholder or the Note Insurer in any such Proceeding. 
  
 Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under
this Indenture or any of the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture
Trustee, at the written direction of the Note Insurer, shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the Holders of the Notes and the Note Insurer in respect of
which such judgment has been recovered after payment of amounts required to be paid pursuant to paragraph (a) of Section 5.07 hereof. 
  
 Section 5.07. Application of Money Collected. If the Notes have been declared due and payable following an Event of Default and such declaration
and its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee with respect to each Class 
  

 26 

 of Notes pursuant to this Article V or otherwise and any other monies that may then be held or thereafter received by the
Indenture Trustee as security for such Class of Notes shall be applied in the following order, at the date or dates fixed by the Indenture Trustee and, in case of the payment of the entire amount due on account of principal of, and interest on, such
Class of Notes, upon presentation and surrender thereof: 
  
 (a)
first, to the Indenture Trustee, any unpaid Indenture Trustee Fees with respect to such Class then due and any other amounts payable and due to the Indenture Trustee with respect to such Class under this Indenture including any amounts in
respect of indemnification or reimbursement of costs and expenses including costs or expenses incurred by it in connection with the enforcement of the remedies provided for in this Article V (subject to Section 6.16 herein), to the Note Insurer, any
unpaid Premium with respect to such Class then due, and to the Owner Trustee, any unpaid Owner Trustee Fees with respect to such Class then due; 
  
 (b) second, from amounts then on deposit in the related Payment Account, to the Holders of the related Class of Notes, the Payment Amount for such
Class; 
  
 (c) third, from amounts then on deposit in the
related Payment Account, the allocable portion of the Overcollateralization Deficit, if any, for the related Class of Notes; 
  
 (d) fourth, from amounts then on deposit in the related Payment Account, to the Holders of the other Class of Notes, the Shortfall Amount for the
other Class of Notes; 
  
 (e) fifth, from amounts then on
deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the related Class as of such Payment Date; 
  
 (f) sixth, from amounts then on deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the other
Class of Notes as of such Payment Date to the extent not already paid pursuant to clause (e) above; 
  
 (g) seventh, from amounts then on deposit in the related Payment Account, to the payment of the Note Principal Balance of the Outstanding Notes of
such Class, up to the amount of their unpaid Note Principal Balance, ratably, without preference or priority of any kind; 
  
 (h) eighth, from amounts then on deposit in the related Payment Account, to the related Reserve Account, such Loan Group’s pro rata share of
the Reserve Payment Amount based on the amount of Net Monthly Excess Cashflow; 
  
 (i) ninth, with respect to the Class A-1 Notes, from amounts then on deposit in the related Payment Account and amounts released from the related Reserve Account, to the Holders of the Class A-1 Notes, the
Class A-1 Net WAC Cap Carry-Forward Amount and, with respect to the Class A-2 Notes, from amounts then on deposit in the related Payment Account, the Yield Maintenance Account and amounts released from the related Reserve Account, to the Holders of
the Class A-2 Notes, the Class A-2 Net WAC Cap Carry-Forward Amount; 
  

 27 

 (j) tenth, from: 
  

	 	(A)	amounts then on deposit in the Payment Account related to the Class A-1 Notes, to the Master Servicer, any amount due to it with respect to the Group 1 Mortgage Loans; and

  

	 	(B)	amounts then on deposit in the Payment Account related to the Class A-2 Notes, to the Master Servicer, any amount due to it with respect to the Group 2 Mortgage Loans;

  
 (k) eleventh, to the Indenture Trustee,
any amounts in respect of indemnity or reimbursement due the Indenture Trustee under any of the Basic Documents to the extent not previously paid or reimbursed under paragraph (a) hereof; and 
  
 (l) twelfth, to the Owner Trustee, any amounts due and owing to the
Owner Trustee under Article IX of the Trust Agreement or the other Basic Documents, to the extent not already paid by the Servicer pursuant to Section 9.02 of the Trust Agreement; and 
  
 (m) thirteenth, following the making by the Indenture Trustee of all allocations, transfers and disbursements
described above, from amounts then on deposit in each Payment Account, the Indenture Trustee shall distribute to or at the direction of the Certificateholders (as identified in the Certificate Register maintained by the Owner Trustee), the amount
remaining on such Payment Date in each Payment Account, if any. 
  
 Section 5.08. Limitation on Suits. No Holder of a Note shall have any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless: 
  
 (a) such Holder has previously given
written notice to the Indenture Trustee and the Note Insurer of a continuing Event of Default; 
  
 (b) the Holders of Notes representing not less than 25% of the Note Principal Balance of the Outstanding Notes of both Classes shall have made written request to the Indenture Trustee to institute Proceedings in
respect of such Event of Default in its own name as Indenture Trustee hereunder; 
  
 (c) such Holder or Holders have offered to the Indenture Trustee indemnity satisfactory to it in full against the costs, expenses and liabilities to be incurred in compliance with such request; 
  
 (d) the Indenture Trustee, for sixty (60) days after its receipt of such
notice, request and offer of indemnity, has failed to institute any such Proceeding; 
  
 (e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of Notes representing more than 50% of the Note Principal Balance of the
Outstanding Notes of both Classes; and 
  

 28 

 (f) the consent of the Note Insurer shall have been obtained; it being understood and intended that no
one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the rights of any other Holders of Notes or to obtain or to seek to obtain
priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the Holders of Notes. 
  
 (g) In the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, the Indenture Trustee shall take the action prescribed by the
group representing a greater percentage of the Note Principal Balance of the Outstanding Notes of both Classes. 
  
 Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest. Subject to the provisions in this Indenture (including
Sections 3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to recovery from amounts in the portion of the Trust Estate relating to such Note, the Holder of any Note shall have the right, to the extent permitted by applicable
law, which right is absolute and unconditional, to receive payment of each installment of interest on such Note on the respective Payment Date for such installments of interest, to receive payment of each installment of principal of such Note when
due (or, in the case of any Note called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall not be impaired without the consent of such Holder. 
  
 Section 5.10. Restoration of Rights and Remedies. If the Indenture
Trustee, the Note Insurer or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined to be adverse to the
Indenture Trustee, the Note Insurer or to such Noteholder, then and in every such case the Indenture Trustee, the Note Insurer and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted. 
  
 Section 5.11. Rights and Remedies Cumulative. No right or remedy
herein conferred upon or reserved to the Indenture Trustee, the Note Insurer or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of an), right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. 
  
 Section
5.12. Delay or Omission Not Waiver. No delay or omission of the Indenture Trustee, the Note Insurer or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with the prior consent of the Note Insurer, as the case may be. 
  

 29 

 Section 5.13. Control by Noteholders. The Holders of Notes representing more than 50% of the Note
Principal Balance of the Outstanding Notes of both Classes on the applicable Record Date shall, with the written consent of the Note Insurer (a copy of which shall be provided to the Indenture Trustee), have the right to direct the time, method and
place of conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that: 
  
 (a) such written direction shall not be in conflict with any rule of law or with this Indenture; 
  
 (b) any direction to the Indenture Trustee to undertake a Sale of the Trust
Estate shall be by the Holders of Notes representing the percentage of the Note Principal Balance of the Outstanding Notes specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is applicable; and 
  
 (c) the Indenture Trustee may take any other action deemed proper by the
Indenture Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.01 hereof, the Indenture Trustee need not take any action that it determines might involve it in liability or be unjustly prejudicial to
the Noteholders not consenting. 
  
 Section 5.14. Waiver of
Past Defaults. The Holders of Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes on the applicable Record Date may on behalf of the Holders of all the Notes, and with the written consent of
the Note Insurer, waive any past Default hereunder and its consequences, except a Default: 
  
 (a) in the payment of principal or any installment of interest on any Note; or 
  
 (b) in respect of a covenant or provision hereof that under Section 9.02 hereof cannot be modified or amended without the consent of the Holder of each
Outstanding Note affected. 
  
 Upon any such waiver, such Default
shall cease to exist, and any Event of Default arising therefrom shall be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon.

  
 Section 5.15. Undertaking for Costs. All parties to
this Indenture agree, and each Holder of any Note by his acceptance thereof shall be deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit
against the Indenture Trustee for any action taken, suffered or omitted by it as Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall
not apply to any suit instituted by the Indenture Trustee or the Note Insurer, to any suit instituted by any Noteholder, or Group of Noteholders, holding in the aggregate Notes 
  

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 representing more than 10% of the Note Principal Balance of the Outstanding Notes of both Classes, or to any suit
instituted by any Noteholder for the enforcement of the payment of any Interest Payment Amount or Base Principal Payment Amount on any Note on or after the related Payment Date or for the enforcement of the payment of principal of any Note on or
after the Final Stated Maturity Date (or, in the case of any Note called for redemption, on or after the applicable Redemption Date). 
  
 Section 5.16. Waiver of Stay or Extension Laws. The Trust covenants (to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension of law wherever enacted, now or at any time hereafter in force, that may affect the covenants in, or the performance of, this Indenture; and
the Trust (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but
will suffer and permit the execution of every such power as though no such law had been enacted. 
  
 Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a “Sale”) of any portion of the Trust Estate pursuant to
Section 5.04 hereof shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on the Notes and
under this Indenture with respect thereto shall have been paid. The Indenture Trustee may, with the consent of the Note Insurer, from time to time postpone any public Sale by public announcement made at the time and place of such Sale. 

 
 (b) To the extent permitted by law, the Indenture Trustee shall not in any
private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless: 
  
 (i) the Holders of Notes representing not less than 50% of the Note Principal Balance of the Notes of the Class or Classes then
Outstanding and the Note Insurer consents to or directs the Indenture Trustee in writing to make such Sale; or 
  
 (ii) the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders of the Notes and the Note
Insurer in respect of Reimbursement Amounts, in full payment thereof in accordance with Section 5.07 hereof, on the Payment Date next succeeding the date of such Sale. 
  
 The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale
or disposition thereof for purposes of this Section 5.17(b). In the absence of a Note Insurer Default, no Sale hereunder shall be effective without the consent of the Note Insurer. 
  
 (c) Unless the Holders of all Outstanding Notes or the Note Insurer have otherwise consented or directed the Indenture
Trustee, at any), public Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (b)(ii) of this Section 5.17 has not been established by the Indenture Trustee and no Person
bids an amount equal to or greater than such amount, the Indenture Trustee, acting in its capacity as Indenture Trustee (i) on behalf of the Noteholders and the Note Insurer, shall prevent 
  

 31 

 such Sale and bid an amount (which shall include the Indenture Trustee’s right, in its capacity as Indenture
Trustee, to credit bid) at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders and the Note Insurer. 
  

(d) In connection with a Sale of all or any portion of the Trust Estate: 
  
 (i) any Holder or Holders of Notes may bid for and purchase the property offered for Sale, and upon
compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash
up to the amount that shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment; 
  
 (ii) the Indenture Trustee may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by
crediting the gross Sale price against the sum of (a) the amount that would be payable to the Holders of the Notes as a result of such Sale in accordance with Section 5.07 hereof on the Payment Date next succeeding the date of such Sale and (b) the
expenses of the Sale and of any Proceedings in connection therewith which are reimbursable to it, without being required to produce the Notes in order to complete any such Sale or in order for the net Sale price to be credited against such Notes,
and any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture; 
  
 (iii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof; 
  
 (iv) the Indenture Trustee is hereby irrevocably appointed the agent and attorney in-fact of the Trust to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action
necessary to effect such Sale; and 
  
 (v) no
purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. 
  
 Section 5.18. Action on Notes. The Indenture Trustee’s right to
seek and recover judgment under this Indenture shall not be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture
Trustee, the Note Insurer or the Holders of Notes shall be impaired by the recovery of any judgment by the Indenture Trustee against the Trust or by the levy of any execution under such judgment upon any portion of the Trust Estate. Any money or
property collected by the Indenture Trustee shall be applied in accordance with Section 5.07 hereof. 
  

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 Section 5.19. No Recourse. The Trust Estate Granted to the Indenture Trustee as security for the
Notes serves as security only for the Notes. The Noteholders shall have no recourse against the Owner Trustee, the Indenture Trustee, the Note Registrar, the Authenticating Agent, the Seller, the Sponsor, the Master Servicer, the Backup Servicer or
any of their respective Affiliates, or to the assets of any of the foregoing entities. 
  
 Section 5.20. Application of the Trust Indenture Act. Pursuant to Section 316(a) of the TIA, all provisions automatically provided for in Section 316(a) are hereby expressly excluded. 
  
 Section 5.21. 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 Noteholders, and may be exercised at the direction of Holders of Notes representing at least 51% of the
Note Principal Balance of the Outstanding Notes of both Classes; provided, that the Note Insurer shall be entitled to any distributions of reimbursements as set forth in the Indenture and the Insurance Agreement and the Note Insurer shall retain
those rights under Section 9.01 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 to it under the Note Insurance Policy and the Insurance Agreement (and the Note Insurer no longer has any obligation under the Note Insurance Policy, except for breach thereof by the Note Insurer), 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. 
  
 ARTICLE VI 
  
 THE INDENTURE TRUSTEE 
  
 Section 6.01. Duties of Indenture Trustee. (a) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall
exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs.

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

  
 (i) the Indenture Trustee need perform only
those duties that are expressly set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and 
  
 (ii) in the absence of bad faith on its part, the Indenture Trustee may request and conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed therein, upon certificates, opinions, resolutions, statements, reports, 
  

 33 

 instruments or other documents furnished to the Indenture Trustee and conforming, on their faces, to the
requirements of this Indenture. The Indenture Trustee shall, however, examine such certificates and opinions to determine whether they conform on their face to the requirements of this Indenture. 
  
 (c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful misconduct, except that: 
  
 (i) The duties and obligations of the Indenture Trustee shall be determined solely by the express provisions of this Indenture, the
Indenture Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee and,
in the absence of bad faith on the part of the Indenture Trustee, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates, opinions or other
documents (including, but not limited to, any reports or statements furnished by the Master Servicer or Backup Servicer) reasonably believed by the Indenture Trustee to be genuine and to have been furnished by the proper party to the Indenture
Trustee and which on their face, do not contradict the requirements of this Indenture; 
  
 (ii) this paragraph does not limit the effect of paragraph (b) of this Section 6.01; 
  
 (iii) the Indenture Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; 
  
 (iv) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good
faith in accordance with a direction of the Noteholders or the Note Insurer (including directions pursuant to Sections 5.13 or 5.17 hereof or in accordance with the direction of the Note Insurer) or exercising any trust or power or remedy conferred
upon the Indenture Trustee under this Indenture; and 
  
 (v) The Indenture Trustee shall not be charged with knowledge of any failure by the Master Servicer to comply with any of its obligations under the Sale and Servicing Agreement or any breach of representations or warranties under the Sale
and Servicing Agreement unless a Responsible Officer of the Indenture Trustee obtains actual knowledge of such failure or breach or the Indenture Trustee receives written notice of such failure or breach from the Master Servicer, the Backup Servicer
or the Note Insurer. 
  
 (d) Except with respect to duties of the
Indenture Trustee prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Sections
5.01(c), 5.01(d), 5.01(e), 5.01(f), 5.01(g) or 5.01(h) hereof or any Default described in Sections 5.01(c) hereof or of any event described in Section 3.05 hereof unless a Responsible Officer assigned to and working in the Indenture Trustee’s
corporate trust 
  

 34 

 department and having direct responsibility for this Indenture has actual knowledge thereof or unless written notice of
any event that is in fact such an Event of Default or Default is received by the Indenture Trustee at the Corporate Trust Office, and such notice references the Notes generally, the Trust, the Trust Estate or this Indenture. 
  
 (e) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably assured to it under this Indenture or the other Basic Documents. 
  
 (f) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the provisions of this Section 6.01 and to the
provisions of the TIA. 
  
 (g) Notwithstanding any extinguishment
of all right, title and interest of the Trust in and to the Trust Estate following an Event of Default and a consequent declaration of acceleration of the maturity of the Notes, whether such extinguishment occurs through a Sale of the Trust Estate
to another Person, the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the rights, powers and duties of the Indenture Trustee with respect to the Trust Estate (or the proceeds thereof), the Noteholders and the Note Insurer and
the rights of Noteholders and the Note Insurer shall continue to be governed by the terms of this Indenture. 
  
 (h) The Indenture Trustee shall at all times retain possession of the Indenture Trustee’s Mortgage Files in the State of California, except for those
Indenture Trustee’s Mortgage Files or portions thereof released to the Master Servicer or the Note Insurer pursuant to this Indenture or the Sale and Servicing Agreement. 
  
 (i) Subject to the other provisions of this Indenture and without limiting the generality of this Section 6.01, the
Indenture Trustee shall have no duty (a) to see to any recording, filing, or depositing of this Indenture 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, 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 Estate from funds available in the Payment Accounts or (D) to confirm or verify the contents of any reports or certificates of the Master
Servicer or the Backup Servicer delivered to the Indenture Trustee pursuant to this Indenture believed by the Indenture trustee to be genuine and to have been signed or presented by the proper party or parties. 
  
 Section 6.02. Notice of Default. Immediately after the occurrence of
any Default known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall transmit by mail to the Note Insurer and the Sponsor notice of each such Default and, within ninety (90) days after the occurrence of any Default known
to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived; provided, however, that in no
event shall the Indenture Trustee provide notice, or fail to provide notice of a Default of which a 
  

 35 

 Responsible Officer of the Indenture Trustee has actual knowledge in a manner contrary to the requirements of the Trust
Indenture Act. Concurrently with the mailing of any such notice to the Holders of the Notes, the Indenture Trustee shall transmit by mail a copy of such notice to the Rating Agencies. 
  
 Section 6.03. Rights of Indenture Trustee. (a) Except as otherwise provided in Section 6.01 hereof, the Indenture
Trustee may rely on, and be protected in acting or refraining to act upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The Indenture Trustee need not investigate any fact or matter stated in
any such document. 
  
 (b) Before the Indenture Trustee acts or
refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee. The Indenture Trustee shall not be liable for any action it takes or omits to take in
good faith in reliance on any such Officer’s Certificate or Opinion of Counsel. 
  
 (c) With the consent of the Note Insurer, which consent shall not be unreasonably withheld, the Indenture Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent
appointed with due care. 
  
 (d) The Indenture Trustee shall not
be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. 
  
 (e) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders or the Note Insurer, pursuant to the provisions of this Indenture, unless such Noteholders or the Note Insurer shall have offered to
the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the
occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge (which has not been cured), to exercise such of the rights and powers vested in it by this Indenture, 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. 
  
 (f) The Indenture Trustee shall not be bound to make any investigation into the facts of the 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 so by the Noteholders or the Note Insurer and provided further that payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in tile making of such investigation is, in the opinion of the Indenture Trustee, reasonably assured to the Indenture Trustee by the security afforded to it by the
terms of this Indenture or such other security or indemnity as the Indenture Trustee may reasonably require as a condition to taking any such action. 
  
 (g) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture
Trustee shall not be answerable for anything other than its negligence or willful misconduct in the performance of such act. 
  

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 Section 6.04. Not Responsible for Recitals, Issuance of Notes or Mortgage Loans. The recitals
contained herein and in the Notes, except, with respect to the Indenture Trustee, the certificates of authentication on the Notes, shall be taken as the statements of the Trust, and the Owner Trustee, the Indenture Trustee and the Authenticating
Agent assume no responsibility for their correctness. The Owner Trustee and the Indenture Trustee make no representations with respect to the Trust Estate or as to the validity or sufficiency of this Indenture or of the Notes. Neither the Indenture
Trustee nor the Owner Trustee shall be accountable for the use or application by the Trust of the Notes or the proceeds thereof or any money paid to the Trust or upon a Trust Order pursuant to the provisions hereof. 
  
 The Indenture Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any Mortgage or any Mortgage Loan, or the recordability, sufficiency, perfection and priority of any mortgage or the maintenance of any such perfection and priority or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to Noteholders under this Indenture, including, without limitation: the existence, condition and ownership of any Mortgaged Property; the
existence and enforceability of any hazard insurance or primary mortgage insurance thereon; the validity of the assignment of any Mortgage Loan to the Indenture Trustee or of any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the Seller, the Sponsor, Issuer, Master Servicer, Backup Servicer, Note Insurer with any warranty or representation made under this Indenture, the Sale and Servicing Agreement, the
Insurance Agreement or in any related document or the accuracy of any such warranty or representation; any investment of monies by or at the direction of the Sponsor or the Master Servicer or any loss resulting therefrom; the acts or omissions of
any of the Sponsor, the Master Servicer or any Mortgagor; any action of the Master Servicer taken in the name of the Indenture Trustee; the failure of the Master Servicer to act or perform any duties acquired of it as agent of the Indenture Trustee
hereunder; or any action by the Indenture Trustee taken at the instruction of the Master Servicer or the Note Insurer. The Indenture Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any
time or otherwise to perfect or maintain the perfection of any security interest or lien granted to it hereunder. 
  
 Section 6.05. May Hold Notes. The Indenture Trustee, any Agent, or any other agent of the Trust, in its individual or any other capacity, may
become the owner or pledgee of Notes and, subject to Sections 6.07, 6.09 and 6.12 hereof, may otherwise deal with the Trust or any Affiliate of the Trust with the same rights it would have if it were not Indenture Trustee, Agent or such other agent.

  
 Section 6.06. Money Held in Trust. Money held by the
Indenture Trustee in trust hereunder need not be segregated from other funds except to the extent required by this Indenture or by law. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Trust and except to the extent of income or other gain on investments that are obligations of the Indenture Trustee, in its commercial capacity, and income or other gain actually received by the Indenture Trustee on
investments, which are obligations of others. 
  

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 Section 6.07. Eligibility, Disqualification. Irrespective of whether this Indenture is qualified
under the TIA, this Indenture shall always have an indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always have a combined capital and surplus as stated in Section 6.08 hereof. The
Indenture Trustee shall be subject to TIA Section 310(b). 
  
 Section 6.08. Indenture Trustee’s Capital and Surplus. The Indenture Trustee shall at all times (a)(i) have a combined capital and surplus of at least $550,000,000, or (ii) be a member of a bank holding company system, the
aggregate combined capital and surplus of which is at least $100,000,000 and (b) be rated (or have long- term debt rated) “BBB” or better by S&P and “Baa2” by Moody’s; provided, however, that the Indenture Trustee’s
separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(1), its combined capital and surplus
for purposes of this Section 6.08 shall be as set forth in the latest such report. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall resign
immediately in the manner and with the effect hereinafter specified in this Article VI. 
  
 Section 6.09. Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article VI shall
become effective until the acceptance of appointment by the successor Indenture Trustee under Section 6.10 hereof. 
  
 (b) The Indenture Trustee may resign at any time by giving written notice thereof to the Trust, the Note Insurer and each Rating Agency. If an instrument
of acceptance by a successor Indenture Trustee shall not have been delivered to the Indenture Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any court of competent
jurisdiction for the appointment of a successor Indenture Trustee. 
  
 (c) The Indenture Trustee may be removed at any time by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, by
written notice delivered to the Indenture Trustee and to the Trust. 
  
 (d) If at any time: 
  
 (i) the
Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 hereof and shall fail to resign or eliminate such conflicting interest in accordance with Section 6.07 hereof after written request therefor by the Trust, the Note
Insurer or by any Noteholder; or 
  
 (ii) the
Indenture Trustee shall cease to be eligible under Section 6.08 hereof or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; 
  

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 then, in any such case, (x) the Owner Trustee, on behalf of the Trust, by a Trust Order, with the written consent of, or
at the written direction of the Note Insurer, may remove the Indenture Trustee, and the Owner Trustee, on behalf of the Trust, by a Trust Order, shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint a successor Indenture Trustee acceptable to the Note Insurer and to vest in such successor Indenture Trustee any property, title, right or power deemed necessary or desirable, subject to the other provisions
of this Indenture; provided, however, if the Owner Trustee, on behalf of the Trust, and the Note Insurer do not join in such appointment within thirty (30) days after the receipt by it of a request to do so, (either by reason of resignation or
removal) or in case an Event of Default has occurred and is continuing, the Indenture Trustee may petition a court of competent jurisdiction to make such appointment, or (y) subject to Section 5.15 hereof, and, in the case of a conflicting interest
as described in clause (i) above, unless the Indenture Trustee’s duty to resign has been stayed as provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at least six (6) months may, on
behalf of himself and all others similarly situated, with the consent of the Note Insurer, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. 
  
 (e) If the Indenture Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, the Note Insurer may, and if the Note Insurer fails to do so, the Owner Trustee, on behalf of the Trust, by a Trust Order, shall promptly, appoint a successor
Indenture Trustee acceptable to the Note Insurer and reasonably acceptable to the Sponsor. 
  
 (f) The Master Servicer, on behalf of the Trust, shall give notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee to the Backup Servicer, the
Holders of Notes and the Note Insurer. Each notice shall include the name of the successor Indenture Trustee and the address of its Corporate Trust Office. 
  
 Section 6.10. Acceptance of Appointment by Successor Indenture Trustee. Every successor Indenture Trustee appointed hereunder shall execute,
acknowledge and deliver to the Trust, the Note Insurer and the retiring Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor
Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee. Notwithstanding the foregoing, upon a Trust Request of the Owner Trustee or the
Note Insurer, on behalf of the Trust, or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges and any fees, expenses or other amounts owing the Indenture trustee, execute and deliver an instrument
transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and deliver to such successor Indenture Trustee all property and money held by such retiring
Indenture Trustee hereunder. Upon a written request of any such successor Indenture Trustee, the Owner Trustee, on behalf of the Trust, shall, with the written consent of the Note Insurer, execute and deliver any and all instruments for more fully
and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts. 
  

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 No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such
successor Indenture Trustee shall be qualified and eligible under this Article VI. 
  
 Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee. Any corporation or banking association into which the Indenture 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 Indenture Trustee shall be a party, or any corporation or banking association succeeding to all or
substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder, provided, that such corporation or banking association shall be otherwise qualified and eligible under this
Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes have been authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with the same effect as if such successor Indenture Trustee had authenticated such Notes. 
  
 Section 6.12. Preferential Collection of Claims Against Trust. The
Indenture Trustee (and any co-trustee or separate trustee) shall be subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b), and an Indenture Trustee (and any co-trustee or separate trustee) who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated. 
  
 Section 6.13. Co-Indenture Trustees and Separate Indenture Trustees. At any time or times, for the purpose of meeting the legal requirements of the TIA or of any jurisdiction in which any of the Trust Estate
may at the time be located, the Indenture Trustee shall have power and shall execute and deliver all instruments necessary to appoint one or more Persons approved by the Indenture Trustee either to act as co-trustee, jointly with the Indenture
Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity
aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Section 6.13. All fees and expenses of any co-trustee or separate trustee shall be payable by the Trust. 
  
 Should any written instrument from the Trust be required by any co-trustee or
separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such instruments shall, on written request, be executed, acknowledged and delivered by the Owner
Trustee, on behalf of the Trust, with the written consent of the Note Insurer. 
  

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 Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be
appointed subject to the following terms: 
  
 (a) The Notes shall
be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder,
shall be exercised, solely by the Indenture Trustee. 
  
 (b) The
rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Indenture Trustee or by the
Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to
be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. 
  
 (c) The Indenture Trustee at any time may accept the resignation of or remove
any co-trustee or separate trustee appointed under this Section 6.13. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this Section 6.13. 
  
 (d) The Indenture Trustee shall not be liable by reason of any act or
omission of a co-trustee or separate trustee appointed by the Indenture Trustee with due care. No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Indenture Trustee, or any other such
trustee hereunder. 
  
 (e) Any Act of Noteholders delivered to the
Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. 
  
 (f) Any co-trustee or separate trustee appointed hereunder shall be afforded the same rights, protections and immunities as the Indenture Trustee.

  
 Section 6.14. Authenticating Agents. The Owner Trustee,
acting at the direction of the Certificateholders, shall appoint an Authenticating Agent with power to act on the Trust’s behalf, subject to the direction of the Certificateholders, in the authentication and delivery of the Notes designated for
such authentication and, containing provisions therein for such authentication (unless the Owner Trustee, acting at the direction of the Certificateholders, has made other arrangements, satisfactory to the Indenture Trustee and such Authenticating
Agent, for notation on the Notes of the authority of an Authenticating Agent appointed after the initial authentication and delivery of such Notes) in connection with transfers and exchanges under Section 2.06 hereof, as fully to all intents and
purposes as though the Authenticating Agent had been expressly authorized by Section 2.06 hereof to authenticate and deliver Notes. For all purposes of this Indenture (other than in connection with the authentication and delivery of Notes pursuant
to Sections 2.05 and 2.11 hereof in connection with their initial issuance), the authentication and delivery of Notes by the Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication and delivery of Notes “by
the Indenture Trustee.” Such Authenticating Agent shall at all times be a Person that both meets the requirements of Section 6.07 hereof for the Indenture Trustee hereunder and has an office for presentation of Notes in the United States of
America. The Indenture Trustee, shall initially be the Authenticating Agent and shall be the 
  

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 Note Registrar as provided in Section 2.06 hereof. The office from which the Indenture Trustee shall perform its duties
as Note Registrar and Authenticating Agent shall be its Corporate Trust Office. Any Authenticating Agent appointed pursuant to the terns of this Section 6.14 or pursuant to the terms of any supplemental indenture shall deliver to the Indenture
Trustee as a condition precedent to the effectiveness of such appointment an instrument accepting the trusts, duties and responsibilities of Authenticating Agent and of Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee for
and holding the Indenture Trustee harmless against, any loss, liability or expense (including reasonable attorneys’ fees) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance, administration
of the trust or exercise of authority by such Authenticating Agent, Note Registrar or co-Note Registrar. 
  
 Any corporation or banking association into which any Authenticating Agent may be merged or converted or with which it may be consolidated, or any
corporation or banking association resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any corporation or banking association succeeding to the corporate trust business of any Authenticating
Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this Section 6.14, without the execution or filing of any further act on the part of the parties hereto or the
Authenticating Agent or such successor corporation or banking association. 
  
 Any Authenticating Agent may at any time resign by giving written notice of resignation to the Trust. The Owner Trustee, acting at the direction of the Certificateholders, may at any time with the consent of the Note
Insurer terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent and the Indenture Trustee. Upon receiving such a notice of resignation or upon such a termination, or in case at any time
any Authenticating Agent shall cease to be eligible under this Section 6.14, the Owner Trustee, acting at the direction of the Certificateholders, shall promptly appoint a successor Authenticating Agent acceptable to the Note Insurer, shall give
written notice of such appointment to the Indenture Trustee, and shall mail notice of such appointment to all Holders of Notes. 
  
 The Indenture Trustee agrees, subject to Section 6.01(e) hereof to pay to any Authenticating Agent from time to time reasonable compensation for its
services and the Indenture Trustee shall be entitled to be reimbursed for such payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04 and 6.05 hereof shall be applicable to any Authenticating Agent. 
  
 Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee
shall, on or prior to the Closing Date, execute and deliver the acknowledgement of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale and Servicing Agreement. 
  
 (b) The Indenture Trustee shall (i) on or prior to the Closing Date execute and deliver the acknowledgement of receipt of
the Mortgage Loans required by Section 2.06(b)(1) of the Sale and Servicing Agreement, (ii) on or prior to sixty (60) days following the Closing Date execute and deliver the Initial Certification required by Section 2.06(b)(ii) of the Sale and
Servicing Agreement, and (iii) on or prior to one hundred eighty (180) days following the Closing Date execute and deliver the Final Certification required by Section 2.06(b)(iii) of the Sale and Servicing Agreement. 
  

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 (c) In giving each of the acknowledgements, the Initial Certification and the Final Certification
referred to in paragraphs (a) and (b) of this Section 6.15, the Indenture Trustee shall not be under any duty or obligation (i) to inspect, review or examine any such documents, instruments, securities or other papers to determine that they or the
signatures thereto are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face, (ii) to determine whether any Mortgage File should
include a flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement, or (iii) to determine the validity,
sufficiency, recordability, perfection, or priority of any document in the Mortgage File. 
  
 (d) In the event that the Mortgage Loans are required to be recorded in accordance with the provisions of Section 2.05 of the Sale and Servicing Agreement, no later than the fifth Business Day of each fourth month,
commencing in January 2005, the Indenture Trustee shall deliver to the Master Servicer and the Note Insurer a report dated as of the first day of such month, identifying those Mortgage Loans for which it has not yet received (i) an original recorded
Mortgage or a copy thereof certified to be true and correct by the public recording office in possession of such Mortgage or (ii) an original recorded Assignment of Mortgage to the Indenture Trustee and any required intervening Assignments of
Mortgage or a copy thereof certified to be a true and correct copy by the public recording office in possession of such Assignment of Mortgage. 
  
 Section 6.16. Indenture Trustee Fees and Expenses Indemnification. The Indenture Trustee shall be entitled to receive the Indenture Trustee Fee on
each Payment Date as provided herein. The Indenture Trustee also shall be entitled to (i) payment of or reimbursement for expenses and disbursements incurred or made by the Indenture Trustee in accordance with any of the provisions of this Indenture
or the Sale and Servicing Agreement (including, but not limited to, the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), and (ii) indemnification against losses, liability
costs and expenses, including reasonable attorney’s fees, incurred, arising out of or in connection with this Indenture, the Notes, the Sale and Servicing Agreement or any other documents or agreements relating to the Trust or the Notes, other
than any loss, liability, cost or expense incurred solely by reason of willful malfeasance, bad faith or negligence of the Indenture Trustee in the performance of its duties under the Basic Documents or by reason of its failure to perform its
obligations hereunder. The Indenture Trustee and any director, officer, employee or agent of the Indenture Trustee shall be indemnified by, first, the Trust Estate, in an amount not to exceed $125,000 in any calendar year as a first-priority
expense pursuant to the first sentence of Section 8.02 hereof and Section 5.07(a) hereof, second, the Trust Estate on any Payment Date, to the extent that the Indenture Trustee’s claims for indemnification exceed $125,000 in any calendar
year, pursuant to Sections 8.02(xi) and 5.07(k) hereof, and third, the Master Servicer, to the extent that the Indenture Trustee’s claims for indemnification exceed $125,000 in any calendar year and there are no funds available at
priority second above available for such purpose, and held harmless against any loss, liability costs or reasonable expense incurred in connection with this Indenture or the Notes, other than any loss, liability, cost or expense incurred by
reason of 
  

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 willful misfeasance, bad faith or negligence in the performance by the Indenture Trustee of its duties hereunder or by
reason of its failure to perform its obligations hereunder. The obligations of the Master Servicer and the Trust under this Section 6.16 shall survive termination of the Trust and payment of the Notes, and shall extend to any co-Indenture Trustee or
separate-Indenture Trustee appointed pursuant to this Article VI. 
  
 The Indenture Trustee or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Indenture Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder,
servicing agent, custodian or sub-custodian with respect to certain Permitted Investments, (ii) using Affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. Such
compensation is not payable pursuant to this Indenture. 
  
 ARTICLE VII 
  
 NOTEHOLDERS’ LISTS AND
REPORTS 
  
 Section 7.01. Note Registrar to Furnish
Indenture Trustee Names and Addresses of Noteholders. (a) The Note Registrar shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less than forty-five (45) days nor more than sixty (60) days after the Payment
Date occurring closest to six (6) months after the Closing Date and each Payment Date occurring at six (6) month intervals thereafter, all information in the possession or control of the Note Registrar, in such form as the Indenture Trustee may
reasonably require, as to names and addresses of the Holders of Notes, and (ii) at such other times, as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Note Registrar of any such request, a list of similar
form and content as of a date not more than ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. 
  
 (b) In addition to furnishing to the Indenture Trustee the Noteholder lists,
if any, required under paragraph (a) of this Section 7.01, the Note Registrar shall also furnish all Noteholder lists, if any, required under Section 3.03 hereof at the times required by such Section 3.03. 
  
 Section 7.02. Preservation of Information: Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee as provided
in Section 7.01 hereof and the names and addresses of the Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 hereof upon
receipt of a new list so furnished. 
  
 (b) Noteholders may
communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. 
  

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 (c) The Trust, the Indenture Trustee and the Note Registrar shall have the protection of TIA Section
312(c). 
  
 Section 7.03. Reports by Indenture Trustee.
Within sixty (60) days after December 31 of each year (the “reporting date”), commencing December 31, 2004, (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail to all Noteholders a brief report dated as of such
reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the Indenture Trustee’s Remittance Report pursuant to Section 2.08(d) hereof, also mail to Holders of Notes and the Note
Insurer with respect to which it has made advances, any reports with respect to such advances that are required by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of Notes and the Note Insurer any reports required by TIA
Section 313(b)(1). For purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal amount of indenture securities outstanding on the date as of
which such information is provided shall be the Note Principal Balance of the then Outstanding Notes covered by the report. 
  
 Section 7.04. Reports by Trust. The Trust shall cause the Master Servicer, on behalf of the Trust, (a) to deliver to the Indenture Trustee and the
Backup Servicer within fifteen (15) days after the Trust is required to file the same with the Commission copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing as the
Commission may by rules and regulations prescribe) that the Trust is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, and (b) to also comply with the other provisions of TIA Section 314(a). 
  
 A copy of each report required under this Section 7.03 shall, at the time of
such transmission to Holders of Notes and the Note Insurer be filed by the Sponsor with the Commission and with each securities exchange upon which the Notes are listed. The Master Servicer, on behalf of the Trust, will notify the Backup Servicer
and the Indenture Trustee when the Notes are listed on any securities exchange. 
  
 ARTICLE VIII 
  
 ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES 
  
 Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Trust hereby directs the Indenture Trustee to establish, on or before the Closing Date, two Eligible Accounts that shall be the “Payment
Accounts” for the Notes. Each Payment Account shall relate to one of the two Classes of Notes. The Indenture Trustee shall promptly deposit in the related Payment Account (i) the Servicer Remittance Amount for the related Group received by it
from the Master Servicer on the Servicer Remittance Date pursuant to the Sale and Servicing Agreement, (ii) any other funds from any deposits for such Group to be made by the Master Servicer pursuant to the Sale and Servicing Agreement, (iii) any
amount for such Group required to be deposited in such Payment Account pursuant to this Section 8.01(c), (iv) all amounts for such Group received pursuant to Section 8.03 hereof, (v) the Termination Price received by it from the 
  

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 Sponsor on the related Clean-up Call Date pursuant to Section 10.01, (vi) on each Payment Date, in accordance with the
Indenture Trustee’s Remittance Report, (A) until the Shortfall Amount for the related Class is paid in full, and (B) until the amount specified in clause (v) of Section 8.02 for such group is paid in full, in each case, first, from the
Payment Account relating to the other Class of Notes, to the extent of the Net Monthly Excess Cashflow from the Group of Mortgage Loans relating to the other Class of Notes and second, from each Reserve Account, an amount equal to the product
of (A) a fraction, the numerator of which is the amount on deposit in such Reserve Account and the denominator of which is the aggregate amounts on deposit in both Reserve Accounts and (B) the Shortfall Amount after giving effect to this Section
8.01(a)(vi)(B) first, (vii) on each Payment Date, from each Reserve Account an amount equal to the product of (A) a fraction, the numerator of which is the amount on deposit in each such Reserve Account and the denominator of which is the
aggregate amounts on deposit in both Reserve Accounts and (B) the Reserve Account Release Amount, and (viii) all other amounts for such Group received for deposit in such Payment Account, including the payment of any Loan Repurchase Price or
Substitution Adjustment for a Mortgage Loan in such Group received by the Indenture Trustee. All amounts that are deposited from time to time in a Payment Account are subject to withdrawal by the Indenture Trustee for the purposes set forth in
Section 8.02 hereof. All funds withdrawn from a Payment Account pursuant to Section 8.02 hereof for the purpose of making payments to the Holders of Notes shall be applied in accordance with Sections 3.03 and 8.02 hereof. 
  
 (b) The Trust hereby directs the Indenture Trustee to establish, on or before
the Closing Date, two Eligible Accounts that shall be the “Reserve Accounts” for the Notes. Each Reserve Account shall relate to each of the two Loan Groups. The Indenture Trustee shall deposit and withdraw funds in the Reserve Account in
accordance with the provisions of Section 8.01(a) and Section 8.02 hereof. Amounts in the Reserve Accounts can be used to (i) pay Shortfall Amounts in accordance with Section 8.01 and (ii) to pay Class A-1 Net WAC Cap Carry-forward Amounts and Class
A-2 Net WAC Cap Carry-forward Amounts. Amounts on deposit in either of the Reserve Accounts may be used to pay Shortfall Amounts for either Class of Notes, provided, that to the extent that funds are on deposit in both Reserve Accounts, funds will
be withdrawn pursuant to Section 8.01(a)(vi). Class A-1 Net WAC Cap Carry-forward Amounts and Class A-2 Net-WAC Cap Carry-forward Amounts can only be paid from funds released from each related Reserve Account pursuant to Section 8.01(a)(vii).

  
 (c) The Trust hereby directs the Indenture Trustee to
establish, on or before the Closing Date, an Eligible Account that shall be the “Yield Maintenance Account” for the Class A-2 Notes. The Indenture Trustee shall deposit into the Yield Maintenance Account, on each Payment Date, from the
total amount, if any, received by it under the Cap Agreement, an amount equal to the product of (x) the excess, if any, of (i) the lesser of one-month LIBOR and the maximum rate (as such terms are used in the Cap Agreement) over (ii) the strike rate
with respect to such Payment Date and the Class A-2 Note Balance immediately prior to such Payment Date. Any excess over the amount payable under the Cap Agreement over the amount described in the prior sentence will be distributed on such Payment
Date to the Certificateholder. The Indenture Trustee shall withdraw funds in the Yield Maintenance Account in accordance with the provisions of Section 8.02 hereof. Amounts in the Yield Maintenance Account can only be used on each Payment Date to
pay Class A-2 Net WAC Cap Carry-forward Amounts: any remaining amounts will be released on each Payment Date to the Certificateholders pursuant to Section 8.02(xiii) hereof. 
  

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 (d) So long as no Default or Event of Default shall have occurred and be continuing, amounts held in the
Accounts, other than the Payment Account or the Note Insurance Payment Account, shall at the written direction of the Master Servicer be invested in Permitted Investments, which Permitted Investments shall mature no later than the Business Day
preceding the immediately following Payment Date. Absent written direction, all such amounts shall be held uninvested. Amounts in the Payment Account may be invested in Permitted Investments at the direction of the Indenture Trustee or remain
uninvested. 
  
 All income or other gains, if any, from investment
of moneys deposited in the Collection Account and Payment Account shall be for the benefit of the Master Servicer and the Indenture Trustee, respectively and on or after each Payment Date, any such amounts may be released from such Accounts and paid
to the Master Servicer or Indenture Trustee, as applicable, as part of its compensation hereunder. Any loss resulting from such investment of moneys deposited in the Collection Account or the Payment Account shall be reimbursed immediately as
incurred to the related Account by the Master Servicer or Indenture Trustee, respectively. Subject to Section 6.01 hereof and the preceding sentence, neither the Indenture Trustee nor the Master Servicer shall in any way be held liable by reason of
any insufficiency in the Accounts. 
  
 The Indenture Trustee shall
not in any way be held liable by reason of any insufficiency in any Account (other than the Payment Account) held by the Indenture Trustee resulting from any investment loss on any Permitted Investment included therein (except to the extent that the
Indenture Trustee is the obligor and has defaulted thereon). 
  
 In order to comply with its duties under the U.S. Patriot Act, the Indenture Trustee shall obtain and verify certain information and documentation from the owners of the accounts that the Indenture Trustee establishes pursuant to this
Indenture including, but not limited to, each account owner’s name, address, and other identifying information. 
  
 (e) Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold all such money and property
received by it as part of the Trust Estate and shall apply it as provided in this Indenture. 
  
 If the Indenture Trustee shall not have received the Servicer Remittance Amount by close of business on any related Servicer Remittance Date, the Indenture Trustee shall, unless the Master Servicer shall have made
provisions satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice, with a copy to the Backup Servicer and the Note Insurer, to the Master Servicer of the
Master Servicer’s failure to remit such Servicer Remittance Amount and that such failure, if not remedied by the close of business on the Business Day after the date upon which such notice is delivered to the Master Servicer, shall constitute a
Servicer Event of Default under the Sale and Servicing Agreement. If the Indenture Trustee shall subsequently receive any such Servicer Remittance Amount by the close of business on such Business Day, such Servicer Event of Default shall not be
deemed to have occurred. Notwithstanding any other provision hereof, the Indenture Trustee shall deliver to the Master Servicer, or its designee or assignee, any Servicer 
  

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 Remittance Amount received with respect to a Mortgage Loan after the related Servicer Remittance Date to the extent that
the Master Servicer previously made payment or provision for payment with respect to such Servicer Remittance Amount in accordance with this Section 8.01, and any such Servicer Remittance Amount shall not be deemed part of the Trust Estate.

  
 Except as otherwise expressly provided in this Indenture and
the Sale and Servicing Agreement, if, following delivery by the Indenture Trustee of the notice described above, the Master Servicer shall fail to remit the Servicer Remittance Amount on any Servicer Remittance Date, the Indenture Trustee shall
deliver a second notice to the Master Servicer, the Backup Servicer, the Trust and the Note Insurer by the close of business on the Business Day immediately prior to the related Payment Date indicating that a Servicer Event of Default occurred and
is continuing under the Sale and Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as are required of the Indenture Trustee under Article VII of the Sale and Servicing Agreement. In addition, if a default occurs in any
other performance required under the Sale and Servicing Agreement, the Indenture Trustee may, and upon the request of the Note Insurer or, with the consent of the Note Insurer, the Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes of both Classes shall, take such action as may be appropriate to enforce such payment or performance including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to
any right to claim a Default or Event of Default under this Indenture and to proceed thereafter as provided in Article V hereof. 
  
 Section 8.02. Payments; Statements. On each Payment Date, the Indenture Trustee shall withdraw from each Payment Account, such amounts on deposit
therein relating to the Indenture Trustee Fees, expenses and other amounts then due to it including any payments with respect to reimbursement or indemnification due to the Indenture Trustee (subject to Section 6.16), the Owner Trustee Fee due to
the Owner Trustee for such Payment Date and the Premium due the Note Insurer for such Payment Date and shall pay itself the Indenture Trustee Fee and any other amounts due the Indenture Trustee and shall distribute such Owner Trustee Fee and Premium
as instructed in writing by the Master Servicer. On each Payment Date, unless the Notes have been declared due and payable pursuant to Section 5.02 hereof and moneys collected by the Indenture Trustee are being applied in accordance with Section
5.07 hereof, Available Funds on deposit in each Payment Account on any Payment Date or Redemption Date shall be withdrawn from such Payment Account, in the amounts required (based on the Indenture Trustee’s Remittance Report prepared by the
Indenture Trustee on or before such Payment Date in reliance on the related Servicer Remittance Report), for application on such Payment Date in respect of payments for the related Class of Notes as follows: 
  
 (i) from amounts then on deposit in the related Payment
Account, to the Holders of the related Class of Notes, the Payment Amount for such Class; 
  
 (ii) from amounts then on deposit in the related Payment Account, as a payment of principal, an amount equal to the Overcollateralization
Deficit, if any, for the related Class of Notes; 
  

 48 

 (iii) with respect to the other Class of Notes, from amounts then on deposit in the
related Payment Account, to the Holders of the other Class of Notes, the Shortfall Amount for the other Class; 
  
 (iv) from amounts then on deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the
related Class as of such Payment Date; 
  
 (v)
from amounts then on deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the other Class of Notes as of such Payment Date to the extent not already reimbursed pursuant to clause (iv) above, allocated
pro rata based on the amount of each Reimbursement Amount; 
  
 (vi) from amounts then on deposit in the related Payment Account, as a payment of the principal, an amount equal to the Overcollateralization Increase Amount for the related Class of Notes; 
  
 (vii) from amounts then on deposit in the related Payment
Account, to the related Reserve Account, the Reserve Payment Amount; 
  
 (viii) with respect to the Class A-1 Notes, from amounts then on deposit in the related Payment Account and amounts released from the related Reserve Account, to the Holders of the Class A-1 Notes, the Class A-1 Net
WAC Cap Carry-Forward Amount; 
  
 (ix) with
respect to the Class A-2 Notes, from amounts then on deposit in the related Payment Account, the Yield Maintenance Account and amounts released from the related Reserve Account, to the Holders of the Class A-2 Notes, the Class A-2 Net WAC Cap
Carry-Forward Amount; 
  
 (x) from: 

 

	 	(A)	amounts then on deposit in the Payment Account related to the Class A-1 Notes, to the Master Servicer, any amount due to it with respect to the Group 1 Mortgage Loans; and

  

	 	(B)	amounts then on deposit in the Payment Account related to the Class A-2 Notes, to the Master Servicer, any amount due to it with respect to the Group 2 Mortgage Loans;

  
 (xi) pro rata, from aggregate
amounts then on deposit in both Payment Accounts, any amounts in respect of indemnity or reimbursement due the Indenture Trustee under any of the Basic Documents to the extent not previously paid or reimbursed hereunder; 
  
 (xii) pro rata, from aggregate amounts then on deposit in
both Payment Accounts, to the Owner Trustee, its Expenses as defined in section 9.02 of the Trust Agreement, to the extent the Sponsor has not already paid to the Owner Trustee such Expenses; and 
  

 49 

 (xiii) following the making by the Indenture Trustee of all allocations, transfers and
disbursements described above, from amounts then on deposit in each Payment Account and the Yield Maintenance Account, the Indenture Trustee shall distribute to the Certificateholders (as identified in the Certificate Register maintained by the
Owner Trustee), the amount remaining on such Payment Date in each Payment Account and the Yield Maintenance Account, if any. 
  
 Section 8.03. Claims against the Note Insurance Policy. (a) No later than two (2) Business Days prior to each Payment Date, the Indenture Trustee
shall determine with respect to the immediately following Payment Date, the amount required to be on deposit in each Payment Account on such Payment Date as a result of the Master Servicer’s remittance of the Servicer Remittance Amount on the
related Servicer Remittance Date. 
  
 (b) If the Servicer
Remittance Report with respect to any Payment Date indicates that an Insured Amount shall be payable for any Group, after giving effect to the distributions specified in Section 8.02 (calculating such distributions without giving effect to any
Insured Amount to be paid by the Note Insurer on such Payment Date) the Indenture Trustee shall complete a Notice in the form of Exhibit A to the Note Insurance Policy and submit such notice to the Note Insurer no later than 12:00 noon New York City
time (9:00 Los Angeles time) on the second Business Day preceding such Payment Date as a claim for an Insured Amount. 
  
 (c) The Indenture Trustee shall establish an Eligible Account (which may be a subaccount of the Payment Account) for the benefit of Holders of the Notes
and the Note Insurer referred to herein as the “Note Insurance Payment Account” over which the Indenture Trustee shall have exclusive control and sole right of withdrawal. The Indenture Trustee shall deposit upon receipt any amount paid
under the Note Insurance Policy in the Note Insurance Payment Account and distribute such amount only for purposes of payment to the Noteholders of the related Group of the Insured Amount for such Group for which a claim was made and such amount may
not be applied to satisfy any costs, expenses or liabilities of the Master Servicer, the Indenture Trustee or the Trust. Amounts paid under the Note Insurance Policy, to the extent needed to pay the Insured Amount shall be disbursed by the Indenture
Trustee to the Noteholders in accordance with Section 8.02. 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 the Insured Amount with other funds available to
make such payment. However, the amount of any payment of principal of or interest on the Notes to be paid from funds transferred from the Note Insurance Payment Account shall be noted as provided in subsection (d) of this Section 8.03 in the Note
Register and in the Indenture Trustee’s Remittance Report. Funds held in the Note Insurance Payment Account shall not be invested. Any funds remaining in the Note Insurance Payment Account on the first Business Day following a Payment Date
shall be returned to the Note Insurer pursuant to the written Instructions of the Note Insurer by the end of such Business Day. 
  
 (d) The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid in respect of any Note from moneys
received under the Note Insurance Policy. The Note Insurer shall have the right to inspect such records at reasonable times during normal business hours upon one (1) Business Day’s prior written notice to the Indenture Trustee. 
  

 50 

 (e) In the event that the Indenture Trustee has received a certified copy of an order of the appropriate
court that any Insured Amount has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Indenture Trustee shall so notify the Note Insurer, shall comply with the provisions of the Note Insurance Policy to
obtain payment by the Note Insurer of such voided Insured Amount, and shall, at the time it provides notice to the Note Insurer, notify, by mail to the Noteholders of the affected Notes that, in the event any Noteholder’s Insured Amount is so
recovered, such Noteholder will be entitled to payment pursuant to the Note Insurance Policy, a copy of which shall be made available through the Indenture Trustee, the Note Insurer or the Note Insurer’s fiscal agent, if any, and the Indenture
Trustee shall furnish to the Note Insurer or its fiscal agent, if any, its records evidencing the payments which have been made by the Indenture Trustee and subsequently recovered from the Noteholders, and dates on which such payments were made.

  
 (f) The Indenture Trustee shall promptly notify the Note
Insurer of any proceeding or the institution of any action, of which a Responsible Officer of the Indenture Trustee has actual knowledge, seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or
similar law (a “Preference Claim”) of any payment made with respect to the Notes. Each Noteholder, by its purchase of Notes, the Master Servicer, the Backup Servicer, and the Indenture Trustee agree that, the Note Insurer (so long
as no Note 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, supersede as or performance bond pending any such appeal. In addition and without limitation of the foregoing, the Note Insurer shall be subrogated to, and each Noteholder,
the Master Servicer, the Backup Servicer and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the fullest extent permitted by law, the rights of the Master Servicer, the Backup Servicer, the Indenture Trustee and each
Noteholder 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 Indenture Trustee shall, upon retirement of the Notes, furnish to the
Note Insurer a notice of such retirement, and, upon retirement of the Notes and the expiration of the term of the Note Insurance Policy, surrender the Note Insurance Policy to the Note Insurer for cancellation. 
  
 (h) Unless a Note Insurer Default exists and is continuing, the Indenture
Trustee and the Trust shall cooperate in all respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer’s rights or interests hereunder without limiting the rights or affecting the interests of
the Noteholders as otherwise set forth herein. 
  
 (i) Each
Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agrees that, unless a Note Insurer Default exists and is continuing, the Note Insurer shall have the right to direct all matters relating to the Notes in any proceeding in a
bankruptcy of the Trust, including without limitation any proceeding relating to a Preference Amount and the posting of any surety or Note pending any such appeal. 
  

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 (j) Anything herein to the contrary notwithstanding, any payment with respect to principal of or interest
on the Notes which is made with moneys received pursuant to the terms of the Note Insurance Policy shall not be considered payment of the Notes from the Trust. The Trust and the Indenture Trustee acknowledge, and each Holder by its acceptance of a
Note agrees, that without the need for any further action on the part of the Note Insurer, the Trust, the Indenture Trustee or the Note Registrar (x) to the extent the Note Insurer makes payments, directly or indirectly, on account of principal of
or interest on the Notes to the Holders of such Notes, the Note Insurer will be fully subrogated to, and each Noteholder, the Trust and the Indenture Trustee hereby delegate and assign to the Note Insurer, to the fullest extent permitted by law, the
rights of such Holders to receive such principal and interest from the Trust, including, without limitation, any amounts due to the Noteholders in respect of securities law violations arising from the offer and sale of the Notes, and (y) the Note
Insurer shall be paid such amounts from the sources and in the manner provided herein for the payment of such amounts. 
  
 Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans. (a) Each Payment Account shall relate solely to the Notes of
the related Class and to the Mortgage Loans in the related Group, Permitted Investments and other property securing the related Notes. Funds and other property in each Payment Account shall not be commingled with the other Payment Account or any
other moneys or property of the Trust or any Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other property received or held by it as part of a Payment Account in collective accounts maintained by it in
the normal course of its business and containing funds or property held by it for other Persons (which may include the Trust or an Affiliate); provided, that such accounts are under the sole control of the Indenture Trustee and the Indenture Trustee
maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to the related Payment Account. 
  
 (b) If any amounts are needed for payment from a Payment Account and sufficient uninvested funds are not available therein to make such payment, the
Indenture Trustee shall cause to be sold or otherwise converted to cash, to the extent available, a sufficient amount of the investments in such Payment Account. 
  
 (c) The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its possession, or in the
possession of an agent whose actions with respect to such items are under the sole control of the Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Payment Accounts. The Indenture Trustee
shall relinquish possession of such items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in the Payment Accounts,
against delivery of the amount receivable in connection with any sale. 
  
 (d) The Master Servicer shall not direct the Indenture Trustee to invest any part of the Trust Estate in Permitted Investments that constitute uncertificated securities (as defined in Section 8-102 of the Uniform Commercial Code, as enacted
in the relevant jurisdiction) unless it has delivered an Opinion of Counsel addressed to the Indenture Trustee and reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each type of security for which
authority to invest is being sought, the procedures that must be followed to maintain the lien and security interest created by this Indenture with respect to the Trust Estate. 
  

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 (e) With respect to any portion of the Trust Estate invested in Permitted Investments, the Indenture
Trustee acknowledges and agrees that: 
  
 (i) any
Permitted Investment that is held in a deposit account shall be held solely in an Eligible Account; and each such Eligible Account shall be subject to the sole and exclusive dominion, custody and control of the Indenture Trustee; and, without
limitation on the foregoing, the Indenture Trustee shall have sole signature authority with respect thereto; 
  
 (ii) any Permitted Investment that constitutes Physical Property shall be delivered to the Indenture Trustee in accordance with paragraph
(a) and/or (b) of the definition of “Delivery,” as applicable, and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a securities intermediary (as such term is defined in Section 8-102(a)(14) of the Uniform
Commercial Code) acting solely for the Indenture Trustee; and 
  
 (iii) any Permitted Investment that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations shall be delivered in accordance with paragraph (c) of the definition of
“Delivery” and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Permitted Investment as described in such paragraph. 
  
 Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the representations or warranties of the Sponsor set forth in Section 4.01 of the Sale and Servicing Agreement was materially incorrect or otherwise misleading with respect to
any Mortgage Loan as of the time made, the Indenture Trustee shall direct the Sponsor to either cure, repurchase or substitute for such Mortgage Loan as provided in Section 4.02 of the Sale and Servicing Agreement. Upon any purchase of or
substitution for a Deleted Mortgage Loan by the Sponsor in accordance with Section 2.06 or Section 4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall deliver the Indenture Trustee’s Mortgage File relating to such Deleted
Mortgage Loan to the Sponsor, and the Trust and the Indenture Trustee shall execute such instruments of transfer as are necessary to convey title to such Deleted Mortgage Loan to the Sponsor from the lien of this Indenture. Nothing in this Section
8.05 should be construed to obligate the Indenture Trustee to actively monitor the correctness or accuracy of the representations and warranties of the Sponsor. 
  

Section 8.06. Reports by Indenture Trustee to Noteholders; Access to Certain Information. On each Payment Date, the Indenture Trustee, shall
provide the written reports required by the first paragraph of Section 2.08(d) to Noteholders of record as of the related Record Date (including the Clearing Agency, if any) and the Note Insurer. The Indenture Trustee will make available the
Indenture Trustee’s Remittance Report (and, at its option, any additional files containing the same information in an alternative format) to any interested person via the Indenture Trustee’s internet website. The Indenture Trustee’s
internet website shall initially be located at https://www.corporatetrust.db.com/invr and assistance in using the website 
  

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 can be obtained by calling the Indenture Trustee’s investor relations desk at 800.735.7777. The Indenture Trustee
shall have the right to alter the manner in which it provides its Indenture Trustee’s Remittance Reports to Noteholders upon notice to Noteholders in the manner in which such Indenture Trustee’s Remittance Reports are then being provided.

  
 The Indenture Trustee shall make available at its Corporate
Trust Office, during normal business hours, for review by any Noteholder, designees of the Issuer, or the Note Insurer, originals or copies of the following items: (a) the Indenture and any amendments thereto, (b) all Indenture Trustee’s
Remittance Reports and other reports delivered since the Closing Date pursuant to Section 2.08(d) hereof, (c) any Officers’ Certificates delivered to the Indenture Trustee since the Closing Date as described in the Indenture and (d) any
Accountants’ reports delivered to the Indenture Trustee since the Closing Date as required under the Sale and Servicing Agreement. Copies of any and all of the foregoing items will be available from the Indenture Trustee upon request; however,
the Indenture Trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing such copies and shall not be required to provide such copies without reasonable assurances that such sum will be
paid. 
  
 Section 8.07. Release of Trust Estate. The
Indenture Trustee shall, at such time as there are no Notes Outstanding, release all of the Trust Estate to the Trust (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02 hereof and amounts due the Indenture
Trustee hereunder). 
  
 Section 8.08. Amendment to Sale and
Servicing Agreement. The Indenture Trustee may, without the consent of any Holder, enter into or consent to any amendment or supplement to the Sale and Servicing Agreement for the purpose of increasing the obligations or duties of any party
other than the Indenture Trustee or the Holders of the Notes. The Indenture Trustee shall not enter into or consent to any such supplement or amendment unless the Indenture Trustee receives (i) an Opinion of Counsel that the position of the Holders
would not be materially adversely affected or written confirmation of satisfaction of the Rating Agency Condition has been delivered to it and (ii) an Opinion of Counsel experienced in federal income tax matters that such amendment or supplement
will not prevent the Notes from being characterized as debt for United States federal income tax purposes and will not cause the Issuer to be characterized as an association (or a publicly traded partnership) taxable as a corporation or a taxable
mortgage pool for United States federal income tax purposes. The Indenture Trustee may in its discretion decline to enter into any such supplement or amendment if its own rights, duties or immunities would be adversely affected. Prior to entering
into any supplement or amendment an Opinion of Counsel shall be delivered to the Indenture Trustee (upon which it may conclusively rely) to the effect that such amendment or supplement is permitted and authorized by this Indenture and the Sale and
Servicing Agreement. 
  
 Section 8.09. Delivery of the Mortgage
Files Pursuant to Sale and Servicing Agreement. As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall deliver to the Master Servicer (if directed in writing by the Master Servicer) the Indenture
Trustee’s Mortgage Files for such Mortgage Loan upon receipt by the Indenture Trustee on or prior to the date such release is to be made of: 
  
 (a) such Officer’s Certificates, if any, as are required by the Sale and Servicing Agreement; and 
  

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 (b) a Request for Release, executed by the Master Servicer, providing that the Master Servicer (if
directed in writing by the Master Servicer) will hold or retain the Indenture Trustee’s Mortgage Files in trust for the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes. 
  
 Section 8.10. Master Servicer as Agent. In order to facilitate the
servicing of the Mortgage Loans by the Master Servicer of such Mortgage Loans, the Master Servicer of the Mortgage Loans has been appointed by the Trust to retain, in accordance with the provisions of the Sale and Servicing Agreement and this
Indenture, all Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into the related Payment Account on or prior to the related Servicer Remittance Date. 
  
 Section 8.11. Termination of Master Servicer. In the event of the occurrence of a Servicer Event of Default specified
in Section 7.01 of the Sale and Servicing Agreement, the Indenture Trustee may, with the consent of the Note Insurer or, with the prior written consent of the Note Insurer, the Holder of Notes representing not less than 50% of the Note Principal
Balance of the Outstanding Notes of both Classes, and shall, upon the written direction of the Note Insurer (or as otherwise provided in the Sale and Servicing Agreement), terminate the Master Servicer as provided in Section 7.01 of the Sale and
Servicing Agreement. If the Indenture Trustee terminates the Master Servicer, the Backup Servicer shall, pursuant to Section 7.02 of the Sale and Servicing Agreement, assume the duties of the Master Servicer or appoint a successor master servicer
acceptable to the Rating Agencies in accordance with the directions of the Note Insurer and meeting the requirements set forth in the Sale and Servicing Agreement. 
  
 Section 8.12. Opinion of Counsel. The Indenture Trustee shall be entitled to receive at least five (5) Business Days’
notice of any action to be taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with releases of Mortgage Loans that were subject to a prepayment in full), accompanied by copies of any instruments involved, and the Indenture
Trustee shall be entitled to receive an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that
all conditions precedent to the taking of such action have been complied with. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the
Indenture Trustee in connection with any such action. 
  
 Section
8.13. Appointment of Collateral Agents. The Indenture Trustee may, at no additional cost to the Trust or to the Indenture Trustee, with the consent of the Note Insurer, appoint one or more Collateral Agents to hold all or a portion of the
Indenture Trustee Mortgage Files, as Agent for the Indenture Trustee. Such Collateral Agent shall meet the requirements of Article IX of the Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be governed by said Article IX.

  
 Section 8.14. Rights of the Note Insurer to Exercise Rights
of Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall have the right to exercise all rights of the Noteholders under this Indenture, without any further consent of the
Noteholders, including, without limitation: 
  
 (a) the right to
require the Master Servicer to effect foreclosures upon Mortgage Loans upon failure of the Master Servicer to do so; 
  

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 (b) the right to require the Sponsor to repurchase or substitute for Deleted Mortgage Loans pursuant to
Section 8.05; 
  
 (c) the right to direct the actions of the
Indenture Trustee during the continuance of an Event of Default; and 
  
 (d) the right to vote on proposed amendments to this Indenture. 
  
 In addition, each Noteholder agrees that, unless a Note Insurer Default exists, the rights specifically set forth above may be exercised by the Noteholders only with the prior written consent of the Note Insurer.

  
 Except as otherwise provided in Section 8.03 hereof and
notwithstanding any provision in this Indenture to the contrary, so long as a Note Insurer Default has occurred and is continuing, the Note Insurer shall have no rights to exercise any voting rights of the Noteholders hereunder, nor shall the
Indenture Trustee be required to obtain the consent of, or act at the direction of, the Note Insurer. 
  
 All notices, statements, reports, certificates or opinions required by this Indenture to be sent to any other party hereto or to the Noteholders shall
also be sent to the Note Insurer. 
  
 Section 8.15. Trust
Estate and Accounts Held for Benefit of the Note Insurer. The Indenture Trustee shall hold the Trust Estate and the Indenture Trustee’s Mortgage Files, for the benefit of the Noteholders and the Note Insurer, and all references in this
Indenture and in the Notes to the benefit of Holders of the Notes shall be deemed to include the Note Insurer (provided there does not exist a Note Insurer Default). 
  
 ARTICLE IX 
  
 SUPPLEMENTAL INDENTURES 
  
 Section 9.01. Supplemental Indentures Without Consent of Noteholders. With the consent of the Note Insurer and without the consent of the Holders
of any Notes, the Trust and the Indenture Trustee, at any time and from time to time, may enter into one or more indenture supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes: 
  
 (a) to correct or amplify the description of any property at any time subject
to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property;

  

 56 

 (b) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes
of the issuance, authentication and delivery of any Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; 
  

(c) to evidence the succession of another Person to the Trust to the extent permitted herein, and the assumption by any such successor of the covenants
of the Trust herein and in the Notes contained; 
  
 (d) to add to
the covenants of the Trust, for the benefit of the Holders of all Notes and the Note Insurer, or to surrender any right or power herein conferred upon the Trust; 
  
 (e) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any
other provision herein, or to amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided that such action shall not adversely affect
in any material respect the interests of the Holders of the Notes or the Certificateholders and will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuer to be characterized as an
association (or a publicly traded partnership) taxable as a corporation or a taxable mortgage pool for United States federal income tax purposes; provided, that the amendment shall be deemed not to adversely affect in any material respect the
interests of the Holders of the Notes and the Note Insurer and will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuer to be characterized as an association (or a publicly traded
partnership) taxable as a corporation or a taxable mortgage pool for United States federal income tax purposes if the Person requesting the amendment obtains either (i) an Opinion of Counsel delivered to, but not at the expense of, the Indenture
Trustee or to the Note Insurer, to such effect or (ii) written confirmation of the satisfaction of the Rating Agency Condition; or 
  
 (f) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture
under the TIA or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA. 
  
 Section 9.02. Supplemental Indentures with Consent of Noteholders. With the consent of the Note Insurer and with the
consent of Holders of Notes representing not less than a majority of the Note Principal Balance of all Outstanding Notes of the Classes affected thereby by Act of said Holders delivered to the Trust and the Indenture Trustee, the Trust and the
Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights
of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each Outstanding Note affected thereby: 
  
 (a) change any Payment Date or the Final Stated Maturity Date of the Notes
or, with respect to the Notes, reduce the Note Principal Balance thereof or the Note Rate thereon, change the earliest date on which any Note may be redeemed at the option of the Sponsor, change payment where, or the coin or currency in which, any
Note or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Note on or after the Final Stated Maturity Date thereof or for the enforcement of the payment
of the entire remaining unpaid principal amount of any Note on or after the Final Stated Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date); 
  

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 (b) reduce the percentage of the Note Principal Balance of the Outstanding Notes, the consent of the
Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required for any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences provided for in this
Indenture; 
  
 (c) modify any of the provisions of this Section
9.02 or Sections 5.13 or 5.17(b) hereof, except to increase any percentage specified therein or to provide that certain other provisions of this Indenture cannot be modified or waived without the consent of the Holder of each Outstanding Note
affected thereby; 
  
 (d) modify or alter the provisions of the
proviso to the definition of the term “Outstanding;” 
  
 (e) permit the creation of any lien other than the lien of this Indenture with respect to any part of the Trust Estate or terminate the lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of
the security afforded by the lien of this Indenture; 
  
 (f)
modify any of the provisions of this Indenture in such manner as to affect the calculation of the Interest Payment Amount or Base Principal Payment Amount for any Payment Date and either Class (including the calculation of any of the individual
components of such amounts) or to affect rights of the Holders of the Notes to the benefits of any provisions for the redemption of Notes contained herein; or 
  

(g) incur any indebtedness, other than the Notes, that would cause the Trust or the Trust Estate to be treated as a “taxable mortgage pool”
within the meaning of Code Section 7701(i). 
  
 The Indenture
Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and
delivered hereunder. The Indenture Trustee shall not be liable for any such determination made in good faith. 
  
 It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof. 
  

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 Promptly after the execution by the Trust and the Indenture Trustee of any supplemental indenture
pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Notes to which such supplemental indenture relates a notice setting forth in general terns the substance of such supplemental indenture. Any failure of the
Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. 
  

Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and shall be fully protected in relying upon, (i) an Opinion of Counsel stating that the execution
of such supplemental indenture is authorized or permitted by this Indenture and such supplemental indenture does not adversely affect the interests of the Noteholders or the Note Insurer in any material respect; (ii) an Opinion of Counsel
experienced in federal income tax matters stating that the execution of such supplemental indenture will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuer to be characterized as
an association (or a publicly traded partnership) taxable as a corporation or a taxable mortgage pool for United States federal income tax purposes; or (iii) written confirmation of satisfaction of the Rating Agency Condition. The Indenture Trustee
may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise. The Master Servicer, on behalf of the Trust, shall cause
executed copies of any supplemental indentures to be delivered to the Backup Servicer, the Note Insurer and the Rating Agencies. 
  
 Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article IX, this Indenture shall be
modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes to which such supplemental indenture relates that have theretofore been or thereafter are authenticated
and delivered hereunder shall be bound thereby. 
  
 Section 9.05.
Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA. 

 
 Section 9.06. Reference in Notes to Supplemental Indentures. Notes
authenticated and delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in
such supplemental indenture. If the Owner Trustee, acting at the direction of the Certificateholders, shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Owner Trustee, acting at the direction of
the Certificateholders, to any such supplemental indenture may be prepared by the Master Servicer and executed by the Owner Trustee, acting at the direction of the Certificateholders, on behalf of the Trust, and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Notes. 
  
 Section
9.07. Amendments to Governing Documents. The Indenture Trustee shall, upon a Trust Request, consent to any proposed amendment to the Trust’s governing documents, or an 
  

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 amendment to or waiver of any provision of any other document relating to the Trust’s governing documents, such
consent to be given without the necessity of obtaining the consent of the Holders of any Notes upon receipt by the Indenture Trustee of: 
  
 (a) an Officer’s Certificate, to which such proposed amendment or waiver shall be attached, stating that such attached copy is a true copy of the
proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; 
  
 (b) written confirmation of the satisfaction of the Rating Agency Condition with respect to such proposed amendment; and, 
  
 (c) written consent of the Note Insurer. 
  
 Notwithstanding the foregoing, the Indenture Trustee may decline to consent
to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise. 
  
 Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or any
provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the proposed
amendment or waiver. 
  
 ARTICLE X 
  
 REDEMPTION OF NOTES 
  
 Section 10.01. Redemption of Notes. (a) The Sponsor may, at its sole
cost and expense, (i) terminate this Indenture and all the Notes may be redeemed in whole, but not in part, on any Redemption Date on and after the related Clean-Up Call Date at the Termination Price, (ii) redeem the Class A-1 Notes or Class A-2
Notes, on any Redemption Date on and after the related Clean-up Call Date at the applicable Termination Price or (iii) to the extent that the Sponsor has redeemed one Class of Notes, redeem the outstanding Class of Notes on any Redemption Date on
and after the related Clean-up Call Date; provided that, in each case, either (i) the Group related to the Class of Notes that is not being redeemed has reached its Specified Overcollateralization Amount and will remain at its Specified
Overcollateralization Amount after giving effect to the redemption of the Class of Notes being redeemed or (ii) the Class of Notes that is not being redeemed is no longer outstanding. Upon the redemption of either Class of Notes, the related
Sub-Trust shall be terminated and Excess Interest from such Sub-Trust will no longer be available to fund the Reserve Account. Any amounts on deposit in the Reserve Account related to the Class of Notes redeemed shall remain on deposit in such
Reserve Account until all of the Notes are redeemed and may continue to be used to fund Shortfall Amounts for the other Class of Notes. 
  

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 (b) Any such purchase or redemption shall be accomplished by deposit by the Sponsor, into the related
Payment Account of the Termination Price on the Servicer Remittance Date preceding the Redemption Date. The amounts on deposit therein shall be distributed by the Indenture Trustee on such Redemption Date in accordance with the priority set forth in
Section 8.02 hereof. No termination or redemption is permitted without the prior written consent of the Note Insurer if it would result in a draw on the Note Insurance Policy. 
  
 (c) [Reserved]. 
  
 (d) Upon the redemption of either Class of Notes, the related Mortgage Loans in the Trust Estate shall be released and delivered to the Sponsor.

  
 (e) Upon receipt of the written notice from the Sponsor of its
election to redeem the Notes pursuant to Section 10.01 (a) hereof (which shall state that the Sponsor has determined that the conditions to redemption at the option of the Sponsor have been satisfied and setting forth information as may be required
to accomplish such redemption), the Indenture Trustee shall prepare and deliver to the Trust, the Seller, the Master Servicer, the Backup Servicer and the Note Insurer, no later than the related Redemption Date, an Indenture Trustee’s
Remittance Report. 
  
 Section 10.02. Form of Redemption
Notice. Notice of redemption shall be given by the Indenture Trustee in the name of and at the expense of the Trust by first class mail, postage prepaid, mailed not less than ten days prior to the Redemption Date to each Holder of Notes to be
redeemed, such Holders being determined as of the Record Date for such Payment Date, and to the Note Insurer. 
  
 All notices of redemption shall state: 
  
 (a) the Redemption Date; 
  
 (b) the price at which the Notes of such Class will be redeemed; and 
  
 (c) the fact of payment in full on such Notes, the place where such Notes are to be surrendered for final payment (which
shall be the office or agency of the Trust to be maintained as provided in Section 3.02 hereof), and that no interest shall accrue on such Note for any period after the date fixed for redemption. 
  
 Failure to give notice of redemption, or any defect therein, to any Holder of
any Note selected for redemption shall not impair or affect the validity of the redemption of any other Note. 
  
 Section 10.03. Notes Payable on Optional Redemption. Notice of redemption having been given as provided in Section 10.02 hereof, the Notes to be
redeemed shall, on the applicable Redemption Date, become due and payable and (unless the Trust shall default in such payment) no interest shall accrue on such Notes for any period after such Redemption Date; provided, however, that if such payment
is not made on the Redemption Date, the Note Principal Balance shall, until paid, bear interest from the Redemption Date at the applicable Note Rate. 
  

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 Section 10.04. Auction Sale. If the Sponsor does not elect to exercise its clean-up call option
pursuant to Section 10.01 hereof with respect to either Class or one Class of Notes within three months after the related Clean-up Call Date, on the following Payment Date, the remaining Mortgage Loans in the related Sub-Trust or Sub-Trusts will be
sold pursuant to the auction process outlined in Exhibit B. The amounts received from the auction sale must be sufficient to redeem the Notes for an amount equal to the aggregate outstanding Note Principal Balance of the related Class or Classes of
Notes, plus all accrued and unpaid interest thereon including shortfalls of Interest Carry-forward Amounts (including, with respect to the Class A-1 Notes, any Class A-1 Net WAC Cap Carry-Forward Amount and the Class A-2 Notes, any Class A-2 Net WAC
Cap Carry-Forward Amount), the Indenture Trustee’s fees and expenses associated with such auction sale (including any fees and expenses associated with engaging a third-party as agent to assist in the auction sale process), unreimbursed
advances due and owing to the Master Servicer and all amounts due and owing to the Note Insurer (such aggregate amount, the “Minimum Sale Price”). 
  
 However, if Noteholders representing 66-2/3% of the outstanding principal balance of the related Class or Classes of Notes
consent and the Note Insurer consents, the Indenture Trustee may sell the Mortgage Loans remaining in the related Sub-Trust or Sub-Trusts after the Clean-up Call Date for less than the Minimum Sale Price. The Indenture Trustee will submit a claim to
the Note Insurer for any resulting shortfalls in Insured Amounts pursuant to Section 8.03 hereof. Additionally, to the extent that the auction sale would not produce sufficient proceeds and the Noteholders do not consent to sell the Mortgage Loans
for less than the Minimum Sale Price, the Note Insurer may exercise the clean-up call option with respect to the related Class or Classes of Notes for the Minimum Sale Price (such funds to be distributed according to the priority established, as
applicable, in Section 5.07). In any event, the Indenture Trustee shall be entitled to reimbursement of its costs and expenses of any such sale (including any fees and expenses associated with engaging a third-party to assist in any attempted
auction sale). 
  
 In addition, so long as the auction process
continues with respect to either Group, all payments from such Group that would normally be distributed to the Certificateholders pursuant to Section 8.02(x) or 5.07(l) hereof will be distributed as principal to the Noteholders of the related Class
and all payments from the other Group that would normally be distributed to the Certificateholders will be deposited in the related Reserve Account. 
  
 ARTICLE XI 
  
 MISCELLANEOUS 
  
 Section 11.01. Compliance Certificates and Opinions. (a) Upon any application or request by any Person to the Indenture Trustee to take any action under any provision of this Indenture, such Person shall
furnish to the Indenture Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have been complied with and an Opinion of Counsel, if requested by the
Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or request as to which the furnishing of such documents is specifically
required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. 
  

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 (b) Every certificate, opinion or letter with respect to compliance with a condition or covenant provided
for in this Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request (other than certificates provided pursuant to TIA Section 314(a)(4)) shall include and shall be deemed
to include (regardless of whether specifically stated therein) the following: 
  
 (i) a statement that each individual signing such certificate, opinion or letter has read such covenant or condition and the definitions herein relating thereto; 
  
 (ii) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based; 
  
 (iii) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
  
 (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. 
  
 Section 11.02. Form of Documents Delivered to Indenture Trustee. In
any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters
in one or several documents. 
  
 Any certificate or opinion of the
Trust may be based, insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a
copy of such other counsel’s opinion and shall include a statement to the effect that such counsel believes that such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel. 
  
 Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. 
  
 Wherever in this Indenture, in connection with any application or certificate or report to the indenture Trustee, it is
provided that the Trust shall deliver any document as a condition of the reporting of such application, or as evidence of the Trust’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of
such application or at the 
  

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 effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document
shall in such case be conditions precedent to the right of the Trust to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to
rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(ii) hereof. 
  
 Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to
the taking of any action by the Indenture Trustee at the request or direction of the Trust, then, notwithstanding that the satisfaction of such condition is a condition precedent to the Trust’s right to make such request or direction, the
Indenture Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.01 (d) hereof. 
  
 Section 11.03. Acts of Noteholders. (a) Any request, demand,
authorization, direction, notice, consent, waiver or other action provided by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in
person or by an agent duly appointed in writing; and, except as herein otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Trust. Such instrument or instruments (and the action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Trust, if made in the manner provided in
this Section 11.03. 
  
 (b) The fact and date of the execution by
any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall
also constitute sufficient proof of his authority. 
  
 (c) The
ownership of Notes shall be proved by the Note Register. 
  
 (d)
Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Trust in reliance thereon; whether or not notation of such action is made upon such Notes. 
  
 Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Trust. Any request, demands authorization,
direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: 
  
 (a) the Indenture Trustee by any Noteholder or by the Trust shall be sufficient for every purpose hereunder if in writing
and made, given, furnished or filed and received by the Indenture Trustee at its Corporate Trust Office; or 
  

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 (b) the Trust by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder (except as provided in Section 5.01 (c) and (d)) hereof if in writing and mailed, first-class postage prepaid, to the Trust addressed to it at Accredited Mortgage Loan Trust 2004-1, in care of U.S. Bank Trust National Association, 400
North Michigan Avenue, Chicago, Illinois 60611, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Trust. 
  
 (c) the Note Insurer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in
writing and mailed, first-class, postage prepaid, to Ambac Assurance Corporation addressed to it at One State Street Plaza, New York, New York 10004, Attention: Surveillance Department (in each case in which notice or other communication to the Note
Insurer refers to an Event of Default, a claim on the Note Insurance Policy or with respect to which failure on the part of the Note Insurer to respond shall be deemed to constitute consent or acceptance, then a copy of such notice or other
communication should also be sent to the attention of the General Counsel and shall be marked to indicate “URGENT MATERIAL ENCLOSED”), or at any other address previously furnished in writing to the Indenture Trustee by the Note Insurer; or

  
 (d) the Sponsor by the Indenture Trustee or by any Noteholder
shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California, 92128, Attention: Corporate Trust Administration, or at any other
address previously furnished in writing to the Indenture Trustee by the Sponsor; or 
  
 (e) the Master Servicer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Accredited Home Lenders, Inc., 15090 Avenue
of Science, San Diego, California 92128, Attention: Corporate Trust Administration or at any other address previously furnished in writing to the Indenture Trustee by the Master Servicer; or 
  
 (f) the Seller by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: Corporate Trust Administration or at any other address
previously furnished in writing to the Indenture Trustee by the Seller; or 
  
 (g) the Underwriter by any party or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to Morgan Stanley, 1585 Broadway, New York, New York 10036,
Attention: Steve Shapiro, or at any other address previously furnished in writing to the Indenture Trustee by the Underwriter; or 
  

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 (h) the Backup Servicer by the Master Servicer or the Indenture Trustee shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage prepaid, to Countrywide Home Loans, Inc., 7105 Corporate Drive, Plano, Texas 75024, Attention: Accredited Mortgage Loan Trust 2004-1; or at any other address previously furnished in
writing to the Indenture Trustee by the Backup Servicer. 
  
 Notices required to be given to the Rating Agencies by the Trust or the Indenture Trustee shall be in writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of Moody’s, at the following address:
Moody’s Investors Service, Inc., Residential Mortgage Monitoring Department, 99 Church Street, New York, New York 10004 and (ii) in the case of S&P, at the following address: Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc., 55 Water Street, New York, New York, 10041, Attention: Asset-Backed Surveillance Department; or as to each of the foregoing, at such other address as shall be designed by written notice to the other parties. 

 
 Section 11.05. Notices and Reports to Noteholders; Waiver of
Notices. Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed, first-class
postage prepaid, to each Noteholder affected by such event or to whole such report is required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice or the mailing of such report. In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice
or report so mailed, to any particular Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any notice or report that is mailed in the manner herein provided shall be conclusively presumed to have
been duly given or provided. 
  
 Where this Indenture provides for
notice in any manner, such notice may be waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with
the Indenture Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 
  
 In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice. 
  
 Section 11.06. Rules by Indenture
Trustee. The Indenture Trustee may (but is not obligated to) make reasonable rules for any meeting of Noteholders. 
  
 Section 11.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that is
required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control. 
  

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 Section 11.08. Effect of Headings and Table of Contents. The Article and Section headings herein
and the Table of Contents are for convenience only and shall not affect the construction hereof. 
  
 Section 11.09. Successors and Assigns. All covenants and agreements in this Indenture by the Trust shall bind its successors and assigns, whether
so expressed or not. 
  
 Section 11.10. Separability. In
case any provision in this Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
  
 Section 11.11. Benefits of Indenture. Nothing in this Indenture or in
the Notes, expressed or implied, shall give to any Person, other than the Note Insurer, the parties hereto and their successors hereunder, any separate trustee or co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit or any
legal or equitable right, remedy or claim under this Indenture. 
  
 Section 11.12. Legal Holidays. In any case where the date of any Payment Date, Redemption Date or any other date on which principal of or interest on any Note is proposed to be paid shall not be a Business Day, then (notwithstanding
any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the nominal date of any such Payment Date, Redemption Date
or other date for the payment of principal of or interest on any Note and no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day. 
  
 Section 11.13. Governing Law. IN VIEW OF THE FACT THAT NOTEHOLDERS ARE
EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A WELL-DEVELOPED BODY OF
COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE
PERFORMED THEREIN, 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 11.14. Counterparts. This instrument may be executed in any number of counterparts, each of which so executed
shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
  
 Section 11.15. Recording of Indenture. This Indenture is subject to recording in any appropriate public recording offices, such recording to be
effected by the Master Servicer, on behalf of the Trust, and at its expense in compliance with any Opinion of Counsel delivered pursuant to Sections 2.11 (c) or 3.06 hereof. 
  

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 Section 11.16. Trust Obligation. (a) No recourse, may be taken, directly or indirectly, with
respect to the obligations of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee (except as
expressly stated herein regarding performance of its own obligations) Owner Trustee in its individual capacity, (ii) any manner of a beneficial interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer, director, employee or
agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee
in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or
beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Trust hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement. 
  
 (b) It is expressly understood and agreed by the parties hereto that (i) this
Agreement is executed and delivered by U.S. Bank Trust, National Association, not individually or personally but solely as Owner Trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the Trust Agreement,
(ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by U.S. Bank Trust, National Association but is made and intended
for the purpose for binding only the Issuer, (iii) nothing herein contained shall be construed as creating any liability on U.S. Bank Trust, National Association, individually or personally, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (iv) under no circumstances shall U.S. Bank Trust, National Association be personally
liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Agreement or any other related documents.

  
 Section 11.17. No Petition. The Indenture Trustee, by
entering into this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Seller or the Trust, or join in any institution against the Seller or the
Trust of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes, this
Indenture or any of the Basic Documents. In addition, the Indenture Trustee will, if directed in writing by the Majority Noteholders and indemnity is provided as set forth herein, on behalf of the Holders of the Notes, (a) file a written objection
to any motion or the Sponsor with the Seller or other proceeding seeking the substantive consolidation of the Sponsor with the Trust, (b) file an appropriate memorandum of points and authorities or other brief in support of such objection, or (c)
endeavor to establish at the hearing on such objection that the substantive consolidation of such entities would be materially prejudicial to the Noteholders. 
  

 68 

 This Section 11.17 will survive for one year and one day following the termination of this indenture.

  
 Section 11.18. Inspection. The Trust agrees that, on
reasonable prior notice, it will permit any representative of the Indenture Trustee and the Note Insurer, during the Trust’s normal business hours, to examine all of books of account, records, reports and other papers of the Trust, to make
copies and extracts therefrom, to cause such books to be audited by Independent Accountants selected by the Indenture Trustee or the Note Insurer, as the case may be, and to discuss its affairs, finances and accounts with its officers, employees and
Independent Accountants (and by this provision the Trust hereby authorizes its Accountants to discuss with such representatives such affairs, finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any
expense incident to the exercise by the Indenture Trustee of any right under this Section 11.18 shall be borne by the Trust. 
  
 Section 11.19. Usury. The amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to an amount that shall
not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New York (whichever shall permit the higher rate), that could lawfully be contracted for, charged or received (the
“Highest Lawful Rate”). In the event any payment of interest on any Note exceeds the Highest Lawful Rate, the Trust stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of both the
Indenture Trustee, acting on behalf of the Holder of such Note, and the Trust, and the Holder receiving such excess payment shall promptly, upon discovery of such error or upon notice thereof from the Trust or the Indenture Trustee, refund the
amount of such excess or, at the option of the Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee for the benefit of
Holders of Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full term of such Notes. 
  
 Section 11.20. Note Insurer Default. Any right conferred to the Note
Insurer shall be suspended during any period in which a Note Insurer Default exists other than its right to receive Reimbursement Amounts and to consent to amendments. At such time as the Notes are no longer Outstanding under this Indenture, and no
amounts owed to the Note Insurer under the Basic Documents remain unpaid, the Note Insurer’s rights under this Indenture shall terminate. 
  
 Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as a third-party beneficiary of this Indenture which shall be binding upon and
inure to the benefit of 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 Noteholders, subject to Section 11.20,
shall succeed to the Note Insurer’s rights hereunder. Without limiting the generality of the foregoing, all covenants and agreements in this Indenture 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 Indenture. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 69 

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

			
	 ACCREDITED MORTGAGE LOAN

	 TRUST 2004-1

		
	 By:
	 	U.S. BANK TRUST NATIONAL ASSOCIATION,
	 	 	not in its individual capacity, but solely as Owner Trustee under the Trust Agreement
		
	By:	 	 /s/    Patricia M.
Child        

	 	 	Name: Patricia M. Child
	 	 	Title: Vice President
	
	 DEUTSCHE BANK NATIONAL TRUST COMPANY,

	 	 	as Indenture Trustee
		
	 By:
	 	 /s/    Barbara Campbell        

	 	 	 Name: Barbara Campbell

	 	 	 Title: Assistant Vice President

		
	 By:
	 	 /s/    Ronald Reyes        

	 	 	 Name: Ronald Reyes

	 	 	 Title: Assistant Vice President

  

 70 

 APPENDIX I 
  
 DEFINED TERMS 
  
 “Accepted Servicing Practices”: The Master Servicer’s normal servicing practices, which in general will conform to the mortgage
servicing practices of prudent mortgage lending institutions which service, for their own account, mortgage loans of the same type as the Mortgage Loans in the jurisdictions in which the related Mortgaged Properties are located. 
  
 “Account”: Any of the Collection Account, the Payment
Accounts, the Reserve Account, Yield Maintenance Account or the Note Insurance Payment Account. 
  
 “Accountant”: A Person engaged in the practice of accounting who (except when the Indenture provides that an Accountant must be
Independent) may be employed by or affiliated with the Trust or an Affiliate of the Trust. 
  
 “Accrual Period”: With respect to the Notes and any Payment Date, the period from and including the prior Payment Date (or, in the case of the first Payment Date, from and including the Closing Date)
to and including the day immediately preceding such Payment Date. 
  
 “Act”: With respect to any Noteholder, as defined in Section 11.03 of the Indenture. 
  
 “Administrative Fees”: With respect to any Payment Date, an amount equal to the sum of the Indenture Trustee Fee, the Owner Trustee Fee
and the Backup Servicer Fee, each with respect to such Payment Date. 
  
 “Affiliate”: With respect to any Person, any other Person directly or indirectly controlling, controlled by, or under direct or indirect common control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise; and the
terms “controlling” and “controlled” have meanings correlative to the foregoing. 
  
 “Agent”: Any Note Registrar or Authenticating Agent. 
  
 “Aggregate Principal Balance”: With respect to any Mortgage Loans and any date of determination, the
aggregate of the Principal Balances of such Mortgage Loans as of such date of determination. 
  
 “Appraised Value”: As to any Mortgaged Property, the appraised value of the Mortgaged Property based upon the appraisal made in connection with the origination of the Mortgage Loan and, in the case of
a Mortgaged Property that was purchased with the proceeds of the Mortgage Loan or within twelve months preceding the origination of the Mortgage Loan, the sales price of the Mortgaged Property, if such sales price is less than such appraised value.

  
 “Assignment of Mortgage”: With respect to
each Mortgage Loan, an assignment of the Mortgage, notice of transfer or equivalent instrument sufficient under the laws of the 

 jurisdiction wherein the related Mortgaged Property is located to reflect of record the conveyance of the Mortgage to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. 
  
 “Authenticating Agent”: The Person, if any, appointed as Authenticating Agent by the Owner Trustee on behalf of the Trust, acting at the direction of the Certificateholders, pursuant to Section 6.14
of the Indenture, until any successor Authenticating Agent for the Notes is named, and thereafter “Authenticating Agent” shall mean such successor. The initial Authenticating Agent shall be the Indenture Trustee. Any Authenticating Agent
other than the Indenture Trustee shall sign an instrument under which it agrees to be bound by all of the terms of this Indenture applicable to the Authenticating Agent. 
  
 “Authorized Denominations”: Each Class of Notes is issuable only in the minimum Percentage Interest
corresponding to a minimum denomination of $10,000 or integral multiples of $1,000 in excess thereof; provided, however, that one Note of each Class is issuable in a denomination equal to any such multiple plus an additional amount
such that the aggregate denomination of all Notes of such Class shall be equal to the Original Note Principal Balance of such Class. 
  
 “Authorized Officer”: With respect to (i) the Indenture Trustee, any Responsible Officer, (ii) the Owner Trustee, the president, any vice
president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer, any financial services officer or any other officer of the Owner Trustee customarily performing functions
similar to those performed by the above officers and (iii) any other Person, the chairman, chief operating officer, president or any vice president of such Person. 
  
 “Available Funds”: With respect to any Payment Date and either Group, the amount to be on deposit in the
related Payment Account on such Payment Date less the Indenture Trustee Fee and any payments in respect of the indemnification and other expenses (subject to Section 6.16 of the Indenture) due to the Indenture Trustee pursuant to the Indenture or
the Sale and Servicing Agreement, the Owner Trustee Fee, and the Premium payable to the Note Insurer, in each case with respect to the related Group (excluding the amount of any Insured Amounts and prior to the application of such amounts as
described in Section 8.02 of the Indenture for such Payment Date) as a result of (i) the Servicer Remittance Amount for the related Group received by the Indenture Trustee from the Master Servicer on the Servicer Remittance Date pursuant to the Sale
and Servicing Agreement, (ii) any other funds from any deposits for such Group to be made by the Master Servicer pursuant to the Sale and Servicing Agreement, (iii) the Termination Price received from the Sponsor on the related Clean-up Call Date
pursuant to Section 10.01 of the Indenture, (iv) on each Payment Date, in accordance with the Indenture Trustee’s Remittance Report, (A) until the Shortfall Amount for the related Class, is paid in full, and (B) until the amount specified in
clause (v) of Section 8.02 of the Indenture for such group is paid in full, in each case, first, from the Payment Account relating to the other Class of Notes, to the extent of the Net Monthly Excess Cashflow from the Group of Mortgage Loans
relating to the other Class of Notes and second, from each Reserve Account, an amount equal to the product of (A) a fraction, the numerator of which is the amount on deposit in such Reserve Account and the denominator of which is the
aggregate amounts on deposit in both Reserve Accounts and (B) the Shortfall Amount after giving effect to Section 8.01(a)(vi)(B) first of the Indenture, (v) on 
  

 2 

 each Payment Date, from each Reserve Account an amount equal to the product of (A) a fraction, the numerator of which is
the amount on deposit in such Reserve Account and the denominator of which is the aggregate amounts on deposit in both Reserve Accounts and (B) the Reserve Account Release Amount, and (vi) all other amounts for such Group received for deposit in
such Payment Account, including the payment of any Loan Repurchase Price or Substitution Adjustment for a Mortgage Loan in such Group received by the Indenture Trustee. For purposes of calculating the Available Funds, any Loan Repurchase Price or
Substitution Adjustment that is paid shall be deemed deposited in the Payment Account in the Due Period preceding such Servicer Remittance Date. 
  
 “Backup Servicer”: Countrywide Home Loans Servicing LP, a Texas limited partnership, or any successor appointed as provided in the Sale
and Servicing Agreement. 
  
 “Backup Servicing
Fee”: As defined in Section 5.08 of the Sale and Servicing Agreement. 
  
 “Backup Servicing Fee Rate”: The product of (i) 0.015% per annum, subject to a minimum of $2,000 per Collection Period and (ii) the stated principal balance of the Mortgage Loans at the beginning of
the related Due Period. In the event that servicing is transferred to the Backup Servicer, the product of (i) 0.50% per annum plus the per annum rates (as applicable) referred to as supplemental fees in clause (i) of the Servicing Fee Rate
definition and (ii) the stated principal balance of the Mortgage Loans at the beginning of the related Due Period. 
  
 “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 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 greater than the preceding Monthly Payment. 
  
 “Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended. 
  
 “Base Principal Payment Amount”: For any Payment Date and either Class of Notes will be the lesser of: 
  
 (a) the excess of (x) the sum, as of such Payment Date, of
(A) the Available Funds for the related Group of Mortgage Loans and (B) any Insured Amount with respect to the related Class of Notes over (y) the sum of the Interest Payment Amount for such Group; and 
  
 (b) the sum, without duplication, of: 
  

	 	(i)	all scheduled principal payments due and collected or advanced for the related Due Period, plus the principal portion of all prepayments in full received during the related
Prepayment Period, plus all partial prepayments and other unscheduled recoveries of 

  

 3 

	 	    	principal (other than Net Liquidation Proceeds) received during the prior calendar month less any related reimbursements of Delinquency Advances or of Servicing Advances to the
Master Servicer, in each case, for the related Group of Mortgage Loans; 

  

	 	(ii)	the Principal Balance of each Mortgage Loan in such Group that was repurchased by the Sponsor on the related Servicer Remittance Date from such Group to the extent such Principal
Balance is actually received by the Indenture Trustee and less any related reimbursements of Delinquency Advances or of Servicing Advances to the Master Servicer; 

  

	 	(iii)	any Substitution Adjustments delivered by the Sponsor on the related Servicer Remittance Date in connection with a substitution of a Mortgage Loan in that Group, to the extent such
Substitution Adjustments are actually received by the Indenture Trustee; 

  

	 	(iv)	the Net Liquidation Proceeds actually collected by the Master Servicer on all Mortgage Loans in such Group during the preceding calendar month to the extent such Net Liquidation
Proceeds relate to principal; 

  

	 	(v)	the proceeds received by the Indenture Trustee upon the exercise by the Sponsor of its option to call the related Class of Notes to the extent such proceeds relate to principal;

  

	 	(vi)	the proceeds received by the Indenture Trustee on any termination of the trust to the extent such proceeds relate to principal allocable to such Group; 

  

	 	(vii)	any amount that the Note Insurer has elected to pay as principal including Liquidated Loan Losses prior to the occurrence of any Remaining Overcollateralization Deficit;

  
 minus 
  

	 	(viii)	the amount of any Overcollateralization Reduction Amount for such Group for such Payment Date. 

  
 In no event will the Base Principal Payment Amount for a Group with respect to any Payment Date be (x) less than zero or (y)
greater than the then aggregate outstanding Note Principal Balance of the related Class of Notes. 
  
 “Basic Documents”: The Indenture, the Trust Agreement, the Sale and Servicing Agreement, the Insurance Agreement, the Cap Agreement and
the Indemnification Agreement. 
  
 “Beneficial
Owner”: With respect to a Book-Entry Note, the Person who is the beneficial owner of such Note as reflected on the books of the Clearing Agency for the Notes or on the books of a Person maintaining an account with such Clearing Agency (as
either a Direct Participant or an Indirect Participant, in accordance with the rules of such Clearing Agency). 
  

 4 

 “Best Efforts”: Efforts determined to be in good faith and reasonably diligent by the
Person performing such efforts, specifically the Trust or the Master Servicer or any other agent of the Trust, as the case may be, in its reasonable discretion. Such efforts do not require the Trust or the Master Servicer or any other agent of the
Trust, as the case may be, to enter into any litigation, arbitration or other legal or quasi-legal proceeding, nor do they require the Trust or the Master Servicer or any other agent of the Trust, as the case may be, to advance or expend fees or
sums of money in addition to those specifically set forth in this Indenture and the Sale and Servicing Agreement. 
  
 “Book-Entry Notes”: Any Notes registered in the name of the Clearing Agency or its nominee, ownership of which is reflected on the books
of the Clearing Agency or on the books of a person maintaining an account with such Clearing Agency (as either a Direct Participant or an Indirect Participant in accordance with the rules of such Clearing Agency). 
  
 “Business Day”: 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 Delaware, the State of California, or the state in which the Indenture Trustee’s office from which
payments will be made to Noteholders, are authorized or obligated by law, regulation or executive order to be closed. 
  
 “Cap Agreement”: The interest rate cap agreement, dated as of February 19, 2004, between the Indenture Trustee, in its capacity as
indenture trustee, and the Cap Counterparty. 
  
 “Cap
Counterparty”: Swiss Re Financial Products Corporation, a Delaware corporation. 
  
 “CERCLA”: The Comprehensive Environmental Response, Compensation and Liability Act of 1980. 
  
 “Certificates”: Each Trust Certificate issued pursuant to the Trust Agreement and which represents ownership in the Trust. 
  
 “Civil Relief Act”: The Servicemembers Civil Relief Act.

  
 “Civil Relief Act Interest Shortfall”: With
respect to any Payment Date, for any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Civil Relief Act or similar state
law, the amount, if any, by which (a) interest collectible on such Mortgage Loan during the most recently ended calendar month is less than (b) one month’s interest on the Principal Balance of such Mortgage Loan, calculated at a rate equal to
the related Mortgage Interest Rate. 
  
 “Class”:
Each class of Notes designated as the Class A-1 Notes and the Class A-2 Notes. 
  

 5 

 “Class A-1 Base Principal Payment Amount”: The Base Principal Payment Amount for the
Class A-1 Notes. 
  
 “Class A-1 Carry-Forward
Amount”: As of any Payment Date, the sum of (a) the amount, if any, by which (i) the Class A-1 Interest Payment Amount as of the immediately preceding Payment Date exceeded (ii) the amount of interest actually paid to the Holders of the
Class A-1 Notes on such immediately preceding Payment Date and (b) thirty (30) days’ interest on the amount described in clause (i), calculated at an interest rate equal to the Class A-1 Note Rate. 
  
 “Class A-1 Formula Note Rate”: A per annum rate equal to the
lesser of (i) LIBOR plus 0.30%; provided, that, on any Payment Date after the Clean-Up Call Date related to the Class A-1 Notes, the Class A-1 Formula Note Rate will be equal to LIBOR plus 0.60% per annum, and (ii) 13.0%. 
  
 “Class A-1 Formula Payment Amount”: With respect to the
Class A-1 Notes for any Payment Date, the sum of the Class A-1 Interest Payment Amount and the Class A-1 Base Principal Payment Amount. 
  
 “Class A-1 Interest Payment Amount”: With respect to the Class A-1 Notes for any Payment Date, an amount equal to (a) the Current
Interest for the Class A-1 Notes, plus (b) the Class A-1 Carry-Forward Amount remaining unpaid as of such Payment Date. 
  
 “Class A-1 Interest Remittance Amount”: With respect to the Class A-1 Notes for any Payment Date, the portion of the Interest Remittance
Amount that was collected or advanced on Loan Group I. 
  
 “Class A-1 Net Interest Amount”: With respect to the Class A-1 Notes and for any Payment Date, the Class A-1 Interest Remittance Amount minus the Class A-1 Notes’ pro rata share of the Administrative Fees and Premium
(based on the Loan Group 1 share of the aggregate Principal Balance of the Mortgage Loans). 
  
 “Class A-1 Net WAC Cap Carry-Forward Amount”: With respect to the Class A-1 Notes and any Payment Date, the sum of (a) the excess of (x) the Current Interest for the Class A-1 Notes calculated at the
Class A-1 Formula Note Rate over (y) the Current Interest for the Class A-1 Notes calculated at the Class A-1 Net WAC Cap Rate, in each case as of such Payment Date and (b) the amount of any Class A-1 Net WAC Cap Carry-Forward Amount remaining
unpaid from any previous Payment Date, with interest thereon at the Class A-1 Formula Note Rate. 
  
 “Class A-1 Net WAC Cap Rate”: A per annum rate equal to (A) (1) the Class A-1 Net Interest Amount, divided by (2) the Principal Balance
of Loan Group I as of the first day of the related Collection Period, multiplied by 12, minus (B) for each Payment Date up to including the Payment Date in February 2007, 0.25% and, thereafter 0.50%, multiplied by 30 divided by the number of days in
the related accrual period. 
  

 6 

 “Class A-1 Note”: Any Note designated as a “Class A-1 Note” on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. 
  
 “Class A-1 Note Principal Balance”: As of any date of
determination, the Original Note Principal Balance of the Class A-1 Notes less any amounts actually paid with respect to principal thereon on all prior Payment Dates. 
  
 “Class A-1 Note Rate”: With respect to any Payment Date, the per annum rate equal to the lesser of (i) the
Class A-1 Formula Note Rate and (ii) the Class A-1 Net WAC Cap Rate for such Payment Date. 
  
 “Class A-1 Payment Amount”: With respect to the Class A-1 Notes for any Payment Date, the amount to be paid to the Holders of the Class A-1 Notes on such Payment Date, applied first to interest and
then to principal, which amount shall be equal to the lesser of (i) the Class A-1 Formula Payment Amount for such Payment Date and (ii) the amount (including any applicable portion of any Insured Amount) available for payment on account of the Class
A-1 Notes for such Payment Date. 
  
 “Class A-2 Base
Principal Payment Amount”: The Base Principal Payment Amount for the Class A-2 Notes. 
  
 “Class A-2 Carry-Forward Amount”: As of any Payment Date, the sum of (a) the amount, if any, by which (i) the Class A-2 Interest Payment Amount as of the immediately preceding Payment Date exceeded
(ii) the amount of interest actually paid to the Holders of the Class A-2 Notes on such immediately preceding Payment Date and (b) thirty (30) days’ interest on the amount described in clause (i), calculated at an interest rate equal to the
Class A-2 Note Rate. 
  
 “Class A-2 Formula Note
Rate”: A per annum rate equal to the lesser of (i) LIBOR plus 0.30%; provided, that, on any Payment Date after the Clean-Up Call Date related to the Class A-2 Notes, the Class A-2 Formula Note Rate will be equal to LIBOR plus 0.60%
per annum, and (ii) 13.0%. 
  
 “Class A-2 Formula Payment
Amount”: With respect to the Class A-2 Notes for any Payment Date, the sum of the Class A-2 Interest Payment Amount and the Class A-2 Base Principal Payment Amount. 
  
 “Class A-2 Interest Payment Amount”: With respect to the Class A-2 Notes for any Payment Date, an amount
equal to (a) the Current Interest for the Class A-2 Notes, plus (b) the Class A-2 Carry-Forward Amount remaining unpaid as of such Payment Date. 
  
 “Class A-2 Interest Remittance Amount”: With respect to the Class A-2 Notes for any Payment Date, the portion of the Interest Remittance
Amount that was collected or advanced on Loan Group II. 
  
 “Class A-2 Net Interest Amount”: With respect to the Class A-2 Notes and for any Payment Date, the Class A-2 Interest Remittance Amount minus the Class A-2 Notes’ pro rata share of the Administrative Fees and Premium
(based on the Loan Group 2 share of the aggregate Principal Balance of the Mortgage Loans). 
  

 7 

 “Class A-2 Net WAC Cap Carry-Forward Amount”: With respect to the Class A-2 Notes and
any Payment Date, the sum of (a) the excess of (x) the Current Interest for the Class A-2 Notes calculated at the Class A-2 Formula Note Rate over (y) the Current Interest for the Class A-2 Notes calculated at the Class A-2 Net WAC Cap Rate, in each
case as of such Payment Date and (b) the amount of any Class A-2 Net WAC Cap Carry-Forward Amount remaining unpaid from any previous Payment Date, with interest thereon at the Class A-2 Formula Note Rate. 
  
 “Class A-2 Net WAC Cap Rate”: A per annum rate equal to (A)
(1) the Class A-2 Net Interest Amount divided by (2) the Principal Balance of Loan Group II as of the first day of the related Collection Period, multiplied by 12, minus (B) for each Payment Date up to including the Payment Date in February 2007,
0.25% and, thereafter 0.50%, multiplied by 30 divided by the number of days in the related accrual period. 
  
 “Class A-2 Note”: Any Note designated as a “Class A-2 Note” on the face thereof, in the form of Exhibit A to the Indenture. The
Class A-2 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. 
  
 “Class A-2 Note Principal Balance”: As of any date of determination, the Original Note Principal Balance of the Class A-2 Notes
less any amounts actually paid with respect to principal thereon on all prior Payment Dates. 
  
 “Class A-2 Note Rate”: With respect to any Payment Date, the per annum rate equal to the lesser of (i) the Class A-2 Formula Note Rate
and (ii) the Class A-2 Net WAC Cap Rate for such Payment Date. 
  
 “Class A-2 Payment Amount”: With respect to the Class A-2 Notes for any Payment Date, the amount to be paid to the Holders of the Class A-2 Notes on such Payment Date, applied first to interest and then to principal, which
amount shall be equal to the lesser of (i) the Class A-2 Formula Payment Amount for such Payment Date and (ii) the amount (including any applicable portion of any Insured Amount) available for payment on account of the Class A-2 Notes for such
Payment Date. 
  
 “Clean-Up Call Date”: The first
Payment Date on which: (1) the Class A-1 Note Principal Balance is equal to or less than 10% of the Original Note Principal Balance of Class A-1 Notes provided that Loan Group 2 is either currently at its Specified Overcollateralization Amount and
will remain at its Specified Overcollateralization Amount after giving effect to the redemption of the Class A-1 Notes or the Class A-2 Notes are no longer outstanding; (2) the Class A-2 Note Principal Balance is equal to or less than 10% of the
Original Note Principal Balance of the Class A-2 Notes provided that Loan Group 1 is either currently funded at its Specified Overcollateralization Amount and will remain at its Specified Overcollateralization Amount after giving effect to
redemption of the Class A-2 Notes or the Class A-1 Notes are no longer outstanding; or (3) to the extent the Sponsor has not exercised the optional clean-up call with respect to either of the Class A-1 Notes or Class A-2 Notes, the Sponsor may
redeem both 
  

 8 

 Classes of Notes when their aggregate outstanding Principal Balance is equal to or less than 10% of the sum of (a) the
original Aggregate Principal Balance of the Class A-1 Notes, and (b) the original Aggregate Principal Balance of the Class A-2 Notes. 
  
 “Clearing Agency”: An organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange Act of
1934, as amended, and the regulations of the Commission thereunder and shall initially be The Depository Trust Company of New York, the nominee for which is Cede & Co. 
  
 “Clearing Agency Participants”: The entities for whom the Clearing Agency will maintain book-entry records
of ownership and transfer of Book-Entry Notes, which may include securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations. 
  
 “Closing Date”: February 19, 2004. 
  
 “Code”: The Internal Revenue Code of 1986, as amended. 
  
 “Collection Account”: The Eligible Account established and
maintained by the Master Servicer pursuant to Section 5.02(b) of the Sale and Servicing Agreement. 
  
 “Collection Period”: With respect to each Payment Date, the calendar month preceding the related Payment Date. 
  
 “Commission”: The United States Securities and Exchange
Commission. 
  
 “Compensating Interest”: As
defined in Section 6.05 of the Sale and Servicing Agreement. 
  
 “Corporate Trust Office”: With respect to (y) the Indenture Trustee, the principal office of the Indenture Trustee at which at any particular time its corporate trust business shall be principally administered, which office
at the date of the execution of the Basic Documents is located at: Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa Ana, California 92705-4934, Attention: Trust Administration - AC0401 where it conducts its trust
administration services; and (z) the Owner Trustee, the office of the Owner Trustee at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of the Basic Documents is located at
209 South LaSalle Street, Suite 300, Chicago, Illinois 60604, Attention: Corporate Trust Administration. 
  
 “Credit Enhancement Amount”: With respect to any Payment Date, the sum of (a) the aggregate Overcollateralization Amount of Group 1 and
Group 2 for such Payment Date (after taking into account any Overcollateralization Increase Amount) and (b) the amount on deposit in both Reserve Accounts after giving effect to any deposit to or withdrawal (not related to the Reserve Account
Release Amount) of funds from both Reserve Accounts on such Payment Date. 
  
 “Cumulative Loan Loss Percentage”: As of any Payment Date, a fraction, the numerator of which is the sum of all Liquidated Loan Losses which have occurred between the Cut-Off Date and the last day of
the immediately preceding month and the denominator of which is the Cut-off Date Aggregate Principal Balance of the Mortgage Loans. 
  

 9 

 “Current Interest”: With respect to either Class of Notes and any Payment Date, the
interest accrued during the related Accrual Period at the related Note Rate on the related Note Principal Balance as of such Payment Date (and prior to making any payments on such Payment Date) reduced by the sum of Civil Relief Act Interest
Shortfalls and Net Prepayment Interest Shortfalls, in each case, related to the Mortgage Loans in the related Group. 
  
 “Curtailment”: With respect to a Mortgage Loan, any payment of principal received in advance of its Monthly Payment and which is not
accompanied by an amount as to interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment. 
  

“Cut-Off Date”: With respect to the Mortgage Loans originated on or prior to January 31, 2004, the close of business as of January 31,
2004 after giving effect to scheduled payments of principal due on or prior to February 1, 2004 and with respect to Mortgage Loans originated thereafter, the date of origination thereof. 
  
 “Cut-Off Date Aggregate Principal Balance”: With respect to each Loan Group or both Loan Groups, the
aggregate of the Cut-Off Date Principal Balance of the Mortgage Loans in such Loan Group or both Loan Groups, as required by the context. The Cut-Off Date Aggregate Principal Balance of the Mortgage Loans for the Trust is $505,002,175.18. The
Cut-Off Date Aggregate Principal Balance for the Mortgage Loans in Loan Group 1 and Loan Group 2 is $250,121,202.65 and $254,880,972.53. 
  
 “Cut-Off Date Principal Balance”: Means as to any Mortgage Loan, the unpaid principal balance of such Mortgage Loan as of the related
Cut-Off Date as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) (or, with respect to Mortgage Loans which were
originated after the Cut-Off Date, as of the date of origination) and after giving effect to any previous Curtailments and Liquidation Proceeds allocable to principal (other than with respect to any Liquidated Mortgage Loan), irrespective of any
delinquency in payment by the related Mortgagor. 
  
 “Debt
Service Reduction”: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction of the Monthly Payment due on such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a reduction that constitutes a
Deficient Valuation or a permanent forgiveness of principal. 
  
 “Default”: Any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. 
  
 “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. 
  

 10 

 “Definitive Notes”: Notes other than Book-Entry Notes. 
  
 “Deleted Mortgage Loan”: A Mortgage Loan replaced or to be
replaced by a Qualified Substitute Mortgage Loan. 
  
 “Delinquency Advance”: The aggregate of the advances required to be made by the Master Servicer on any Servicer Remittance Date pursuant to Section 5.18 of the Sale and Servicing Agreement, the amount of any such advances
being equal to the sum of 
  
 (i) with respect
to each Mortgage Loan, other than an REO Mortgage Loan, that was Delinquent as of the close of business on the last day of the Due Period preceding the related Servicer Remittance Date, the aggregate amount of Monthly Payments (with interest thereon
calculated at the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient Valuation and/or any Debt Service Reduction), net of the related Servicing Fee
and Backup Servicing Fee) due during the related Due Period, and 
  
 (ii) with respect to each REO Property which was acquired during or prior to the related Collection Period and as to which an REO Disposition did not occur during the related Collection Period, an amount equal to the
excess, if any, of (i) interest on the Principal Balance of the related REO Mortgage Loan at the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient
Valuation and/or any Debt Service Reduction) for such REO Mortgage Loan net of the related Servicing Fee and Backup Servicing Fee, for the most recently ended Due Period over (ii) the Net REO Proceeds transferred to the Payment Account for such
Payment Date; 
  
 provided, however, that in each such case such
advance has not been determined by the Master Servicer to be a Nonrecoverable Advance. For purposes of the preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the assumed monthly
payment that would have been due on the related Due Date based on the original principal amortization schedule for such Balloon Mortgage Loan. 
  
 “Delinquency Ratio”: With respect to any Payment Date, the percentage equivalent of a fraction (a) the numerator of which equals the
Aggregate Principal Balances of all Mortgage Loans that are sixty (60) or more days Delinquent, in foreclosure or converted to REO Property as of the last day of the related Collection Period and (b) the denominator of which is the Aggregate
Principal Balance of the Mortgage Loans as of the last day of such Collection Period. 
  
 “Delinquent”: A Mortgage Loan is “delinquent” if any payment due thereon is not made by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is “30 days
delinquent” if such payment has not been received by the close of business on 
  

 11 

 the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no
such corresponding day (e.g., as when a 30-day month follows a 31-day month in which a payment was due on the 31st day of such month) then on the last day of such immediately succeeding month. Similarly for “60 days delinquent,”
“90 days delinquent” and so on. 
  
 “Delivery”: When used with respect to Permitted Investments means: 
  
 (a) with respect to bankers’ acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute
“instruments” within the meaning of Section 9-102(a)(47) of the Uniform Commercial Code and are susceptible of physical delivery (except with respect to Permitted Investments consisting of certificated securities (as defined in Section
8-102(a)(4) of the Uniform Commercial Code)), physical delivery to the Indenture Trustee or its custodian endorsed to the Indenture Trustee or its custodian or endorsed in blank; 
  
 (b) with respect to a certificated security (as defined in Section 8-102(a)(4) of the Uniform Commercial
Code) (i) delivery of such certificated security, not containing any evidence of a right or interest inconsistent with the Indenture Trustee’s interest therein, endorsed to, or registered in the name of, the Indenture Trustee or endorsed in
blank to a securities intermediary (as defined in Section 8-102(a)(14) of the Uniform Commercial Code) and the making by such securities intermediary of appropriate entries in its records identifying such certificated securities as credited to the
securities account (as defined in Section 8-501(a) of the Uniform Commercial Code) of the Indenture Trustee, or (ii) by delivery thereof to a “clearing corporation” (as defined in Section 8-102(5) of the Uniform Commercial Code) and the
making by such clearing corporation of appropriate entries in its records crediting the securities account of a securities intermediary by the amount of such certificated security and the making by such securities intermediary of appropriate entries
in its records identifying such certificated securities as credited to the securities account of the Indenture Trustee (all Permitted Investments described in subsections (a) and (b), and “Physical Property”); and, in any event, any such
Physical Property in registered form shall be registered in the name of the Indenture Trustee or its nominee or custodian; and such additional or alternative procedures as may hereafter become appropriate to effect the complete transfer of ownership
of any such Permitted Investments to the Indenture Trustee or its nominee or custodian, consistent with then applicable law or regulations or the interpretation thereof; and 
  
 (c) with respect to any security issued by the U.S. Treasury, Fannie Mae or Freddie Mac that is a book-entry
security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the Uniform Commercial
Code: the making by a Federal Reserve Bank of an appropriate entry crediting such Permitted Investment to an account of a securities intermediary that is also a “participant” pursuant to applicable federal regulations; the making by such
securities intermediary of appropriate entries in its records crediting such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations and Articles 8 and 9 of the Uniform Commercial Code to the securities

  

 12 

 account of the Indenture Trustee; and such additional or alternative procedures as may hereafter become
appropriate to effect complete transfer of ownership of any such Permitted Investments to the Indenture Trustee or its nominee or custodian, consistent with then applicable law or regulations or the interpretation thereof. 
  
 “Direct Participant”: Any broker-dealer, bank or other
financial institution for which the Clearing Agency holds Notes from time to time as a securities depositary. 
  
 “Due Date”: With respect to any Mortgage Loan and any Monthly Payment, the date on which such Monthly Payment is due from the related
Mortgagor. 
  
 “Due for Payment”: With respect to
(i) an Insured Amount, the Payment Date on which Insured Amounts are due and payable pursuant to the terms of the Indenture and (ii) a Preference Amount, the Business Day on which the documentation required by the Note Insurer has been received by
the Note Insurer. 
  
 “Due Period”: With respect
to any Payment Date, the period commencing on the second day of the month preceding the month in which such Payment Date occurs and ending on the first day of the month in which such Payment Date occurs. 
  
 “Eligible Account”: Either (A) an account or accounts
(including any sub-account or sub-accounts) maintained with an institution (which may include the Indenture Trustee; provided, that the Indenture Trustee otherwise meets these requirements) whose deposits are insured by the FDIC, the
unsecured and uncollateralized debt obligations of which institution shall be rated “AA” or better by S&P and “Aa2” or better by Moody’s and in the highest short term rating by S&P and Moody’s, 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 (including the Indenture Trustee) 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, (iv) a principal subsidiary of a bank holding company, or (v) approved in writing by the
Note Insurer and the Rating Agencies or (B) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution or trust company (which may include the Indenture Trustee; provided, that the
Indenture Trustee otherwise meets these requirements), having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity. 
  
 “ERISA”: The Employee Retirement Income Security Act of 1974, as amended. 
  
 “Event of Default”: As defined in Section 5.01 of the Indenture. 
  
 “Excess Overcollateralization Amount”: With respect to each
Group of Mortgage Loans and any Payment Date, the excess, if any, of (a) the Overcollateralization Amount that would apply to that Group on such Payment Date after giving effect to the payment of the Base Principal Payment Amount for such Group
calculated without reduction for any Overcollateralization Reduction Amounts, over (b) the Specified Overcollateralization Amount for such Group. 
  

 13 

 “Excess Spread”: With respect to any Payment Date and each Loan Group, an amount equal
to the excess of (A) the sum of (x) the product of (i) the aggregate Principal Balances of Mortgage Loans as of the first day of the immediately preceding Collection Period and (ii) one-twelfth of the weighted average Mortgage Interest Rate for the
Mortgage Loans, as the case may be, as of the first day of the related Collection Period to the extent that interest payments that are due during the related Collection Period are either received or advanced and (y) any Prepayment Charges collected
during the related Prepayment Period over (B) the sum of (i) the aggregate Interest Payment Amount for the related Class of Notes for such Payment Date and (ii) the sum of the Servicing Fee, the Indenture Trustee Fee, the Owner Trustee Fee and the
Premium in each case for the Mortgage Loans in such Loan Group with respect to such Payment Date. 
  
 “Exchange Act”: Means the Securities Exchange Act of 1934, as amended. 
  
 “Fannie Mae”: Fannie Mae, formerly known as, The Federal National Mortgage Association, and any successor
thereto. 
  
 “FDIC”: The Federal Deposit
Insurance Corporation, and any successor thereto. 
  
 “Final Certification”: A certification as to the completeness of each Indenture Trustee’s Mortgage File prepared by the Indenture Trustee, and provided by the Indenture Trustee within one hundred eighty (180) of the
Closing Date pursuant to Section 2.06(b)(iii) of the Sale and Servicing Agreement. 
  
 “Final Stated Maturity Date”: The Payment Date occurring in April 2034. 
  
 “Foreclosure Profits”: As to any Payment Date, the excess, if any, of (i) Net Liquidation Proceeds in respect of each Mortgage Loan that
became a Liquidated Mortgage Loan during the Collection Period immediately preceding such Payment Date over (ii) the sum of the unpaid Principal Balance of each such Liquidated Mortgage Loan plus accrued and unpaid interest at the applicable
Mortgage Interest Rate on the unpaid Principal Balance thereof from the Due Date on which interest was last paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an REO Mortgage Loan, from the Due Date on which interest
was last deemed to have been paid pursuant to Section 5.06 of the Sale and Servicing Agreement) to the next succeeding Due Date following the date such Loan became a Liquidated Mortgage Loan, plus any amounts required by applicable law to be paid to
the related Mortgagors. 
  
 “Freddie Mac”:
Freddie Mac, formerly known as The Federal Home Loan Mortgage Corporation, and any successor thereto. 
  
 “GAAP”: Generally accepted accounting principles, consistently applied. 
  
 “Governmental Plan”: A governmental plan within the meaning of Section 3(32) of ERISA. 
  
 “Grant”: To assign, transfer, mortgage, pledge, create and
grant a security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan and the related Mortgage Files, a Permitted Investment, the Sale and Servicing Agreement, or any other instrument shall include 
  

 14 

 all rights, powers and options (but none of the obligations) of the Granting party thereunder, including, without
limitation, the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments thereunder, Insurance Proceeds, Loan Repurchase Prices and all other moneys payable thereunder and all proceeds
thereof, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in the name of the Granting party or otherwise, and generally to do and receive anything
that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. 
  
 “Group”: With respect to the Notes, either Group 1 or Group 2, as the context requires. With respect to the Mortgage Loans, either Loan
Group 1 or Loan Group 2, as the context requires. 
  
 “Group 1”: With respect to the Notes, the Class A-1 Notes. The related Loan Group for Group 1 is Loan Group 1. 
  
 “Group 2”: With respect to the Notes, the Class A-2 Notes. The related Loan Group for Group 2 is Loan Group 2. 
  
 “Highest Lawful Rate”: As defined in Section 11.19 of the
Indenture. 
  
 “Indemnification Agreement”: The
Indemnification Agreement dated as of February 10, 2004, among the Note Insurer and the Underwriters, as such agreement may be amended or supplemented in accordance with the provisions thereof. 
  
 “Indenture”: The Indenture, dated as of February 1, 2004,
between the Trust and the Indenture Trustee, relating to the issuance of the Notes. 
  
 “Indenture Trustee”: Deutsche Bank National Trust Company, a national banking association, or its successor-in-interest, or any successor Indenture Trustee appointed as provided for in Section 6.09 of
the Indenture. 
  
 “Indenture Trustee Fee”: As to
any Payment Date, the fee payable to the Indenture Trustee in respect of its services as Indenture Trustee pursuant to Section 6.16 of the Indenture as set forth in a separate fee agreement provided; however that in no case will the Indenture
Trustee Fee exceed a monthly rate equal to one-twelfth of 0.0049% on the Stated Principal Balance of each Mortgage Loan. 
  
 “Indenture Trustee’s Mortgage File”: The documents delivered to the Indenture Trustee, pursuant to Section 2.05 of the Sale and
Servicing Agreement. 
  
 “Indenture Trustee’s
Remittance Report”: The statement prepared pursuant to Section 2.08(d) of the Indenture, containing the following information with respect to each Class: 
  
 (a) the amount of the payment with respect to each Class of Notes and Certificates; 
  

 15 

 (b) the amount of such payments allocable to principal, separately identifying the aggregate amount of
any Principal Prepayments or other unscheduled recoveries of principal included therein and separately identifying any Overcollateralization Increase Amounts for each Group; 
  
 (c) the amount of such payments allocable to interest and the calculation thereof; 
  
 (d) the Note Principal Balance of each Class of Notes as of such Payment
Date, together with the Note Principal Balance of each Class of Notes (based on a Note in an original Note Principal Balance of $1,000) then outstanding, in each case after giving effect to any payment of principal on such Payment Date; 

 
 (e) the amount of any Insured Amounts included in the amounts paid to the
Noteholders on such Payment Date; 
  
 (f) the total of any
Substitution Adjustments and any Loan Repurchase Price amounts included in such payment; 
  
 (g) the amounts, if any, of any Liquidated Loan Losses for the related Collection Period and cumulative Liquidated Loan Losses since the Closing Date; and 
  
 (h) LIBOR for such Payment Date. 
  
 Items (a), (b) and (c) above shall, with respect to each Class of Notes, be presented on the basis of a Note having a $1,000 denomination. 
  
 “Independent”: When used with respect to any specified
Person, means such a Person who (i) is in fact independent of the Trust and any other obligor upon the Notes, (ii) does not have any direct financial interest or any material indirect financial interest in the Trust or in any such other obligor or
in an Affiliate of the Trust or such other obligor, and (iii) is not connected with the Trust or any such other obligor as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is
herein provided that any Independent Person’s opinion or certificate shall be furnished to the Indenture Trustee, such Person shall be appointed by a Trust Order and such opinion or certificate shall state that the signer has read this
definition and that the signer is Independent within the meaning hereof. 
  
 “Indirect Participant”: Any financial institution for whom any Direct Participant holds an interest in a Note. 
  

“Individual Note”: A Note of an Original Note Principal Balance of $1,000; a Note of an Original Note Principal Balance in excess of
$1,000 shall be deemed to be a number of Individual Notes equal to the quotient obtained by dividing such Original Note Principal Balance amount by $1,000. 
  
 “Initial Certification”: A certification as to the completeness of each Indenture Trustee’s Mortgage File prepared by the Indenture
Trustee, and provided by the Indenture Trustee within sixty (60) days of the Closing Date pursuant to Section 2.06(b)(ii) of the Sale and Servicing Agreement. 
  

 16 

 “Insurance Agreement”: The Insurance and Indemnity Agreement dated as of February 19,
2004 among the Seller, the Indenture Trustee, the Note Insurer, the Sponsor, the Master Servicer and the Trust as such agreement may be amended or supplemented in accordance with the provisions thereof. 
  
 “Insurance Proceeds”: Proceeds paid by any insurer pursuant
to any insurance policy covering a Mortgage Loan to the extent such proceeds are not applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the express requirements of law or in
accordance with prudent and customary servicing practices. “Insurance Proceeds” do not include “Insured Amounts.” 
  
 “Insured Amounts”: Means, with respect to any Payment Date and the Notes, the sum of (i) any Insured Interest Payment for such Payment
Date and (ii) any Insured Principal Payment for such Payment Date. 
  
 “Insured Interest Payment”: Means, with respect to any Payment Date and the Notes, the excess, if any, of Required Interest Distributions over the Available Funds for the related Group for such Payment Date. 
  
 “Insured Payments”: Means, the aggregate amount actually
paid by the Note Insurer to the Indenture Trustee in respect of (i) Insured Amounts for a Payment Date and (ii) Preference Amounts for any given Business Day. 
  

“Insured Principal Payment”: (i) for any Payment Date other than the Payment Date occurring in April 2034, the Remaining
Overcollateralization Deficit allocable to the Notes, if any, for such Payment Date and (ii) with respect to the Payment Date occurring in April 2034, the outstanding Note Principal Balance of such Class of Notes (after giving effect to all
distributions to be made thereon on such Payment Date other than any portion thereof consisting of an Insured Principal Payment). 
  
 “Interest Determination Date”: With respect to any Accrual Period for the Class A-1 Notes or Class A-2 Notes, the second London Business
Day prior to the immediately preceding Payment Date; provided, however, that with respect to the March 2004 Payment Date, the Interest Determination Date shall be February 17, 2004. 
  
 “Interest Payment Amount”: The Class A-1 Interest Payment
Amount or Class A-2 Interest Payment Amount, as applicable. 
  
 “Interest Remittance Amount”: As of any Payment Date and any Group, is an amount equal to (1) the product of (x) 1/12 of the Weighted Average Mortgage Interest Rate of the related Group as of the beginning of the prior
Collection Period and (y) the Principal Balance related to that Group as of the beginning of the prior Collection Period minus (2) the aggregate amount of Net Prepayment Interest Shortfalls and Civil Relief Act Interest Shortfalls for such Group for
the prior period. 
  

 17 

 “Late Payment Rate”: Has the meaning ascribed thereto in the Insurance Agreement.

  
 “Letter Agreement”: The Letter of
Representations to the Clearing Agency from the Indenture Trustee and the Trust dated February 19, 2004. 
  
 “LIBOR”: With respect to any Accrual Period for the Class A-1 Notes or Class A-2 Notes, the rate determined by the Indenture Trustee on
the related Interest Determination Date on the basis of the posted rate U.S. dollar deposits for one month which appears on Telerate Page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date. If no such posted rate appears, LIBOR
will be determined on the basis of the offered quotation of the Reference Banks for U.S. dollar deposits for one month to prime banks in the London interbank market as of 11:00 a.m. London time, on such date. If fewer than two Reference Banks
provide such offered quotations on that date, LIBOR will be calculated as the offered rate which one or more leading banks in The City of New York selected by the Indenture Trustee (after consultation with the Master Servicer) are quoting as of
11:00 a.m., New York City time, on such date to leading European banks for U.S. dollar deposits for one month; provided, however, that if such banks are not quoting as described above, LIBOR will be equal to the value calculated for
the immediately preceding Accrual Period. 
  
 In any event, LIBOR
is calculated as the arithmetic mean (rounded, if necessary, to the nearest 1/100th of a percent (0.0001), with
upwards rounding of amounts equal to or in excess of 5/1,000th of a percent (0.0005) of all such quotations.

  
 “Liquidated Loan Loss”: With respect to any
Payment Date, the aggregate of the amount of losses with respect to each Mortgage Loan which became a Liquidated Mortgage Loan on or prior to the last day of the calendar month preceding such Payment Date, equal to the excess of (i) the unpaid
Principal Balance of each such Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the amortization schedule at the time applicable thereto at the applicable Mortgage Interest Rate from the Due Date as to which interest was
last paid with respect thereto through the next succeeding Due Date following the date such Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to such Liquidated Mortgage Loan. 
  
 “Liquidated Mortgage Loan”: A Mortgage Loan with respect to
which the related Mortgaged Property has been acquired, liquidated or foreclosed and with respect to which the Master Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered and for which the Master Servicer
has so designated on its Servicer Remittance Report. 
  
 “Liquidation Expenses”: Expenses incurred by the Master Servicer in connection with the liquidation of any defaulted Mortgage Loan or property acquired in respect thereof (including, without limitation, legal fees and
expenses, committee or referee fees, and, if applicable, brokerage commissions and conveyance taxes), any unreimbursed amount expended by the Master Servicer pursuant to Sections 5.04 and 5.06 of the Sale and Servicing Agreement respecting the
related Mortgage Loan and any unreimbursed expenditures for real property taxes or for property restoration or preservation of the related Mortgaged Property. Liquidation Expenses shall not include any previously incurred expenses in respect of an
REO Mortgage Loan which have been netted against related REO Proceeds. 
  

 18 

 “Liquidation Proceeds”: The amount received by the Master Servicer in connection with
(i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through an Indenture Trustee’s sale, foreclosure sale, REO Disposition or
otherwise or (iii) the liquidation of any other security for such Mortgage Loan, including, without limitation, pledged equipment, inventory and working capital and assignments of rights and interests made by the related Mortgagor. 
  
 “Loan Group”: Any of Loan Group 1 or Loan Group 2.

  
 “Loan Group 1”: The pool of Mortgage Loans
identified in the Mortgage Loan Schedule for Sub-Trust 1. 
  
 “Loan Group 2”: The pool of Mortgage Loans identified in the Mortgage Loan Schedule for Sub-Trust 2. 
  
 “Loan Repurchase Price”: With respect to any Mortgage Loan, the Principal Balance of such Mortgage Loan as of the date of repurchase,
plus the greater of (x) all accrued and unpaid interest thereon and (y) thirty (30) days’ interest thereon, computed, as of the next succeeding Due Date for such repurchased Mortgage Loan, at the Mortgage Interest Rate, plus the amount of any
unreimbursed Delinquency Advances and Servicing Advances made by the Master Servicer with respect to such Mortgage Loan, plus any costs and damages incurred by the Trust in connection with any violation by such mortgage loan of any predatory or
abusive lending law, which purchase price shall be deposited in the Collection Account on the next succeeding Servicer Remittance Date, after deducting therefrom any amounts received in respect of such repurchased Mortgage Loan or Loans and being
held in the Collection Account for future payment to the extent such amounts have not yet been applied to principal or interest on such Mortgage Loan. 
  
 “Loan-to-Value Ratio” or “LTV”: With respect to any Mortgage Loan as of its date of origination, the ratio on such date
borne by the original Principal Balance of the Mortgage Loan to the Appraised Value of the related Mortgaged Property. 
  
 “London Business Day”: A day on which banking institutions in the City of London, England, are not required or authorized to be closed.

  
 “Majority Noteholders”: With respect to the
Notes, the Holder or Holders of Notes evidencing Percentage Interests in excess of 51% in the aggregate. With respect to the Class A-1 Notes or Class A-2 Notes, the Holder or Holders of Class A-1 Notes or Class A-2 Notes, as applicable, evidencing
Percentage Interests in excess of 51% in the aggregate. 
  
 “Master Servicer”: Accredited Home Lenders, Inc., a California corporation, or any successor appointed as provided in the Sale and Servicing Agreement. 
  

 19 

 “Master Servicer Prepayment Charge Amount”: The amounts payable by the Master Servicer
in respect of any waived Prepayment Charges pursuant to Section 3.05 of the Sale and Servicing Agreement. 
  
 “Maximum Collateral Amount”: With respect to each Loan Group or both Loan Groups, the Cut-Off Date Aggregate Principal Balance for the
related Loan Group or both Loan Groups, as required by the context. 
  
 “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.

  
 “MIN: The Mortgage Identification Number for
Mortgage Loans registered with MERS on the MERS System. 
  
 “MOM Loan”: A Mortgage Loan for which MERS is 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 Payment”: As to any Mortgage Loan (including any
REO Mortgage Loan) and any Due Date, the payment of principal and interest due thereon as specified for such Due Date in the related amortization schedule at the time applicable thereto (after adjustment for any Curtailments and Deficient Valuations
occurring prior to such Due Date but before any adjustment to such amortization schedule by reason of any bankruptcy, other than Deficient Valuations, or similar proceeding or any moratorium or similar waiver or grace period). 
  
 “Moody’s”: Moody’s Investors Service, Inc., a
corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, “Moody’s” shall be deemed to refer to any other
nationally recognized rating agency designated by the Note Insurer. 
  
 “Mortgage”: The mortgage, deed of trust or other instrument creating a first or second lien on the Mortgaged Property. 
  
 “Mortgage File”: As described in Exhibit A to the Sale and Servicing Agreement. 
  
 “Mortgage Interest Rate”: As to any Mortgage Loan, the per
annum rate at which interest accrues on the unpaid Principal Balance thereof. 
  
 “Mortgage Loan Schedule”: The schedule of Mortgage Loans as of the Cut-Off Date attached as Schedule I to the Indenture, which will be deemed to be modified automatically to reflect any replacement,
sale, substitution, liquidation, transfer or addition of any Mortgage Loan. The Mortgage Loan Schedule sets forth as to each Mortgage Loan: (i) its identifying number and the name of the related Mortgagor; (ii) the billing address, mailing address
and property address for the related Mortgaged Property including the state and zip code; (iii) its date of origination; (iv) the original number of months to stated maturity; (v) a designation indicating 
  

 20 

 whether or not such Mortgage Loan is a Balloon Loan; (vi) the original Principal Balance; (vii) its Principal Balance as
of the applicable Cut-Off Date and its Cut-Off Date Principal Balance; (viii) the Mortgage Interest Rate and margin; (ix) the scheduled monthly payment of principal and interest; (x) a Group designation; (xi) the LTV; and (xii) if the Mortgage Loan
is registered with MERS on the MERS System, the MIN. 
  
 “Mortgage Loans”: The Mortgage Loans (together with any Qualified Substitute Mortgage Loans substituted therefor in accordance with the Basic Documents, as from time to time are held as a part of the Trust), so being
identified in the Mortgage Loan Schedule on the Closing Date. When used in respect of any Payment Date, the term Mortgage Loans shall mean all Mortgage Loans (including those in respect of which the Indenture Trustee has acquired the related
Mortgaged Property) which have not been repaid in full prior to the related Due Period, did not become Liquidated Mortgage Loans prior to such related Due Period or were not repurchased or replaced by the Sponsor prior to such related Due Period.

  
 “Mortgage Note”: The original, executed note
or other evidence of any indebtedness of a Mortgagor under a Mortgage Loan. 
  
 “Mortgaged Property”: The underlying property or properties securing a Mortgage Loan, consisting of a fee simple or leasehold interest in one or more parcels of land. 
  
 “Mortgagor”: The obligor on a Mortgage Note. 
  
 “Net Foreclosure Profits”: As to any Payment Date, the
excess, if any, of (i) the aggregate Foreclosure Profits with respect to such Payment Date over (ii) Liquidated Loan Losses with respect to such Payment Date. 
  

“Net Liquidation Proceeds”: As to any Liquidated Mortgage Loan, Liquidation Proceeds net of Liquidation Expenses and net of any
unreimbursed Delinquency Advances and Servicing Advances made by the Master Servicer with respect to such Liquidated Mortgage Loan. For all purposes of the Basic Documents, Net Liquidation Proceeds shall be allocated first to accrued and unpaid
interest on the related Mortgage Loan and then to the unpaid Principal Balance thereof. 
  
 “Net Monthly Excess Cashflow”: With respect to any Payment Date and any Group, the excess of (x) the Available Funds for such Group then on deposit in the related Payment Account over (y) the sum
(without duplication) of (i) the Interest Payment Amount for such Group and such Payment Date and, (ii) the Base Principal Payment Amount and the Overcollateralization Deficit, in each case, for such Group and such Payment Date. 
  
 “Net Prepayment Interest Shortfalls”: For any Payment Date
and either Group of Mortgage Loans, the amount by which the aggregate Prepayment Interest Shortfalls for such Group during the related Prepayment Period exceeds available Compensating Interest for such Group. 
  
 “Net REO Proceeds”: As to any REO Mortgage Loan, REO
Proceeds net of any related expenses of the Master Servicer. 
  

 21 

 “Nonpayment”: Means, with respect to any Payment Date, an Insured Amount is Due for
Payment but has not been paid pursuant to the Indenture. 
  
 “Nonrecoverable Advances”: Means, with respect to any Mortgage Loan, (a) any Delinquency Advance or Servicing Advance previously made and not reimbursed pursuant to Section 5.03 of the Sale and Servicing Agreement, or (b) a
Delinquency Advance proposed to be made in respect of a Mortgage Loan or REO Property either of which, in the good faith business judgment of the Master Servicer, as evidenced by an Officer’s Certificate delivered to the Note Insurer and the
Indenture Trustee no later than the Business Day following such determination, would not ultimately be recoverable pursuant to Section 5.03 of the Sale and Servicing Agreement. 
  
 “Note”: Any Class A-1 Note or Class A-2 Note executed by the Owner Trustee on behalf of the Trust and
authenticated by the Indenture Trustee. 
  
 “Noteholder” or “Holder”: Each Person in whose name a Note is registered in the Note Register, except that, solely for the purposes of giving any consent, waiver, request or demand pursuant to the
Indenture, any Note registered in the name of the Master Servicer, the Backup Servicer or the Sponsor, or any Affiliate of any of them, shall be deemed not to be outstanding and the undivided Percentage Interest evidenced thereby shall not be taken
into account in determining whether the requisite percentage of Notes necessary to effect any such consent, waiver, request or demand has been obtained. For purposes of any consent, waiver, request or demand of Noteholders pursuant to the Indenture,
upon the Indenture Trustee’s request, the Master Servicer, the Backup Servicer and the Sponsor shall provide to the Indenture Trustee a notice identifying any of their respective Affiliates that is a Noteholder as of the date(s) specified by
the Indenture Trustee in such request. Any Notes on which payments are made under the Note Insurance Policy shall be deemed to be Outstanding and held by the Note Insurer to the extent of such payment. 
  
 “Note Insurance Payment Account”: The Note Insurance Payment
Account established in accordance with Section 8.03(c) of the Indenture and maintained by the Indenture Trustee. 
  
 “Note Insurance Policy”: The financial guarantee insurance policy, number AB0737BE, and all endorsements thereto dated the Closing Date,
issued by the Note Insurer for the benefit of the Noteholders. 
  
 “Note Insurer”: Ambac Assurance Corporation a Wisconsin-domiciled stock insurance corporation, and any successors thereto. 
  
 “Note Insurer Default”: The existence and continuance of any of the following: 
  
 (i) the Note Insurer shall have failed to make a required
payment when due under the Note Insurance Policy; 
  
 (ii) the Note Insurer shall have (i) filed a petition or commenced any case or proceeding under any provision or chapter of the Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to

  

 22 

 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 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 
  
 (iii) a court of competent jurisdiction, the New York Department of Insurance or any other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a
custodian, indenture trustee, agent, or receiver for the Note Insurer or for all or any material portion of its property or (ii) authorizing the taking of possession by a custodian, indenture trustee, agent, or receiver of the Note Insurer or of all
or any material portion of its property. 
  
 “Note
Principal Balance”: With respect to a Class of Notes on any date of determination, the Class A-1 Note Principal Balance or the Class A-2 Note Principal Balance. As to any particular Note and date of determination, the product of the
Percentage Interest evidenced thereby and the aggregate principal balance of all Notes of the same Class as of such date of determination. The Certificates do not have a “Note Principal Balance.” 
  
 “Note Rate”: The Class A-1 Note Rate or Class A-2 Note Rate,
as applicable. 
  
 “Note Register”: As defined in
Section 2.06 of the Indenture. 
  
 “Note
Registrar”: As defined in Section 2.06 of the Indenture. 
  
 “Notice”: The telephonic or telegraphic notice, promptly confirmed in writing by telecopy substantially in the form of Exhibit A to the Note Insurance Policy, the original of which is subsequently delivered by registered or
certified mail, from the Indenture Trustee specifying the Insured Amount or Preference Amount which shall be due and owing on the applicable Payment Date. 
  
 “Officer’s Certificate”: A certificate signed by the chairman of the board, the president or a vice president and the treasurer, the
secretary or one of the assistant treasurers or assistant secretaries of the Sponsor, the Master Servicer, or the Backup Servicer, or, with respect to the Trust, a certificate signed by a Responsible Officer of the Owner Trustee, at the direction of
the Certificateholders as required by any Basic Document. 
  
 “Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be counsel for the Sponsor, the Master Servicer, the Indenture Trustee, the Owner Trustee, a Noteholder or a Noteholder’s prospective
transferee or the Note Insurer (including except as otherwise provided herein, in-house counsel) reasonably acceptable to each addressee of such opinion and experienced in matters relating to the subject of such opinion. 
  
 “Original Note Principal Balance”: As of the Closing Date
and as to the Class A-1 Notes, $250,121,000 and as to the Class A-2 Notes, $254,879,000. The Certificates do not have an “Original Note Principal Balance.” 
  

 23 

 “Outstanding”: As of the date of determination, all Notes theretofore authenticated and
delivered under the Indenture except: 
  
 (i)
Definitive Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar for cancellation; 
  
 (ii) Notes or portions thereof for whose payment or redemption money in the necessary amount has been theretofore deposited with the
Indenture Trustee in trust for the Holders of such Notes; provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor, satisfactory to the
Indenture Trustee, has been made; 
  
 (iii) Notes
in exchange for or in lieu of which other Notes have been authenticated and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser (as defined by the
Uniform Commercial Code of the applicable jurisdiction); and 
  
 (iv) Notes alleged to have been destroyed, lost or stolen that have been paid as provided for in Section 2.07 of the Indenture; 
  

provided, however, that Notes which have been paid with proceeds of the Policy shall continue to remain Outstanding for purposes of this Indenture until
the Note Insurer has been paid as subrogee hereunder or reimbursed pursuant to the Insurance Agreement as evidenced by a written notice from the Note Insurer delivered to the Indenture Trustee, and the Note Insurer shall be deemed to be the Holder
thereof to the extent of any payments thereon made by the Note Insurer which have not been reimbursed; provided, further, however, that in determining whether the Holders of the requisite percentage of the Note Principal Balance
of the Outstanding Notes have given any request, demand, authorization, direction, notice, consent or waiver hereunder, Notes owned by the Trust, any other obligor upon the Notes or any Affiliate of the Trust, the Master Servicer or the Sponsor or
such other obligor shall be disregarded and deemed not to be Outstanding, except that, in determining whether the Indenture Trustee shall be protected in relying upon any such request, demand, authorization, direction, notice, consent or waiver,
only Notes that a Responsible Officer of the Indenture Trustee has actual knowledge to be so owned shall be so disregarded. Notes so owned that have been pledged in good faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Indenture Trustee the pledgee’s right so to act with respect to such Notes and that the pledgee is not the Trust, any other obligor upon the Notes or any Affiliate of the Trust, the Master Servicer or the Sponsor or such
other obligor. 
  
 “Overcollateralization
Amount”: As of any Payment Date and either Group, the excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage Loans in such Group as of the close of business on the last day of the related Due Period over (b) the Note
Principal Balance of the related Class as of such Payment Date (after taking into account the payment of all principal payments for such Group on such Payment Date, except for any portion thereof related to any Overcollateralization Increase Amount
for such Payment Date); provided, however, that such amount shall not be less than zero. 
  

 24 

 “Overcollateralization Deficiency Amount”: With respect to any Payment Date and either
Group, the difference, if greater than zero, between (a) the Specified Overcollateralization Amount for such Group applicable to such Payment Date and (b) the Overcollateralization Amount for such Group applicable to such Payment Date prior to
taking into account the payment of any related Overcollateralization Increase Amount for such Group on such Payment Date. 
  
 “Overcollateralization Deficit”: As of any Payment Date, the amount, if any, by which (a) the aggregate Note Principal Balance of the
Notes, after taking into account the payment of the Base Principal Payment Amount for each Group on such date, but before taking into account any principal payment funded from Net Monthly Excess Cashflow, the Reserve Accounts or any Insured
Principal Payment exceeds (b) the aggregate Stated Principal Balance of the Mortgage Loans determined as of the end of the immediately preceding Prepayment Period. For purposes of determining the amount to be paid on account of the
Overcollateralization Deficit to the Noteholders of each Class of Notes on the Payment Date, the Overcollateralization Deficit will be allocated to each Class pro rata based on the amount by which the Note Principal Balance of each
class on such payment date, after payment of the Base Principal Payment Amount but before taking into account any principal payment funded from Net Monthly Excess Cashflow, any amounts released from the Reserve Accounts or any Insured Principal
Payment, exceeds the aggregate Stated Principal Balance of the Mortgage Loans in the related group as of the end of the immediately preceding Payment Date. 
  
 “Overcollateralization Increase Amount”: With respect to any Payment Date and either Group, the lesser of: 
  
 (i) the Overcollateralization Deficiency Amount for such
Group as of such Payment Date (after taking into account the payment of the Base Principal Payment Amount for such Group on such Payment Date); and 
  
 (ii) 100% of the amount of Net Monthly Excess Cashflow on such Payment Date. 
  
 “Overcollateralization Reduction Amount”: With respect to any Payment Date and either Group, the lesser of
(a) the Excess Overcollateralization Amount for such Group and Payment Date and (b) the Base Principal Payment Amount for such group and Payment Date, calculated without reduction for any Overcollateralization Reduction Amounts. 
  
 “Overcollateralized Percentage”: As to any Payment Date, and
with respect to either Loan Group, the percentage equivalent of a fraction, the numerator of which is the Overcollateralization Amount for such Loan Group as of such Payment Date and the denominator of which is the Aggregate Principal Balance of the
Mortgage Loans in such Loan Group as of the end of the related Collection Period; as to both Loan Groups, the percentage equivalent of a fraction, numerator of which is the Overcollateralization Amounts for both Loan Groups and the denominator of
which is the Aggregate Principal Balance of the Mortgage Loans in both Loan Groups as of the end of the related Collection Period. 
  

 25 

 “Owner-Occupied Mortgaged Property”: A Residential Dwelling as to which (a) the related
Mortgagor represented an intent to occupy as such Mortgagor’s primary residence at the origination of the Mortgage Loan, and (b) the Sponsor has no actual knowledge that such Residential Dwelling is not so occupied. 
  
 “Ownership Interest”: As to any Note, any ownership or
security interest in such Note, including any interest in such Note as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. 
  
 “Owner Trustee”: U.S. Bank Trust National Association, a
national banking association, not in its individual capacity, but solely as owner trustee under the Trust Agreement, and any successor owner trustee thereunder. 
  

“Owner Trustee Fee”: As defined in Section 9.01 of the Trust Agreement. 
  
 “Paying Agent”: The Indenture Trustee or any other depository institution or trust company that is
authorized by the Trust pursuant to Section 3.03 of the Indenture to pay the principal of, or interest on, any Notes on behalf of the Trust, which agent, if not the Indenture Trustee, shall have signed an instrument agreeing to be bound by the terms
of the Indenture applicable to such Paying Agent. 
  
 “Payment Account”: With respect to each Class of Notes, the segregated trust account, which shall be an Eligible Account, established and maintained pursuant to Section 8.01(a) of the Indenture and entitled “Deutsche
Bank, National Trust Company”, as Indenture Trustee for Accredited Mortgage Loan Trust 2004-1 Asset-Backed Notes, Series 2004-1, Class A-[1][2], Payment Account,” as the case may be, on behalf of the related Noteholders and the Note
Insurer. 
  
 “Payment Amount”: The Class A-1
Payment Amount or the Class A-2 Payment Amount, as applicable. 
  
 “Payment Date”: The 25th day of any month or if such 25th day is not a Business Day, the first Business Day immediately following, commencing on March 25, 2004. 
  
 “Percentage Interest”: With respect to a Note of either Class, the portion evidenced by such Note,
expressed as a percentage rounded to four decimal places, equal to a fraction the numerator of which is the denomination represented by original principal balance of such Note and the denominator of which is the Original Note Principal Balance of
such Class. With respect to the Certificates, the portion evidenced thereby as stated on the face of such Certificate. 
  

 26 

 “Permitted Investments”: As used herein, Permitted Investments shall include the
following: 
  
 (i) obligations of, or guaranteed
as to timely payments of principal and interest by, the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; 
  
 (ii) repurchase agreements on obligations specified in
clause (i) maturing not more than three months from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated at least A-l+ by S&P and in one of the two
highest ratings by Moody’s; 
  
 (iii)
certificates of deposit, time deposits and bankers’ acceptances (which, in the case of bankers’ acceptances, shall in no event have an original maturity of more than 365 days) of any U.S. depository institution or trust company,
incorporated under the laws of the United States or any state; provided, that the debt obligations of such depository institution or trust company at the date of acquisition thereof have been rated in one of the two highest ratings by
Moody’s and S&P. 
  
 (iv) commercial
paper (having original maturities of not more than 270 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated in the highest short-term rating by each of the
Rating Agencies; and 
  
 (v) units of
money market funds registered under the Investment Company Act of 1940, investing in any of the foregoing, including any funds managed or advised by the Indenture Trustee or any affiliate of the Indenture Trustee; provided, such money market
funds are at the time rated at least “AAAm” or “AAAm-G” by S&P, and in one of the two highest short-term ratings by Moody’s; 
  
 provided, that no instrument described hereunder shall evidence either the right to receive (x) only interest with respect to the obligations underlying such
instrument or (y) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provided a yield to maturity at par greater than 120% of the yield to
maturity at par of the underlying obligations; and provided, further, that no instrument described hereunder may be purchased at a price greater than par if such instrument may be prepaid or called at a price less than its purchase
price prior to stated maturity. 
  
 “Person”: Any
individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, national banking association, unincorporated organization or government or any agency or political subdivision thereof.

  
 “Physical Property”: As defined in clause (b)
of the definition of “Delivery.” 
  
 “Plan”: Either (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 
  

 27 

 4975(e)(1) of the Code) that is subject to Section 4975 of the Code or (iii) a Governmental Plan 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. 
  
 “Predecessor Notes”: With respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that
evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.07 of the Indenture in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the lost,
destroyed or stolen Note. 
  
 “Preference
Amount”: Any payment of principal or interest on a Note, which would have been covered under the Note Insurance Policy as any Insured Amount, which is made to an owner of a Note by or on behalf of the Indenture Trustee and which has been
deemed a preferential transfer and was previously recovered from its owner pursuant to the United States Bankruptcy Code in accordance with a final, non appealable order from a court of competent jurisdiction. 
  
 “Preference Claim”: As defined in Section 8.03(f) of the
Indenture. 
  
 “Premium”: The product of the
Premium Percentage and the aggregate outstanding Note Principal Balance for the related Class on the related Payment Date, but after giving effect to any payments on such Payment Date. 
  
 “Premium Percentage”: The rate at which the “Premium” is determined (including any “premium
supplement”), as defined in the Insurance Agreement. 
  
 “Prepayment Charge”: As to a Mortgage Loan, any charge paid by a Mortgagor in connection with Principal Prepayment made within the related Prepayment Charge Period, the Prepayment Charges with respect to each applicable
Mortgage Loan so held by the Trust being identified in a Prepayment Charge Schedule (other than any Master Servicer Prepayment Charge Payment Amount). 
  
 “Prepayment Charge Period”: As of any Mortgage Loan, the period of time, if any, during which a Prepayment Charge may be imposed.

  
 “Prepayment Charge Schedule”: As of any date,
the list of Prepayment Charges on the Mortgage Loans included in the Trust on such date, attached as Exhibit H to the Sale and Servicing Agreement. The Prepayment Charge Schedule shall set forth the following information with respect to each
Prepayment Charge: 
  
 (i) the Mortgage Loan
identifying number; 
  
 (ii) a code indicating
the term of the Prepayment Charge; 
  
 (iii) the
state of origination of the related Mortgage Loan; 
  
 (iv) the date on which the first Monthly Payment was due on the related Mortgage Loan; 
  

 28 

 (v) the term of the related Mortgage Loan; and 
  
 (vi) the Cut-Off Date Principal Balance of the related
Mortgage Loan. 
  
 “Prepayment Interest
Shortfall”: With respect to any Payment Date, for each Mortgage Loan that was the subject during the related Prepayment Period of a Principal Prepayment in full, an amount equal to the excess, if any, of (a) 30 days’ interest on the
Principal Balance of such Mortgage Loan at a per annum rate equal to (i) the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Civil Relief Act, any Deficient Valuation and/or any
Debt Service Reduction) minus (ii) the Servicing Fee Rate and the Backup Servicing Fee Rate, over (b) the amount of interest actually remitted by the related Mortgagor in connection with such Principal Prepayment in full, less the Servicing
Fee and the Backup Servicing Fee for such Mortgage Loan in such month. 
  
 “Prepayment Period”: With respect to any Payment Date, the period commencing on the 16th
day of the month preceding the month in which such Payment Date occurs (or, in the case of the first Payment Date, the day following the Cut-Off Date) and ending on the 15th day of the month in which such Payment Date occurs. 
  
 “Principal Balance”: As to any Mortgage Loan and any date of determination, the outstanding principal balance of such Mortgage Loan as of
such date of determination. 
  
 “Principal
Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date. 
  
 “Proceeding”: Any suit in equity, action at law or other judicial or administrative proceeding. 
  
 “Prospectus Supplement”: The Prospectus Supplement dated
February 10, 2004 relating to the Notes filed with the Commission in connection with the Registration Statement heretofore filed or to be filed with the Commission pursuant to Rule 424(b)(5). 
  
 “Qualified Appraiser”: An appraiser, duly appointed by the
Sponsor, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal
made by such appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, Recovery and Enforcement Act of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated.

  
 “Qualified Substitute Mortgage Loan”: A
mortgage loan or mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section 2.06 or 4.02(b) of the Sale and Servicing Agreement, which (a) has or have an interest rate greater than or equal to those applicable to the Deleted Mortgage
Loan, (b) relates or relate to a detached one- to four-family residence and has or have the same or a better lien priority as the Deleted Mortgage Loan and has or have the same occupancy status as the Deleted Mortgage Loan or is or are
Owner-Occupied Mortgaged Property(ies), (c) matures or mature no later than (and not more than one year earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio or Loan-to-Value 
  

 29 

 Ratios at the time of such substitution no higher than the Loan-to-Value Ratio of the Deleted Mortgage Loan, (e) has or
have a Stated Principal Balance or Stated Principal Balances, 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 principal balance) not more than the Stated Principal Balance of the Deleted Mortgage Loan as of such date, (f) complies or comply as of the date of substitution with each representation and warranty set forth in Section 4.01 of
the Sale and Servicing Agreement, and (g) is otherwise acceptable to the Note Insurer. 
  
 “Rating Agency”: S&P or Moody’s. 
  
 “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 Master Servicer, the Backup Servicer, the Sponsor, the Seller, the Note Insurer and the Trust in writing that
such action will not result in a reduction, qualification or withdrawal of the then current “implied” rating of the Notes that it maintains without taking into account the Note Insurance Policy. 
  
 “Record Date”: With respect to the Notes, the Business Day
immediately preceding the related Payment Date. 
  
 “Redemption Date”: The Payment Date, if any, on which the Class A-1 Notes, the Class A-2 Notes or all of the Notes are redeemed, in each case, pursuant to Article X of the Indenture, which date may occur on or after the
related Clean-Up Call Date. 
  
 “Reference
Banks”: Citibank, Barclay’s Bank PLC, The Bank of Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks selected by
the Indenture Trustee (after consultation with the Master Servicer) 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 Master Servicer or the Indenture Trustee or any affiliate thereof and (iii) whose quotations appear on the Telerate Page 3750 on the relevant Interest Determination Date. 
  
 “Reimbursement Amount”: Means, as to any Payment Date, the
sum of (x) (i) all Insured Payments paid by the Note Insurer, but for which the Note Insurer has not been reimbursed prior to such Payment Date pursuant to Section 8.02(iv) and (v) of the Indenture or 5.07(e) and (f) of the Indenture, plus
(ii) interest accrued on such Insured Payments not previously repaid calculated at the Late Payment Rate from the date the Indenture Trustee received the related Insured Payments or the date such Insured Payments were made, and (y) without
duplication (i) any amounts then due and owing to the Note Insurer under the Insurance Agreement, as certified to the Indenture Trustee by the Note Insurer plus (ii) interest on such amounts at the Late Payment Rate. In the event any amounts
due under the Insurance Agreement are not clearly allocable to a particular Group, those amounts shall be allocated between the Groups pro rata based on the aggregate unpaid Principal Balance of the related Notes. 
  

 30 

 “Remaining Overcollateralization Deficit”: With respect to any Payment Date, the excess,
if any, of (a) the aggregate Note Principal Balances of both Classes of Notes, after payment of the Base Principal Payment Amount for both Groups and after taking into account any principal payment funded from Net Monthly Excess Cashflow and from
amounts released from the Reserve Accounts, but before taking into account the principal portion of any Insured Principal Payment, over (b) the aggregate Stated Principal Balance of the Mortgage Loans as of the close of business on the last day of
the prior Prepayment Period. For purposes of determining the amount to be paid on account of the Remaining Overcollateralization Deficit to the Noteholders of each Class of Notes on the Payment Date, the Remaining Overcollateralization Deficit will
be allocated to each Class pro rata based on the amount by which the Note Principal Balance of each Class on such Payment Date, after payment of the Base Principal Payment Amount but after taking into account any principal payment
funded from Net Monthly Excess Cashflow and from amounts released from the Reserve Account, but before taking into account any Insured Principal Payment, exceeds the aggregate Stated Principal Balances of the Mortgage Loans in the related Group as
of the end of the immediately preceding Payment Date. 
  
 “REO Disposition”: The final sale by the Master Servicer of a REO Property acquired by the Master Servicer in foreclosure or by deed in lieu of foreclosure. 
  
 “REO Mortgage Loan”: Any Mortgage Loan which is not a Liquidated Mortgage Loan and as to which the
indebtedness evidenced by the related Mortgage Note is discharged and the related Mortgaged Property is held as part of the Trust. 
  
 “REO Proceeds”: Proceeds received in respect of any REO Mortgage Loan (including, without limitation, proceeds from the rental of the
related Mortgaged Property). 
  
 “REO Property”:
A Mortgaged Property acquired by the Master Servicer in the name of the Indenture Trustee on behalf of the Noteholders through foreclosure or deed-in-lieu of foreclosure. 
  
 “Required Interest Distributions”: (i) with respect to the Class A-1 Notes and any Payment Date, the Class
A-1 Interest Payment Amount for such Payment Date, and (ii) with respect to the Class A-2 Notes and any Payment Date, the Class A-2 Interest Payment Amount for such Payment Date. 
  
 “Request for Release”: A request for release in substantially the form attached as Exhibit F of the
Sale and Servicing Agreement. 
  
 “Reserve
Account”: The two segregated trust accounts relating to the two Loan Groups, each of which shall be an Eligible Account (or subaccount of the Payment Account), established and maintained pursuant to Section 8.01(b) of the Indenture and
entitled Deutsche Bank, National Trust Company as Indenture Trustee for Accredited Mortgage Loan Trust 2004-1, Asset-Backed Notes, Series 2004-1, Cross-collateralization Reserve Account, Class A-[1][2]” on behalf of the Noteholders and the Note
Insurer. 
  

 31 

 “Reserve Account Release Amount”: With respect to any Payment Date, the lesser of (a)
the aggregate amounts on deposit in both Reserve Accounts and (b) and the amount by which the Credit Enhancement Amount exceeds the Specified Credit Enhancement Amount. 
  
 “Reserve Payment Amount”: With respect to any Payment Date and either Loan Group, the amount necessary for
the aggregate funds on deposit in both Reserve Accounts to equal the Specified Reserve Amount. 
  
 “Residential Dwelling”: A one- to four-family dwelling, a unit in a planned unit development, a unit in a condominium development or a townhouse. 
  
 “Responsible Officer”: When used with respect to the
Indenture Trustee or the Owner Trustee, any officer assigned to the Corporate Trust Office (or any successor thereto), including any Vice President, Second or Assistant Vice President, Senior Trust Officer, Trust Officer, Assistant Trust Officer,
any Assistant Secretary, associate, any trust officer or any other officer of the Indenture Trustee or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and to whom, with respect to
a particular matter, such matter is referred because of such officer’s knowledge of and familiarity with the particular subject. When used with respect to the Sponsor or the Master Servicer, the chief executive officer, the president or any
vice president, assistant vice president, or any secretary or assistant secretary. 
  
 “Rolling Six Month Delinquency Rate”: For any Payment Date, the fraction, expressed as a percentage, equal to the average of the Delinquency Ratio for each of the six immediately preceding Collection
Periods (or for each Payment Date starting in March 2004 through August 2004, the corresponding number of preceding Collection Periods). 
  
 “Sale”: The meaning specified in Section 5.17 of the Indenture. 
  
 “Sale and Servicing Agreement”: The Sale and Servicing Agreement, dated as of February 1, 2004, among the
Trust, the Master Servicer, the Backup Servicer, the Sponsor , the Seller, and the Indenture Trustee, providing for, among other things, the sale of the Mortgage Loans from the Seller to the Trust and the servicing of the Mortgage Loans. 

 
 “Securities Act”: Means the Securities Act of 1933, as
amended. 
  
 “Seller”: Accredited Home Capital,
Inc., a Delaware corporation. 
  
 “Servicer Event of
Default”: As defined in Section 7.01 of the Sale and Servicing Agreement. 
  
 “Servicer Remittance Amount”: With respect to any Servicer Remittance Date, an amount equal to the sum of (i) all Monthly Payments on the Mortgage Loans collected by the Master Servicer during the
related Due Period, (ii) all Curtailments and other amounts collected on account of principal (including Net REO Proceeds, Net Liquidation Proceeds and Insurance Proceeds, if any) by the Master Servicer during the related Collection Period, (iii)
all Principal Prepayments in full (including Prepayment Charges) collected by the Master Servicer during the related Prepayment Period, (iv) all Delinquency Advances made by the Master Servicer with 
  

 32 

 respect to Monthly Payments due to be received on the Mortgage Loans during the related Due Period and (v) any other
amounts required to be placed in the Collection Account by the Master Servicer pursuant to the Sale and Servicing Agreement but excluding the following: 
  
 (a) amounts received on a Mortgage Loan, other than timely Monthly Payments, and including late payments, Liquidation Proceeds and
Insurance Proceeds, to the extent the Master Servicer has previously made an unreimbursed Delinquency Advance or an unreimbursed Servicing Advance with regard to such Mortgage Loan, to the extent of such unreimbursed Delinquency Advance or
unreimbursed Servicing Advance as applicable; 
  
 (b) those portions of each payment of interest on a particular Mortgage Loan which represent the Servicing Fee and the Backup Servicing Fee; 
  
 (c) that portion of Liquidation Proceeds and REO Proceeds to the extent of any unpaid Servicing Fee and Backup Servicing Fee; 

 
 (d) all income from Permitted Investments that is held in
the Collection Account for the account of the Master Servicer; 
  
 (e) all amounts actually recovered by the Master Servicer in respect of late fees, assumption fees and similar fees; 
  
 (f) certain other amounts which are reimbursable to the Master Servicer, as provided in this Sale and Servicing Agreement; 
  
 (g) all amounts previously advanced by the Master Servicer
as Delinquency Advances or Servicing Advances that are determined in good faith by the Master Servicer to be unrecoverable from the proceeds of the particular Mortgage Loan to which they relate; and 
  
 (h) Net Foreclosure Profits. 
  
 “Servicer Remittance Date”: With respect to any Payment
Date, the second Business Day preceding the Payment Date. 
  
 “Servicer Remittance Report”: The monthly report prepared by the Master Servicer and delivered to the parties specified in Section 5.16(a) of the Sale and Servicing Agreement. 
  
 “Servicer Reporting Date”: As defined in Section 5.16(a) of
the Sale and Servicing Agreement. 
  
 “Servicing
Advances”: All reasonable and customary “out-of-pocket” costs and expenses incurred in the performance by the Master Servicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation,
restoration and protection of the Mortgaged Property, including, without limitation, real estate taxes and insurance premiums, (b) any enforcement, collection and judicial proceedings, including foreclosures and liquidations, 
  

 33 

 (c) the management and liquidation of the REO Property, including reasonable fees paid to any independent contractor in
connection therewith, (d) compliance with the obligations under Sections 5.04 and 5.06 of the Sale and Servicing Agreement, all of which reasonable and customary out-of-pocket costs and expenses are reimbursable to the Master Servicer to the extent
provided in Sections 5.03 and 5.06 of the Sale and Servicing Agreement and (e) expenses incurred in connection with any Mortgage Loan being registered on the MERS System. 
  
 “Servicing Compensation”: The Servicing Fee and other amounts to which the Master Servicer is entitled
pursuant to Section 5.08 of the Sale and Servicing Agreement. 
  
 “Servicing Fee”: As defined in Section 5.08 of the Sale and Servicing Agreement. 
  
 “Servicing Fee Rate”: The product of (i) 0.485% per annum (to the extent that servicing is transferred and in the event that 30+ day
Delinquencies on the Mortgage Loans are greater than 25% and less than or equal to 35% of the Aggregate Principal Balance of the Mortgage Loans, a supplemental fee of 0.15% per annum will apply and in the event that 30+ day Delinquencies on the
Mortgage Loans are greater than 35% of the Aggregate Principal Balance of the Mortgage Loans then a supplemental fee of 0.20% per annum will apply) and (ii) the stated principal balance of the Mortgage Loans at the beginning of the related Due
Period. 
  
 “Servicing Officer”: Any officer of
the Master 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 Indenture Trustee and the Note Insurer by the
Master Servicer, as such list may from time to time be amended. 
  
 “Shortfall Amount”: With respect to any Payment Date and either Class of Notes, an amount, not less than zero, equal to the excess, if any, of (A) the sum of (i) the Interest Payment Amount and the Base Principal Payment
Amount, in each case, for such Group and such Payment Date and (ii) the amount of any Overcollateralization Deficit allocable to such Class and such Payment Date over (B) the Available Funds (without taking into account the portion thereof referred
to in clause (iv) of the definition “Available Funds”) for such Class and such Payment Date. 
  
 “Specified Credit Enhancement Amount”: With respect to any Payment Date, the sum of the Specified Overcollateralization Amounts for both
Groups. 
  
 “Specified Overcollateralization
Amount”: The greatest of (i) (a) with respect to each of Loan Group 1 and Loan Group 2 and any Payment Date on which the Step Down Requirement has not been satisfied, an amount equal to 2.70% of the Maximum Collateral Amount for each such
Group, respectively, (b) with respect to any Payment Date on which the Step Down Requirement has been satisfied, the related Stepped Down Required Over-collaterized Percentage, or (c) with respect to any Payment Date on which a Step-up Test Event
has occurred, the related Stepped Up Required Overcollateralization Percentage, (ii) the sum of the three largest Mortgage Loans by outstanding Aggregate Principal Balance in the related Loan Group, (iii) the product of two and the excess of (x) 50%
of the Aggregate Principal Balance of the Mortgage Loans (including Mortgage Loans in foreclosure) and any REO Mortgage Loans in 
  

 34 

 the related Loan Group that are 90 days or more delinquent over (y) three times the related Excess Spread, and (iv) 0.50%
of the aggregate Maximum Collateral Amount for each Loan Group; provided, however, that during the period that the auction process is continuing pursuant to Section 10.04 of the Indenture the Specified Overcollateralization Amount
shall be 100% of the Aggregate Principal Balance of Mortgage Loans in the related Loan Group. 
  
 “Specified Reserve Amount”: Means, with respect to any Payment Date, the excess, if any, of (x) the sum of Specified Overcollateralization Amounts for both Groups on such Payment Date, over (y) the
sum of Overcollateralization Amounts for both Groups and such Payment Date. 
  
 “Sponsor”: Accredited Home Lenders, Inc., a California corporation. 
  
 “Standard & Poor’s” or “S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized statistical rating
organization designated by the Note Insurer. 
  
 “Stated
Principal Balance”: As to any Mortgage Loan and Payment Date, the unpaid principal balance of such Mortgage Loan as of the Due Date in the related Collection Period as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) after giving effect to (i) any previous Principal Prepayments in full received during the related Prepayment Period, (ii) any
previous Curtailments and Liquidation Proceeds allocable to principal received during the prior calendar month (other than with respect to any Liquidated Mortgage Loan) and (iii) the payment of principal due on the Due Date in the related Collection
Period and irrespective of any delinquency in payment by the related Mortgagor. 
  
 “Statutory Trust Statute”: 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. 
  
 “Step Down Requirement”: The Step Down Requirement is
satisfied on or after the later of (a) the 37th Payment Date or (b) the Payment Date upon which the Aggregate Principal Balance of the Mortgage Loans is equal to or less than 50% of the initial aggregate Maximum Collateral Amount. 
  
 “Stepped Down Required Overcollateralized Percentage”: For
any Payment Date for which the Step Down Requirement is satisfied, (A) with respect to Loan Group 1, 5.40% of the Aggregate Principal Balance of the related Mortgage Loans and (B) with respect to Loan Group 2, 5.40% of the Aggregate Principal
Balance of the related Mortgage Loans. 
  

 35 

 “Step-Up Test Event”: On any Payment Date, if either of the following events occur: (i)
the Rolling Six Month Delinquency Rate exceeds 12.50% or (ii) the Cumulative Loan Loss Percentage exceeds the following percentages on any Payment Date during the following periods: 
  

				
	 Payment Date Occurring During

	  	Percentage

	 
	 March 2004 - February 2006
	  	1.40	%
	 March 2006 - February 2007
	  	2.20	%
	 March 2007 - February 2008
	  	2.90	%
	 March 2008 and thereafter
	  	4.00	%

  
 “Stepped Up
Required Overcollateralized Percentage”: On any Payment Date on which a Step-Up Test Event exists, the Overcollateralization target will increase (x) with respect to Loan Group 1, from 2.70% to 4.50% of the initial Maximum Collateral Amount
of Loan Group 1 (or from 5.40% to 9.00% of the Aggregate Principal Balance of the Mortgage Loans on the related Payment Date if the Step Down Requirement has been met) and (y) with respect to Loan Group 2, from 2.70% to 4.50% of the initial Maximum
Collateral Amount of Loan Group 2 of the related Mortgage Loans (or from 5.40% to 9.00% of the Aggregate Principal Balance of the Mortgage Loans on the related Payment Date of the Step Down Requirement has been met). 
  
 “Substitution Adjustment”: As to any date on which a
substitution occurs pursuant to Sections 2.06 or 4.02(b) of the Sale and Servicing Agreement, the amount (if any) by which the aggregate principal balances (after application of principal payments received on or before the date of substitution) of
any Qualified Substitute Mortgage Loans as of the date of substitution, are less than the aggregate Stated Principal Balance of the related Deleted Mortgage Loans (after application of the scheduled principal portion of the Monthly Payments due in
the month of substitution) together with 30-days’ interest thereon at the Mortgage Interest Rate. 
  
 “Sub-Trust”: Shall have the meaning specified in Section 3.01 of the Trust Agreement and include either Sub-Trust 1 or Sub-Trust 2, each
of which constitute a separate interest in the Trust Estate pursuant to Section 3806(b)(2) of the Statutory Trust Statute. 
  
 “Sub-Trust 1”: The portion of the Trust Estate assigned to Loan Group 1. 
  
 “Sub-Trust 2”: The portion of the Trust Estate assigned to Loan Group 2. 
  
 “Telerate Page 3750”: The display designated as Telerate
Page 3750 on the Telerate Service (or such other page as may replace the Telerate page on that service for the purpose of displaying London interbank offered rates of major banks). 
  
 “Termination Price”: The greater of (A) the sum of (i) 100% of the Note Principal Balance of the related
Class of Notes, (ii) the aggregate amount of accrued and unpaid interest on the related Class of Notes through the related Due Period (including with respect to the Class A-1 Notes, any Class A-1 Net WAC Cap Carry-Forward Amount and with respect to
the Class A-2 Notes, any Class A-2 Net WAC Cap Carry-Forward Amount), (iii) any Indenture Trustee’s fees and expenses (including any fees and expenses associated with engaging a third-party as agent to assist in the auction sale pursuant to
Section 10.04 of the Indenture), (iv) any Owner Trustee Fees or Expenses, (v) any unreimbursed advances due and owing to the Master Servicer, (vi) any Reimbursement Amount due the Note Insurer, as applicable and (vii) any costs and damages incurred
by the Trust in connection with any violation by such mortgage loan of any predatory or abusive lending law and (B) the fair market value of the Mortgage Loans in the related Group. 
  

 36 

 “Trust”: Accredited Mortgage Loan Trust 2004-1, a Delaware statutory trust. 

 
 “Trust Agreement”: The Trust Agreement, dated as of
February 11, 2004, as amended and restated as of February 19, 2004, between the Sponsor, the Seller and the Owner Trustee, relating to the establishment of the Trust. 
  
 “Trust Certificate”: A certificate evidencing the beneficial interest of a Trust Certificateholder in the
Trust consisting of the Mortgage Loans in Loan Group 1 and the Mortgage Loans in Loan Group 2, substantially in the form of Exhibit A to the Trust Agreement. 
  
 “Trust Certificateholder,” “Certificateholder” or “Holder”: A Person in
whose name a Trust Certificate is registered. 
  
 “Trust
Estate”: All money, instruments and other property subject or intended to be subject to the lien of the Indenture, for the benefit of the Noteholders and the Note Insurer, as of any particular time, including, without limitation, all
property and interests, including all proceeds thereof, granted to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, pursuant to the Granting Clauses of the Indenture. The Trust Estate shall consist of two separate
Sub-Trusts comprised of Sub-Trust 1 and Sub-Trust 2. 
  
 “Trust Indenture Act” or “TIA”: The Trust Indenture Act of 1939, as it may be amended from time to time. 
  
 “Trust Order” and “Trust Request”: A written order or request of the Trust signed on behalf of the Trust by an
Authorized Officer of the Owner Trustee, at the direction of the Certificateholders and delivered to the Indenture Trustee or the Authenticating Agent, as applicable. 
  
 “Underwriter”: Morgan Stanley & Co. Incorporated. 
  
 “Underwriting Guidelines”: The underwriting guidelines of
the Sponsor as approved by the Note Insurer. 
  
 “United
States Person”: A citizen or resident of the United States, a corporation, a partnership or other entity treated as a corporation or a partnership organized in or under the laws of, the United States or any state thereof including the
District of Columbia, or an estate or trust whose income 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 can exercise primary jurisdiction over its administration and at least one United States Person has the authority to control all substantial decisions of the trust. Notwithstanding the
last clause of the preceding sentence, to the extent provided in Treasury Regulations, certain trusts in existence on August 20, 1996 and treated as United States Persons prior to such date, may elect to continue to be United States Persons.

  
 “Weighted Average Mortgage Interest Rate”:
With respect to any Due Period, the weighted average Mortgage Interest Rates (weighted by Principal Balances) of the Mortgage Loans in Loan Group 1 and Loan Group 2, as applicable, calculated at the opening of business on the first day of such Due
Period. 
  

 37 

 “Yield Maintenance Account”: The Yield Maintenance Account established in accordance
with Section 8.01(b) of the Indenture and maintained by the Indenture Trustee. 
  

 38 

 SCHEDULE I 
  
 MORTGAGE LOAN SCHEDULE 
  
 [On File with Dewey Ballantine LLP] 

 EXHIBIT A 
  
 FORM OF NOTE 
  
 ACCREDITED MORTGAGE LOAN TRUST 2004-1 
  
 CLASS A-[1][2] NOTE 
  
 UNLESS
THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUST OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
  
 THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE INSURANCE
POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE. 
  
 THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. 
  

  

			
	 Note No.:
A-[1][2]
	  	 CUSIP No.:

  

							
	 Class A-[1][2] Original Note Principal Balance:
	  	Percentage Interest:	 	 
	 	 	 $                    
	  	                     100%	 	 

  

			
	 Date of Indenture:
As of February 1, 2004
	  	 First Payment Date:
March 25, 2004

  

 ACCREDITED MORTGAGE LOAN TRUST 2004-1 
 ASSET-BACKED NOTES, SERIES 2004-1, CLASS A-[1][2] 
  
 Accredited Mortgage Loan Trust 2004-1, a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the
“Trust”), for value received, hereby promises to pay to CEDE & CO., or registered assigns, the principal sum of
$                            
(                                        
     Thousand Dollars) payable on each Payment Date in an amount equal to the result obtained by multiplying (x) the Percentage Interest of this Note set forth on the cover page hereof, by (y) the aggregate amount, if any,
payable from the related Payment Account in respect of principal on the Class A-[1][2] Notes, pursuant to the Indenture, dated as of February 1, 2004, between the Trust and Deutsche Bank National Trust Company, a national trust company, as Indenture
Trustee (the “Indenture Trustee”); provided, however, that the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of (i) the Payment Date occurring in April 2034 (the “Final
Stated Maturity Date”), (ii) the Redemption Date, if any, applicable to this Notes pursuant to Article X of the Indenture or (iii) the date on which an Event of Default shall have occurred and be continuing, if the Notes have been declared
to be immediately due and payable in the manner provided in Section 5.02 of the Indenture. Capitalized terms used but not defined herein are defined in Appendix I to the Indenture. 
  
 Pursuant to the terms of the Indenture, payments will be made on the 25th day of each month or, if such day is not a
Business Day, on the Business Day immediately following such 25th day (each a “Payment Date”), commencing on the first Payment Date specified on the cover page hereof, to the Person in whose name this Note is registered at the close
of business on the applicable Record Date, in an amount equal to the product of (a) the Percentage Interest evidenced by this Note and (b) the sum of the amounts to be paid on the Class A-[1][2] Notes with respect to such Payment Date, all as more
specifically set forth in the Indenture. 
  
 Notwithstanding the
foregoing, in the case of Definitive Notes, upon written request at least five (5) days prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Principal Balance of at least
$1,000,000), any payment of principal or interest, other than the final installment of principal or interest, shall be made by wire transfer to an account in the United States of America designated by such Holder reasonably satisfactory to the
Indenture Trustee. 
  
 On each Payment Date, Noteholders will be
entitled to receive interest payments in an aggregate amount equal to the Interest Payment Amount for such Class for such Payment Date, together with principal payments in an aggregate amount equal to the Base Principal Payment Amount for such Class
for such Payment Date, plus, until the Overcollateralization Amount for the related Group and such Payment Date is equal to the Specified Overcollateralization Amount for such Group and such Payment Date, the Net Monthly Excess Cashflow, if any, for
such Group and such Payment Date. The “Note Principal Balance” of a Note as of any date of determination is equal to the initial Note Principal Balance thereof as of the Closing Date, reduced by the aggregate of all amounts previously paid
with respect to such Note on account of principal. 

 The principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Trust with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then to the
unpaid principal of this Note. 
  
 This Note is one of a duly
authorized issue of Notes of the Trust, designated as the “Accredited Mortgage Loan Trust 2004-1, Asset-Backed Notes, Series 2004-1, Class A-[1][2],” issued under the Indenture, to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights and obligations thereunder of the Trust, the Indenture Trustee and the Holders of the Notes. Also issued under the Indenture are the “Accredited Mortgage Loan Trust 2004-1,
Asset-Backed Notes, Series 2004-1, Class A[l][2].” To the extent that any provision of this Note contradicts or is inconsistent with the provisions of the Indenture, the provisions of the Indenture shall control and supersede such contradictory
or inconsistent provision herein. The Notes are subject to all terms of the Indenture. 
  
 The Class A-[1][2] Notes are and will be equally and ratably secured by the Mortgage Loans in Loan Group [1][2], the other collateral related thereto pledged as security therefor as provided in the Indenture, and, to
the extent provided in the Indenture, by the Mortgage Loans in Loan Group [1][2]. 
  
 As described above, the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of the Final Stated Maturity Date and any Redemption Date applicable to such Class, pursuant to Article
X of the Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal Balance of the Notes shall be due and payable on the date on which an Event of Default shall have occurred and be continuing if the Indenture Trustee, at the
direction or upon the prior written consent of Ambac Assurance Corporation (the “Note Insurer”) in the absence of a Note Insurer Default, or the Holders of the Notes representing not less than 50% of the Note Principal Balance of
the Outstanding Notes (with the prior written consent of the Note Insurer in the absence of a Note Insurer Default) of both Classes, shall have declared the Notes to be immediately due and payable in the manner provided in Section 5.02 of the
Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto. 
  
 The Note Insurer, in consideration of the payment of the premium and subject to the terms of the Note Guaranty Insurance Policy (the “Note
Insurance Policy”) thereby has unconditionally and irrevocably guaranteed the payment of the Insured Amounts. 
  
 Pursuant to the Indenture, unless a Note Insurer Default exists (i) the Note Insurer shall be deemed to be the holder of the Notes for certain purposes
specified in the Indenture and will be entitled to exercise all rights of the Noteholders thereunder, including the rights of Noteholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of
such Noteholders, and (ii) the Indenture Trustee may take actions which would otherwise be at its option or within its discretion, including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the
direction of the Note Insurer. In addition, on each Payment Date, after the Noteholders have been paid all amounts to which they are entitled, the Note Insurer will be entitled to be reimbursed for any unreimbursed Insured Payments (with interest
thereon at the “Late Payment Rate” specified in the Insurance Agreement), Reimbursement Amounts and any other amounts owed under the Note Insurance Policy. 

 The Trust shall not be liable upon the indebtedness evidenced by the Notes except to the extent of
amounts available from the Trust Estate which constitutes security for the payment of the Notes. The assets included in the Trust Estate and payments under the Note Insurance Policy will be sole source of payments on the Notes, and each Holder
hereof, by its acceptance of this Note, agrees that (i) such Note will be limited in right of payment to amounts available from the Trust Estate and the Note Insurance Policy as provided in the Indenture and (ii) such Holder shall have no recourse
to the Trust, the Owner Trustee, the Indenture Trustee, the Sponsor, the Master Servicer, the Backup Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Trust pledged to secure
the Notes pursuant to the Indenture. 
  
 Payments of interest on
this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full payment of this Note, shall be made by wire transfer in immediately available funds to the account designated by such
nominee, or if no instructions for wire transfers have been provided to the Indenture Trustee as provided in the Indenture, then by check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the
Note Register as of the close of business on each Record Date. Such checks shall be mailed to the Person entitled thereto at the address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this
Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid
principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Trust, will notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed or
transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and surrender of this Note at the Indenture Trustee’s designated office or at the office of the Indenture
Trustee’s agent designated for such purposes. 
  
 As provided
in the Indenture, both Classes of Notes may be redeemed in whole, but not in part, at the option of the Sponsor on any Payment Date on and after the date on which the sum of the Class A-1 Note Principal Balance and the Class A-2 Note Principal
Balance is less than or equal to 10% of the sum of the Class A-1 Note Principal Balance and Class A-2 Note Principal Balance. 
  
 As provided in the Indenture, either Class of Notes may be redeemed in whole, but not in part at the option of the Sponsor on any Payment Date on and
after the date on which the aggregate unpaid Note Principal Balances on the related class of Notes is less than or equal to 10% of the aggregate Original Note Principal Balance of the related class of Notes; provided that either the Loan
Group relating to the other Class of Notes have reached its specified Overcollateralization Amount or Stepped Down Required Overcollateralized Percentage, as applicable or such other Class is no longer outstanding. In addition, both Classes of Notes
may 

 be redeemed on any Payment Date on and after the date on which the aggregate unpaid Note Principal Balances of both
Classes of Notes is less than or equal to 10% of the aggregate Original Note Principal Balances thereof. 
  
 As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency designated by the Trust pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture Trustee duly
executed by, the Holder hereof or such Holder’s attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include
membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP,
all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate principal amount will be issued to the designated transferee or transferees. No service
charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or other governmental charge that may be imposed in connection with any such registration
of transfer or exchange. 
  
 In the case of a transfer of a Class
A-[1][2] Note, the Note Registrar shall not register the transfer of this Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not a Plan and is not, directly or
indirectly, acquiring this Note or any interest herein on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Plan or (ii) the acquisition and holding of this Note by the transferee qualifies for
exemptive relief under a United States Department of Labor prohibited transaction class exemption (or, if the transferee is a Governmental Plan, will not result in a violation of applicable law). Each Beneficial Owner, by acceptance of a beneficial
interest herein, shall be deemed to make one of the foregoing representations. 
  
 Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with
respect to the obligations of the Trust, the Owner Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in
its individual capacity, (ii) any owner of a beneficial interest in the Trust or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a
beneficial interest in the Trust, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that
any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. 

 
 Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the
case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees by accepting the benefits of the Indenture that such Noteholder or Beneficial Owner will not at any time institute against 

 the Trust, or join in any institution against the Trust of, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes; the Indenture, the Trust Agreement and the Sale and Servicing Agreement and the Insurance Agreement
(the “Basic Documents”). 
  
 The Trust has
entered into the Indenture and this Note is issued with the intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Trust secured by the Trust Estate. Each
Noteholder, by acceptance of a Note (and each Beneficial Owner by acceptance of a beneficial interest in a Note), agrees to treat the Notes for federal, state and local income, single business and franchise tax purposes as indebtedness of the Trust.

  
 Prior to the due presentment for registration of transfer of
this Note, the Trust, the Indenture Trustee and any agent of the Trust or the Indenture Trustee may treat the Person in whose name this Note (as of the day of determination or as of such other date as may be specified in the Indenture) is registered
as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Trust, the Indenture Trustee or any such agent shall be affected by notice to the contrary. 
  
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights
and obligations of the Trust and the rights of the Holders of the Notes under the Indenture at any time by the Trust with the consent of the Note Insurer and the Holders of Notes representing a majority of the Note Principal Balance of the
Outstanding Notes affected thereby. The Indenture also contains provisions permitting the (i) Note Insurer or (ii) if a Note Insurer Default exists, the Holders of Notes representing specified percentages of the Note Principal Balance of Outstanding
Notes, on behalf of the Holders of all the Notes, to waive compliance by the Trust with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Note Insurer or by
the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the amendment thereof, in certain limited circumstances, or the waiver of certain terms and conditions set forth in the Indenture, without
the consent of Holders of the Notes issued thereunder. 
  
 The
term “Trust” as used in this Note includes any successor to the Trust under the Indenture. 
  
 Initially, each Class of Notes will be represented by one Note registered in the name of Cede & Co. as nominees of the Clearing Agency. The Notes will
be delivered in denominations as provided in the Indenture and subject to certain limitations therein set forth. The Notes are exchangeable for a like aggregate initial Note Principal Balance of Notes of different authorized denominations, as
requested by the Holder surrendering the same. 

 THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation
of the Trust, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency herein prescribed. 
  
 Unless the certificate of authentication hereon has been executed by the Authenticating Agent whose name appears below by
manual signature, this Note shall not be entitled to any benefit under the Indenture referred to herein, or be valid or obligatory for any purpose. 

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

  

			
	 ACCREDITED MORTGAGE LOAN TRUST 2004-1

		
	 By:
	 	 U.S. BANK TRUST NATIONAL ASSOCIATION,

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

		
	 By:
	 	  

	 	 	 Authorized Signatory

  
 CERTIFICATE OF
AUTHENTICATION 
  
 This is one of the Class A-[1][2] Notes
designated above and referred to in the within-mentioned Indenture. 
  
 Dated: 
  

			
	 DEUTSCHE BANK NATIONAL TRUST COMPANY,

	 	 	as Authenticating Agent
		
	 By:
	 	  

	 	 	Authorized Signatory

 ASSIGNMENT 
  
 Social Security or taxpayer I.D. or other identifying number of assignee: 
  
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto: 
  
                                       
                                        
                                        
                                        
                                        
           
 (name and address of assignee) 
  
 the within Note and all rights thereunder, and hereby irrevocably constitutes
and appoints
                                        
            , attorney, to transfer said Note on the books kept for registration thereof, with full power of substitution in the premises. 
  
 Dated:
                                        
             */ 
  
 Signature Guaranteed: 
  
                                       
                          */ 
  
 */ NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face
of the within Note in every particular, without alteration, enlargement or any change whatever. Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements
include membership or participation in STAMP or such other “signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934,
as amended.

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