Document:

Amended and Restated Confirmation of Swap Transaction

 Exhibit 4.6 
 EXECUTION COPY 
 AMENDED AND RESTATED CONFIRMATION 
  

	Date:	August 23, 2006 

  

	To:	Carmel Mountain Funding Trust 

	  	15090 Avenue of Science 

	  	San Diego, California 92128 

	  	Attention: Katy Hudson 

	  	Telephone: (858) 676-2177 

	  	Facsimile No: (866) 278-5876 

  

	From:	Calyon New York Branch 

	  	1301 Avenue of the Americas 

	  	New York, New York 10019 

	  	Attention: Rene Fortier 

	  	Telephone: 212-261-3577 

	  	Facsimile: 212-261-3244 

  

	 	Re:	Transaction Reference Number: 40247 

 Ladies and Gentlemen: 
 This Amended and Restated Confirmation amends and restates in its entirety the Confirmation, with the
Transaction Reference Number set forth above, between Party A and Party B dated as of May 10, 2005. The purpose of this letter agreement is to set forth the terms and conditions of the Swap Transaction entered into between Calyon New York
Branch (“Party A”) and Carmel Mountain Funding Trust (“Party B”) on the Trade Date referred to below (the “Transaction”). It constitutes a “Confirmation” as referred to in the
Master Agreement specified below. 
 The definitions and provisions contained in the 2000 ISDA Definitions (the
“Definitions”), as published by the International Swaps and Derivatives Association, Inc. (“ISDA”), are incorporated into this Confirmation. In the event of any inconsistency between the Definitions and the
provisions of this Confirmation, this Confirmation will govern. 
 1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement, dated as of August 23, 2006 (which amends and restates the ISDA Master Agreement dated as of May 10, 2005), as amended and supplemented from time to time (the “Agreement”), between Party A and Party
B. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below. Unless otherwise defined in the Agreement or in the Definitions, capitalized terms used herein have the meanings ascribed to such terms
in Schedule I to the Security Agreement (as defined in the Agreement). 
 2. The terms of the Transaction to which this Confirmation relates
are as follows: 

			
	Trade Date:	  	May 10, 2005
		
	Effective Date of Amendment and Restatement:	  	August 23, 2006
		
	Termination Date:	  	May 10, 2008, subject to annual extension upon agreement of Party A and Party B.
		
	Business Day:	  	Any day other than (i) Saturday and Sunday or (ii) a day on which banking institutions or foreign exchange markets in New York, New York or San Diego, California are authorized or required by
law, regulation or executive order to be closed for business.
		
	Business Day Convention:	  	Following.
		
	Notional Amount:	  	With respect to any Payment Date, the notional amount of this Transaction will equal the product of (i) the Sharing Percentage and (ii) the sum of (x) the average of the aggregate Outstanding
Purchase Price of the Mortgage Loans owned by Party B on each day during the related Calculation Period and (y) the average of any cash and Eligible Investments held by Party B in the Collateral Account at the opening of business on the first day
of, and at the close of business on the last day of, the related Calculation Period.
		
	Maximum Notional Amount:	  	$1,000,000,000.00. In no event will the Notional Amount of this Transaction exceed the Maximum Notional Amount without the prior written consent of Party A.
		
	Aggregate Maximum Notional Amount:	  	The sum of the Maximum Notional Amount of this Transaction and the maximum notional amount of each other Interest Rate Swap.
		
	Sharing Percentage:	  	With respect to any date, the percentage expressed as a fraction, the numerator of which is the Maximum Notional Amount of this Transaction and the denominator of which is the Program Size, as
of such date. For the avoidance of doubt, the Sharing Percentage shall never be greater than one.

  

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	Calculation Period:	  	With respect to each Payment Date, the calendar month immediately preceding the month in which such Payment Date occurs; provided, however, solely for the purposes of calculating Issuer Funding
Cost with respect to such Payment Date, “Calculation Period” shall mean the period from and including the prior Payment Date to but excluding such Payment Date, except that in each case (i) the initial Calculation Period will
commence on, and include, the Effective Date and (ii) the final Calculation Period will end on, and include, the Termination Date.
		
	Payment Dates:	  	The 25th day of each month (or, if any such day is not a Business Day, the next following Business Day), commencing June 27, 2005.
		
	Interim Payment Dates:	  	Each Business Day on which a deposit is made into the Collateral Account in respect of proceeds from (i) the sale of a Mortgage Loan pursuant to Section 4.6(b) of the Mortgage Loan
Purchase and Servicing Agreement (other than a sale, or a Mortgage Loan subject to sale, to a Seller or the Servicer pursuant to Section 2.1(b), 3.3, 6.2 or 7.1 of the Mortgage Loan Purchase and Servicing Agreement) or
(ii) a Mortgage Loan that is prepaid in full (each such date, a “Loan Termination Date”; and each such Mortgage Loan which is sold (other than a sale, or a Mortgage Loan subject to sale, to a Seller or the Servicer pursuant to Section
2.1(b), 3.3, 6.2 or 7.1 of the Mortgage Loan Purchase and Servicing Agreement) or prepaid in full is referred to as a “Terminated Loan”); provided, however, that if the Servicer is not aware by 3:00
p.m. Eastern time at least one Business Day in advance that a deposit into the Collateral Account in respect of a Terminated Loan is going to be made, such deposit shall be deemed to occur on the Business Day immediately following the day on which
such deposit was made, and the Mortgage Loan in respect of which such deposit was made shall be deemed to be a Terminated Loan on the Business Day immediately following the day on which such deposit was made. Party B shall give Party A written
notice of any Loan Termination Date at least one Business Day prior to any such Loan Termination Date.
		
	Calculation Agent:	  	The Servicer. Party B shall ensure that the Calculation Agent shall perform its obligations in good faith. Party A may dispute any calculation of the Calculation

  

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		  	Agent, and the parties shall use reasonable efforts (and act in good faith) to resolve any disputes concerning such calculations. Party B shall ensure that the Calculation Agent shall, upon the
request of Party A, provide a certified statement to Party A showing in reasonable detail such calculations, specifying the source of such calculations and providing copies of all documents and information relied upon by the Calculation Agent in
performing its obligations hereunder. In addition, Party B or the Servicer shall provide to Party A, on or before the tenth Business Day of each month and no later than the tenth Business Day after a request, a report dated no earlier than one
Business Day before the date such report is delivered, which shall include for each Mortgage Loan, as of the date of such report, the information listed on Exhibit A hereto, and such other information as may be agreed between Party A and Party B
from time to time.
		
	3. Party A Floating Amount:	  	On each Payment Date, Party A will pay Party B an amount equal to the product of the Sharing Percentage times the excess of: (a) (i) the Issuer Funding Cost for the related Calculation
Period, times (ii) the Credit Reduction Factor for such Payment Date, over (b) any amounts previously paid by Party A as a Party A Accrued Interest Amount during such Calculation Period; provided, however that, if Party A does not
receive written notice from Party B of the Party A Floating Amount by at least 12:00 p.m. Eastern time one Business Day prior to the related Payment Date, Party A shall have no obligation to pay the Party A Floating Amount until the Business Day
after Party A receives written notice from Party B of the relevant Party A Floating Amount.
		
	Party A Interim Floating Amount:	  	On each Interim Payment Date, Party A will pay Party B an amount equal to the product of (i) the Sharing Percentage times (ii) the sum of all positive Partial Removal Payments for all
Mortgage Loans determined to be Terminated Loans on such date;

  

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		  	 provided, however that, if Party A does not receive written notice from Party B of the Party A Interim Floating Amount by at least 12:00 p.m.
Eastern time one Business Day prior to the related Interim Payment Date, Party A shall have no obligation to pay the Party A Interim Floating Amount until the Business Day after Party A receives written notice from Party B of the relevant Party A
Interim Floating Amount.
  
 Notwithstanding anything herein to the contrary, on any
Business Day (other than a Payment Date, Expected Maturity, Final Maturity for any Extended Notes or date on which any Extended Notes outstanding after the Final Maturity thereof are paid in full) on which a net payment in respect of a Party A
Interim Floating Amount is due and payable from Party A in an amount less than $ 500,000 (and such payment, plus the aggregate of all other net payments in respect of the Party A Interim Floating Amount which were due on a prior Interim Payment Date
but which have not been paid due to the operation of this paragraph, are less than $500,000), Party A shall postpone such net payment until the earlier to occur of (x) the immediately succeeding Payment Date, (y) the immediately succeeding Expected
Maturity or Final Maturity for any Extended Notes or date on which any Extended Notes outstanding after the Final Maturity thereof are paid in full and (z) the immediately succeeding Interim Payment Date on which a net payment in respect of the
Party A Interim Floating Amount is due and the aggregate of the amount of such payment, plus the aggregate of all other net payments in respect of the Party A Interim Floating Amount which were due on a prior Interim Payment Date but which have not
been paid due to the operation of this paragraph, is equal to or greater than $500,000. On any Business Day on which a payment in respect of the Party A Interim Floating Amount is required to be made pursuant to the immediately preceding sentence,
all amounts in respect of the Party A Interim Floating Amount which theretofore have not been paid due to the operation of this paragraph shall be paid to Party B.

		
	Party A Accrued Interest Amount:	  	On any Business Day (other than a Payment Date) on which any Extended Notes are paid in full, Party A will pay Party B an amount equal to the product of the

  

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		  	 Sharing Percentage times the amount of unpaid Extended Note Monthly Interest accrued from and including the later of (x) the immediately preceding
Payment Date and (y) the Expected Maturity of such Extended Notes to but excluding such date; provided, however, that on each Party A Accrued Interest Payment Date with respect to which Delinquent Loans or Defaulted Loans existed during the related
Calculation Period, the Party A Accrued Interest Payment shall be multiplied by the Credit Reduction Factor for such Party A Accrued Interest Payment Date.
  
 provided, however that, if Party A does not receive written notice from Party B of the amount of the Party A Accrued Interest Amount by 12:00 p.m. New York City
time one Business Day prior to the related date of payment of the Party A Accrued Interest Amount, Party A shall have no obligation to pay the Party A Accrued Interest Amount until the Business Day after Party A receives written notice from Party B
of such Party A Accrued Interest Amount.
  
 Notwithstanding anything herein to the
contrary, on any Business Day (other than a Payment Date, Expected Maturity or Final Maturity (as defined in the Security Agreement)) on which a net payment in respect of a Party A Accrued Interest Amount is due and payable from Party A in an amount
less than $500,000, Party A shall postpone such net payment until the earlier to occur of (x) the immediately succeeding Payment Date, (y) the immediately succeeding Expected Maturity or Final Maturity and (z) the immediately succeeding Business Day
on which aggregate net payments in respect of Party A Accrued Interest Amounts are due and payable from Party A in an amount equal to or greater than $500,000.

		
	4. Party B First Floating Amount:	  	 On each Payment Date, Party B will pay Party A an amount equal to the product of (i) the Sharing Percentage and:
  
 (ii) (A) minus (B), where (A) equals the sum of (a) the interest collected in respect of the
Mortgage Loans with respect to the related Calculation Period, including Monthly Servicer Advances (other than amounts to be held in the Collection Account for the benefit of a

  

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		  	Mortgage Loan Buyer pursuant to Section 4.6(b) of the Mortgage Loan Purchase and Servicing Agreement), (b) amounts on deposit in the Reserve Fund (including reinvestment income on such
amounts received during the related Calculation Period) to the extent that the amount on deposit in the Reserve Fund exceeds the Required Reserve Fund Amount, (c) amounts on deposit in the Market Value Reserve Account (including reinvestment income
on such amounts received during the related Calculation Period) to the extent that the amount on deposit in the Market Value Reserve Account exceeds the Market Value Requirement and (d) the reinvestment income received during the related Calculation
Period on amounts on deposit in the Collateral Account, and where (B) equals the sum of (a) Allocated Expenses payable on such Payment Date and (b) the Holdback Amount for such Payment Date.
		
	Party B Second Floating Amount:	  	On each Payment Date, Party B will pay to Party A an amount equal to the product of (i) the Sharing Percentage and (ii) any amount payable to the Swap Counterparties on such Payment Date
pursuant to Sections 5.02, 6.03(b)(xi) and (xiii), 6.05(g), 6.06 and clause Tenth of Section 7.02(b) of the Security Agreement.
		
	Party B Interim Floating Amount:	  	 On each Interim Payment Date, Party B will pay Party A an amount equal to the product of (i) the Sharing Percentage and (ii) the sum of the absolute
value of all negative Partial Removal Payments for all Mortgage Loans determined to be Terminated Loans on such date.
  
 Notwithstanding anything herein to the contrary, on any Business Day (other than a Payment Date, Expected Maturity, Final Maturity for any Extended Notes or date on which any Extended Notes outstanding after the
respective Final Maturity thereof are paid in full) on which a net payment in respect of a Party B Interim Floating Amount is due and payable from Party B in an amount less than $500,000 (and such payment, plus the aggregate of any other net
payments in respect of the Party B Interim Floating Amount which were due on a prior Interim Payment Date but which have not been

  

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		  	paid due to the operation of this paragraph, is less than $500,000), Party B shall postpone such net payment until the earliest to occur of (x) the immediately succeeding Payment Date, (y) the
immediately succeeding Expected Maturity or Final Maturity or date on which any Extended Notes are paid in full and (z) the immediately succeeding Interim Payment Date on which a net payment in respect of the Party B Interim Floating Amount is due
and the aggregate of the amount of such payment, plus the aggregate of any other net payments in respect of the Party B Interim Floating Amount which were due on a prior Interim Payment Date but which have not been paid due to the operation of this
paragraph, are equal to or greater than $500,000. On any date on which a payment in respect of the Party B Interim Floating Amount is required to be made pursuant to the immediately preceding sentence, all amounts in respect of the Party B Interim
Floating Amount which theretofore have not been paid due to the operation of this paragraph shall be paid to Party A.
		
	Party B Additional Amounts:	  	 On any Business Day on which Party B receives any Failed Securitization Interest Amount with respect to a Mortgage Loan, Party B will pay Party A an
amount equal to the product of (i) the Sharing Percentage and (ii) such Failed Securitization Interest Amount.
  
 Notwithstanding anything herein to the contrary, on any Business Day (other than a Payment Date, Expected Maturity, Final Maturity for Extended Notes or date on which any Extended Notes are paid in full) on which a
net payment in respect of a Party B Additional Amount is due and payable from Party B in an amount less than $500,000 (and such payment, plus the aggregate of any other net payments in respect of Party B Additional Amounts which were due on a
prior Business Day but which have not been paid due to the operation of this paragraph, are less than $500,000) Party B shall postpone such net payment until the earliest to occur of (x) the immediately succeeding Payment Date, (y) the immediately
succeeding Expected Maturity or Final Maturity or date on which any Extended Notes are paid in full and (z) the immediately succeeding Business Day on which a net payment in respect of Party B Additional Amounts is due and the aggregate of the
amount of such payment, plus the aggregate of any

  

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		  	other net payments in respect of Party B Additional Amounts which were due on a prior Business Day but which have not been paid due to the operation of this paragraph, are equal to or greater
than $500,000. On any date on which a payment in respect of Party B Additional Amounts is required to be made pursuant to the immediately preceding sentence, all amounts in respect of Party B Additional Amounts which theretofore have not been paid
due to the operation of this paragraph shall be paid to Party A.
		
	5. Definitions:	  	 “Credit-Adjusted Price” means, with respect to a Terminated Loan that is a Delinquent Loan or a Defaulted Loan, the hypothetical
sales proceeds in cash, as determined in good faith by the Calculation Agent, that would be received in connection with the sale of a Reference Mortgage Loan to a Qualified Purchaser on the date such Delinquent Loan or Defaulted Loan, as the case
may be, becomes a Terminated Loan.
  
 “Credit Reduction Factor” means as
of any Payment Date or Party A Accrued Interest Payment Date, the lesser of (A) one and (B) a fraction equal to (i) the average aggregate Outstanding Purchase Price of the Mortgage Loans owned by Party B on each day during the related Calculation
Period exclusive of Defaulted Loans and Delinquent Loans (other than Defaulted Loans pursuant to clause (i) of the definition thereof and Delinquent Loans, in either case, for which the Servicer is currently making Monthly Servicer Advances) (prior
to giving effect to payments and allocations on such date) divided by (ii) the sum of (x) the aggregate outstanding principal amount of the Senior Notes (except with respect to all non-interest bearing Secured Liquidity Notes outstanding as of the
end of the related Calculation Period, which shall equal an amount equal to the issue price of such Secured Liquidity Notes) and (y) the aggregate Principal Amount of the Subordinated Notes outstanding as of the related Calculation Period and the
Principal Amount Charge-Offs (to the extent not reinstated) as of the related Calculation Period.
  
 “Failed Securitization Interest Amount” means the amounts released from the Collection Account in accordance with Section 4.6(g) of the Mortgage Loan Purchase and Servicing Agreement,
representing

  

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		 	interest amounts previously paid on Mortgage Loans identified for sale to any Mortgage Loan Buyer, which sale has been abandoned by Party B.
		
		 	“Holdback Amount” means, (A) with respect to any Payment Date, an amount equal to the lesser of (i) the Excess Spread for such Payment Date and (ii) the sum of
(x) the amount as is required to cause the Market Value Reserve Available Amount to equal the Market Value Requirement and (y) the amount as is required to cause the Reserve Fund Available Amount of the Reserve Fund to equal the Required
Reserve Fund Amount and (B) with respect to any Interim Payment Date, an amount equal to the sum of (x) the amount as is required to cause the Market Value Reserve Available Amount to equal the Market Value Requirement and (y) the
amount that is required to cause the Reserve Fund Available Amount of the Reserve Fund to equal the Required Reserve Fund Amount.
		
		 	“Issuer Funding Cost” means, with respect to any Calculation Period, an amount equal to the sum (without duplication) of:
		
		 	(i) with respect to a Calculation Period in which occurred the Expected Maturities of interest-bearing Secured Liquidity Notes, the accrued and unpaid Interest Component from and including the
respective Issuance Dates to but excluding the respective Expected Maturities of such Secured Liquidity Notes (for the avoidance of doubt including without limitation any such accrued interest paid with the proceeds of the Capitalized Interest
Component of additional Classes of Secured Liquidity Notes),
		
		 	(ii) with respect to a Calculation Period in which occurred the Expected Maturity of non-interest bearing Secured Liquidity Notes, the Interest Component from and including the respective
Issuance Dates to but excluding the respective Expected Maturity, in respect of such Secured Liquidity Notes (for the avoidance of doubt including without limitation any such Interest Component paid with the proceeds of the Capitalized Interest
Component of additional Classes of Secured Liquidity Notes and any Interest Component with respect to any such Secured Liquidity Notes),

  

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		 	(iii) with respect to any Calculation Period immediately preceding a Payment Date for Extended Notes including a Final Maturity or other maturity date for the Extended Notes (if other than a
Payment Date), the amount of accrued and unpaid Extended Note Monthly Interest, payable in respect of the Extended Notes, on such Payment Date, Final Maturity or other maturity date, and
		
		 	(iv) with respect to any Calculation Period immediately preceding a Payment Date for Term Notes or Subordinated Notes including a Final Maturity or other maturity date for the Term Notes or
Subordinated Notes (if other than a Payment Date), the amount of accrued and unpaid interest payable in respect of such Term Notes or Subordinated Notes on such following Payment Date.
		
		 	“Partial Removal Payment” means an amount, which may be positive or negative, calculated with respect to each Terminated Loan (I) which is sold by Party B or securitized
equal to the difference between (i) the Outstanding Purchase Price of such Terminated Loan and (ii) the sum of (A) (x) if such Terminated Loan is not a Delinquent or Defaulted Loan, the sales proceeds of such Terminated Loan
(which sales proceeds in the case of a bundled whole loan sale or a securitization shall equal the sales proceeds for the related bundle of loans or securitization) or (y) if the Terminated Loan is a Delinquent Loan or a Defaulted Loan, the
Credit- Adjusted Price of such Terminated Loan and (B) the amount, if any, withdrawn from the Market Value Reserve Account for such Terminated Loan pursuant to Section 6.05(c) of the Security Agreement or (II) which results from a
prepayment in full of such Mortgage Loan equal to (i) the Outstanding Purchase Price of such Terminated Loan less (ii) the principal payments and Prepayment Charges that were deposited in the Collateral Account on or prior to such date. To
the extent that the Partial Termination Payment is a positive number, Party A shall pay such amount to Party B and to the extent that it is a negative number, Party B shall pay to Party A an amount equal to the absolute value
thereof.

  

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		  	“Qualified Purchaser” means a regular purchaser in the market for subprime mortgage loans and home equity loans.
		
		  	“Reference Mortgage Loan” means a hypothetical subprime mortgage loan or home equity loan, as applicable, used by the Calculation Agent for the purposes of determining the
Credit-Adjusted Price with respect to a Terminated Loan that is a Delinquent Loan or a Defaulted Loan which is otherwise substantially similar to such Delinquent Loan or Defaulted Loan in all respects, including interest rate, principal balance,
cash flows, lien position and all other payment characteristics, except that such loan is not a Delinquent Loan or Defaulted Loan, as the case may be.
		
	6. Payment Instructions:	  	Party A
		
		  	Calyon New York Branch
		  	ABA#: 02600-807-3
		  	Account: Derivative Products
		  	Acct#: 01-88180-3211-00-001-180
		  	Attn: Back Office Operations
		  	Phone: (212) 261-7890
		  	 Facsimile: (212) 459-3166

		
		  	 Party B

		
		  	 Deutsche Bank Trust Company Americas

		  	 ABA 021001033

		  	 Acct: 01419647

		  	 Name: TSS

		  	 Ref: Accredited Coll Account

		  	 Attn: Jessica Richmond

 7. No Recourse. It is expressly understood and agreed by the parties hereto that
(a) this Confirmation is executed and delivered by U.S. Bank Trust National Association, not individually or personally but solely as Owner Trustee of Party B, in the exercise of the powers and authority conferred and vested in it,
(b) each of the representations, undertakings and agreements herein made on the part of Party B 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 of binding only Party B, (c) 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 (d) under no circumstances shall U.S. Bank Trust National Association be
personally liable for the payment of any indebtedness or expenses of Party B or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by Party B under this Confirmation or any other related
documents. 
  

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 Please confirm that the foregoing correctly sets forth the terms and conditions of our agreement by
execution and delivery of this Confirmation. 
  

			
	Yours sincerely,
	
	CALYON NEW YORK BRANCH
		
	By:	 	 /s/ IAN CHEUNG

	Name:	 	Ian Cheung
	Title:	 	Director
		
	By:	 	 /s/ RICARDO L. GOMES

	Name:	 	Ricardo L. Gomes
	Title:	 	Vice President
	
	Confirmed as of the date above:
	
	CARMEL MOUNTAIN FUNDING TRUST
		
	By:	 	U.S. Bank Trust National Association, not in its individual capacity but solely as Owner Trustee on behalf of Party B
		
	By:	 	 /s/ PATRICIA M. CHILD

	Name:	 	Patricia M. Child
	Title:	 	Vice President

 Exhibit A to Confirmation 
 Party B Report 
  

	(i)	Party B’s loan number; 

  

	(ii)	the Mortgagor’s name; 

  

	(iii)	the address of the Mortgaged Property; 

  

	(iv)	the current interest rate; 

  

	(v)	the original loan balance; 

  

	(vi)	the current loan balance as of the last day of the immediately preceding month; (vii) the Outstanding Purchase Price; (viii) the interest paid-to-date and the next payment
date; 

  

	(ix)	the appraised value of the Mortgaged Property at the time the Mortgage Loan was originated; 

  

	(x)	whether the interest rate is fixed or adjustable (and if adjustable, the “ARM” code, which includes the index, margin and caps); 

  

	(xi)	the lien position of the Mortgage Loan on the Mortgaged Property (and if a second lien, the outstanding principal balance of the first lien at the time the Mortgage Loan was
originated and the monthly payment and maturity of the first lien loan); 

  

	(xii)	the occupancy status of the Mortgaged Property (including whether owner occupied); 

  

	(xiii)	whether the Mortgage Loan is a Balloon Mortgage Loan; (xiv) the first payment date; (xv) the maturity date; (xvi) the principal and interest payment; (xvii) the
property type of the Mortgaged Property; 

  

	(xviii)	the applicable loan grade and the Mortgagor’s FICO Score (where available in the Mortgage File); 

  

	(xix)	the Mortgage Note date; 

  

 Exhibit A-1 

	(xx)	the prepayment penalty and prepayment penalty type; (xxi) the delinquency status; 

  

	(xxii)	IO Term; 

  

	(xxiii)	Loan Purpose; 

  

	(xxiv)	Documentation Type; 

  

	(xxv)	ARM Code; 

  

	(xxvi)	Minimum Rate (if ARM Code does not include it); and 

  

	(xxvii)	Maximum Rate (if ARM Code does not include it). 

  

 Exhibit A-2Amended and Restated Schedule to the Master Agreement

 Exhibit 4.7 
 EXECUTION COPY 
 (Multicurrency-Cross Border) 
 AMENDED AND RESTATED SCHEDULE 
 to the 
 Master Agreement 
 dated as of
August 23, 2006 
 between 
 LEHMAN BROTHERS SPECIAL FINANCING INC. (“Party A”), 
 a corporation organized under the laws of 
 the State of Delaware 
 and 
 ACCREDITED HOME LENDERS, INC. (“Party B”), 
 a corporation organized under the laws of 
 Delaware 
 This Amended and Restated Schedule to the Master Agreement amends and restates in its entirety the Schedule dated as of May 10, 2005, between Party A and Party B.

 Part 1: Termination Provisions 
 In this Agreement: 
  

	(a)	“Specified Entity” means: 

 in relation to Party
A for the purpose of: 
  

			
	Section 5(a)(v),	 	Not applicable.
	Section 5(a)(vi),	 	Not applicable.
	Section 5(a)(vii),	 	Not applicable.
	Section 5(b)(iv),	 	Not applicable.

 and in relation to Party B for the purpose of: 
  

			
	Section 5(a)(v),	 	All Affiliates.
	Section 5(a)(vi),	 	All Affiliates.
	Section 5(a)(vii),	 	All Affiliates.
	Section 5(b)(iv),	 	All Affiliates.

  

	(b)	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement and shall also include any repurchase transactions, reverse
repurchase transactions, buy/sellback transactions and securities lending transactions and any other related OTC transactions now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider or Specified
Entity of such party) and the other party to this Agreement (or any Credit Support Provider or Specified Entity of such party). 

  

	(c)	The “Cross Default” provisions of Section 5(a)(vi) will not apply to Party A and will apply to Party B. 

 The following provisions apply: 
 “Specified Indebtedness” will have the meaning specified in Section 14 of this Agreement. 
 “Threshold Amount” means the lesser of (i) USD 10 million or (ii) two percent (2%) of the Stockholders’ Equity of Party B, in the case of Party B (or its equivalent in any other currency).

  

 For purposes hereof, “Stockholders’ Equity” means with respect to an entity, at any
time, the sum at such time of (i) its capital stock (including preferred stock) outstanding, taken at par value, (ii) its capital surplus and (iii) its retained earnings, minus (iv) treasury stock, each to be determined in
accordance with generally accepted accounting principles consistently applied at most recent quarter end. 
  

	(d)	The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will not apply to Party A and will apply to Party B. 

  

	(e)	The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A and will not apply to Party B. 

  

	(f)	Payments on Early Termination. For the purpose of Section 6(e) of this Agreement, Loss and the Second Method will apply. 

  

	(g)	“Termination Currency” means United States Dollars (“USD”). 

  

	(h)	Additional Termination Events will apply. Each of the following shall constitute an Additional Termination Event with respect to which Party B shall be the sole Affected
Party: 

  

	 	(i)	Financial Covenants. AHLHC shall fail to maintain: 

  

	 	(A)	at any time, a minimum Adjusted Tangible Net Worth of at least the sum of (1) $300,000,000 plus (2) 50% of AHLHC’s positive quarterly net income for such quarter from
the calendar quarter beginning on October 1, 2006, 

  

	 	(B)	as of the last business day of each fiscal quarter, an Interest Coverage Ratio of at least 1.10:1.0, 

  

	 	(C)	at any time, a ratio of Non-Warehouse Debt to Adjusted Tangible Net Worth that is less than or equal to 2.0:1.0, 

  

	 	(D)	as of the last business day of any month, Unrestricted Cash And Cash Equivalents and available borrowing capacity of at least $20,000,000, which continues uncured for five
(5) business days, or 

  

	 	(E)	at any time, a ratio of Recourse Debt to Tangible Net Worth Ratio that is less than or equal to 17.0:1.0. 

  

	 	(ii)	Net Earnings. AHLHC shall report net earnings for any six rolling calendar months of less than $1.00 on a consolidated basis in accordance with GAAP.

  

	 	(iii)	Repo Agreement Default. An “Event of Default” (as such term is defined in the Repo Agreement) occurs and is continuing. 

  

	 	(iv)	Change of Control. A Designated Event (as defined below) occurs with respect to Party B. A “Designated Event” means that: 

  

	 	(A)	Party B or AHLHC dissolves, merges or consolidates with another entity (unless (1) it is the surviving party or (2) the entity into which it merges has equity and a market
value of at least that of Party B or AHLHC immediately prior to such merger and such entity expressly assumes the obligations of the Party B at the time of such merger), or sells, transfers, or otherwise disposes of a material portion of its
business or assets, other than sales, transfers or dispositions of mortgage loans in the ordinary course of Party B’s or AHLHC’s business; 

  

 2 

	 	(B)	any Person or entity or any group (within the meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended) of Persons and/or entities, shall have
acquired beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended), directly or indirectly, in one or more transactions, of securities of Party B
(or other securities convertible into such securities) representing more than 50% of the combined voting power of all securities of Party B entitled to vote in the election of directors (other than a Person or entity owning such securities on the
date of this Agreement); or 

  

	 	(C)	Party B shall cease to be a wholly-owned subsidiary of AHLHC. 

  

	 	(v)	Material Adverse Change. Party B has experienced or is experiencing a material adverse change, determined by Party A in Party A’s sole discretion, in its
business, assets, or operations or financial condition. For the purpose of the foregoing Termination Event, Party B shall be the Affected Party. 

 Capitalized terms used in this Part 1(h) shall have the meanings set forth below: 
 “Adjusted Tangible Net Worth” means, for any Person, Net Worth of such person plus (a) Subordinated Debt (provided that Subordinated Debt shall not be taken into account to the extent that it would cause
Adjusted Tangible Net Worth to be comprised of greater than 25% of Subordinated Debt) plus minority interest in Accredited Mortgage Loan REIT Trust as shown on the most recent financial statement of Seller, minus (b) (i) servicing
rights, and (ii) all intangible assets, including goodwill, patents, tradenames, trademarks, copyrights, franchises, any organization expenses, deferred expenses, prepaid expenses, prepaid assets, receivables from shareholders, unconsolidated
Affiliates or employees, and any other asset as shown as an intangible asset on the balance sheet of such Person on a consolidated basis as determined at a particular date in accordance with GAAP. 
 “AHLHC” means Accredited Home Lenders Holding Co. and its Subsidiaries on a consolidated basis. 
 “Consolidated Debt” means, at any time, the aggregate principal amount of Indebtedness of AHLHC outstanding at such time
as reflected on the consolidated balance sheet of AHLHC, prepared in accordance with GAAP. 
 “EBITDA” means,
for any period, Net Income for such period on a consolidated basis, plus, without duplication and to the extent reflected as a charge in the statement of such Net Income for such period, the sum of (a) total income tax expense,
(b) interest expense, (c) depreciation and amortization expense, (d) amortization of intangibles (including, but not limited to, goodwill) and organization costs, (e) any extraordinary expenses or losses (including, whether or
not otherwise includable as a separate item in the statement of such Net Income for such period, losses on sales of assets outside of the ordinary course of business), and (f) any other noncash charges, and minus, to the extent included in the
statement of such Net Income for such period, the sum of (a) any extraordinary income or gains (including, whether or not otherwise includable as a separate item in the statement of such Net Income for such period, gains on the sales of assets
outside of the ordinary course of business) and (b) any other noncash income (other than any income represented by a receivable that in the ordinary course would be expected to be paid in cash), all as determined on a consolidated basis.

 “Indebtedness of AHLHC” means AHLHC’s (a) obligations for borrowed money, (b) obligations
representing the deferred purchase price of property (whether real or personal, tangible or intangible) or services (other than accounts payable arising in the ordinary course of AHLHC’s business payable on terms customary in the trade),
(c) obligations, whether or not assumed, secured by liens or payable out of the proceeds or production from property now or hereafter 

  

 3 

 
owned or acquired by AHLHC, (d) obligations which are evidenced by notes, acceptances, or similar instruments, (e) capitalized lease obligations,
(f) rate hedging obligations, (g) contingent obligations of any type which are reportable on AHLHC’s balance sheet in accordance with GAAP, (h) obligations for which AHLHC is obligated pursuant to or in respect of a letter of
credit or similar instrument and (i) repurchase obligations or liabilities of Party B with respect to accounts or notes receivable and chattel paper sold by AHLHC. 
 “Interest Coverage Ratio” means, for any applicable computation period, the ratio of (a) EBITDA to (b) Interest
Expense. 
 “Interest Expense” means, for any applicable computation period, all interest paid or accrued
during such period by AHLHC on a consolidated basis, determined in accordance with GAAP. 
 “Net Income”
means, for any period, the consolidated net income (or loss) for such period, determined on a consolidated basis in accordance with GAAP. 
 “Non-Warehouse Debt” means, at any time, Consolidated Debt minus Warehouse Debt. 
 “Recourse Debt to Adjusted Tangible Net Worth Ratio” means, at any time, the ratio of (a) Consolidated Debt minus the liabilities related to securitizations which are accounted for as financings under Financial
Accounting Standards Board (FASB) Rule 140 to (b) Adjusted Tangible Net Worth. 
 “Repo Agreement” means
the Fourth Amended and Restated Master Repurchase Agreement Governing Purchases and Sales of Mortgage Loans, dated as of June 23, 2006, between Lehman Brothers Bank, FSB, Accredited Mortgage Loan REIT Trust and Party B, dated as of the date
hereof, as amended from time to time. 
 “Unrestricted Cash and Cash Equivalents” means, as of any date of
determination, the sum of (a) the aggregate amount of unrestricted cash and (b) the aggregate amount of unrestricted cash equivalents (valued at the fair market value). As used in this definition, “Unrestricted” means the
specified asset is not subject to any liens or claims of any kind in favor of any Person. 
 “Warehouse Debt”
shall mean Indebtedness of AHLHC, whether or not it is recourse, that is secured or otherwise backed by Party B’s mortgage loans, mortgage-backed securities or other mortgage assets, and that is used generally by Party B to provide it with
financing or liquidity for the origination or acquisition by it of mortgage loans, mortgage-backed securities or other mortgage assets in Party B’s ordinary course of business. 
  

	(i)	Additional Event of Default. An “Event of Default” with respect to which Party B shall be the Defaulting Party under and as defined in the ISDA Master Agreement,
dated as of the date hereof, between Calyon New York Branch and Party B (as amended from time to time) shall constitute an Event of Default hereunder with respect to Party B as the sole Defaulting Party. 

 Part 2: Tax Representations 
  

	(a)	Payer Tax Representations. For the purpose of Section 3(e) of this Agreement, Party A and Party B will each make the following representation:

 It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Sections 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party under
this Agreement. In making this 

  

 4 

 
representation, it may rely on (i) the accuracy of any representation made by the other party pursuant to Section 3(f) of this Agreement,
(ii) the satisfaction(s) of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement; and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, 
 provided that it shall not be a breach of this representation where reliance is placed on clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) of this Agreement by reason of material prejudice to its legal or commercial position. 
  

	(b)	Payee Tax Representations. For the purpose of Section 3(f) of this Agreement: 

  

	 	(i)	Party A represents that it is a corporation duly organized and validly existing under the laws of the State of Delaware. 

  

	 	(ii)	Party B represents that it is a corporation duly organized and validly existing under the laws the State of California and its federal taxpayer identification number is 33-0426859.

 Part 3: Agreement to Deliver Documents 
 For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to deliver the following documents, as applicable: 
  

	(a)	Party A and Party B will deliver forms and/or documents described in Section 4(a)(iii) of this Agreement upon reasonable demand by the other party.

  

	(b)	Other documents to be delivered are: 

  

							
	Party required to
deliver document	  	 Form/Document/Certificate
	  	Date by which
to be delivered	  	Covered by
Section 3(d)
				
	Party A and
Party B	  	Incumbency certificate or other evidence reasonably satisfactory to the other party of the authority and genuine signature of the individual signing the Agreement and any Credit Support Document
on behalf of such party to execute the same.	  	Upon
execution
of this
Agreement.	  	Yes
				
	Party A and
Party B	  	Evidence reasonably satisfactory to the other party of the authority of such party and its Credit Support Provider to enter into the Agreement, any Credit Support Document and each Transaction
entered into hereunder.	  	Upon
execution
of this
Agreement.	  	Yes

  

 5 

							
	 Party required to
 deliver document
	  	 Form/Document/Certificate
	  	Date by which
to be delivered	  	Covered by
Section 3(d)
				
	Party A and Party
B	  	A copy of the annual report (i) in the case of Party A, of its Credit Support Provider and (ii) in the case of Party B, AHLHC, containing audited consolidated financial statements for such
fiscal year certified by independent public accountants and prepared in accordance with generally accepted accounting principles consistently applied.	  	As soon as
available
and in any
event
within 90
days of the
end of each
fiscal year
of
AHLHC.	  	Yes
				
	Party A and Party
B	  	For its most recent fiscal quarter, a copy of the unaudited financial statements of (i) in the case of Party A, its Credit Support Provider and (ii) in the case of Party B, AHLHC, prepared in
accordance with generally accepted accounting principles consistently applied.	  	As soon as
available
and in any
event
within 60
days of the
end of each
fiscal
quarter of
AHLHC.	  	Yes
				
	Party A and
Party B	  	Any Credit Support Document(s) specified in Part 4 of this Schedule.	  	Upon
execution
of this
Agreement.	  	No
				
	Party A and
Party B	  	An opinion of counsel to Party A and Party B substantially in the form of Exhibit B to this Schedule.	  	Upon
execution
of this
Agreement.	  	No
				
	Party B	  	All notices, reports, documents, certificates information, statements or instructions required to be delivered to Reference Party A (as defined in the Confirmation) under any Program Documents
and such other documents as Party A may reasonable request from time to time.	  	Upon
request.	  	Yes

  

 6 

							
	Party required to
deliver document	  	 Form/Document/Certificate
	  	Date by which
to be delivered	  	Covered by
Section 3(d)
				
	Party B	  	A certificate of an authorized financial officer of Party B certifying that no Additional Termination Event has occurred and the calculations of the financial covenants set forth in Part 1(h)(i)
of this Schedule for said period and the methodology used in computing said financial covenants, in form and detail satisfactory to Party A.	  	Within 30
days after
the end of
each
calendar
quarter or
30 days
after
request by
Party A.	  	Yes
				
	Party B	  	Notice of Amendment to any Program Document	  	Upon
execution
of such
amendment.	  	Yes

 Part 4: Miscellaneous 
  

	(a)	Addresses for Notices. For the purpose of Section 12(a) of this Agreement: 

 Address for notices or communications to Party A: 
  

			
	Address:	 	 Lehman Brothers Special Financing Inc.
 c/o Lehman
Brothers Inc.
 Transaction Management
 745 Seventh Avenue, 28th
Floor
 New York, NY 10019

		
	Attention:	 	Donald Kutch
	Telephone No.:	 	(212) 526-5810
	Facsimile No.:	 	(646) 758-1964
		
		 	For all purposes.

 Address for notices or communications to Party B: 
  

			
	Address:	 	 Accredited Home Lenders, Inc.
 15090 Avenue of
Science,
 San Diego, California 92128

		
	Attention:	 	Katy Hudson
	Telephone No.:	 	858-676-2177
	Facsimile No.:	 	866-278-5876
		
		 	For all purposes.

  

 7 

	(b)	Process Agent. For the purpose of Section 13(c) of this Agreement: 

  

			
	 Party A appoints as its Process Agent:
	 	Not applicable.
	 Party B appoints as its Process Agent:
	 	Not applicable.

  

	(c)	Offices. The provisions of Section 10(a) will apply to this Agreement. 

  

	(d)	Multibranch Party. For the purpose of Section 10(c) of this Agreement: 

 Party A is not a Multibranch Party. 
 Party B is not a Multibranch Party. 
  

	(e)	Calculation Agent. The Calculation Agent is Party A. 

  

	(f)	Credit Support Document. Details of any Credit Support Document, each as amended, extended, supplemented or otherwise modified in writing from time to time, and each of which
is incorporated by reference in, constitutes part of, and is in connection with, this Agreement and each Confirmation (unless provided otherwise in a Confirmation) as if set forth in full in this Agreement or such Confirmation, is a Credit Support
Document: 

 In the case of Party A: 
 Guarantee of Party A’s obligations hereunder in the form annexed hereto as Exhibit A to this Schedule. 
 In the case of Party B: 
 Credit Support Annex annexed hereto which supplements, forms part of, and is subject to, this
Agreement. 
  

	(g)	Credit Support Provider. 

  

			
	Credit Support Provider means in relation to Party A:	 	Lehman Brothers Holdings Inc.
	Credit Support Provider means in relation to Party B:	 	Not Applicable

  

	(h)	Governing Law. THIS AGREEMENT WILL BE GOVERNED BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PROVISIONS
THEREOF, OTHER THAN SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW). 

  

	(i)	Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will apply to any Transactions. 

  

	(j)	“Affiliate” will have the meaning specified in Section 14 of this Agreement, provided, however, that with respect to Party A, such definition
shall be understood to exclude Lehman Brothers Derivative Products Inc. and Lehman Brothers Financial Products Inc. 

  

	(k)	Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the second line of subparagraph (i) thereof the word “non-”; and
(ii) deleting the final paragraph thereof. 

  

 8 

 Part 5: Other Provisions 
  

	(a)	Representations. Section 3 of this Agreement is hereby amended by adding the following additional subsections: 

  

	 	“(g)	No Reliance. It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice from such advisors as it has deemed necessary. It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and explanations related to the terms and conditions of the Transaction will not be considered investment advice or a recommendation to enter into that Transaction. No communication
(written or oral) received from the other party will be deemed to be an assurance or guarantee as to the expected results of that Transaction. 

  

	 	(h)	Assessment and Understanding. It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of that Transaction. It is also capable of assuming, and assumes, the risks of that Transaction. 

  

	 	(i)	Status of Parties. The other party is not acting as a fiduciary for or an advisor to it in respect of that Transaction. 

  

	 	(j)	No Agency. It is entering into this Agreement, including each Transaction, as principal and not as agent of any person or entity. 

  

	 	(k)	Eligible Contract Participant. It is an “eligible contract participant” within the meaning of Section 1a(12) of the Commodity Exchange Act.”

  

	(b)	Set-off. Section 6 of this Agreement is hereby amended by adding the following new subsection 6(f): 

  

	 	(f)	Set-off. 

  

	 	(i)	In addition to any rights of set-off a party may have as a matter of law or otherwise, upon the occurrence of an Event of Default or an Additional Termination Event and the
designation of an Early Termination Date pursuant to Section 6 of the Agreement with respect to a party (“X”), the other party (“Y”) will have the right (but not be obliged) without prior notice to X or any other
person to set-off or apply any obligation of X owed to Y (and to any Affiliate of Y) (whether or not matured or contingent and whether or not arising under this Agreement, and regardless of the currency, place of payment or booking office of the
obligation) against any obligation of Y (and of any Affiliate of Y) owed to X (whether or not matured or contingent and whether or not arising under this Agreement, and regardless of the currency, place of payment or booking office of the
obligation). 

  

	 	(ii)	If the amount of an obligation is unascertained, Y may in good faith estimate that amount and set-off in respect of the estimate, subject to the relevant party accounting to the
other when the amount of the obligation is ascertained. 

  

	 	(iii)	This clause (f) shall not constitute a mortgage, charge, lien or other security interest upon any of the property or assets of either party to this Agreement.

  

 9 

	(c)	Transfer. Notwithstanding anything to the contrary in Section 7 of this Agreement, Party A may assign its rights and obligations under this Agreement, in whole
and not in part, to any Affiliate of Holdings effective upon delivery to Party B of the guarantee by Holdings, in favor of Party B, of the obligations of such Affiliate, such guarantee to be otherwise identical to the guarantee then in effect of the
obligations of the transferor at the sole expense of Party A. 

  

	(d)	Notices. For the purposes of subsections (iii) and (v) of Section 12(a), the date of receipt shall be presumed to be the date sent if sent
on a Local Business Day or, if not sent on a Local Business Day, the date of receipt shall be presumed to be the first Local Business Day following the date sent. 

  

	(e)	Service of Process. The penultimate sentence of Section 13(c) shall be amended by adding the following language at the end thereof: “if permitted in the
jurisdiction where the proceedings are initiated and in the jurisdiction where service is to be made.” 

  

	(f)	Waiver of Trial By Jury. Insofar as is permitted by law, each party irrevocably waives any and all rights to trial by jury in any legal proceeding in connection with this
Agreement or any Transaction, and acknowledges that this waiver is a material inducement to the other party’s entering into this Agreement and each Transaction hereunder. 

  

	(g)	Accuracy of Specified Information. Section 3(d) is hereby amended by adding in the third line thereof after the word “respect” and before the period the
words “or, in the case of audited or unaudited financial statements or balance sheets, a fair presentation of the financial condition of the relevant person.” 

  

	(h)	Confirmation. Party A and Party B each agrees and acknowledges that the only Transaction that is or will be governed by this Agreement is the Transactions evidenced by the
one Confirmation dated on the date hereof (it being understood that, in the event such Confirmation shall be amended (in any respect), such amendment shall not constitute (for purposes of this paragraph) a separate Transaction or a separate
Confirmation). 

  

	(i)	Severability. Except as otherwise provided in Sections 5(b)(i) or 5(b)(ii) of the Agreement in the event that any one or more of the provisions contained in
this Agreement should be held invalid, illegal, or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby so long as this
Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter of this Agreement and the deletion of such portion of this Agreement will not substantially impair the respective
benefits and expectations of the parties to this Agreement. The parties shall endeavor, in good faith negotiations, to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions. 

  

	(j)	Consent to Recording. The parties agree that each may electronically record all telephonic conversations between marketing and trading personnel in connection with
this Agreement and that any such recordings may be submitted in evidence in any Proceedings relating to this Agreement. 

  

	(k)	Furnishing Specified Information. Section 4(a)(iii) is hereby amended by inserting “promptly upon the earlier of (i)” in lieu of the word “upon” at
the beginning thereof and inserting “or (ii) such party learning that the form or document is required before the word “any” on the first line thereof. 

  

	(l)	Consent to Disclosure. Party B consents to Party A effecting such disclosure as Party A may deem appropriate to enable Party A to transfer Party B’s records and
information, to process and execute Party B’s instructions, or in pursuance of Party B’s or Party A’s commercial interest, to any of its Affiliates. For the avoidance of doubt, Party B’s consent to disclosure includes the right
on the part of Party A to allow access to any intended recipient of Party B information to the records of Party A by any means. 

  

 10 

 The parties executing this Schedule have executed the Master Agreement and have agreed as to the contents of this
Schedule. 
  

							
	 LEHMAN BROTHERS
 SPECIAL FINANCING INC. 
 (Name of Party)
	 	 ACCREDITED HOME LENDERS, INC.
 (Name of Party)

				
	 By:
	 	 /s/ FRED MADONNA
	 	By:	 	 /s/ CHARLES O. RYAN

	 Name:
	 	Fred Madonna	 	Name:	 	Charles O. Ryan
	 Title:
	 	Senior Vice President	 	Title:	 	Securitization Coordinator

  

 EXHIBIT A to Schedule 
 GUARANTEE OF LEHMAN BROTHERS HOLDINGS INC. 
 LEHMAN BROTHERS SPECIAL FINANCING INC.
(“Party A”) and ACCREDITED HOME LENDERS, INC. (“Party B”) have entered into a Master Agreement dated as of May 10, 2005, which has been amended and restated by an Amended and Restated Schedule to Master Agreement
dated as of August 23, 2006 (the “Master Agreement”), pursuant to which Party A and Party B have entered and/or anticipate entering into one or more transactions (each a “Transaction”), the Confirmation of each of which
supplements, forms part of, and will be read and construed as one with, the Master Agreement (collectively referred to as the “Agreement”). This Guarantee is a Credit Support Document as contemplated in the Agreement. For value received,
and in consideration of the financial accommodation accorded to Party A by Party B under the Agreement, LEHMAN BROTHERS HOLDINGS INC., a corporation organized and existing under the laws of the State of Delaware (“Guarantor”), hereby
agrees to the following: 
 (a) Guarantor hereby unconditionally guarantees to Party B the due and punctual payment of all amounts payable by
Party A under each Transaction when and as Party A’s obligations thereunder shall become due and payable in accordance with the terms of the Agreement. In case of the failure of Party A to pay punctually any such amounts, Guarantor hereby
agrees, upon written demand by Party B, to pay or cause to be paid any such amounts punctually when and as the same shall become due and payable. 
 (b) Guarantor hereby agrees that its obligations under this Guarantee constitute a guarantee of payment when due and not of collection. 
 (c) Guarantor hereby agrees that its obligations under this Guarantee shall be unconditional, irrespective of the validity, regularity or enforceability of the Agreement against Party A (other than as a result of the unenforceability
thereof against Party B), the absence of any action to enforce Party A’s obligations under the Agreement, any waiver or consent by Party B with respect to any provisions thereof, the entry by Party A and Party B into additional Transactions
under the Agreement or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor (excluding the defense of payment or statute of limitations, neither of which is waived) provided, however, that
Guarantor shall be entitled to exercise any right that Party A could have exercised under the Agreement to cure any default in respect of its obligations under the Agreement or to setoff, counterclaim or withhold payment in respect of any Event of
Default or Potential Event of Default in respect of Party B or any Affiliate, but only to the extent such right is provided to Party A under the Agreement. The Guarantor acknowledges that Party A and Party B may from time to time enter into one or
more Transactions pursuant to the Agreement and agrees that the obligations of the Guarantor under this Guarantee will upon the execution of any such Transaction by Party A and Party B extend to all such Transactions without the taking of further
action by the Guarantor. 
 (d) This Guarantee shall remain in full force and effect until such time as Party B shall receive written notice
of termination. Termination of this Guarantee shall not affect Guarantor’s liability hereunder as to obligations incurred or arising out of Transactions entered into prior to the termination hereof. 
 (e) Guarantor further agrees that this Guarantee shall continue to be effective or be reinstated, as the case may be, if at any time, payment, or any
part thereof, of any obligation or interest thereon is rescinded or must otherwise be restored by Party B upon an Event of Default as set forth in Section 5(a)(vii) of the Master Agreement affecting Party A or Guarantor. 
 (f) Guarantor hereby waives (i) promptness, diligence, presentment, demand of payment, protest, order and, except as set forth in paragraph
(a) hereof, notice of any kind in connection with the Agreement and this Guarantee, or (ii) any requirement that Party B exhaust any right to take any action against Party A or any other person prior to or contemporaneously with proceeding
to exercise any right against Guarantor under this Guarantee. 
  

 2 

 This Guarantee shall be governed by and construed in accordance with the laws of the State of New York,
without reference to choice of law doctrine. All capitalized terms not defined in this Guarantee, but defined in the Agreement, shall have the meanings assigned thereto in the Agreement. 
 Any notice hereunder will be sufficiently given if given in accordance with the provisions for notices under the Agreement and will be effective as set
forth therein. All notices hereunder shall be delivered to Lehman Brothers Holdings Inc., Attention: Corporate Counsel, 399 Park Avenue, 11th Floor, New York, NY 10022 USA (Facsimile No. (212) 526-0339) with a copy to Lehman Brothers Special Financing Inc., Attention: Transaction Management, 745 Seventh Avenue, 28th Floor, New York, NY 10019 USA. 

 

 3 

 IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed in its corporate name by its duly
authorized officer as of the date of the Agreement. 
  

			
	LEHMAN BROTHERS HOLDINGS INC.
		
	By:	 	 /s/ JAMES J. KILLERLANE III

	Name:	 	James J. Killerlane III
	Title:	 	Vice President
	Date:	 	August 18, 2006

  

 EXHIBIT B to Schedule 
 [Form of Opinion of Counsel] 
 [Date]                                      
                   
 [Other Counterparty] 
 Ladies and Gentlemen: 
 I have acted as counsel to
[counterparty], a
[                                        
] corporation (“Party [A][B]”), and am familiar with matters pertaining to the execution and delivery of the Master Agreement (the “Master Agreement”) dated as of [date] between Accredited Home Lenders, Inc. (“Party
B”) and Lehman Brothers Special Financing Inc. (“Party A”). 
 In connection with this opinion, I have examined, or have had
examined on my behalf, an executed copy of the Master Agreement, certificates and statements of public officials and officers of Party B and such other agreements, instruments, documents and records as I have deemed necessary or appropriate for the
purposes of this opinion. 
 Based on the foregoing but subject to the assumptions, exceptions, qualifications and limitations hereinafter
expressed, I am of the opinion that: 
  

	 	1.	Party B is a corporation duly incorporated, validly existing and in good standing under the laws of
[                ]. 

  

	 	2.	The execution, delivery and performance of the Master Agreement, by or on behalf of Party B, are within its corporate power, have been duly authorized by all corporate action and do
not conflict with any provision of its certificate of incorporation or by-laws. 

  

	 	3.	The Master Agreement has been duly executed and delivered by Party B and constitutes a legal, valid and binding obligation, enforceable against it in accordance with its terms.

  

	 	4.	To the best of my knowledge no consent, authorization, license or approval of or registration or declaration with, any governmental authority is required in connection with the
execution, delivery and performance of the Master Agreement by Party [A][B]. 

 The foregoing opinions are subject to the
following assumptions, exceptions, qualifications and limitations: 
 A. My opinion in paragraph 3 above is subject to (i) the effect of
any bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors rights generally (including, without limitation, the effect of statutory or other laws regarding fraudulent or other similar transfers),
(ii) general principles of equity, regardless of whether enforceability is considered in a proceeding in equity or at law, (iii) the equitable discretion of the court before which any proceeding therefor may be brought, (iv) the
application of judicial decisions involving statutes or principles of equity which have held that certain covenants and other provisions of agreements, including those providing for the acceleration of obligations upon the occurrence of events
therein described, are unenforceable in circumstances where it can be demonstrated that the enforcement of such provisions is not reasonably necessary for the protection of the party invoking the right to accelerate, (v) such requirements of
good 

  

 2 

 
faith, fair dealing and commercial reasonableness as may be imposed by the law of the State of New York on the exercise by a party of its contractual rights
and remedies, (vi) possible judicial application of foreign laws or foreign government actions affecting creditors’ rights, and (v) the validity, binding effect or enforceability, under certain circumstances, of contractual provisions
with respect to indemnification or waiving defenses to obligations where such indemnification or such waivers are against public policy. 
 B. I am qualified to practice law in [            ] and render no opinion on the laws of any jurisdiction other than the laws of
[            ]. 
 C. My opinions are limited to the present laws and to
the facts as they presently exist. I assume no obligation to revise or supplement this opinion should the present laws of the jurisdictions referred to in paragraph B above be changed by legislative action, judicial decision or otherwise.

 D. This letter is rendered to you in connection with the Master Agreement [and the Guarantee] and the transactions related thereto and may
not be relied upon by any other person or by you in any other context or for any other purpose. This letter may not be quoted in whole or in part, nor may copies thereof be furnished or delivered to any other person, without the prior written
consent of Party B, except that you may furnish copies hereof (i) to your independent auditors and attorneys, (ii) to any state or local authority having jurisdiction over you or over Party [A][B], (iii) pursuant to the order of any
legal process of any court of competent jurisdiction or any governmental agency, and (iv) in connection with any legal action arising out of the Master Agreement. 
 E. I have assumed with your permission (i) the genuineness of all signatures by each party other than Party B, (ii) the authenticity of documents submitted to me as originals and the conformity to authentic
original documents of all documents submitted to me as copies, and (iii) the due execution and delivery, pursuant to due authorization, of the Master Agreement by each party other than Party B. 
 F. I have also assumed for the purpose of this opinion that the Master Agreement constitute the legal valid and binding obligation of Party [A][B] in
accordance with New York law by which is governed. 
 G. I express no opinion as to the prohibition on transfers in Section 7(a) of the
Master Agreement Terms in any case in which its operation would conflict with Section 9-406 or Section 9-408 of the Uniform Commercial Code as in effect in the State of New York. 
 Very truly yours, 
  

 3

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