Document:

Amended and Restated Trust Agreement dated as of November 25, 2003

 Exhibit 4.2 
  
 EXECUTION COPY 
  
 AMENDED AND RESTATED TRUST AGREEMENT 
  
 dated as of November 25, 2003 
  
 by and among 
  
 ACCREDITED HOME LENDERS, INC.,

 as Sponsor, 
  
 ACCREDITED HOME CAPITAL, INC., 
 as Seller,

  
 and 
  
 U.S. BANK TRUST NATIONAL ASSOCIATION, 
 as Owner Trustee 
  
 ACCREDITED MORTGAGE LOAN TRUST 2003-3 
 Asset-Backed Notes, Series 2003-3 

 TABLE OF CONTENTS 
  

	ARTICLE I	  	 
	DEFINITIONS	  	 
			
	 Section 1.01.
	 	 Capitalized Terms
	  	1
	 Section 1.02.
	 	 Other Definitional Provisions
	  	5
		
	ARTICLE II	  	 
	ORGANIZATION	  	 
			
	 Section 2.01.
	 	 Name
	  	6
	 Section 2.02.
	 	 Office
	  	6
	 Section 2.03.
	 	 Purposes and Powers
	  	6
	 Section 2.04.
	 	 Appointment of Owner Trustee
	  	7
	 Section 2.05.
	 	 Initial Capital Contribution of Owner Trust Estate
	  	7
	 Section 2.06.
	 	 Declaration of Trust
	  	8
	 Section 2.07.
	 	 Liability of the Certificateholders
	  	8
	 Section 2.08.
	 	 Title to Trust Property.
	  	8
	 Section 2.09.
	 	 Situs of Trust
	  	8
	 Section 2.10.
	 	 Representations and Warranties of the Sponsor
	  	8
	 Section 2.11.
	 	 Federal Income Tax Treatment of the Trust.
	  	10
	 Section 2.12.
	 	 Covenants of the Sponsor
	  	10
	 Section 2.13.
	 	 Covenants of the Certificateholders
	  	11
	 Section 2.14.
	 	 Representations and Warranties of the Seller
	  	12
	 Section 2.15.
	 	 Covenants of the Seller
	  	13
		
	ARTICLE III	  	 
	SUB-TRUSTS	  	 
			
	 Section 3.01.
	 	 Series Trust
	  	13
	 Section 3.02.
	 	 Establishment of Sub-Trust.
	  	13
	 Section 3.03.
	 	 Assets of Sub-Trust
	  	13
	 Section 3.04.
	 	 Liabilities of Sub-Trust.
	  	14
		
	ARTICLE IV	  	 
	CERTIFICATES AND TRANSFER OF INTERESTS	  	 
			
	 Section 4.01.
	 	 Initial Ownership
	  	15
	 Section 4.02.
	 	 The Certificates
	  	15
	 Section 4.03.
	 	 Execution, Authentication and Delivery of Certificates
	  	15
	 Section 4.04.
	 	 Registration of Transfer and Exchange of Certificates
	  	16
	 Section 4.05.
	 	 Mutilated, Destroyed, Lost or Stolen Certificates
	  	16
	 Section 4.06.
	 	 Persons Deemed Owners
	  	17
	 Section 4.07.
	 	 Access to List of Certificateholders’ Names and Addresses
	  	17
	 Section 4.08.
	 	 Maintenance of Office or Agency
	  	17
	 Section 4.09.
	 	 Restrictions on Transfers of Certificates
	  	17

  

 i 

	ARTICLE V	  	 
	ACTIONS BY OWNER TRUSTEE	  	 
			
	 Section 5.01.
	 	 Prior Notice to the Certificateholders with Respect to Certain Matters
	  	20
	 Section 5.02.
	 	 Action by Certificateholders with Respect to Bankruptcy
	  	22
	 Section 5.03.
	 	 Restrictions on Certificateholders’ Power
	  	22
	 Section 5.04.
	 	 Majority Control
	  	22
		
	ARTICLE VI	  	 
	TAX PROVISIONS; CERTAIN DUTIES	  	 
			
	 Section 6.01.
	 	 Federal Income Tax Provisions
	  	22
	 Section 6.02.
	 	 Withholding Taxes
	  	26
	 Section 6.03.
	 	 Accounting and Reports to the Certificateholders, the Internal Revenue Service and Others
	  	27
		
	ARTICLE VII	  	 
	AUTHORITY AND DUTIES OF OWNER TRUSTEE	  	 
			
	 Section 7.01.
	 	 General Authority
	  	27
	 Section 7.02.
	 	 General Duties
	  	28
	 Section 7.03.
	 	 Action upon Instruction
	  	28
	 Section 7.04.
	 	 No Duties Except as Specified in this Agreement, the Basic Documents or any Instructions
	  	29
	 Section 7.05.
	 	 No Action Except under Specified Documents or Instructions
	  	30
	 Section 7.06.
	 	 Restrictions
	  	30
		
	ARTICLE VIII	  	 
	CONCERNING THE OWNER TRUSTEE	  	 
			
	 Section 8.01.
	 	 Acceptance of Trusts and Duties
	  	30
	 Section 8.02.
	 	 Furnishing of Documents
	  	31
	 Section 8.03.
	 	 Representations and Warranties of the Owner Trustee
	  	32
	 Section 8.04.
	 	 Reliance; Advice of Counsel
	  	32
	 Section 8.05.
	 	 Not Acting in Individual Capacity
	  	33
	 Section 8.06.
	 	 Owner Trustee Not Liable for the Certificates or Mortgage Loans
	  	33
	 Section 8.07.
	 	 Owner Trustee May Own Certificates and Notes
	  	33
	 Section 8.08.
	 	 Licenses
	  	34
		
	ARTICLE IX	  	 
	COMPENSATION OF OWNER TRUSTEE	  	 
			
	 Section 9.01.
	 	 Owner Trustee’s Fees and Expenses
	  	34
	 Section 9.02.
	 	 Indemnification
	  	34
	 Section 9.03.
	 	 Payments to the Owner Trustee
	  	35

  

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	ARTICLE X	  	 
	TERMINATION OF TRUST AGREEMENT	  	 
	 Section 10.01.
	 	 Termination of Trust Agreement
	  	35
		
	ARTICLE XI	  	 
	SUCCESSOR OWNER TRUSTEES AND ADDITIONAL OWNER TRUSTEES	  	 
			
	 Section 11.01.
	 	 Eligibility Requirements for Owner Trustee
	  	36
	 Section 11.02.
	 	 Resignation or Removal of Owner Trustee
	  	36
	 Section 11.03.
	 	 Successor Owner Trustee
	  	37
	 Section 11.04.
	 	 Merger or Consolidation of Owner Trustee
	  	38
	 Section 11.05.
	 	 Appointment of Co-Trustee or Separate Trustee.
	  	38
		
	ARTICLE XII	  	 
	MISCELLANEOUS	  	 
			
	 Section 12.01.
	 	 Supplements and Amendments
	  	39
	 Section 12.02.
	 	 No Legal Title to Owner Trust Estate in Certificateholders
	  	40
	 Section 12.03.
	 	 Limitations on Rights of Others
	  	40
	 Section 12.04.
	 	 Notices
	  	41
	 Section 12.05.
	 	 Severability
	  	41
	 Section 12.06.
	 	 Separate Counterparts
	  	41
	 Section 12.07.
	 	 Successors and Assigns
	  	41
	 Section 12.08.
	 	 No Petition
	  	41
	 Section 12.09.
	 	 No Recourse
	  	42
	 Section 12.10.
	 	 Headings
	  	42
	 Section 12.11.
	 	 GOVERNING LAW
	  	42
	 Section 12.12.
	 	 Grant of Certificateholder Rights to Note Insurer
	  	42
	 Section 12.13.
	 	 Third-Party Beneficiary
	  	43
	 Section 12.14.
	 	 Suspension and Termination of Note Insurer’s Rights
	  	43
	 Section 12.15.
	 	 Master Servicer
	  	43

  
 EXHIBITS 
  

	 EXHIBIT A
	 	 Form of Trust Certificate

	 EXHIBIT B
	 	 Form of Certificate of Trust

	 EXHIBIT C
	 	 Form of Investment Letter

	 EXHIBIT D
	 	 Form of Transferor Certificate

  

 iii 

 This AMENDED AND RESTATED TRUST AGREEMENT, dated as of November 25, 2003, is among ACCREDITED HOME
LENDERS, INC., as sponsor (the “Sponsor”), ACCREDITED HOME CAPITAL, INC., as seller (the “Seller”) and U.S. BANK TRUST, NATIONAL ASSOCIATION, a national banking association, as owner trustee (the “Owner
Trustee”). 
  
 NOW, THEREFORE, in consideration of the
mutual agreements herein contained, and of other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.01. Capitalized Terms. For all purposes of this Agreement, the following terms shall have the meanings set forth below: 
  
 “Agreement” shall mean this Trust Agreement, as may be
amended and supplemented from time to time. 
  
 “Annual
Tax Reports” shall have the meaning assigned thereto in Section 6.01(c)(xi). 
  
 “Authorized Officer” shall have the meaning assigned thereto in Appendix I to the Indenture. 
  
 “Backup Servicer” shall mean Countrywide Home Loans Servicing LP, or any successor backup servicer appointed pursuant to the Sale and
Servicing Agreement. 
  
 “Basic Documents” shall
mean this Agreement, the Sale and Servicing Agreement, the Indenture, the Insurance Agreement and the Indemnification Agreement. 
  
 “Business Day” shall mean any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal holiday or a day on which the
Note Insurer or banking institutions in the State of New York, the State of Delaware, the State of California, or the state in which the Indenture Trustee’s office from which payments will be made to the Certificateholder, are authorized or
obligated by law, regulation or executive order to be closed. 
  
 “Capital Account” shall have the meaning assigned thereto in Section 6.01(c)(i). 
  
 “Certificate” shall mean each Trust Certificate. 
  

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

 1 

 “Certificate Register” and “Certificate Registrar” shall mean the
register mentioned and the registrar appointed pursuant to Section 4.04. 
  
 “Class” shall mean either the Class A-1 Notes, the Class A-2 Notes or the Class A-3 Notes. 
  
 “Class A-1 Notes” shall mean the Accredited Mortgage Loan Trust 2003-3, Asset-Backed Notes, Series 2003-3, Class A-1. 
  
 “Class A-2 Notes” shall mean the Accredited Mortgage Loan
Trust 2003-3, Asset-Backed Notes, Series 2003-3, Class A-2. 
  
 “Class A-3 Notes” shall mean the Accredited Mortgage Loan Trust 2003-3, Asset-Backed Notes, Series 2003-3, Class A-3. 
  
 “Code” shall mean the Internal Revenue Code of 1986, as amended, and, where appropriate in context, Treasury Regulations promulgated
thereunder. 
  
 “Corporate Trust Office” shall
mean, with respect to the Owner Trustee, an office of the Owner Trustee which for purposes of the Agreement is located at 400 North Michigan Avenue, Second Floor, Chicago, Illinois 60611, Attention: Corporate Trust Administration; or at such other
address as the Owner Trustee may designate by notice to the Certificateholders and the Sponsor, or an office of any successor Owner Trustee (the address of which the successor Owner Trustee will notify the Certificateholders and the Sponsor).

  
 “ERISA” shall mean the Employee Retirement
Income Security Act of 1974, as amended. 
  
 “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended. 
  
 “Expenses” shall have the meaning assigned to such term in Section 9.02. 
  
 “Group I Mortgage Loans” shall mean a pool of fixed rate mortgage loans, as identified in the related Mortgage Loan Schedule. 

 
 “Group II Mortgage Loans” shall mean a pool of fixed and
adjustable-rate mortgage loans, as identified in the related Mortgage Loan Schedule. 
  
 “Group III Mortgage Loans” shall mean a pool of fixed and adjustable-rate mortgage loans, as identified in the related Mortgage Loan Schedule. 
  
 “Holder Nonrecourse Debt Minimum Gain” shall have the
meaning set forth for “partner nonrecourse debt minimum gain” in Treasury Regulations Section 1.704-2(i)(2). A Certificateholder’s share of Holder Nonrecourse Debt Minimum Gain shall be determined in accordance with Treasury
Regulations Section 1.704-2(i)(5). 
  
 “Indemnification
Agreement” shall mean the Indemnification Agreement, dated as of November 20, 2003, between the Note Insurer and the Underwriters. 
  

 2 

 “Indenture” shall mean the Indenture, dated as of November 1, 2003, by and between the
Trust and the Indenture Trustee. 
  
 “Indenture
Trustee” means Deutsche Bank National Trust Company, as Indenture Trustee under the Indenture. 
  
 “Insurance Agreement” shall mean the Insurance and Indemnity Agreement dated as of November 25, 2003 among the Note Insurer, the Trust,
the Master Servicer, the Seller, the Sponsor and the Indenture Trustee, including any amendments and supplements thereto. 
  
 “Investment Letter” shall have the meaning assigned to such term in Section 4.04. 
  
 “Loan Group” shall mean either Loan Group I, Loan Group II
or Loan Group III. 
  
 “Loan Group I” shall mean
the pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group I. 
  
 “Loan Group II” shall mean the pool of Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group II.

  
 “Loan Group III” shall mean the pool of
Mortgage Loans identified in the Mortgage Loan Schedule as having been assigned to Loan Group III. 
  
 “Master Servicer” shall mean Accredited Home Lenders, Inc., a California corporation, or any successor master servicer appointed pursuant
to the Sale and Servicing Agreement. 
  
 “Mortgage
Loans” shall mean the Group I Mortgage Loans, the Group II Mortgage Loans and the Group III Mortgage Loans. 
  
 “Non-U.S. Person” shall mean an individual, corporation, partnership or other person other than a United States Person. 
  
 “Noteholder” shall have the meaning assigned to such terms
in the Indenture. 
  
 “Note Insurance Policy”
shall mean the financial guaranty insurance policy issued by the Note Insurer for the benefit of the Noteholders. 
  
 “Note Insurer” shall mean Ambac Assurance Corporation, a New York financial guaranty insurance company. 
  
 “Note Insurer Default” shall have the meaning assigned to
such term in the Indenture. 
  
 “Note Principal
Balance” shall have the meaning assigned to such term in the Indenture. 
  
 “Notes” shall mean the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes. 
  

 3 

 “Outstanding” shall have the meaning assigned to such term in the Indenture. 

 
 “Ownership Interest” means, with respect to any
Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Certificateholder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.

  
 “Owner Trust Estate” shall mean the Trust
Estate, including the contribution of $1,000 referred to in Section 2.05 hereof. 
  
 “Owner Trustee” shall mean U.S. Bank Trust National Association, a national banking association, not in its individual capacity but solely as owner trustee under this Agreement, and any successor
owner trustee hereunder. 
  
 “Payment Date” shall
mean the 25th day of each month or, if such 25th day is not a Business Day, the next succeeding Business Day, commencing December 26, 2003. 
  
 “Percentage Interest” shall mean with respect to any Certificate, the percentage portion of the
Certificates evidenced thereby as stated on the face of such Certificate. 
  
 “Prospective Holder” shall have the meaning set forth in Section 4.09(a). 
  
 “Rating Agency Condition” means, with respect to any action to which a Rating Agency Condition applies, that each Rating Agency shall
have been given ten (10) days (or such shorter period as is acceptable to each Rating Agency) prior notice thereof and that each of the Rating Agencies shall have notified the Indenture Trustee, the Sponsor, the Master Servicer, the Note Insurer,
the Owner Trustee and the Trust in writing that such action will not result in a reduction or withdrawal of the then current rating of the Notes that it maintains without taking into account the Note Insurance Policy. 
  
 “Record Date” shall mean, with respect to the Certificates
and any Payment Date, the last Business Day of the month immediately preceding the month in which such Payment Date occurs. 
  
 “Sale and Servicing Agreement” shall mean the Sale and Servicing Agreement, dated as of November 1, 2003, among the Sponsor, the Trust,
the Indenture Trustee, the Backup Servicer and the Master Servicer. 
  
 “Secretary of State” shall mean the Secretary of State of the State of Delaware. 
  
 “Seller” shall mean Accredited Home Capital, Inc., a Delaware corporation. 
  
 “Sponsor” shall mean Accredited Home Lenders, Inc., a California corporation. 
  
 “Statutory Trust Statute” shall mean Chapter 38 of Title 12
of the Delaware Code, 12 Del. Code § 3801 et seq., as the same may be amended from time to time. 
  

 4 

 “Sub-Trust” shall have the meaning specified in Section 3.01 and includes either
Sub-Trust I Sub-Trust II or Sub-Trust III, each of which constitute a separate series of interests in the Trust Estate pursuant to Section 3806(b)(2) of the Statutory Trust Statute. 
  
 “Sub-Trust I” shall mean the portion of the Trust Estate assigned to Sub-Trust I. 
  
 “Sub-Trust II” shall mean the portion of the Trust Estate
assigned to Sub-Trust II. 
  
 “Sub-Trust III”
shall mean the portion of the Trust Estate assigned to Sub-Trust III. 
  
 “Taxable Year” shall have the meaning assigned thereto in Section 6.01(c)(x). 
  
 “Tax Matters Partner” shall have the meaning assigned thereto in Section 6.01(c)(xii). 
  
 “Transfer” means any direct or indirect transfer, sale,
pledge, hypothecation or other form of assignment of any Ownership Interest in a Certificate. 
  
 “Treasury Regulations” shall mean regulations, including proposed or temporary regulations, promulgated under the Code. References herein to specific provisions of proposed or temporary regulations
shall include analogous provisions of final Treasury Regulations or other successor Treasury Regulations. 
  
 “Trust” shall mean the Accredited Home Equity Loan Trust 2003-3, the Delaware statutory trust created pursuant to this Agreement.

  
 “Trust Certificate” shall mean a certificate
evidencing the beneficial interest of a Certificateholder in the Trust consisting of Sub-Trust I, Sub-Trust II and Sub-Trust III, substantially in the form attached hereto as Exhibit A. 
  
 “Trust Minimum Gain” shall have the meaning set forth for
“partnership minimum gain” in Treasury Regulations 1.704-2(b)(2) and 1.704-2(d). In accordance with Treasury Regulations Section 1.704-2(d), the amount of Trust Minimum Gain is determined by first computing, for each nonrecourse liability
of the Trust, any gain the Trust would realize if it disposed of the property subject to that liability for no consideration other than full satisfaction of the liability, and then aggregating the separately computed gains. A
Certificateholder’s share of Trust Minimum Gain shall be determined in accordance with Treasury Regulations Section 1.704-2(g)(1). 
  
 “Underwriters” shall mean Lehman Brothers Inc. and Goldman, Sachs & Co. 
  
 Section 1.02. Other Definitional Provisions. (a) Capitalized terms used herein and not otherwise defined herein have
the meanings assigned to them in Appendix I to the Indenture. 
  
 (b) All terms defined in this Agreement shall have the defined meanings when used in any certificate or other document made or delivered pursuant hereto unless otherwise defined therein. 
  

 5 

 (c) As used in this Agreement and in any certificate or other document made or delivered pursuant hereto
or thereto, accounting terms not defined in this Agreement or in any such certificate or other document, and accounting terms partly defined in this Agreement or in any such certificate or other document to the extent not defined, shall have the
respective meanings given to them under generally accepted accounting principles. To the extent that the definitions of accounting terns in this Agreement or in any such certificate or other document are inconsistent with the meanings of such terms
under generally accepted accounting principles, the definitions contained in this Agreement or in any such certificate or other document shall control. 
  
 (d) The words “hereof,” “herein,” “hereunder” and words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement; Section and Exhibit references contained in this Agreement are references to Sections and Exhibits in or to this Agreement unless otherwise specified; and the term
“including” shall mean “including without limitation.” 
  
 (e) The definitions contained in this Agreement are applicable to the singular as well as the plural forms of such terns and to the masculine as well as to the feminine and neuter genders of such terms. 
  
 (f) Any agreement, instrument or statute defined or referred to herein or in
any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments
thereto and instruments incorporated therein; references to a Person are also to its permitted successors and assigns. 
  
 ARTICLE II 
  
 ORGANIZATION 
  
 Section 2.01. Name. The Trust governed hereby shall be known as “Accredited Mortgage Loan Trust 2003-3,” in which name the Owner Trustee may conduct the business of the Trust, make and execute
contracts and other instruments on behalf of the Trust and sue and be sued on behalf of the Trust. 
  
 Section 2.02. Office. The office of the Trust shall be in care of the Owner Trustee at the Corporate Trust Office or at such other address in the
State of Delaware as the Owner Trustee may designate by written notice to the Certificateholders, Indenture Trustee, the Note Insurer and the Sponsor. 
  
 Section 2.03. Purposes and Powers. The purpose of the Trust is to engage in the following activities: 
  
 (a) to issue the Notes pursuant to the Indenture and to sell
such Notes; 
  
 (b) with the proceeds of the sale
of the Notes and Certificates, to pay the organizational, startup and transactional expenses of the Trust and to purchase the Mortgage Loans to be included in the Owner Trust Estate from the Seller with the balance of such funds pursuant to the Sale
and Servicing Agreement; 
  

 6 

 (c) to assign, grant, transfer, pledge, mortgage and convey the Owner Trust Estate
pursuant to the Indenture and to hold, manage and distribute to the Certificateholders any portion of the Owner Trust Estate released from the lien of, and remitted to the Trust pursuant to, the Indenture; 
  
 (d) to enter into and perform its obligations under the
Basic Documents to which it is or is to be a party; 
  
 (e) to engage in those activities, including entering into agreements, that are necessary, suitable or convenient to accomplish the foregoing or are incidental thereto or connected therewith; 
  
 (f) subject to compliance with the Basic Documents, to
engage in such other activities as may be required in connection with conservation of the Owner Trust Estate and the making of distributions and payments to the Noteholders and the Certificateholders; and 
  
 (g) to issue the Certificates pursuant to this Agreement.

  
 The Trust is hereby authorized by the initial beneficiary and
the Certificateholders to engage in the foregoing activities. The Trust shall not engage in any activity other than in connection with the foregoing or other than as required or authorized by the terms of this Agreement or the other Basic Documents.

  
 Section 2.04. Appointment of Owner Trustee. The Sponsor
hereby appoints the Owner Trustee as trustee of the Trust effective as of the date hereof, to have all the rights, powers and duties set forth herein and in the Statutory Trust Statute, and the Owner Trustee hereby accepts such appointment.

  
 The Owner Trustee may engage, in the name of the Trust or in its own name on
behalf of the Trust, in the activities of the Trust, make and execute contracts on behalf of the Trust and sue on behalf of the Trust. 
  
 Section 2.05. Initial Capital Contribution of Owner Trust Estate. The Sponsor hereby sells, assigns, transfers, conveys and sets over to the Owner
Trustee, as of the date hereof, the sum of $1,000. The Owner Trustee hereby acknowledges receipt in trust from the Sponsor, as of the date hereof, of the foregoing contribution, which shall constitute the initial Owner Trust Estate and shall be
deposited in the Payment Account. The Sponsor shall pay organizational expenses of the Trust as they may arise or shall, upon the request of the Owner Trustee, promptly reimburse the Owner Trustee for any such expenses paid by the Owner Trustee.
Concurrently with the execution of this Agreement, the Trust will enter into the Sale and Servicing Agreement pursuant to which it will purchase the Mortgage Loans, to be designated to the related Sub-Trust, which comprise the remainder of the Owner
Trust Estate. Upon the transfer of the Mortgage Loans pursuant to the Sale and Servicing Agreement, the Owner Trustee shall transfer the initial capital contribution, in the sum of $1,000, to the Sponsor. 
  

 7 

 Section 2.06. Declaration of Trust. The Owner Trustee hereby declares that it will hold the Owner
Trust Estate in trust upon and subject to the conditions set forth herein for the use and benefit of the Noteholders, the Note Insurer and the Certificateholders, subject to the obligations of the Trust Under the Basic Documents. 
  
 It is the intention of the parties hereto that, solely for income and
franchise tax purposes, the Trust constitutes a statutory trust under the Statutory Trust Statute and that this Agreement constitutes the governing instrument of such statutory trust. It is the intention of the parties hereto that, solely for income
and franchise tax purposes, the Trust shall be treated as a security arrangement, with the assets of the Trust being the Sub-Trusts consisting of each Loan Group. The parties agree that, unless otherwise required by appropriate tax authorities, the
Trust will file or cause to be filed annual or other necessary returns, reports and other forms, if any, consistent with the characterization of the Trust, the Sub-Trusts and each Loan Group as provided in the preceding sentence for such tax
purposes. Effective as of the date hereof, the Owner Trustee shall have all rights, powers and duties set forth herein and in the Statutory Trust Statute with respect to accomplishing the purposes of the Trust. The Owner Trustee shall file the
Certificate of Trust with the Secretary of State. 
  
 Section
2.07. Liability of the Certificateholders. Subject to Section 2.05, no Certificateholder shall have any personal liability for any liability or obligation of the Trust. The Certificates shall be fully paid and nonassessable. 
  
 Section 2.08. Title to Trust Property. 
  
 (a) Subject to the Indenture, legal title to all of the Owner Trust Estate
shall be vested at all times in the Trust as a separate legal entity except where applicable law in any jurisdiction requires title to any part of the Owner Trust Estate to be vested in a trustee or trustees, in which case title shall be deemed to
be vested in the Owner Trustee and/or a separate trustee, as the case may be. 
  
 (b) The Certificateholders shall not have legal title to any part of the Owner Trust Estate. No transfer by operation of law or otherwise of any interest of the Certificateholders shall operate to terminate this
Agreement or the trusts hereunder or entitle any transferee to an accounting or to the transfer to it of any part of the Owner Trust Estate. 
  
 Section 2.09. Situs of Trust. The Trust will be located in the State of Delaware and administered by the Owner Trustee in the States of Delaware
and Illinois. The Trust shall not have any employees; provided, however, that nothing herein shall restrict or prohibit the Owner Trustee from having employees within or without the State of Delaware. 
  
 Section 2.10. Representations and Warranties of the Sponsor. The
Sponsor hereby represents and warrants to the Owner Trustee and the Note Insurer that: 
  
 (a) The Sponsor is duly organized and validly existing as a corporation in good standing under the laws of the State of California, with power and authority to own its properties and to conduct its business as such
properties are currently owned and such business is presently conducted. 
  

 8 

 (b) The Sponsor has the power and authority to execute and deliver this Agreement and to carry out its
terms; and the execution, delivery and performance of this Agreement has been duly authorized by the Sponsor by all necessary corporate action. 
  
 (c) The consummation of the transactions contemplated by this Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach
of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or by-laws of the Sponsor, or any indenture, agreement or other instrument to which the Sponsor is a party
or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terns of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or,
any order, rule or regulation applicable to the Sponsor of any court or of any Federal or state regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Sponsor or its properties. 
  
 (d) There are no proceedings or investigations pending or notice of which has
been received in writing before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Sponsor or its properties: (x) asserting the invalidity of this Agreement, (y) seeking to prevent
the consummation of any of the transactions contemplated by this Agreement or (z) seeking any determination or ruling that should reasonably be expected to materially and adversely affect the performance by the Sponsor of its obligations under, or
the validity or enforceability of, this Agreement. 
  
 (e) The
representations and warranties of the Sponsor in Article III of the Sale and Servicing Agreement are true and correct. 
  
 (f) The Sponsor has duly executed and delivered this Agreement, and this Agreement constitutes the legal, valid and binding obligation of the Sponsor,
enforceable against the Sponsor, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by the
application of equitable principles. 
  
 (g) The Sponsor is not in
default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental agency, which default might have consequences that would materially and adversely affect the condition
(financial or otherwise) or operations of the Sponsor or its properties or might have consequences that would materially and adversely affect its performance hereunder. 
  
 (h) The Sponsor will hold itself out to the public under its own name as a separate and distinct entity from the Seller and
the Trust and conduct its business so as not to mislead others as to the identity of the Trust. Without limiting the generality of the foregoing, all oral and written communications, including without limitation, all letters, invoices, contracts,
statements and applications will be made solely in the name of the Trust if they are made on behalf of the Trust and solely in the name of the Sponsor if they are made on behalf of the Sponsor. 
  

 9 

 Section 2.11. Federal Income Tax Treatment of the Trust. 
  
 (a) For so long as the Trust has one Certificateholder for federal income
tax purposes, it will, pursuant to Treasury Regulations promulgated under Section 7701 of the Code, be disregarded as an entity distinct from the Certificateholder for all federal income tax purposes. Accordingly, for federal income tax purposes,
the Certificateholder will be treated as (i) owning all assets owned by the Trust, (ii) having incurred all liabilities incurred by the Trust, and (iii) all transactions between the Trust and the Certificateholder will be disregarded. 
  
 (b) In the event that the Trust has two or more Certificateholders for
federal income tax purposes, the Trust will be treated as a partnership. At any such time that the Trust has two or more Certificateholders, this Agreement may need to be amended, in accordance with Section 12.01 herein, and appropriate provisions
may need to be added so as to provide for treatment of the Trust as a partnership. 
  
 (c) The Owner Trustee shall have no obligation or liability for its failure to treat the Trust as a partnership prior to the earlier of its receipt of notice or its having actual knowledge that the Trust has more than
a single equity owner. 
  
 (d) Neither the Owner Trustee nor any
Certificateholder will, under any circumstances, file a Form 8832, or any successor form, on behalf of the Trust. 
  
 Section 2.12. Covenants of the Sponsor. The Sponsor agrees and covenants for the benefit of each Certificateholder, the Note Insurer and the Owner
Trustee, during the term of this Agreement, and to the fullest extent permitted by applicable law, that: 
  
 (a) it shall not, for any reason, institute proceedings for the Trust to be adjudicated bankrupt or insolvent, or consent to or join in the institution of
bankruptcy or insolvency proceedings against the Trust, or file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Trust, or consent to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of the Trust or a substantial part of the property of the Trust or cause or permit the Trust to make any assignment for the benefit of creditors, or admit in writing
the inability of the Trust to pay its debts generally as they become due, or declare or effect a moratorium on the debt of the Trust or take any action in furtherance of any such action; 
  
 (b) it shall obtain from each counterparty to each Basic Document to which it or the Trust is a party and each other
agreement entered into on or after the date hereof to which it or the Trust is a party, an agreement by each such counterparty that prior to the occurrence of certain events specified in such agreement, such counterparty shall not institute against,
or join any other Person in instituting against, it or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of the United States;
and 
  
 (c) it shall not, for any reason, withdraw or attempt to
withdraw from this Agreement or any other Basic Document to which it is a party. 
  

 10 

 Section 2.13. Covenants of the Certificateholders. Each Certificateholder by becoming a beneficial
owner of the Certificate or by its acceptance of a Certificate agrees: 
  
 (a) to be bound by the terms and conditions of the Certificates of which such Certificateholder is the beneficial owner and of this Agreement and the other Basic Documents, including any supplements or amendments hereto and thereto and to
perform the obligations of a Certificateholder as set forth therein or herein, in all respects as if it were a signatory hereto. This undertaking is made for the benefit of the Trust, the Owner Trustee, the Note Insurer and all other
Certificateholders, present and future; 
  
 (b) to the appointment
of the Owner Trustee as such Certificateholder’s agent and attorney-in-fact to sign any federal income tax information return filed on behalf of the Trust and, if requested by the Trust, to sign such federal income tax information return in its
capacity as holder of an interest in the Trust; 
  
 (c) not to
take any position in such Certificateholder’s tax returns inconsistent with those taken in any tax returns filed by the Trust; and 
  
 (d) if such Certificateholder is other than an individual or other entity holding its Certificate through a broker who reports securities sales on Form
1099-B, to notify the Owner Trustee in writing of any transfer by it of a Certificate in a taxable sale or exchange, within 30 days of the date of the transfer. 
  

Section 2.14. Representations and Warranties of the Seller. The Seller hereby represents and warrants to the Owner Trustee and the Note Insurer
that: 
  
 (a) The Seller is duly organized and validly existing
as a corporation in good standing under the laws of the State of Delaware, with power and authority to own its properties and to conduct its business as such properties are currently owned and such business is presently conducted. 
  
 (b) The Seller has the power and authority to execute and deliver this
Agreement and to carry out its terms; the Seller has full power and authority to transfer and assign the property to be transferred and assigned to and deposited with the Trust and the Seller has duly authorized such transfer and assignment and
deposit to the Trust by all necessary corporate action; and the execution, delivery and performance of this Agreement has been duly authorized by the Seller by all necessary corporate action. 
  
 (c) The consummation of the transactions contemplated by this Agreement and
the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default under, the articles of incorporation or by-laws of the Seller, or
any indenture, agreement or other instrument to which the Seller is a party or by which it is bound; nor result in the creation or imposition of any lien upon any of its properties pursuant to the terns of any such indenture, agreement or other
instrument (other than pursuant to the Basic Documents); nor violate any law or, any order, rule or regulation applicable to the Seller of any court or of any Federal or state regulatory body, administrative agency or other governmental
instrumentality having jurisdiction over the Seller or its properties. 
  

 11 

 (d) There are no proceedings or investigations pending or notice of which has been received in writing
before any court, regulatory body, administrative agency or other governmental instrumentality having jurisdiction over the Seller or its properties: (x) asserting the invalidity of this Agreement, (y) seeking to prevent the consummation of any of
the transactions contemplated by this Agreement or (z) seeking any determination or ruling that should reasonably be expected to materially and adversely affect the performance by the Seller of its obligations under, or the validity or
enforceability of, this Agreement. 
  
 (e) The representations and
warranties of the Seller in Article III of the Sale and Servicing Agreement are true and correct. 
  
 (f) The Seller has duly executed and delivered this Agreement, and this Agreement constitutes the legal, valid and binding obligation of the Seller,
enforceable against the Seller, in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by the
application of equitable principles. 
  
 (g) The Seller is not in
default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or other governmental agency, which default might have consequences that would materially and adversely affect the condition
(financial or otherwise) or operations of the Seller or its properties or might have consequences that would materially and adversely affect its performance hereunder. 
  
 (h) The Seller will hold itself out to the public under its own name as a separate and distinct entity from the Sponsor and
the Trust and conduct its business so as not to mislead others as to the identity of the Trust. Without limiting the generality of the foregoing, all oral and written communications, including without limitations, all letters, invoices, contracts,
statements and applications will be made solely in the name of the Trust if they are made on behalf of the Trust and solely in the name of the Seller if they are made on behalf of the Seller. 
  
 Section 2.15. Covenants of the Seller. The Seller agrees and covenants
for the benefit of each Certificateholder, the Note Insurer and the Owner Trustee, during the term of this Agreement, and to the fullest extent permitted by applicable law, that: 
  
 (a) it shall not create, incur or suffer to exist any indebtedness or engage in any business, except, in each case, as
permitted by its articles of incorporation and by-laws and the Basic Documents; 
  
 (b) it shall not, for any reason, institute proceedings for the Trust to be adjudicated bankrupt or insolvent, or consent to or join in the institution of bankruptcy or insolvency proceedings against the Trust, or
file a petition seeking or consenting to reorganization or relief under any applicable federal or state law relating to the bankruptcy of the Trust, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of the Trust or a substantial part of the property of the Trust or cause or permit the Trust to make any assignment for the benefit of creditors, or admit in writing the inability of the Trust to pay its debts generally as they
become due, or declare or effect a moratorium on the debt of the Trust or take any action in furtherance of any such action; 
  

 12 

 (c) it shall obtain from each counterparty to each Basic Document to which it or the Trust is a party and
each other agreement entered into on or after the date hereof to which it or the Trust is a party, an agreement by each such counterparty that prior to the occurrence of certain events specified in such agreement, such counterparty shall not
institute against, or join any other Person in instituting against, it or the Trust, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings or other similar proceedings under the laws of the United States or any state of
the United States; and 
  
 (d) it shall not, for any reason,
withdraw or attempt to withdraw from this Agreement or any other Basic Document to which it is a party, dissolve, institute proceedings for it to be adjudicated a bankrupt or insolvent, or consent to the institution of bankruptcy or relief under any
applicable federal or state law relating to bankruptcy, or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator (or other similar official) of it or a substantial part of its property, or make any assignment for the
benefit of creditors, or admit in writing its inability to pay its debts generally as they become due, or declare or effect a moratorium on its debt or take any action in furtherance of any such action. 
  
 ARTICLE III 
  
 SUB-TRUSTS 
  
 Section 3.01. Series Trust. The beneficial interest in the assets of
the Trust shall be divided into designated series as provided in Section 3806(b)(2) of the Statutory Trust Statute (the segregated pool of assets belonging to each series, a “Sub-Trust”). Accordingly, it is the intent of the parties
hereto that Articles II, IV and X of this Agreement shall apply also with respect to each such Sub-Trust as if each such Sub-Trust were a separate series of a statutory trust under the Statutory Trust Statute, and each reference to the term
“Trust” in such Articles shall be deemed to be a reference to each such Sub-Trust to the extent necessary to give effect to the foregoing intent. The use of the terms “Trust” or “Sub-Trust” in this Agreement shall in no
event alter the intent of the parties hereto that the Trust receive the full benefit of the limitation on interseries liability as set forth in Section 3804 of the Statutory Trust Statute. 
  
 Section 3.02. Establishment of Sub-Trust. 
  
 The Owner Trustee hereby establishes and designates three initial
Sub-Trusts, as follows: 
  
 Sub-Trust I, Sub-Trust II and Sub-Trust
III 
  
 The provisions of this Article III shall be applicable to
the above designated Sub-Trusts. 
  
 Section 3.03. Assets of
Sub-Trust. All consideration received by the Owner Trust Estate for the issuance or sale of the Notes relating to a particular Loan Group and Sub-Trust, together with the entire Owner Trust Estate in which such consideration is invested or
reinvested, all income, earnings, profits, and proceeds thereof, including any proceeds derived from the sale, exchange or liquidation of such assets, and any funds or payments derived from any reinvestment of such proceeds in whatever form the same
may be, shall irrevocably belong solely to that Sub- 

  

 13 

 
Trust for all purposes, subject only to the rights of creditors of such Sub-Trust and except as may otherwise be provided in the Sale and Servicing Agreement
or required by applicable tax laws, and shall be so recorded upon the books of account of the Trust. Separate and distinct records shall be maintained for each Sub-Trust and the assets associated with a Sub-Trust shall be held and accounted for
separately from the other assets of the Owner Trust Estate, and any other Sub-Trust. In the event that there is any Owner Trust Estate, or any income, earnings, profits, and proceeds thereof, or funds or payments which are not readily identifiable
as belonging to any particular Sub-Trust, the Owner Trustee shall allocate them to the Certificates generally. Each such allocation by the Owner Trustee shall be conclusive and binding upon all Noteholders and Certificateholders for all purposes.

  
 Section 3.04. Liabilities of Sub-Trust. 
  
 The Owner Trust Estate belonging to each particular Sub-Trust shall be
charged with the liabilities of the Trust in respect of that Sub-Trust and only that Sub-Trust and all expenses, costs, charges and reserves attributable to that Sub-Trust, and any general liabilities, expenses, costs, charges or reserves of the
Trust which are not readily identifiable as belonging to any particular Sub-Trust shall be allocated and charged by the Owner Trustee to the Certificateholders generally, based on their Ownership Interest. Each allocation of liabilities, expenses,
costs, charges and reserves by the Owner Trustee shall be conclusive and binding upon all Noteholders and Certificateholders for all purposes. The Owner Trustee shall have full discretion, to the extent not inconsistent with applicable law, to
determine which items shall be treated as income and which items as capital, and each such determination and allocation shall be conclusive and binding upon the Noteholders and the Certificateholders. Every written agreement, instrument or other
undertaking made or issued by or on behalf of a particular Sub-Trust shall include a recitation limiting the obligation or claim represented thereby to that Sub-Trust and its assets. 
  
 Without limitation of the foregoing provisions of this Article, but subject to the right of the Owner Trustee in its
discretion to allocate general liabilities, expenses, costs, charges or reserves as herein provided, the debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to a particular Sub-Trust shall be
enforceable against the assets of such Sub-Trust only, and not against the assets (i) of the Trust generally or (ii) of any other Sub-Trust. Notice of this limitation on interseries liabilities shall be set forth in the Certificate of Trust of the
Trust (whether originally or by amendment) as filed or to be filed in the Office of the Secretary of State pursuant to the Statutory Trust Statute, and upon the giving of such notice in the Certificate of Trust, the statutory provisions of Section
3804 of the Statutory Trust Statute relating to limitations on interseries liabilities (and the statutory effect under Section 3804 of setting forth such notice in the Certificate of Trust) shall become applicable to the Trust and each Sub-Trust.
Every note, bond, contract, instrument, certificate or other undertaking made or issued by or on behalf of a particular Sub-Trust shall include a recitation limiting the obligation represented thereby to that Sub-Trust and its assets in accordance
with Section 3804(a) of the Statutory Trust Statute. 
  

 14 

 ARTICLE IV 
  
 CERTIFICATES AND TRANSFER OF INTERESTS 
  
 Section 4.01. Initial Ownership. Upon the formation of the Trust by the contribution by the Sponsor pursuant to
Section 2.05 and the filing of the Certificate of Trust with the Secretary of State and until the issuance of the Certificates, the Sponsor shall be the sole owner of the Trust. 
  
 Section 4.02. The Certificates. The Certificates shall be issued as a single certificate which shall represent each
separate series of beneficial interests in each Sub-Trust, substantially in the form of Exhibit A hereto, upon the order of the Owner Trustee, at the direction of the Sponsor, to the Seller concurrently with the sale and assignment to the Trust of
the Mortgage Loans by the Seller, at the direction of the Sponsor, to the Owner Trustee. The Certificates shall represent the entire beneficial interest in the assets of each Sub-Trust subject to the debt represented by the Notes relating to each
Sub-Trust. The Certificates shall be printed, lithographed or engraved or may be produced in any other manner as is reasonably acceptable to the Owner Trustee, as evidenced by its execution thereof. The Certificates shall be executed on behalf of
the Trust by manual or facsimile signature of an Authorized Officer of the Owner Trustee. Certificates bearing the manual or facsimile signatures of individuals who were, at the time when such signatures shall have been affixed, authorized to sign
on behalf of the Trust, shall be valid, notwithstanding that such individuals or any of them shall have ceased to be so authorized prior to the authentication and delivery of such Certificates or did not hold such offices at the date of
authentication and delivery of such Certificates. 
  
 A transferee
of a Certificate shall become a Certificateholder, and shall be entitled to the rights and subject to the obligations of a Certificateholder hereunder upon such transferee’s acceptance of a Certificate duly registered in such transferee’s
name pursuant to Section 4.04. 
  
 The beneficial interest in each
Sub-Trust shall be treated as a single class of securities represented by the Certificates for purposes of Article 8 of the Uniform Commercial Code of the State of Delaware. 
  
 Section 4.03. Execution, Authentication and Delivery of Certificates. Concurrently with the initial transfer of the
Mortgage Loans to the Trust pursuant to the Sale and Servicing Agreement, the Owner Trustee shall cause the Certificates, representing 100% of the Percentage Interests of the Trust, to be executed on behalf of the Trust, authenticated and delivered,
at the written direction of the Sponsor, to the Seller as initial Certificateholder. No Certificate shall entitle its holder to any benefit under this Agreement, or shall be valid for any purpose, unless there shall appear on such Certificate a
certificate of authentication substantially in the form set forth in Exhibit A, executed by the Owner Trustee or the Owner Trustee’s authenticating agent, by manual or facsimile signature; such authentication shall constitute conclusive
evidence that such Certificate shall have been duly authenticated and delivered hereunder. All Certificates shall be dated the date of their authentication. 
  

 15 

 Section 4.04. Registration of Transfer and Exchange of Certificates. The Certificate Registrar
shall keep or cause to be kept, at the office or agency maintained pursuant to Section 4.08, a Certificate Register in which, subject to such reasonable regulations as it may prescribe, the Certificate Registrar shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided. The Owner Trustee shall be the initial “Certificate Registrar.” 
  
 Upon surrender for registration of transfer of any Certificate at the office or agency maintained pursuant to Section 4.08, the Owner Trustee, upon the
satisfaction of the conditions set forth in Section 4.09(c), shall execute, authenticate and deliver (or shall cause its authenticating agent to authenticate and deliver), in the name of the designated transferee or transferees, one or more new
Certificates of a like Percentage Interest dated the date of authentication by the Owner Trustee or any authenticating agent. At the option of a Certificateholder, Certificates may be exchanged for other Certificates of a like Percentage Interest
upon surrender of the Certificates to be exchanged at the office or agency maintained pursuant to Section 4.08. 
  
 Every Certificate presented or surrendered for registration of transfer or exchange shall be accompanied by a written instrument of transfer in form,
attached to the form of Certificate attached hereto as Exhibit A, or such other form satisfactory to the Note Insurer, or, upon the occurrence and continuation of a Note Insurer Default, satisfaction of the Rating Agency Condition, duly
executed by the Certificateholder or his attorney duly authorized in writing. 
  
 No service charge shall be made for any registration of transfer or exchange of Certificates, but the Owner Trustee or the Certificate Registrar may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer or exchange of Certificates. 
  
 The preceding provisions of this Section 4.04 notwithstanding, the Certificate Registrar shall not register transfers or exchanges of Certificates for a period of fifteen (15) days preceding the Payment Date with
respect to the Certificates. 
  
 Notwithstanding anything
contained herein to the contrary, neither the Certificate Registrar nor the Owner Trustee shall be responsible for ascertaining whether any transfer complies with the registration provisions or exemptions from the Securities Act of 1933, as amended,
the Securities Act of 1934, as amended, applicable state securities law or the Investment Company Act of 1940, as amended; provided, however, that if an Investment Letter is specifically required to be delivered to the Owner Trustee by
a purchaser or transferee of a Certificate, the Owner Trustee shall be under a duty to examine the same to determine whether it conforms to the form of Investment Letter set forth as Exhibit C hereto and shall promptly notify the party
delivering the same if such Investment Letter does not so conform. 
  
 Section 4.05. Mutilated, Destroyed, Lost or Stolen Certificates. If (a) any mutilated Certificate shall be surrendered to the Certificate Registrar, or if the Certificate Registrar shall receive evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there shall be delivered to the Certificate Registrar and the Owner Trustee such security or 

  

 16 

 
indemnity as may be required by them to save each of them harmless, then in the absence of notice that such Certificate shall have been acquired by a
protected purchaser, the Owner Trustee on behalf of the Trust shall execute and the Owner Trustee, or the Owner Trustee’s authenticating agent, shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost or
stolen Certificate, a new Certificate of like Percentage Interest. In connection with the issuance of any new Certificate under this Section 4.05, the Owner Trustee or the Certificate Registrar may require the payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection therewith. Any duplicate Certificate issued pursuant to this Section shall constitute conclusive evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time. 
  
 Section 4.06. Persons Deemed Owners. Each person by virtue of becoming a Certificateholder in accordance with this Agreement shall be deemed to be bound by the terns of this Agreement. Prior to due presentation of a Certificate for
registration of transfer, the Owner Trustee or the Certificate Registrar may treat the Person in whose name any Certificate shall be registered in the Certificate Register as the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 6.02 and for all other purposes whatsoever, and neither the Owner Trustee nor the Certificate Registrar shall be bound by any notice to the contrary. 
  
 Section 4.07. Access to List of Certificateholders’ Names and Addresses. The Certificate Registrar shall furnish
or cause to be furnished to the Owner Trustee, the Master Servicer, the Sponsor and the Indenture Trustee immediately prior to each Payment Date, a list of the names and addresses of the Certificateholders as of the most recent Record Date. If one
or more Certificateholder, together evidencing Percentage Interests totaling not less than 25%, apply in writing to the Certificate Registrar, and such application states that the applicants desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates and such application is accompanied by a copy of the communication that such applicants propose to transmit, then the Certificate Registrar shall, within five (5) Business Days
after the receipt of such application, afford such applicants access during normal business hours to the current list of Certificateholders. Each Certificateholder, by receiving and holding a Certificate, shall be deemed to have agreed not to hold
any of the Sponsor, the Certificate Registrar or the Owner Trustee accountable by reason of the disclosure of its name and address, regardless of the source from which such information was derived. 
  
 Section 4.08. Maintenance of Office or Agency. The Owner Trustee shall
maintain an office or offices or agency or agencies where notices and demands to or upon the Owner Trustee in respect of the Basic Documents may be served, and so long as the Owner Trustee is the Certificate Registrar, where Certificates may be
surrendered for registration of transfer or exchange and notices and demands to or upon the Certificate Registrar in respect of the Certificates, may be served. The Owner Trustee initially designates the Corporate Trust Office as its principal
corporate trust office for such purposes. The Owner Trustee shall give prompt written notice to the Note Insurer, the Indenture Trustee, the Sponsor and the Certificateholders of any change in the location of the Certificate Register or any such
office or agency. 
  
 Section 4.09. Restrictions on Transfers
of Certificates. (a) Each prospective purchaser and any subsequent transferee of a Certificate (each, a “Prospective Holder”), other than the Sponsor, shall execute and deliver to the Owner Trustee and the Certificate Registrar
and any 
  

 17 

 
of their respective successors an Investment Letter in the form of Exhibit C hereto to the effect that: 
  
 (i) Such Person is (A) a “qualified institutional
buyer” as defined in Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and is aware that the seller of the Certificate may be relying on the exemption from the registration requirements of the
Securities Act provided by Rule 144A and is acquiring such Certificate for its own account or for the account of one or more qualified institutional buyers for whom it is authorized to act, or (B) a Person involved in the organization or operation
of the Trust or an affiliate of such Person within the meaning of Rule 3a-7 of the Investment Company Act of 1940, as amended (including, but not limited to, the Sponsor). 
  
 (ii) Such Person understands that the Certificates have not been and will not be registered under the
Securities Act and may be offered, sold, pledged or otherwise transferred only to a person whom the seller reasonably believes is (A) a qualified institutional buyer or (B) a Person involved in the organization or operation of the Trust or an
affiliate of such Person, in a transaction pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or exempt from the registration requirements of the Securities Act and any such state
securities laws. 
  
 (iii) Such Person
understands that the Certificates bear a legend to the following effect: 
  
 “THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY STATE SECURITIES LAWS. THIS CERTIFICATE MAY BE DIRECTLY OR INDIRECTLY
OFFERED OR SOLD OR OTHERWISE DISPOSED OF (INCLUDING PLEDGED) BY THE HOLDER HEREOF ONLY TO (I) A “QUALIFIED INSTITUTIONAL BUYER” AS DEFINED IN RULE 144A UNDER THE ACT, IN A TRANSACTION THAT IS REGISTERED UNDER THE ACT AND APPLICABLE STATE
SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND SUCH STATE LAWS OR (II) A PERSON INVOLVED IN THE ORGANIZATION OR OPERATION OF THE TRUST OR AN AFFILIATE OF SUCH A PERSON WITHIN THE MEANING OF RULE 3a-7 OF THE
INVESTMENT COMPANY ACT OF 1940, AS AMENDED (INCLUDING, BUT NOT LIMITED TO, ACCREDITED HOME LENDERS, INC.) IN A TRANSACTION THAT IS REGISTERED UNDER 
  

 18 

 THE ACT AND APPLICABLE STATE SECURITIES LAWS OR THAT IS EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE
ACT AND SUCH LAWS. NO PERSON IS OBLIGATED TO REGISTER THIS CERTIFICATE UNDER THE ACT OR ANY STATE SECURITIES LAWS.” 
  
 (b) By its acceptance of a Certificate, each Prospective Holder agrees and acknowledges that no legal or beneficial interest in all or any portion of any
Certificate may be transferred directly or indirectly to an entity that holds residual securities as nominee to facilitate the clearance and settlement of such securities through electronic book-entry changes in accounts of participating
organizations (a “Book-Entry Nominee”) and any such purported transfer shall be void and have no effect. 
  
 The Certificates shall bear an additional legend referring to the restrictions contained in preceding paragraph to the following effect: 
  
 THIS CERTIFICATE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF
UNLESS, PRIOR TO SUCH DISPOSITION, THE PROPOSED TRANSFEREE DELIVERS TO THE OWNER TRUSTEE AND THE CERTIFICATE REGISTRAR A CERTIFICATE STATING THAT SUCH TRANSFEREE IS NOT AN ENTITY THAT WILL HOLD THIS CERTIFICATE AS NOMINEE TO FACILITATE THE CLEARANCE
AND SETTLEMENT OF SUCH SECURITY THROUGH ELECTRONIC BOOK-ENTRY CHANGES IN ACCOUNTS OF PARTICIPATING ORGANIZATIONS. 
  
 (c) No transfer of a Certificate or any beneficial interest therein shall be made to any person unless the Owner Trustee has received a representation
letter from the Prospective Holder to the effect that such Prospective Holder (i) is not a person which is an employee benefit plan, trust or account subject to Title I of ERISA or Section 4975 of the Code or a governmental plan, as defined in
Section 3(32) of ERISA, subject to any federal, state or local law which is, to a material extent, similar to the foregoing provisions of ERISA or the Code (any such person being a “Plan”), (ii) is not an entity, including an
insurance company separate account or general account, whose underlying assets include “plan assets” by reason of a Plan’s investment in the entity and (iii) is not directly or indirectly purchasing such Certificate or interest
therein on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Plan. 
  
 (d) The Owner Trustee shall not execute, and shall not countersign and deliver, a Certificate in connection with any transfer thereof unless the
transferor shall have provided to the Owner Trustee an Investment Letter, signed by the transferee, which certificate shall contain the consent of the transferee to any amendments of this Agreement as may be required to effectuate further the
foregoing restrictions on transfer of the Certificates to Book-Entry Nominees, and an agreement by the transferee that it will not transfer a Certificate without providing to the Owner Trustee an Investment Letter. 
  

 19 

 (e) [Reserved]. 
  

(f) Unless the Prospective Holder delivers a certificate to the Owner Trustee to the effect that it is a United States Person, the Prospective Holder,
other than Accredited Home Lenders, Inc. or an affiliate of the Accredited Home Lenders, Inc., shall obtain and deliver to the Note Insurer and the Owner Trustee an Opinion of Counsel satisfactory to the Note Insurer to the effect that, as a matter
of federal income tax law, the transfer of the Certificate to such Prospective Holder will not result in the imposition of any U.S. withholding tax on payments in respect of the Mortgage Loans or the Certificate. 
  
 (g) No pledge or transfer of the Certificates shall be effective unless such
pledge or transfer is (i) to a single beneficial owner and (ii) accompanied by an Opinion of Counsel satisfactory to the Owner Trustee and the Note Insurer, which Opinion of Counsel shall not, unless otherwise agreed, be an expense of the Trust, the
Certificate Registrar, the Master Servicer, the Backup Servicer, the Note Insurer or the Sponsor, to the effect such pledge or transfer will not cause the Trust to be treated for federal income tax purposes as a taxable mortgage pool, association or
a publicly traded partnership taxable as a corporation. 
  
 ARTICLE V 
  
 ACTIONS BY OWNER TRUSTEE

  
 Section 5.01. Prior Notice to the Certificateholders
with Respect to Certain Matters. With respect to the following matters, the Owner Trustee shall not take action (and the Certificateholders shall not direct the Owner Trustee to take any action) unless at least thirty (30) days before the taking
of such action, the Owner Trustee shall have notified the Certificateholders (unless the Certificateholders have directed the Owner Trustee to take action) and the Note Insurer in writing of the proposed action and neither the Certificateholders nor
the Note Insurer shall have notified the Owner Trustee in writing prior to the 30th day after such notice is given
that such Certificateholders and/or the Note Insurer have withheld consent or the Certificateholders have provided alternative written direction (any direction by the Certificateholders shall require the prior written consent of the Note Insurer):

  
 (a) the initiation of any claim or lawsuit by
the Trust (except claims or lawsuits brought in connection with the collection of the Mortgage Loans) and the compromise of any action, claim or lawsuit brought by or against the Trust (except with respect to the aforementioned claims or lawsuits
for collection of the Mortgage Loans); 
  
 (b)
the election by the Trust to file an amendment to the Certificate of Trust (unless such amendment is required to be filed under the Statutory Trust Statute); 
  

(c) the amendment or other change to this Agreement or any Basic Document in circumstances where the consent of any Certificateholder
is required; provided, that notwithstanding this Section 5.01, the prior written consent of the Note Insurer must be obtained for any amendment or change to this Agreement or any other Basic Document; 
  

 20 

 (d) the amendment or other change to this Agreement or any other Basic Document in
circumstances where the consent of any Certificateholder is not required and such amendment materially adversely affects the interest of the Certificateholders; 
  
 (e) the appointment pursuant to the Indenture of a successor Note Registrar, or Indenture Trustee or
pursuant to this Agreement of a successor Certificate Registrar or the consent to the assignment by the Note Registrar or Indenture Trustee or Certificate Registrar of their respective obligations under the Indenture or this Agreement, as
applicable; 
  
 (f) the consent to the waiver of
any default of any Basic Document; 
  
 (g) the
consent to the assignment by the Indenture Trustee or Master Servicer of their respective obligations under any Basic Document; 
  
 (h) except as provided in Article X hereof, dissolve, terminate or liquidate the Trust in whole or in part; 
  
 (i) merge or consolidate the Trust with or into any other
entity, or convey or transfer all or substantially all of the Trust’s assets to any other entity; 
  
 (j) cause the Trust to incur, assume or guaranty any indebtedness other than as set forth in this Agreement or the other Basic Documents;

  
 (k) do any act which would make it impossible
to carry on the ordinary business of the Trust as described in Section 2.03 hereof; 
  
 (l) confess a judgment against the Trust; 
  
 (m) possess Trust assets, or assign the Trust’s right to property, for other than a Trust purpose; 
  
 (n) cause the Trust to lend any funds to any entity; or

  
 (o) change the Trust’s purpose and
powers from those set forth in this Agreement. 
  
 In addition the
Trust shall not commingle its assets with those of any other entity. The Trust shall maintain its financial and accounting books and records separate from those of any other entity. Except as expressly set forth herein, the Trust shall pay its
indebtedness, operating expenses and liabilities from its own funds, and the Trust shall not pay the indebtedness, operating expenses and liabilities of any other entity. The Master Servicer, on behalf of the Trust, shall maintain appropriate
minutes or other records of all appropriate action. The Trust shall maintain its office separate from the offices of the Sponsor, the Seller and the Master Servicer. 
  

 21 

 Notwithstanding the other provisions of this Section 5.01, the Owner Trustee shall not have the power,
except upon the written direction of the Certificateholders with the prior written consent of the Note Insurer, and to the extent otherwise consistent with the Basic Documents, to remove or replace the Master Servicer or the Indenture Trustee.

  
 Section 5.02. Action by Certificateholders with Respect to
Bankruptcy. The Owner Trustee shall not have the power to (i) institute proceedings to have the Trust declared or adjudicated bankrupt or insolvent, (ii) consent to the institution of bankruptcy or insolvency proceedings against the Trust, (iii)
file a petition or consent to a petition seeking reorganization or relief on behalf of the Trust under any applicable federal or state law relating to bankruptcy, (iv) consent to the appointment of a receiver, liquidator, assignee, trustee,
sequestrator (or any similar official) of the Trust or a substantial portion of the property of the Trust, (v) make any assignment for the benefit of the Trust’s creditors, (vi) cause the Trust to admit in writing its inability to pay its debts
generally as they become due, or (vii) take any action, or cause the Trust to take any action, in furtherance of any of the foregoing (any of the above, a “Bankruptcy Action”) without the unanimous prior written consent and approval
of all Certificateholders and the prior written consent and approval of the Note Insurer and the delivery to the Owner Trustee by each such Certificateholder of a certification that such Certificateholder reasonably believes that the Trust is
insolvent. So long as the Indenture and the Insurance Agreement remain in effect and no Note Insurer Default exists, no Certificateholder shall have the power to take, and shall not take, any Bankruptcy Action with respect to the Trust or direct the
Owner Trustee to take any Bankruptcy Action with respect to the Trust. The terms of this Section 5.02 shall survive for one year and one day following the termination of this Agreement. 
  
 Section 5.03. Restrictions on Certificateholders’ Power. The Certificateholders shall not direct the Owner
Trustee to take or refrain from taking any action if such action or inaction would be contrary to any obligation of the Trust or the Owner Trustee under this Agreement or any of the other Basic Documents or would be contrary to Section 2.03, nor
shall the Owner Trustee be obligated to follow any such direction, if given. 
  
 Section 5.04. Majority Control. Except as expressly provided herein, any action that may be taken by the Certificateholders under this Agreement may be taken by the holders of Certificates evidencing more than
50% of the Percentage Interest in the Trust and such action shall be binding upon all Certificateholders. Except as expressly provided herein, any written notice of the Certificateholders delivered pursuant to this Agreement shall be effective if
signed by holders of Certificates evidencing more than 50% of the Percentage Interest in the Trust at the time of the delivery of such notice and such action shall be binding upon all Certificateholders. 
  
 ARTICLE VI 
  
 TAX PROVISIONS; CERTAIN DUTIES 
  
 Section 6.01. Federal Income Tax Provisions. (a) For so long as the
Trust has a single owner for federal income tax purposes, it will, pursuant to Treasury Regulations promulgated under section 7701 of the Code, be disregarded as an entity distinct from the Certificateholder for all federal income tax purposes.
Accordingly, for federal income tax purposes, the Certificateholder will be treated as (i) owning all assets owned by the Trust, (ii) having incurred all liabilities incurred by the Trust, and (iii) all transactions between the Trust and the
Certificateholder will be disregarded. 
  

 22 

 (b) Neither the Owner Trustee nor any Certificateholder will, under any circumstances, and at any time,
make an election of IRS Form 8832 or otherwise, to classify the Trust as an association taxable as a corporation for federal, state or any other applicable tax purpose. 
  
 (c) If the Trust is treated as a partnership (rather than disregarded as a separate entity) for federal income tax purposes
pursuant to Section 2.06, the following provisions shall apply: 
  
 (i) A separate capital account (a “Capital Account”) shall be established and maintained for each Certificateholder by the Sponsor, in accordance with Treasury Regulations Section 1.704-1 (b)(2)(iv).
No Certificateholder shall be entitled to interest on its Capital Account or any capital contribution made by such Certificateholder to the Trust. 
  
 (ii) Upon termination of the Trust pursuant to Article X, any amounts available for distribution to Certificateholders shall be
distributed to the Certificateholders with positive Capital Account balances in accordance with such balances. For purposes of this Section 6.01(c)(ii), the Capital Account of each Certificateholder shall be determined after all adjustments made in
accordance with this Section 6.01 resulting from the Trust’s operations and from all sales and dispositions of all or any part of the assets of the Trust. Any distributions pursuant to this Section 6.01(c)(ii) shall be made by the end of the
Taxable Year in which the termination occurs (or, if later, within 90 days after the date of the termination). 
  
 (iii) No Certificateholder shall be required to restore any deficit balance in its Capital Account. Furthermore, no Certificateholder
shall be liable for the return of the Capital Account of, or of any capital contribution made to the Trust by, another Certificateholder. 
  
 (iv) Profit and loss of the Trust for each Taxable Year shall be allocated to the Certificateholders in accordance with their respective
Percentage Interests. 
  
 (v) Notwithstanding any
provision to the contrary, (i) any expense of the Trust that is a “nonrecourse deduction” within the meaning of Treasury Regulations Section 1.704-2(b)(1) shall be allocated in accordance with the Certificateholders’ respective
Percentage Interests, (ii) any expense of the Trust that is a “partner nonrecourse deduction” within the meaning of Treasury Regulations Section 1.704-2(i)(2) shall be allocated in accordance with Treasury Regulations Section
1.704-2(i)(1), (iii) if there is a net decrease in Trust Minimum Gain within the meaning of Treasury Regulations Section 1.704-2(f)(1) for any Taxable Year, items of gain and income shall be allocated among the Certificateholders in accordance with
Treasury Regulations Section 1.704-2(f) and the ordering rules contained in Treasury Regulations Section 1.704-2(i), and (iv) if there is a net decrease in Certificateholder Nonrecourse Debt Minimum Gain within the meaning of Treasury Regulations
Section 1.704-2(i)(4) for any Taxable Year, items of 
  

 23 

 
gain and income shall be allocated among the Certificateholders in accordance with Treasury Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Treasury Regulations Section 1.704-2(j). A Certificateholder’s “interest in partnership profits” for purposes of determining its share of the nonrecourse liabilities of the Trust within the meaning of Treasury Regulations
Section 1.752-3(a)(3) shall be such Certificateholder’s Percentage Interest. 
  
 (vi) If a Certificateholder receives in any Taxable Year an adjustment, allocation, or distribution described in subparagraphs (4), (5),
or (6) of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such Certificateholder’s Capital Account that exceeds the sum of such Certificateholder’s shares of Trust Minimum Gain and
Certificateholder Nonrecourse Debt Minimum Gain, as determined in accordance with Treasury Regulations Sections 1.704-2(g) and 1.704-2(i), such Certificateholder shall be allocated specially for such Taxable Year (and, if necessary, later Taxable
Years) items of income and gain in an amount and manner sufficient to eliminate such negative Capital Account balance as quickly as possible as provided in Treasury Regulations Section 1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of
income or gain to a Certificateholder in accordance with this Section 6.01(c)(vi), to the extent permitted by Regulations Section 1.704-1(b), items of expense or loss shall be allocated to such Certificateholder in an amount necessary to offset the
income or gain previously allocated to such Certificateholder under this Section 6.01(c)(vi). 
  
 (vii) Loss shall not be allocated to a Certificateholder to the extent that such allocation would cause a deficit in such
Certificateholder’s Capital Account (after reduction to reflect the items described in Treasury Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Certificateholder’s shares of Trust Minimum Gain and
Certificateholder Nonrecourse Debt Minimum Gain. Any loss in excess of that limitation shall be allocated to all the Certificateholders in accordance with their respective Percentage Interests. After the occurrence of an allocation of loss to a
Certificateholder in accordance with this Section 6.01(c)(vii), to the extent permitted by Treasury Regulations Section 1.704-1(b), profit shall be allocated to such Certificateholder in an amount necessary to offset the loss previously allocated to
such Certificateholder under this Section 6.01(c)(vii). 
  
 (viii) If a Certificateholder transfers any part or all of its Percentage Interest and the transferee is admitted as a Certificateholder as provided herein (a “Transferee Certificateholder”), the
distributive shares of the various items of profit and loss allocable among the Certificateholders during such Taxable Year shall be allocated between the transferor and the Transferee Certificateholder (at the election of the Certificateholders
(including the transferor, but excluding the Transferee Certificateholder)) either (i) as if the Taxable Year had ended on the date of the transfer or (ii) based on the number of days of such Taxable Year that each was a Certificateholder without
regard to the results of Trust activities in the respective portions of such Taxable Year in which the transferor and Transferee Certificateholder were Certificateholders. 
  

 24 

 (ix) “Profit” and “loss” and any items of income, gain, expense or
loss referred to in this Section 6.01 shall be determined in accordance with federal income tax accounting principles as modified by Treasury Regulations Section 1.704-1(b)(2)(iv), except that profits and losses shall not include items of income,
gain, and expense that are specially allocated pursuant to Sections 6.01(c)(v), 6.01(c)(vi) or 6.01(c)(vii) hereof. All allocations of income, profits, gains, expenses, and losses (and all items contained therein) for federal income tax purposes
shall be identical to all allocations of such items set forth in this Section 6.01, except as otherwise required by Section 704(c) of the Code and Section 1.704-1(b)(4) of the Treasury Regulations. 
  
 (x) The taxable year of the Trust (the “Taxable
Year”) shall be the calendar year or such other taxable year as may be required by Section 706(b) of the Code. 
  
 (xi) At the Trust’s expense, the Sponsor shall (i) prepare, or cause to be prepared, and file or cause to be filed such tax returns
relating to the Trust (including a partnership information return, IRS Form 1065) as are required by applicable federal, state, and local law, (ii) cause such returns to be signed in the manner required by law, (iii) make such elections as may from
time to time be required or appropriate under any applicable law so as to maintain the Trust’s classification as a partnership for tax purposes, (iv) prepare and deliver, or cause to be prepared and delivered, to the Certificateholders, no
later than 120 days after the close of each Taxable Year (or no later than April l5th), a Schedule K-1, a copy of the Trust’s informational tax return (IRS Form 1065), and such other reports (collectively, the “Annual Tax
Reports”) setting forth in sufficient detail all such information and data with respect to the transactions effected by or involving the Trust during such Taxable Year as shall enable each Certificateholder to prepare its federal, state,
and local income tax returns in accordance with the laws then prevailing, and (v) collect, or cause to be collected, any withholding tax as described in Section 5.02(c) with respect to income or distributions to Certificateholders. 
  
 (xii) The Sponsor shall, if required, be designated as the
tax matters partner for the Trust within the meaning of Section 6231(a)(7) of the Code (the “Tax Matters Partner”). The Tax Matters Partner shall have the right and obligation to take all actions authorized and required,
respectively, by the Code for the Tax Matters Partner. The Tax Matters Partner shall have the right to retain professional assistance in respect of any audit or controversy proceeding initiated with respect to the Trust by the Internal Revenue
Service or any state or local taxing authority, and all expenses and fees incurred by the Tax Matters Partner on behalf of the Trust shall constitute expenses of the Trust. In the event the Tax Matters Partner receives notice of a final partnership
adjustment under Section 6223(a)(2) of the Code, the Tax Matters Partner shall either (i) file a court petition for judicial review of such adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition shall be
mailed to all other Holders on the date such petition is filed, or (ii) mail a written notice to all other Holders, within such period, that describes the Tax Matters Partner’s reasons for determining not to file such a petition. 
  
 (xiii) Except as otherwise provided in this Section 6.01 and
Section 7.06, the Certificateholders shall instruct the Sponsor in writing as to whether to make any available election under the Code or any applicable state or local tax law on behalf of the Trust. 
  

 25 

 Section 6.02. Withholding Taxes. In the event that any withholding tax is imposed under federal,
state, or local law on the Trust’s payment (or allocations of income) to a Certificateholder, such tax shall reduce the amount otherwise distributable to such Certificateholder in accordance with this Section 6.02. The Indenture Trustee, on
behalf of the Owner Trustee, is hereby authorized and directed to retain in the Payment Account from amounts otherwise distributable to the Certificateholders sufficient funds for the payment of any tax that is legally owed by the Trust (but such
authorization shall not prevent the Indenture Trustee from contesting any such tax in appropriate proceedings, and withholding payment of such tax, if permitted by law, pending the outcome of such proceedings). The Sponsor will provide the Indenture
Trustee with a statement indicating the amount of any such withholding tax. The amount of any withholding tax imposed with respect to a Certificateholder shall be treated as cash distributed to such Certificateholder at the time it is withheld by
the Indenture Trustee and remitted to the appropriate taxing authority from the Payment Account at the direction of the Indenture Trustee, on behalf of the Owner Trustee. If there is a possibility that withholding tax is payable with respect to a
distribution (such as a distribution to a Certificateholder who is a Non-U.S. Person), the Indenture Trustee may in its sole discretion withhold such amounts in accordance with this paragraph. In the event that a Certificateholder wishes to apply
for a refund of any such withholding tax, the Owner Trustee and the Indenture Trustee shall reasonably cooperate with such Certificateholder in making such claim so long as such Certificateholder agrees in writing to reimburse the Owner Trustee for
any out-of-pocket expenses incurred. 
  
 Any Certificateholder
which is organized under the laws of a jurisdiction outside the United States shall, on or prior to the date such Certificateholder becomes a Certificateholder, (a) so notify the Owner Trustee and the Indenture Trustee, on behalf of the Trust, (b)
(i) provide the Owner Trustee and the Indenture Trustee, on behalf of the Trust, with Internal Revenue Service form W-8, or (ii) notify the Owner Trustee and the Indenture Trustee, on behalf of the Trust, that it is not entitled to an exemption from
United States withholding tax or a reduction in the rate thereof on payments of interest. Any such Certificateholder agrees by its acceptance of a Certificate, on an ongoing basis, to provide like certification for each taxable year and to notify
the Owner Trustee and the Indenture Trustee, on behalf of the Trust, should subsequent circumstances arise affecting the information provided. The Trust, the Owner Trustee and the Indenture Trustee shall be fully protected in relying upon, and each
Certificateholder by its acceptance of a Certificate hereunder agrees to indemnify and hold the Trust, the Owner Trustee and the Indenture Trustee harmless against all claims or liability of any kind arising in connection with or related to their
reliance upon any documents, forms or information provided by any Certificateholder. In addition, if the Indenture Trustee has not withheld taxes on any payment made to any Certificateholder, and the Indenture Trustee is subsequently required to
remit to any taxing authority any such amount not withheld, such Certificateholder shall return such amount to the Indenture Trustee upon written demand by the Indenture Trustee. Neither the Owner Trustee nor the Indenture Trustee shall be liable
for damages to any Certificateholder due to a violation of the Code unless and only to the extent such liability is caused by the Owner Trustee’s or the Indenture Trustee’s failure to act in accordance with its standard of care under this
Agreement. 
  

 26 

 Section 6.03. Accounting and Reports to the Certificateholders, the Internal Revenue Service and
Others. The Sponsor shall (a) maintain (or cause to be maintained) the books of the Trust on a calendar year basis on the accrual method of accounting, including, without limitation, the allocations of net income under Section 6.01, and (b)
deliver (or cause to be delivered) to each Certificateholder such information, reports or statements as may be required by the Code and applicable Treasury Regulations and as may be required to enable each Certificateholder to prepare its respective
federal and state income tax returns. Consistent with the Trust’s (and each Loan Groups’ and Sub-Trusts’) characterization for tax purposes as a security arrangement for the issuance of non-recourse debt, no federal income tax return
shall be filed on behalf of the Trust unless either (y) the Trust, the Sub-Trusts, the Owner Trustee or the Certificateholders receive an Opinion of Counsel based on a change in applicable law occurring after the date hereof that the Code requires
such a filing or (z) the Internal Revenue Service shall determine that the Trust (or a related Loan Group or Sub-Trust) is required to file such a return. In the event that the Trust (or a related Loan Group or Sub-Trust) is required to file tax
returns, the Owner Trustee shall elect under Section 1278 of the Code to include in income currently any market discount that accrues with respect to the Mortgage Loans. The Owner Trustee shall prepare or shall cause to be prepared any tax returns
required to be filed by the Trust or the Sub-Trusts and shall remit such returns to the Sponsor at least five days before such returns are due to be filed. The Sponsor, or any other such party required by law, shall promptly sign such returns and
deliver such returns after signature to the Owner Trustee and such returns shall be filed by, or at the direction of, the Owner Trustee with the appropriate tax authorities. In no event shall the Sponsor be liable for any liabilities, costs or
expenses of the Trust or the Sub-Trusts arising out of the application of any tax law, including federal, state, foreign or local income or excise taxes or any other tax imposed on or measured by income (or any interest, penalty or addition with
respect thereto or arising from a failure to comply therewith), except for any such liability, cost or expense attributable to the Sponsor’s breach of its obligations under this Agreement. 
  
 ARTICLE VII 
  
 AUTHORITY AND DUTIES OF OWNER TRUSTEE 
  
 Section 7.01. General Authority. The Owner Trustee is authorized and
directed to execute and deliver or cause to be executed and delivered the Notes, the Certificates and the Basic Documents to which the Trust is to be a party and each certificate or other document attached as an exhibit to or contemplated by the
Basic Documents to which the Trust is to be a party and any amendment or other agreement or instrument described in Article IV, in each case, as the Sponsor shall approve, as evidenced conclusively by the Owner Trustee’s execution thereof. In
addition, the Owner Trustee is authorized and directed, on behalf of the Trust, to execute and deliver to the Authenticating Agent the Trust Request and the Trust Orders referred to in Section 2.11 of the Indenture, directly to the Authenticating
Agent to authenticate and deliver Class A-1 Notes in the Original Note Principal Balance of $194,704,000, the Class A-2 Notes in the Original Note Principal Balance of $210,312,000 and Class A-3 Notes in the Original Note Principal Balance of
$110,534,000 In addition to the foregoing, the Owner Trustee is authorized, but shall not be obligated, to take all actions required of the Trust, pursuant to the Basic Documents. 
  

 27 

 Section 7.02. General Duties. (a) It shall be the duty of the Owner Trustee: 
  
 (i) to discharge (or cause to be discharged) all of its
responsibilities pursuant to the terms of this Agreement and the Basic Documents to which the Trust is a party and to administer the Trust in the interest of the Certificateholders, subject to the Basic Documents and in accordance with the
provisions of this Agreement; and 
  
 (ii) to
maintain the Trust’s existence as a statutory trust under the laws of the State of Delaware. 
  
 (b) The Owner Trustee shall not be responsible for taking any action on behalf of the Trust under any Basic Document unless specifically directed in
writing to do so in accordance with Section 7.03 of this Agreement. 
  
 (c) The Owner Trustee shall not be responsible for any matter regarding the Securities Act, the Exchange Act or the Investment Company Act of 1940, as amended, or the rules or regulations thereunder. 
  
 Section 7.03. Action upon Instruction. (a) Subject to Article V
hereof, and in accordance with the terms of the Basic Documents, the Certificateholders may by written instruction direct the Owner Trustee in the management of the Trust but only to the extent consistent with the limited purpose of the Trust. Such
direction may be exercised at anytime by written instruction of the Certificateholders pursuant to Article V hereof. Without limiting the generality of the foregoing, the Owner Trustee shall act as directed in writing by the Certificateholders in
connection with Note redemptions requested by the Certificateholders, and shall take all actions and deliver all documents that the Trust is required to take and deliver in accordance with Section 4.01 and Article X of the Indenture in order to
effect any redemption requested by the Certificateholders. 
  
 (b)
The Owner Trustee shall not be required to take any action hereunder or under any other Basic Document if the Owner Trustee shall have reasonably determined, or shall have been advised by counsel, that such action is likely to result in liability on
the part of the Owner Trust or is contrary to the terms hereof or of any other Basic Document or is otherwise contrary to law. 
  
 (c) Subject to Article V hereof, whenever the Owner Trustee is unable to decide between alternative courses of action permitted or required by the terms
of this Agreement or under any other Basic Document, the Owner Trustee shall promptly give notice (in such form as shall be appropriate under the circumstances) to the Certificateholders and the Note Insurer requesting instruction from the
Certificateholders as to the course of action to be adopted, and to the extent the Owner Trustee acts in good faith in accordance with any written instruction of the Certificateholders received, the Owner Trustee shall not be liable on account of
such action to any Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such notice or may be necessary under the
circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the Basic Documents, as it shall deem to be in the best interests of the Certificateholders, and shall have no
liability to any Person for such action or inaction. 
  

 28 

 (d) Subject to Article V hereof, in the event that the Owner Trustee is unsure as to the application of
any provision of this Agreement or any other Basic Document or any such provision is ambiguous as to its application, or is, or appears to be, in conflict with any other applicable provision, or in the event that this Agreement permits any
determination by the Owner Trustee or is silent or is incomplete as to the course of action that the Owner Trustee is required to take with respect to a particular set of facts, the Owner Trustee may give notice (in such form as shall be appropriate
under the circumstances) to the Certificateholders requesting instruction and, to the extent that the Owner Trustee acts or refrains from acting in good faith in accordance with any such instruction received, the Owner Trustee shall not be liable,
on account of such action or inaction, to any Person. If the Owner Trustee shall not have received appropriate instruction within ten (10) days of such notice (or within such shorter period of time as reasonably may be specified in such notice or
may be necessary under the circumstances) it may, but shall be under no duty to, take or refrain from taking such action, not inconsistent with this Agreement or the other Basic Documents, as it shall deem to be in the best interests of the
Certificateholders, and shall have no liability to any Person for such action or inaction. 
  
 Section 7.04. No Duties Except as Specified in this Agreement, the Basic Documents or any Instructions. 
  
 (a) The Owner Trustee shall not have any duty or obligation to manage, make any payment with respect to, register, record, sell, dispose of, or otherwise
deal with the Owner Trust Estate, or to otherwise take or refrain from taking any action under, or in connection with, this Agreement or any document contemplated hereby to which the Trust is a party, except as expressly provided by the terms of
this Agreement, any other Basic Document or in any document or written instruction received by the Owner Trustee pursuant to Section 7.03; and no implied duties or obligations shall be read into this Agreement or any other Basic Document against the
Owner Trustee. The Owner Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or to otherwise perfect or maintain the perfection of any security interest or lien granted to it
hereunder or to prepare or file any Securities and Exchange Commission filing for the Trust or to record this Agreement or any other Basic Document. The Owner Trustee nevertheless agrees that it will, at its own cost and expense, promptly take all
action as may be necessary to discharge any liens on any part of the Owner Trust Estate that result from actions by, or claims against, the Owner Trustee in its individual capacity that are not related to the ownership or the administration of the
Owner Trust Estate. 
  
 (b) Notwithstanding anything to the
contrary herein or in any other document, the Owner Trustee shall not be required to execute, deliver or certify on behalf of the Trust or any other Person any filings, certificates, affidavits or other instruments required under the Sarbanes-Oxley
Act of 2002. Notwithstanding any Person’s right to instruct the Owner Trustee, neither the Owner Trustee nor any agent, employee, director or officer of the Owner Trustee shall have any obligation to execute any certificates or other documents
required pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder, and the refusal to comply with any such instructions shall not constitute a default or breach under any Basic Document. 
  

 29 

 Section 7.05. No Action Except under Specified Documents or Instructions. The Owner Trustee shall
not manage, control, use, sell, dispose of or otherwise deal with any part of the Owner Trust Estate except (i) in accordance with the powers granted to and the authority conferred upon the Owner Trustee pursuant to this Agreement, (ii) in
accordance with the other Basic Documents and (iii) in accordance with any document or written instruction delivered to the Owner Trustee pursuant to Section 7.03. 
  
 Section 7.06. Restrictions. Neither the Owner Trustee nor the Sponsor shall take any action (a) that violates or
results in a breach of or is inconsistent with the purposes of the Trust set forth in Section 2.03 or (b) that, to the actual knowledge of the Sponsor and the Owner Trustee, would result in the Trust’s becoming taxable as a corporation for
Federal income tax purposes. The Certificateholders shall not direct the Owner Trustee to take action that would violate the provisions of this Section 7.06. 
  
 ARTICLE VIII 
  
 CONCERNING THE OWNER TRUSTEE 
  
 Section 8.01. Acceptance of Trusts and Duties. The Owner Trustee accepts the trusts hereby created and agrees to perform its duties hereunder with respect to such trusts, but only upon the terms of this
Agreement subject to the other Basic Documents. The Owner Trustee also agrees to disburse all moneys actually received by it constituting part of the Owner Trust Estate upon the terms of the other Basic Documents and this Agreement. The Owner
Trustee shall not be answerable or accountable hereunder or under any other Basic Document under any circumstances, except (i) for its own willful breach or misconduct or gross negligence or (ii) in the case of the inaccuracy of any representation
or warranty contained in Section 8.03 expressly made by the Owner Trustee in its individual capacity. In particular, but not by way of limitation (and subject to the exceptions set forth in the preceding sentence): 
  
 (a) The Owner Trustee shall not be liable for any error of judgment made by
a Responsible Officer of the Owner Trustee; 
  
 (b) The Owner
Trustee shall not be liable with respect to any action taken or omitted to be taken by it in accordance with the instructions of the Certificateholders or the Note Insurer given in accordance with this Agreement; 
  
 (c) No provision of this Agreement or any other Basic Document shall require
the Owner Trustee to expend or risk funds or otherwise incur any financial liability in the performance of any of its rights or powers hereunder or under any other Basic Document if the Owner Trustee shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured or provided to it; 
  
 (d) Under no circumstances shall the Owner Trustee be liable for indebtedness evidenced by or arising under any of the Basic Documents, including the
principal of and interest on the Notes; 
  

 30 

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

  

 31 

 
and any other instruments furnished to the Owner Trustee under the Basic Documents. On behalf of the Owner Trustee, the Sponsor shall furnish to Noteholders
promptly upon written request therefor, copies of the Sale and Servicing Agreement and the Indenture. 
  
 Section 8.03. Representations and Warranties of the Owner Trustee. The Owner Trustee hereby represents and warrants to the Sponsor, the Note
Insurer and the Certificateholders, that: 
  
 (a) It is a
national banking association duly organized and validly existing in good standing under the laws of the United States of America. It has all requisite power and authority to execute, deliver and perform its obligations under this Agreement.

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

  

 32 

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

  

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Certificates or the Notes and may deal with the Sponsor, the Indenture Trustee, the Master Servicer and the Backup Servicer in banking transactions with the
same rights as it would have if it were not Owner Trustee. 
  
 Section 8.08. Licenses. The Sponsor shall cause the Trust to use its best efforts to obtain and maintain the effectiveness of any licenses required in connection with this Agreement and the other Basic Documents and the transactions
contemplated hereby and thereby until such time as the Trust shall terminate in accordance with the terms hereof. 
  
 ARTICLE IX 
  
 COMPENSATION OF OWNER TRUSTEE 
  
 Section 9.01.
Owner Trustee’s Fees and Expenses. The Owner Trustee shall receive as compensation for its services hereunder such fees as have been separately agreed upon before the date hereof between the Master Servicer and the Owner Trustee, and the
Owner Trustee shall be entitled to be reimbursed by the Master Servicer for its other reasonable expenses hereunder as separately agreed (the “Owner Trustee Fee”). 
  
 Section 9.02. Indemnification. The Sponsor shall be liable as obligor for, and shall indemnify the Owner Trustee (in
its individual and trust capacities) and its successors, assigns, agents and servants (collectively, the “Indemnified Parties”) from and against, any and all liabilities, obligations, losses, damages, taxes, claims, actions and
suits, and any and all reasonable costs, expenses and disbursements (including reasonable legal fees and expenses) of any kind and nature whatsoever (collectively, “Expenses”) which may at any time be imposed on, incurred by, or
asserted against any Indemnified Party in any way relating to or arising out of this Agreement, the other Basic Documents, the Owner Trust Estate, the administration of the Owner Trust Estate or the action or inaction of the Owner Trustee hereunder,
except only that the Sponsor shall not be liable for or required to indemnify an Indemnified Party from and against Expenses arising or resulting from any of the matters described in the third sentence of Section 8.01. The indemnities contained in
this Section 9.02 shall survive the resignation or termination of the Owner Trustee or the termination of this Agreement. In any event of any claim, action or proceeding for which indemnity will be sought pursuant to this Section, the Sponsor will
be entitled to participate therein, with counsel selected by the Sponsor and reasonably satisfactory to the Indemnified Parties, but after notice from an Indemnified Party to the Sponsor of its election to assume the defense thereof, the Sponsor
shall not be liable to the Indemnified Party under this Section 9.02 for any legal or other expenses subsequently incurred by such Indemnified Party in connection with the defense of such action; provided, however, that this sentence
shall not be in effect if (1) the Sponsor shall not have employed counsel reasonably satisfactory to the Indemnified Party to represent the Indemnified Party within a reasonable time after notice of commencement of the action, (2) the Sponsor shall
have authorized the employment of counsel for the Indemnified Party at the expense of the Sponsor or (3) in the event any such claim involves a possible imposition of criminal liability or penalty or a material civil penalty on such Indemnified
Party, a conflict of interest between such Indemnified Party and the Sponsor or another indemnitee or the granting of material injunctive relief against such Indemnified Party, and such Indemnified Party informs the Sponsor that such Indemnified
Party desires to be represented by separate counsel, in which case, the reasonable fees and expenses of such separate counsel shall be borne by the Sponsor. If the 

  

 34 

 
Sponsor assumes the defense of any such proceeding, the Sponsor shall be entitled to settle such proceeding without any liability being assessed against any
Indemnified Party or, if such settlement provides for release of any such Indemnified Party without any liability being assessed against any Indemnified Party in connection with all matters relating to the proceeding which have been asserted against
such Indemnified Party in such proceeding by the other parties to such settlement, without the prior written consent of such Indemnified Party, but otherwise only with the prior written consent of such Indemnified Party. 
  
 Section 9.03. Payments to the Owner Trustee. Any amounts paid to the
Owner Trustee pursuant to this Article IX shall be deemed not to be a part of the Owner Trust Estate immediately after such payment. 
  
 ARTICLE X 
  
 TERMINATION OF TRUST AGREEMENT 
  
 Section 10.01. Termination of Trust Agreement. (a) This Agreement (other than Article IX) shall terminate and the Trust shall dissolve and be of no further force or effect on the earlier of: (i) the final
payment or other liquidation of the Mortgage Loans and the disposition of all REO Properties and the remittance of all funds due hereunder with respect to such Mortgage Loans and REP Properties after the satisfaction and discharge of the Indenture
pursuant to Section 4.01 of the Indenture; and (ii) the expiration of 21 years from the death of the last survivor of descendants of Joseph P. Kennedy (the late ambassador of the United States to the Court of St. James). The bankruptcy, liquidation,
dissolution, death or incapacity of the any Certificateholder or the Sponsor shall not (x) operate to terminate this Agreement or the Trust, nor (y) entitle Certificateholders’ or the Sponsor’s legal representatives or heirs to claim an
accounting or to take any action or proceeding in any court for a partition or winding up of all or any part of the Trust or Owner Trust Estate nor (z) otherwise affect the rights, obligations and liabilities of the parties hereto. 
  
 (b) Except as provided in Section 10.01(a) above, none of the Sponsor, the
Master Servicer, the Backup Servicer, the Note Insurer nor the Certificateholders shall be entitled to revoke or terminate the Trust. 
  
 (c) Notice of any termination of the Trust, specifying the Payment Date upon which the Certificateholders shall surrender their Certificates to the
Indenture Trustee for payment of the final distributions and cancellation, shall be given by the Owner Trustee to the Certificateholders, the Note Insurer, the Rating Agencies and the Indenture Trustee mailed within five (5) Business Days of receipt
by the Owner Trustee from the Master Servicer of notice of such termination, which notice given by the Owner Trustee shall state (i) the Payment Date upon or with respect to which final payment of the Certificates shall be made upon presentation and
surrender of the Certificates at the office of the Indenture Trustee therein designated, (ii) the amount of any such final payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only
upon presentation and surrender of the Certificates at the office of the Indenture Trustee therein specified. The Owner Trustee shall give such notice to the Certificate Registrar (if other than the Owner Trustee) and the Indenture Trustee at the
time such notice is given to Certificateholders. Upon presentation and surrender of Certificates, subject to Section 3808 of the Statutory Trust Statute, amounts distributable on such Payment Date pursuant to the terms of the Indenture. 

 

 35 

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

 
 Section 11.02. Resignation or Removal of Owner Trustee. The Owner
Trustee may at any time resign and be discharged from the trusts hereby created by giving written notice thereof to the Trust, the Sponsor, the Master Servicer, the Backup Servicer, the Indenture Trustee and the Note Insurer. Upon receiving such
notice of resignation, the Note Insurer may (and, if the Note Insurer fails to do so, the Sponsor shall promptly) appoint a successor Owner Trustee (acceptable to the Note Insurer) by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Owner Trustee and one copy to the successor Owner Trustee. If no successor Owner Trustee shall have been so appointed and have accepted appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Owner Trustee or the Note Insurer may petition any court of competent jurisdiction for the appointment of a successor Owner Trustee. 
  

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 If at any time the Owner Trustee shall cease to be eligible in accordance with the provisions of Section
11.01 and shall fail to resign after written request therefor by the Certificateholders or the Sponsor, or if at any time the Owner Trustee shall be legally unable to act, or shall be adjudged bankrupt or insolvent, or a receiver of the Owner
Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Owner Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, then the Note Insurer, or the
Certificateholders or the Sponsor with the written consent of the Note Insurer, may remove the Owner Trustee. If the Certificateholders or the Sponsor or the Note Insurer shall remove the Owner Trustee under the authority of the immediately
preceding sentence, the Note Insurer, or the Sponsor with the written consent of the Note Insurer, shall promptly appoint a successor Owner Trustee by written instrument in duplicate, one copy of which instrument shall be delivered to the outgoing
Owner Trustee so removed and one copy to the successor Owner Trustee and payment of all fees owed to the outgoing Owner Trustee. 
  
 Any resignation or removal of the Owner Trustee and appointment of a successor Owner Trustee pursuant to any of the provisions of this Section 11.02 shall
not become effective until acceptance of appointment by the successor Owner Trustee pursuant to Section 11.03, written approval by the Note Insurer and payment of all fees and expenses owed to the outgoing Owner Trustee. The Master Servicer shall
provide notice of such resignation or removal of the Owner Trustee to each of the Rating Agencies, the Indenture Trustee and the Note Insurer. 
  
 Section 11.03. Successor Owner Trustee. Any successor Owner Trustee appointed pursuant to Section 11.02 shall execute, acknowledge and deliver to
the Trust, the Sponsor, the Indenture Trustee, the Note Insurer and to its predecessor Owner Trustee an instrument accepting such appointment under this Agreement, and thereupon, subject to the payment of all fees and expenses owed to the outgoing
Owner Trustee, the resignation or removal of the predecessor Owner Trustee shall become effective and such successor Owner Trustee (if acceptable to the Note Insurer), without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties, and obligations of its predecessor under this Agreement, with like effect as if originally named as Owner Trustee. The predecessor Owner Trustee shall upon payment of its fees and expenses deliver to the successor Owner
Trustee all documents and statements and moneys held by it under this Agreement; and the Sponsor and the predecessor Owner Trustee shall execute and deliver such instruments and do such other things as may reasonably be required for fully and
certainly vesting and confirming in the successor Owner Trustee all such rights, powers, duties, and obligations. 
  
 No successor Owner Trustee shall accept appointment as provided in this Section unless at the time of such acceptance such successor Owner Trustee shall
be eligible pursuant to Section 11.01. 
  
 Upon acceptance of
appointment by a successor Owner Trustee pursuant to this Section 11.03, the Sponsor shall mail notice of the successor of such Owner Trustee to the Certificateholders, the Indenture Trustee, the Noteholders, the Note Insurer and the Rating
Agencies. If the Sponsor fails to mail such notice within ten (10) days after acceptance of appointment by the successor Owner Trustee, the successor Owner Trustee shall cause such notice to be mailed at the expense of the Sponsor. 
  

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 Any successor Owner Trustee appointed pursuant to this Section 11.03 shall file an amendment to the
Certificate of Trust with the Secretary of State identifying the name and principal place of business of such successor Owner Trustee in the State of Delaware. 
  

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

  

 38 

 
obligations (including the holding of title to the Trust or any portion thereof in any such jurisdiction) shall be exercised and performed singly by such
separate trustee or co-trustee, but solely at the direction of the Owner Trustee; 
  
 (ii) no trustee under this Agreement shall be personally liable by reason of any act or omission of any other trustee under this
Agreement; and 
  
 (iii) the Owner Trustee may at
any time accept the resignation of or remove any separate trustee or co-trustee. 
  
 (c) Any notice, request or other writing given to the Owner Trustee shall be deemed to have been given to the separate trustees and co-trustees, as if given to each of them. Every instrument appointing any separate
trustee or co-trustee, other than this Agreement, shall refer to this Agreement and to the conditions of this Article XI. Each separate trustee and co-trustee, upon its acceptance of appointment, shall be vested with the estates specified in its
instrument of appointment, either jointly with the Owner Trustee or separately, as may be provided therein, subject to all the provisions of this Agreement, specifically including every provision of this Agreement relating to the conduct of,
affecting the liability of, or affording protection to, the Owner Trustee. Each such instrument shall be filed with the Owner Trustee. 
  
 (d) Any separate trustee or co-trustee may at any time appoint the Owner Trustee as its agent or attorney-in-fact with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this Agreement on its behalf and in its name. If any separate trustee or co-trustee shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the Owner Trustee, to the extent permitted by law, without the appointment of a new or successor trustee. 
  
 ARTICLE XII 
  
 MISCELLANEOUS 
  
 Section 12.01. Supplements and Amendments. This Agreement may be amended by the Sponsor, the Seller and the Owner Trustee, with the prior written
consent of the Note Insurer, and with prior written notice to the Rating Agencies, but without the consent of any of the Noteholders, the Certificateholders or the Indenture Trustee, to cure any ambiguity, to correct or supplement any provisions in
this Agreement or for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions in this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided,
however, such action shall not adversely affect in any material respect the interests of any Noteholder or Certificateholder. An amendment described above shall be deemed not to adversely affect in any material respect the interests of any
Noteholder if the party requesting the amendment satisfies the Rating Agency Condition with respect to such amendment. 
  
 This Agreement may also be amended from time to time by the Sponsor, the Seller and the Owner Trustee, with the prior written consent of the Rating
Agencies and with the prior written consent of the Indenture Trustee, the Note Insurer, the Noteholders evidencing more than 50% of the Note Principal Balance of the Outstanding Notes of all of the Classes and 

  

 39 

 
the Certificateholders evidencing more than 50% of the Percentage Interests of the Trust, for the purpose of adding any provisions to or changing in any
manner or eliminating any of the provisions of this Agreement or of modifying in any manner the rights of the Noteholders or the Certificateholders; provided, however, no such amendment shall (a) increase or reduce in any manner the
amount of, or accelerate or delay the timing of, collections of payments on the Mortgage Loans or distributions that shall be required to be made for the benefit of the Noteholders, the Certificateholders or the Note Insurer, (b) reduce the
aforesaid percentage of the Outstanding Principal Balance of the Notes or the Percentage Interests required to consent to any such amendment, in either case of clause (a) or (b) without the consent of the holders of all the outstanding Notes, the
Note Insurer and the Certificateholders of all the outstanding Certificates. 
  
 Promptly after the execution of any such amendment or consent, the Sponsor shall furnish written notification of the substance of such amendment or consent to the Certificateholders, the Indenture Trustee, the Note
Insurer and each of the Rating Agencies. 
  
 It shall not be
necessary for the consent of the Certificateholders, the Noteholders or the Indenture Trustee pursuant to this Section to approve the particular form of any proposed amendment or consent, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents (and any other consents of Certificateholders provided for in this Agreement or in any other Basic Document) and of evidencing the authorization of the execution thereof by Certificateholders
shall be subject to such reasonable requirements as the Owner Trustee may prescribe. 
  
 Promptly after the execution of any amendment to the Certificate of Trust, the Owner Trustee shall cause the filing of such amendment with the Secretary of State. 
  
 Prior to the execution of any amendment to this Agreement or the Certificate
of Trust, the Owner Trustee shall be entitled to receive and rely upon an Opinion of Counsel stating that the execution of such amendment is authorized or permitted by this Agreement and that all conditions precedent have been met. The Owner Trustee
may, but shall not be obligated to, enter into any such amendment which affects the Owner Trustee’s own rights, duties or immunities under this Agreement or otherwise. 
  
 Section 12.02. No Legal Title to Owner Trust Estate in Certificateholders. The Certificateholders shall not have
legal title to any part of the Owner Trust Estate. The Certificateholders shall be entitled to receive distributions with respect to their undivided beneficial ownership interest therein only in accordance with Articles VI and X. No transfer, by
operation of law or otherwise, of any right, title, or interest of the Certificateholders to and in their ownership interest in the Owner Trust Estate shall operate to terminate this Agreement or the trusts hereunder or entitle any transferee to an
accounting or to the transfer to it of legal title to any part of the Owner Trust Estate. 
  
 Section 12.03. Limitations on Rights of Others. The provisions of this Agreement are solely for the benefit of the Owner Trustee, the Sponsor, the Seller, the Certificateholders, the Note Insurer and, to the
extent expressly provided herein, the Indenture Trustee and the Noteholders, and nothing in this Agreement, whether express or implied, shall be construed to give to any other Person any legal or equitable right, remedy or claim in the Owner Trust
Estate or under or in respect of this Agreement or any covenants, conditions or provisions contained herein. 
  

 40 

 Section 12.04. Notices. (a) Unless otherwise expressly specified or permitted by the terms hereof,
all communications provided for or permitted hereunder shall be in writing and shall be deemed to have been given if (1) personally delivered, (2) upon receipt by the intended recipient or three Business Days after mailing if mailed by certified
mail, postage prepaid (except that notice to the Owner Trustee shall be deemed given only upon actual receipt by the Owner Trustee), (3) sent by express courier delivery service and received by the intended recipient or (4) except with respect to
notices sent to the Owner Trustee, transmitted by telex or facsimile transmission (or any other type of electronic transmission agreed upon by the parties and confirmed by a writing delivered by any of the means described in (1), (2) or (3), at the
following addresses: (i) if to the Owner Trustee, at its Corporate Trust Office; (ii) if to the Sponsor, Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: General Counsel, telecopy: (858) 676-2170; and
(iii) if to the Note Insurer, Ambac Assurance Corporation, One State Street Plaza, New York, New York, 10004, Attention: Accredited Mortgage Loan Trust 2003-3, telecopy: (858) 676-2170; or, as to each such party, at such other address as shall be
designated by such party in a written notice to each other party. 
  
 (b) Any notice required or permitted to be given to a Certificateholder shall be given by first-class mail, postage prepaid, at the address of such Certificateholder as shown in the Certificate Register. Any notice so mailed within the time
prescribed in this Agreement shall be conclusively presumed to have been duly given, whether or not the Certificateholder receives such notice. 
  
 Section 12.05. Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable
such provision in any other jurisdiction. 
  
 Section 12.06.
Separate Counterparts. This Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered shall be an original, but all such counterparts shall together constitute but one and the same
instrument. 
  
 Section 12.07. Successors and Assigns. All
covenants and agreements contained herein shall be binding upon, and inure to the benefit of, the Sponsor, the Note Insurer, the Owner Trustee and its successors and each Certificateholder and its successors and permitted assigns, all as herein
provided. Any request, notice, direction, consent, waiver or other instrument or action by a Certificateholder shall bind the successors and assigns of such Certificateholder. 
  
 Section 12.08. No Petition. The Owner Trustee, by entering into this Agreement, each Certificateholder, by accepting
a Certificate, and the Indenture Trustee and each Noteholder by accepting the benefits of this Agreement, hereby covenant and agree that they will not at any time institute against the 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 law in connection with any obligations relating to the Certificates,
the Notes, this Agreement or any of the other Basic Documents. 
  

 41 

 This Section 12.08 will survive for one year and one day following the termination of this Agreement.

  
 Section 12.09. No Recourse. Each Certificateholder by
accepting a Certificate acknowledges that such Certificateholder’s Certificate represents a beneficial interest in the Trust only and does not represent an interest in or an obligation of the Master Servicer, the Backup Servicer, the Sponsor,
the Owner Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated in this Agreement, the Certificates or the other Basic Documents. 
  
 Section 12.10. Headings. The headings of the various Articles and
Sections herein are for convenience of reference only and shall not define or limit any of the terms or provisions hereof. 
  
 Section 12.11. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 Section 12.12. Grant of Certificateholder Rights to Note Insurer. (a) In consideration for the issuance of the Certificates and for the guarantee
of the Notes by the Note Insurer pursuant to the Note Insurance Policy, the Certificateholders hereby grant to the Note Insurer the right to act as the holder of 100% of the outstanding Certificates for the purpose of exercising the rights hereunder
of the Certificateholders under this Agreement without the consent of the Certificateholders, including the voting rights of such Certificateholders hereunder, but excluding those rights requiring the consent of all such Certificateholders, and any
rights of such Certificateholders to distributions under the Indenture and the other Basic Documents; provided, that the preceding grant of rights to the Note Insurer by the Certificateholders shall be subject to Section 12.14. 
  
 (b) [Reserved]. 
  
 (c) The duties and responsibilities of the Owner Trustee shall be limited to those expressly provided for in this Agreement.
The parties hereto agree that except for purposes of the foregoing sentence, the Owner Trustee shall have no management responsibilities or owe any fiduciary duties to the Note Insurer (or the Noteholders in the event they succeed to the Note
Insurer’s rights). 
  
 (d) Whenever in connection with its
performance under this Agreement the Owner Trustee receives inconsistent notices or advice from the Note Insurer and the Certificateholders, the Owner Trustee shall, in the absence of a Note Insurer Default, take the action required by the notices
or advice received from the Note Insurer. 
  

 42 

 Section 12.13. Third-Party Beneficiaries. The Indenture Trustee and the Note Insurer are intended
third-party beneficiaries of this Agreement, and this Agreement shall be binding upon and inure to the benefit of the Indenture Trustee and the Note Insurer; provided, that, notwithstanding the foregoing, for so long as a Note Insurer Default
is continuing with respect to its obligations under the Note Insurance Policy, the Certificateholders shall succeed to the Note Insurer’s rights hereunder. Without limiting the generality of the foregoing, all covenants and agreements in this
Agreement that expressly confer rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such covenants to the same extent as if it were a party to
this Agreement. 
  
 Section 12.14. Suspension and Termination
of Note Insurer’s Rights. During the continuation of a Note Insurer Default, rights granted or reserved to the Note Insurer hereunder shall vest instead in the Certificateholders; provided, that the Note Insurer shall be entitled to
any distributions of reimbursements to the Note insurer as set forth in the Indenture and the Insurance Agreement and the Note Insurer shall retain those rights under Section 12.01 to consent to any amendment of this Agreement. 
  
 At such time as either (i) the outstanding Note Principal Balance of the
Notes has been reduced to zero or (ii) the Note Insurance Policy has been terminated and in either case of (i) or (ii) the Note Insurer has been reimbursed for all amounts owed under the Note Insurance Policy and the Insurance Agreement (and the
Note Insurer no longer has any obligation under the Note Insurance Policy), then the rights and benefits granted or reserved to the Note Insurer hereunder (including the rights to direct certain actions and receive certain notices) shall terminate
and the Certificateholders shall be entitled to the exercise of such rights and to receive such benefits of the Note Insurer following such termination to the extent that such rights and benefits are applicable to the Certificateholders. 

 
 Section 12.15. Master Servicer. The Master Servicer is authorized
to prepare, or cause to be prepared, execute and deliver on behalf of the Trust all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Trust, the Sponsor or Owner Trustee to prepare, file or
deliver pursuant to the Basic Documents. Upon written request, the Owner Trustee shall execute and deliver to the Master Servicer a limited power of attorney appointing the Master Servicer the Trust’s agent and attorney-in-fact to prepare, or
cause to be prepared, execute and deliver all such documents, reports, filings, instruments, certificates and opinions. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 43 

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

	 ACCREDITED HOME LENDERS, INC., as Sponsor

		
	 By:
	 	 /s/ RAY W. MCKEWON

	 	 	 Name: Ray W. McKewon

	 	 	 Title: Executive Vice President

	
	 ACCREDITED HOME CAPITAL, INC., as Seller

		
	 By:
	 	 /s/ DAVID E. HERTZEL

	 	 	 Name: David E. Hertzel

	 	 	 Title: GC, AVP & Ass’t Sec’y

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

	 	 	 Name: Nancie J. Arvin

	 	 	 Title: Vice President

  

 44 

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

 A-1 

	 Certificate No. 1
	 	Percentage Interest: 100%

  
 THIS CERTIFIES THAT
Accredited Home Capital, Inc. (the “Certificateholder”) is the registered owner of a 100% Percentage Interest in Accredited Mortgage Loan Trust 2003-3 (the “Trust”) existing under the laws of the State of Delaware
and created pursuant to that certain Trust Agreement, dated as of November 20, 2003, as amended and restated on November 25, 2003 (as amended and restated, the “Trust Agreement”), by and among Accredited Home Lenders, Inc., as
sponsor, Accredited Home Capital, Inc., as seller, and U.S. Bank Trust National Association, not its individual capacity but solely as owner trustee under the Trust Agreement (the “Owner Trustee”). Capitalized terms used but not
otherwise defined herein have the meanings assigned to such terms in the Trust Agreement. The Owner Trustee, on behalf of the Trust and not in its individual capacity, has executed this Certificate by one of its duly authorized signatories as set
forth below. This Certificate is one of the Certificates referred to in the Trust Agreement and is issued under and is subject to the terms, provisions and conditions of the Trust Agreement to which the Certificateholder by virtue of the acceptance
hereof agrees and by which the Certificateholder hereof is bound. Reference is hereby made to the Trust Agreement for the rights of the Certificateholder, as well as for the terms and conditions of the Trust created by the Trust Agreement.

  
 The recitals contained herein (other than the signature and
countersignature of the Owner Trustee) shall be taken as the statements of the Sponsor, and the Owner Trustee assumes no responsibility for the correctness thereof. 
  
 The Certificateholder, by its acceptance hereof, agrees not to transfer this Certificate except in accordance with terms and
provisions of the Trust Agreement. 
  
 The Certificateholder, by
its acceptance hereof, acknowledges that such Certificateholder’s Certificate represents a beneficial interest in the Trust only and does not represent an interest in or an obligation of the Master Servicer, the Backup Servicer, the Seller, the
Sponsor, the Owner Trustee or any Affiliate thereof and no recourse may be had against such parties or their assets, except as may be expressly set forth or contemplated herein, in the Trust Agreement or the other Basic Documents. 
  
 THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF DELAWARE, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  

 A-2 

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

	 ACCREDITED MORTGAGE LOAN TRUST
 2003-3

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

	 	 	Authorized Signatory

  
 Dated: November 25, 2003

  
 CERTIFICATE OF AUTHENTICATION 
  
 This is one of the Certificates referred to in the within-mentioned Trust
Agreement. 
  

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

	 	 	Authorized Signatory

  
 Dated: November 25, 2003

  

 A-3 

 ASSIGNMENT 
  

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfer unto 
  
 PLEASE INSERT SOCIAL SECURITY 
 OR OTHER
IDENTIFYING NUMBER 
 OF ASSIGNEE 
  

 (Please print or type name and address, including postal zip code, of assignee) 
  

 the within instrument, and all rights thereunder, hereby irrevocably constituting
and appointing                     , Attorney, to transfer said Instrument on the books of the Certificate Registrar, with full power of
substitution in the premises. 
  
 Dated: 
  

	 By:
	 	 */

	 	 	Signature Guaranteed:
		
	 By:
	 	 */

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

 A-4 

 EXHIBIT B 
  
 FORM OF CERTIFICATE OF TRUST 
  
 CERTIFICATE OF TRUST OF 
 ACCREDITED MORTGAGE
LOAN TRUST 2003-3 
  
 THIS CERTIFICATE OF TRUST OF ACCREDITED
MORTGAGE LOAN TRUST 2003-3 (the “Trust”), dated as of November 20, 2003, as amended and restated on November 25, 2003 (as amended and restated, the “Trust Agreement”), is being duly executed and filed by U.S. Bank Trust
National Association, a national banking association, as owner trustee (the “Owner Trustee”), to form a statutory trust under the Delaware Statutory Trust Act (12 Del. Code, § 3801 et seq.). 
  
 1. Name. The name of the business trust formed hereby
is Accredited Mortgage Loan Trust 2003-3. 
  
 2.
Delaware Trustee. The name and business address of the Owner Trustee of the Trust in the State of Delaware are U.S. Bank Trust National Association, 300 Delaware Avenue, Eighth Floor, Wilmington, Delaware 19801, Attention: Corporate Trust
Administration. 
  
 3. Series. Pursuant to
Section 3806(b)(2) of the Act, the Trust shall issue one or more series of beneficial interests having the rights and preferences set forth in the Governing instrument of the Trust, as the same may be amended from time to time (each, a
“Series” or “Sub-Trust”). 
  
 4. Notice of Limitation of Liabilities of each Series. Pursuant to Section 3804(a) of the Act, there shall be a limitation on liabilities of each Series such that (a) the debts, liabilities, obligations and expenses incurred,
contracted for or otherwise existing with respect to a particular Series shall be enforceable against the assets of such Series only, and not against the assets of the Trust generally or the assets of any other Series thereof and (b) none of the
debts, liabilities, obligations and expenses incurred, contracted for or otherwise existing with respect to the Trust generally or any other Series thereof shall be enforceable against the assets of such Series. 
  
 5. Effective Date. This Certificate of Trust shall be
effective at 12:01 a.m. on November 20, 2003. 
  

 B-1 

 IN WITNESS WHEREOF, the undersigned, being the sole trustee of the Trust, has executed
this Certificate of Trust as of the date first above written. 
  

	 U.S. BANK TRUST NATIONAL ASSOCIATION, not in its individual capacity but solely as Owner Trustee under the Trust
Agreement, dated as of November 20, 2003.

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  

 B-2 

 EXHIBIT C 
  
 FORM OF INVESTMENT LETTER 
  
                     ,
     
  
 Accredited
Home Lenders, Inc. 
 15030 Avenue of Science 
 San Diego, California 92128 
  
 U.S. Bank Trust National Association 
 300 Delaware Avenue, Eighth Floor, 
 Wilmington, Delaware 19809 
 Attention: Corporate Trust Administration 
  
 Re: Accredited Mortgage Loan Trust 2003-3 (the “Trust”)  
 Asset-Backed Notes, Series 2003-3  
  
 Ladies and Gentlemen: 
  
                                       
   (the “Certificateholder”) has purchased or acquired, or intends to purchase or acquire from             , the current Certificateholder (the “Current
Certificateholder”), a Trust Certificate representing a 100% Percentage Interest (the “Certificate”) in the Trust, which represents an interest in the Trust created pursuant to that certain Trust Agreement, dated as of November
    , 2003, as amended and restated on November 25, 2003 (as amended and restated, the “Trust Agreement”), by and among Accredited Home Lenders, Inc., as Sponsor, Accredited Home Capital, Inc., as Seller
and U.S. Bank Trust National Association, as Owner Trustee. Capitalized terms used and not otherwise defined herein have the meanings assigned to such terms in the Trust Agreement. 
  
 CERTIFICATION 
  
 The undersigned, as an authorized officer or agent of the Certificateholder, hereby certifies, represents, warrants and agrees on behalf of the
Certificateholder as follows: 
  
 1. The Certificateholder is
duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed and is authorized to invest in the Certificate. The person executing this letter on behalf of the Certificateholder is duly authorized to
do so on behalf of the Certificateholder. 
  
 2. The
Certificateholder hereby acknowledges that no transfer of the Certificate may be made unless such transfer is exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”); and applicable state
securities laws, or is made in accordance with the Securities Act and such laws. 
  
 3. The Certificateholder understands that the Certificate has not been and will not be registered under the Securities Act and may be offered, sold, pledged or otherwise transferred to a person whom the transferor
reasonably believes is (A) a qualified institutional 

  

 C-1 

 
buyer (as defined in Rule 144A under the Securities Act) or (B) a Person involved in the organization or operation of the Trust or an affiliate of such
Person, in a transaction pursuant to an effective registration statement under the Securities Act and any applicable state securities laws or exempt from the registration requirements of the Securities Act and any such state securities laws. The
Certifcateholder understands that the Certificate bears a legend to the foregoing effect. 
  
 4. The Certificateholder is acquiring the Certificate for its own account or for accounts for which it exercises sole investment discretion, and not with a view to or for sale or other transfer in connection with any
distribution of the Certificate in any manner that would violate Section 5 of the Securities Act or any applicable state securities laws, subject nevertheless to any requirement of law that the disposition of the Certificateholder’s property
shall at all times be and remain within its control. 
  
 5. The
Certificateholder is (A) a “qualified institutional buyer” (a “QIB”) as defined in Rule 144A under the Securities Act, and is aware that the transferor of the Certificate may be relying on an exemption from the registration
requirements of the Securities Act and is acquiring such Certificate for its own account or for the account of one or more qualified institutional buyers for whom it is authorized to act, or (B) a Person involved in the organization or operation of
the Trust or an affiliate of such Person within the meaning of Rule 3a-7 of the Investment Company Act of 1940, as amended (including, but not limited to, the Sponsor). The Certificateholder is able to bear the economic risks of such an investment.
The Certificateholder is a QIB because [STATE FACTUAL BASIS FOR QIB STATUS]. 
  
 6. If the Certificateholder sells or otherwise transfers the registered ownership of such Certificate, the Certificateholder will comply with the restrictions and requirements with respect to the transfer of the
ownership of the Certificate under the Trust Agreement, and the Certificateholder will obtain from any subsequent purchaser or transferee substantially the same certifications, representations, warranties and covenants as required under the Trust
Agreement in connection with such subsequent sale or transfer thereof. 
  
 7. The Certificateholder is not an entity that will hold a Certificate as nominee (a “Book Entry Nominee”) to facilitate the clearance and settlement of such security through electronic book-entry changes in Accounts or
participating organizations. 
  
 8. The Certificateholder (i) is
not a person which is an employee benefit plan, trust or account subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), or Section 4975 of the Code or a governmental plan, as defined in Section
3(32) of ERISA, subject to any federal, state or local law which is, to a material extent, similar to the foregoing provisions of ERISA or the Code (any such person being a “Plan”), (ii) is not an entity, including an insurance company
separate account or general account, whose underlying assets include “plan assets” by reason of a Plan’s investment in the entity and (iii) is not directly or indirectly purchasing such Certificate on behalf of, as investment manager
of, as named fiduciary of, as trustee of, or with assets of a Plan. 
  
 9. The Certificateholder hereby agrees to indemnify each of the Trust, the Indenture Trustee, the Note Insurer, and the Owner Trustee against any liability that may result if the Certificateholder’s transfer of a Certificate (or any
portion thereof) is not exempt from the 

  

 C-2 

 
registration requirements of the Securities Act and any applicable state securities laws or is not made in accordance with such federal and state laws. Such
indemnification of the Trust, the Indenture Trustee, and the Owner Trustee shall survive the termination of the related Trust Agreement. 
  
 IN WITNESS WHEREOF, the Certificateholder has caused this instrument to be executed on its behalf pursuant to the authority of its Board of Directors, by
its duly authorized signatory              this day of     , 2003. 
  

	 [NAME OF CERTIFICATEHOLDER]

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  

 C-3 

 EXHIBIT D 
  
 FORM OF TRANSFEROR CERTIFICATE 
  
                     ,
     
  
 Accredited
Home Lenders, Inc. 
 15030 Avenue of ScienceSan 
 Diego, California 92128 
  
 U.S. Bank Trust National Association 
 300 Delaware Avenue, Eighth Floor, 
 Wilmington, Delaware 19809 
 Attention: Corporate Trust Administration 
  
 Re: Accredited Mortgage Loan Trust 2003-3 (the “Trust”)  
 Asset-Backed Notes, Series 2003-3  
  
 Ladies and Gentlemen: 
  
 In connection with our
disposition of the above-referenced Asset-Backed Certificates (the “Certificates”) we certify that (i) we understand that the Certificates have not been registered under the Securities Act of 1933, as amended (the “Act”), and are
being transferred by us in a transaction that is exempt from the registration requirements of the Act and (ii) we have not offered or sold any Certificates to, or solicited offers to buy any Certificates from, any person, or otherwise approached or
negotiated with any person with respect thereto, in a manner that would be deemed, or taken any other action which would result in, a violation of Section 5 of the Act. 
  
 Dated: 
  

	 [NAME OF TRANSFEROR]

		
	 By:
	 	  

	 	 	Authorized Officer

  

 D-1Sales and Servicing Agreement

 EXHIBIT 10.1 
  
 EXECUTION COPY 
  
 SALE AND SERVICING AGREEMENT 
  
 dated as of November 1, 2003 
  
 by
and among 
  
 ACCREDITED HOME CAPITAL, INC., 
 as Seller, 
  
 ACCREDITED HOME LENDERS, INC., 
 as Sponsor and Master Servicer, 
  
 ACCREDITED MORTGAGE LOAN TRUST 2003-3, 
 as Issuer, 
  
 COUNTRYWIDE HOME LOANS SERVICING LP, 
 as Backup Servicer, 
  
 and 
  
 DEUTSCHE BANK NATIONAL TRUST COMPANY, 
 as Indenture Trustee 

 TABLE OF CONTENTS 
  

	 	  	 	  	Page

	 ARTICLE I
 DEFINITIONS

			
	 Section 1.01
	  	 Certain Defined Terms
	  	1
	 Section 1.02
	  	 Provisions of General Application
	  	2
	
	 ARTICLE II
 SALE AND CONVEYANCE OF THE MORTGAGE LOANS

			
	 Section 2.01.
	  	 Purchase and Sale of Mortgage Loans; Deposit of Derivatives
	  	2
	 Section 2.02.
	  	 Reserved
	  	3
	 Section 2.03.
	  	 Purchase Price
	  	3
	 Section 2.04.
	  	 Possession of Mortgage Files; Access to Mortgage Files
	  	3
	 Section 2.05.
	  	 Delivery of Mortgage Loan Documents
	  	3
	 Section 2.06.
	  	 Acceptance of the Trust Estate; Certain Substitutions; Certification by the Indenture Trustee
	  	6
	 Section 2.07.
	  	 Grant of Security Interest
	  	8
	 Section 2.08.
	  	 Further Action Evidencing Assignments
	  	9
	 Section 2.09.
	  	 Assignment of Agreement
	  	9
	
	 ARTICLE III
 REPRESENTATIONS, WARRANTIES AND COVENANTS

			
	 Section 3.01.
	  	 Representations, Warranties and Covenants of the Master Servicer
	  	10
	 Section 3.02.
	  	 Representations, Warranties and Covenants of the Sponsor
	  	11
	 Section 3.03.
	  	 Representations, Warranties and Covenants of the Backup Servicer
	  	12
	 Section 3.04.
	  	 Representations, Warranties and Covenants of the Indenture Trustee
	  	14
	 Section 3.05.
	  	 Covenants and Representations of the Sponsor and Master Servicer Regarding Prepayment Charges
	  	15
	 Section 3.06.
	  	 Representations, Warranties and Covenants of the Seller
	  	15
	
	 ARTICLE IV
 THE MORTGAGE LOANS

			
	 Section 4.01.
	  	 Representations and Warranties Concerning the Mortgage Loans
	  	16
	 Section 4.02.
	  	 Purchase and Substitution
	  	24
	
	 ARTICLE V
 ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

			
	 Section 5.01.
	  	 The Master Servicer
	  	26
	 Section 5.02.
	  	 Collection of Certain Mortgage Loan Payments; Collection Account
	  	28
	 Section 5.03.
	  	 Permitted Withdrawals from the Collection Account
	  	29
	 Section 5.04.
	  	 Hazard Insurance Policies; Property Protection Expenses
	  	30

  

 i 

	 Section 5.05.
	  	 Assumption and Modification Agreements
	  	32
	 Section 5.06.
	  	 Realization Upon Defaulted Mortgage Loans
	  	33
	 Section 5.07.
	  	 Indenture Trustee to Cooperate
	  	34
	 Section 5.08.
	  	 Servicing Compensation; Payment of Certain Expenses by Master Servicer
	  	35
	 Section 5.09.
	  	 Annual Statement as to Compliance
	  	35
	 Section 5.10.
	  	 Annual Independent Public Accountants’ Servicing Report
	  	36
	 Section 5.11.
	  	 Access to Certain Documentation
	  	36
	 Section 5.12.
	  	 Maintenance of Fidelity Bond
	  	36
	 Section 5.13.
	  	 Subservicing Agreements Between the Master Servicer and Subservicer and Subservicers
	  	36
	 Section 5.14.
	  	 Reports to the Indenture Trustee; Collection Account Statements
	  	37
	 Section 5.15.
	  	 Optional Purchase of Defaulted Mortgage Loans
	  	38
	 Section 5.16.
	  	 Reports to be Provided by the Master Servicer and the Backup Servicer
	  	39
	 Section 5.17.
	  	 [Reserved]
	  	40
	 Section 5.18.
	  	 Periodic Advances
	  	40
	 Section 5.19.
	  	 Indemnification; Third Party Claims
	  	41
	 Section 5.20.
	  	 Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Master Servicer and Backup
Servicer
	  	41
	 Section 5.21.
	  	 Assignment of Agreement by Master Servicer and Backup Servicer; Master Servicer and Backup Servicer Not to
Resign
	  	42
	 Section 5.22.
	  	 Periodic Filings with the Securities and Exchange Commission Additional Information
	  	42
	 Section 5.23.
	  	 Administrative Duties
	  	43
	
	 ARTICLE VI
 APPLICATION OF FUNDS

			
	 Section 6.01.
	  	 Deposits to the Payment Account
	  	44
	 Section 6.02.
	  	 Collection of Money
	  	44
	 Section 6.03.
	  	 Application of Principal and Interest
	  	44
	 Section 6.04.
	  	 [Reserved]
	  	44
	 Section 6.05.
	  	 Compensating Interest
	  	44
	 Section 6.06.
	  	 Effect of Payments by the Note Insurer; Subrogation
	  	45
	
	 ARTICLE VII
 SERVICER DEFAULT

			
	 Section 7.01.
	  	 Servicer Events of Default
	  	45
	 Section 7.02.
	  	 Backup Servicer to Act: Appointment of Successor
	  	48
	 Section 7.03.
	  	 Waiver of Defaults
	  	52
	 Section 7.04.
	  	 Rights of the Note Insurer to Exercise Rights of the Noteholders
	  	52
	 Section 7.05.
	  	 Indenture Trustee To Act Solely with Consent of the Note Insurer
	  	53
	 Section 7.06.
	  	 Mortgage Loans, Trust Estate and Accounts Held for Benefit of the Note Insurer
	  	53
	 Section 7.07.
	  	 Note Insurer Default
	  	53

  

 ii 

	 ARTICLE VIII
 TERMINATION

			
	 Section 8.01.
	  	 Termination
	  	54
	 Section 8.02.
	  	 Additional Termination Requirements
	  	55
	 Section 8.03.
	  	 Accounting Upon Termination of Master Servicer
	  	55
	 Section 8.04.
	  	 Termination of Backup Servicer as Successor Master Servicer
	  	55
	
	 ARTICLE IX
 [RESERVED]

	
	 ARTICLE X
 MISCELLANEOUS PROVISIONS

			
	 Section 10.01.
	  	 Limitation on Liability
	  	55
	 Section 10.02.
	  	 Acts of Noteholders
	  	56
	 Section 10.03.
	  	 Amendment
	  	57
	 Section 10.04.
	  	 Recordation of Agreement
	  	57
	 Section 10.05.
	  	 Duration of Agreement
	  	58
	 Section 10.06.
	  	 Notices
	  	58
	 Section 10.07.
	  	 Severability of Provisions
	  	58
	 Section 10.08.
	  	 No Partnership
	  	58
	 Section 10.09.
	  	 Counterparts
	  	59
	 Section 10.10.
	  	 Successors and Assigns
	  	59
	 Section 10.11.
	  	 Headings
	  	59
	 Section 10.12.
	  	 No Petition
	  	59
	 Section 10.13.
	  	 Third Party Beneficiary
	  	59
	 Section 10.14.
	  	 Intent of the Parties
	  	59
	 Section 10.15.
	  	 GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL
	  	59
			
	 Schedule I
	  	 Mortgage Loan Schedule
	  	 
	 Appendix I
	  	 Defined Terms
	  	 

  
 EXHIBITS 
  

	 Exhibit A
	  	 Contents of the Mortgage File

	 Exhibit B
	  	 Indenture Trustee’s Acknowledgement of Receipt

	 Exhibit C
	  	 Indenture Trustee’s Acknowledgement of Receipt

	 Exhibit D
	  	 Initial Certification of Indenture Trustee

	 Exhibit E
	  	 Final Certification of Indenture Trustee

	 Exhibit F
	  	 Request for Release of Documents

	 Exhibit N
	  	 AHL Officer’s Certificate

  

 iii 

 SALE AND SERVICING AGREEMENT, dated as of November 1, 2003 (this “Agreement”), by and
among ACCREDITED HOME CAPITAL, INC., a Delaware corporation, as seller (the “Seller”), ACCREDITED HOME LENDERS, INC., a California corporation, as sponsor (the “Sponsor”), ACCREDITED MORTGAGE LOAN TRUST 2003-3, a
Delaware statutory trust, as issuer (the “Trust”), ACCREDITED HOME LENDERS, INC., a California corporation, as master servicer (the “Master Servicer”), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited
partnership, as backup servicer (the “Backup Servicer”), and DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association, as indenture trustee (the “Indenture Trustee”). 
  
 W I T N E S S E T H 
  
 WHEREAS, the Sponsor has sold the mortgage loans (the “Mortgage
Loans”) listed on Schedule I to this Agreement and together with the Mortgage Loans, the “Mortgage Loans”) to the Seller, pursuant to the Master Sale and Purchase Agreement, dated as of December 29, 2001, between the
Sponsor and the Seller; 
  
 WHEREAS, the Seller desires to sell to
the Trust, and the Trust desires to purchase from the Seller, the Mortgage Loans; 
  
 WHEREAS, immediately after such purchase, the Trust will pledge such Mortgage Loans to the Indenture Trustee pursuant to the terms of an Indenture, dated as of November 1, 2003 (the “Indenture”),
between the Trust and the Indenture Trustee, and issue the Accredited Mortgage Loan Trust 2003-3, Asset-Backed Notes (the “Notes”); 
  
 WHEREAS, the Master Servicer has agreed to service the Mortgage Loans, which constitute the principal assets of the Trust; 
  
 WHEREAS, the Backup Servicer has agreed to act as backup servicer of the
Mortgage Loans, which constitute the principal assets of the Trust; 
  
 WHEREAS, the Indenture Trustee will hold the Mortgage Loans and certain other assets pledged to the Indenture Trustee pursuant to the Indenture; and 
  
 NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Seller, the Sponsor, the Trust, the Master Servicer, the
Backup Servicer and the Indenture Trustee hereby agree as follows: 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.01. Certain Defined Terms. Capitalized terms used herein but
not defined herein shall have the meanings ascribed to such terms in Appendix I attached hereto. 
  

 1 

 Section 1.02. Provisions of General Application. 
  
 (a) The terms defined herein and in Appendix I to the Indenture include the
plural as well as the singular. 
  
 (b) The words
“herein,” “hereof” and “hereunder” and other words of similar import refer to this Agreement as a whole. Unless otherwise noted, all references to Articles and Sections shall be deemed to refer to Articles and Sections
of this Agreement. 
  
 (c) Any reference to statutes are to be
construed as including all statutory provisions consolidating, amending or replacing the statute to which reference is made and all regulations promulgated pursuant to such statutes. 
  
 (d) All calculations of interest with respect to the Class A-1 Notes provided for herein shall be made on the basis of a
360-day year consisting of twelve 30-day months. All calculations of interest with respect to the Class A-2 Notes and Class A-3 Notes provided for herein shall be on the basis of a 360-day year and the actual number of days elapsed in the related
Accrual Period. All calculations of interest with respect to any Mortgage Loan provided for herein shall be made in accordance with the terms of the related Mortgage Note and Mortgage or, if such documents do not specify the basis upon which
interest accrues thereon, on the basis of a 360 day year consisting of twelve 30-day months, to the extent permitted by applicable law. 
  
 (e) Any Mortgage Loan payment is deemed to be received on the date such payment is actually received by the Master Servicer; provided,
however, that, for purposes of calculating payments on the Notes, prepayments with respect to any Mortgage Loan are deemed to be received on the date they are applied in accordance with Accepted Servicing Practices consistent with the terms
of the related Mortgage Note and Mortgage to reduce the outstanding Principal Balance of such Mortgage Loan on which interest accrues. 
  
 ARTICLE II 
  
 SALE AND CONVEYANCE OF THE MORTGAGE LOANS 
  
 Section 2.01. Purchase and Sale of Mortgage Loans; Deposit of Derivatives. (a) The Sponsor hereby directs the Seller to sell, transfer, assign, set
over and convey, and the Seller does hereby sell, transfer, assign, set over and convey to the Trust, to be included as part of Sub-Trust 1, Sub-Trust 2 or Sub-Trust 3, as specified in the Mortgage Loan Schedule, in each case without recourse, but
subject to the terms and provisions of this Agreement, all of the right, title and interest of the Seller in and to the Mortgage Loans, including the Cut-Off Date Principal Balance of, and interest due on, such Mortgage Loans listed on Schedule I
attached hereto, and all other assets included or to be included in the Trust Estate. In addition, on or prior to the Closing Date, the Sponsor shall cause the Note Insurer to deliver the Note Insurance Policy. 
  
 (a) The Seller may cause the deposit of derivatives at any time into the
Accredited Mortgage Loan Trust 2003-3 and any such deposited derivatives shall become part of the Trust Estate. 
  

 2 

 Section 2.02. Reserved. 
  
 Section 2.03. Purchase Price. On the Closing Date, as full consideration for the Seller’s sale of the Mortgage
Loans to the Trust, the Underwriter, on behalf of the Trust, will deliver to, or at the direction of, the Seller an amount in cash equal to $513,745,114, plus (B) accrued interest on the Original Note Principal Balance of the Class A-1 Notes at the
rate of 4.46% per annum from (and including) November 1, 2003 to (but not including) the Closing Date. Additionally, the Seller will receive the Certificates issued by the Trust pursuant to the Trust Agreement. 
  
 Section 2.04. Possession of Mortgage Files; Access to Mortgage Files.

  
 (a) Upon the receipt by the Seller, or its designee, of the
purchase price for the Mortgage Loans set forth in Section 2.03 hereof, the ownership of each Mortgage Note, each Mortgage and the contents of the Mortgage File related to each Mortgage Loan will be vested in the Trust, and will be pledged to the
Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. 
  
 (b) Pursuant to Section 2.05 hereof, the Seller has delivered, or caused to be delivered the Indenture Trustee’s Mortgage File related to each Mortgage Loan to the Indenture Trustee. 
  
 (c) The Indenture Trustee will hold the Indenture Trustee’s Mortgage
Files in trust pursuant to the terms of the Indenture for the benefit of all present and future Noteholders and the Note Insurer. 
  
 (d) Consistent with the terms of the Indenture, the Indenture Trustee shall afford the Seller, the Sponsor, the Trust, the Note Insurer, the Master
Servicer and the Backup Servicer reasonable access to all records and documentation regarding the Mortgage Loans relating to this Agreement, such access being afforded at customary charges, upon reasonable prior written request and during normal
business hours at the offices of the Indenture Trustee. 
  
 Section 2.05. Delivery of Mortgage Loan Documents. (a) In connection with the transfer and assignment of the Mortgage Loans, the Seller shall, on or before the Closing Date, deliver, or cause to be delivered, to the Indenture Trustee
(as pledgee of the Trust pursuant to the Indenture), the following documents or instruments constituting the Indenture Trustee’s Mortgage File with respect to each Mortgage Loan so transferred or assigned: 
  
 (i) the original Mortgage Note, endorsed without recourse in
blank or to “Deutsche Bank National Trust Company, as Indenture Trustee under the Indenture dated as of November 1, 2003, Accredited Mortgage Loan Trust 2003-3” by the Sponsor, including all intervening endorsements showing a complete
chain of endorsement; 
  
 (ii) the related
original Mortgage with evidence of recording indicated thereon or a copy thereof certified by the applicable recording office; 
  
 (iii) each intervening mortgage assignment, with evidence of recording indicated thereon or if the original is not available, a copy
thereof certified by the 

  

 3 

 
applicable recording office, if any, showing a complete chain of assignment from the originator of the related Mortgage Loan to the Sponsor (which assignment
may, at the Sponsor’s option, be combined with the assignment referred to in subpart (iv) hereof, in which case it must be in recordable form, but need not have been previously recorded); 
  
 (iv) a mortgage assignment in recordable form (which, if
acceptable for recording in the relevant jurisdiction as evidenced by an opinion of counsel addressed to the Indenture Trustee, may be included in a blanket assignment or assignments) of each Mortgage from the Sponsor to the Indenture Trustee;

  
 (v) originals of all assumption, modification
and substitution agreements in those instances where the terms or provisions of a Mortgage or Mortgage Note have been modified or such Mortgage or Mortgage Note has been assumed (if any); and 
  
 (vi) an original title insurance policy or title opinion (or
(A) a copy of the title insurance policy or title opinion, or (B) the related binder, commitment or preliminary report, or copy thereof in which case the Sponsor hereby certifies that the original Mortgage has been delivered to the title insurance
company that issued such binder, commitment or preliminary report). 
  
 In instances where the original recorded Mortgage or any intervening mortgage assignment or a completed assignment of the Mortgage in recordable form cannot be delivered by the Sponsor to the Indenture Trustee prior to or concurrently with
the execution and delivery of this Agreement due to a delay in connection with recording, the Sponsor may: 
  
 (x) in lieu of delivering such original recorded Mortgage or intervening mortgage assignment, deliver to the Indenture Trustee, a copy
thereof and the Sponsor hereby certifies that the original Mortgage has been delivered to a title insurance company for recordation after receipt of its policy of title insurance or the related binder, commitment or preliminary report therefor; and

  
 (y) with respect to clause (iii) above, in
lieu of delivering the completed assignment in recordable form, deliver to the Indenture Trustee, the assignment in recordable form, otherwise complete except for recording information. 
  
 The Indenture Trustee is hereby authorized and directed, promptly upon receipt thereof, with respect to each assignment described in Section
2.05(a)(iv) hereof, to endorse such assignment as follows: “Deutsche Bank National Trust Company, as Indenture Trustee under the Indenture dated as of November 1, 2003, Accredited Mortgage Loan Trust 2003-3.” 
  
 (b) As promptly as practicable, but in any event within thirty (30) days from
the Closing Date, the Sponsor shall promptly submit, or cause to be submitted for recording in the appropriate public office for real property records, each assignment referred to in Section 2.05(a)(iv); provided however, the Sponsor need not cause
to be recorded any assignment which relates to a Mortgage Loan in any jurisdiction under the laws of which, as evidenced by an Opinion of Counsel delivered by the Sponsor (at the Sponsor’s expense) to the Indenture Trustee, acceptable to the
Rating Agencies and the Note Insurer, the recordation of such 

  

 4 

 
assignment is not necessary to protect the Indenture Trustee’s, the Note Insurer’s, the Noteholders’ and the Certificates’ interest in
the related Mortgage Loan. The Indenture Trustee, shall retain a copy of each assignment submitted for recording. In the event that any such assignment is lost or returned unrecorded because of a defect therein, the Sponsor shall promptly prepare a
substitute assignment or cure such defect, as the case may be, and thereafter the Sponsor shall submit each such assignment for recording. The costs relating to the delivery and recordation of the documents in connection with the Mortgage Loans as
specified in this Article II shall be borne by the Sponsor. 
  
 (c) The Sponsor shall, within five (5) Business Days after the receipt thereof, deliver, or cause to be delivered, to the Indenture Trustee: (i) the original recorded Mortgage and related power of attorney, if any, in those instances where
a copy thereof certified by the Sponsor was delivered to the Indenture Trustee; (ii) the original recorded assignment of Mortgage from the last endorsee to the Indenture Trustee, which, together with any intervening assignments of Mortgage,
evidences a complete chain of assignment from the originator of the Mortgage Loan to the Indenture Trustee, in those instances where copies of such assignments certified by the Sponsor were delivered to the Indenture Trustee; and (iii) the title
insurance policy or title opinion required in Section 2.05(a)(vi). 
  
 Notwithstanding anything to the contrary contained in this Section 2.05, in those instances where the public recording office retains the original Mortgage, power of attorney, if any, assignment or assignment of Mortgage after it has been
recorded or such original has been lost, the Sponsor shall be deemed to have satisfied its obligations hereunder upon delivery to the Indenture Trustee, of a copy of such Mortgage, power of attorney, if any, assignment or assignment of Mortgage
certified by the public recording office to be a true copy of the recorded original thereof. 
  
 From time to time the Sponsor may forward, or cause to be forwarded, to the Indenture Trustee, additional original documents evidencing any assumption or modification of a Mortgage Loan. 
  
 (d) All original documents relating to the Mortgage Loans that are not
required to be delivered to the Indenture Trustee, pursuant to Section 2.05(a) hereof are, and shall be, held by the Master Servicer, the Sponsor or the Seller, as the case may be, in trust for the benefit of the Indenture Trustee, on behalf of the
Noteholders and the Note Insurer. In the event that any such original document is required pursuant to the terms of this Section 2.05 to be a part of an Indenture Trustee’s Mortgage File, such document shall be delivered promptly to the
Indenture Trustee. From and after the sale of the Mortgage Loans to the Trust pursuant hereto, to the extent that the last assignee thereof retains title of record to any Mortgage Loans prior to the vesting of legal title in the Trust, such title
shall be retained in trust for the Trust as the owner of the Mortgage Loans, and the Indenture Trustee, as the pledgee of the Trust under the Indenture. In acting as custodian of any original document which is part of the Indenture Trustee’s
Mortgage Files, the Master Servicer agrees further that it does not and will not have or assert any beneficial ownership interest in the related Mortgage Loans or the Mortgage Files. Promptly upon the Master Servicer’s receipt of any such
original document, the Master Servicer, on behalf of the Trust, shall mark conspicuously each such original document, and its master data processing records with a legend evidencing that the Trust has purchased the related 

  

 5 

 
Mortgage Loan and all right and title thereto and interest therein, and pledged such Mortgage Loan and all right and title thereto and interest therein to
the Indenture Trustee, on behalf of the Noteholders and the Note Insurer. 
  
 (e) With respect to the Mortgage Loan identified on the Mortgage Loan Schedule as loan number 310156206 with a Cut-off Date Principal Balance of $250,400.00, the Sponsor shall, in lieu of delivering the Mortgage, the
Mortgage Note and the other contents of the mortgage file, deposit $250,400.00 with the Indenture Trustee, such funds to be held by the Indenture Trustee for the benefit of the Noteholders. Within 30 days of the Closing Date, the Sponsor may deliver
one or more Qualified Substitute Mortgage Loans to the Indenture Trustee, who will hold such loans as part of the trust estate. The Indenture Trustee will, at the time of such transfer, deliver to the Sponsor an amount equal to the Principal Balance
of such additional Mortgage Loans, such amount not to exceed the deposited amount of $250,400.00. If, after such 30 day period has expired, any amount of the deposited funds remains on deposit with the Indenture Trustee, the Indenture Trustee will
include such funds in Available Funds on the following Payment Date, such funds to be treated as a Principal Payment in full. 
  
 Section 2.06. Acceptance of the Trust Estate; Certain Substitutions; Certification by the Indenture Trustee. (a) The Indenture Trustee agrees to
execute and deliver to the Seller, the Sponsor, the Note Insurer, the Master Servicer and the Backup Servicer on or prior to the Closing Date an acknowledgement of receipt of the Note Insurance Policy in the form attached as Exhibit B hereto.

  
 (b) The Indenture Trustee is authorized and directed to, and
agrees to, do the following: 
  
 (i) execute and
deliver to the Seller, the Sponsor, the Note Insurer, the Master Servicer and the Backup Servicer, on or prior to the Closing Date with respect to each Mortgage Loan transferred on such date, an acknowledgement of receipt, in the form attached as
Exhibit C hereto, of the original Mortgage Note as required to be included in the Indenture Trustee’s Mortgage File (with any exceptions noted) and declares that it will hold such documents and any amendments, replacements or supplements
thereto, as well as any other assets included in the definition of Trust Estate and delivered to the Indenture Trustee, subject to the conditions set forth in the Indenture, for the benefit of the Noteholders and the Note Insurer. 
  
 (ii) to review (or cause to be reviewed) each Indenture
Trustee’s Mortgage File within sixty (60) days after the Closing Date (or, with respect to any Qualified Substitute Mortgage Loans, within sixty (60) days after receipt thereof), and to deliver to the Master Servicer, the Backup Servicer, the
Seller, the Sponsor, and the Note Insurer a certification, in the form attached hereto as Exhibit D, to the effect that, except as otherwise noted, as to each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or any Mortgage Loan specifically identified in such certification as not covered by such certification), (i) all documents specified in Section 2.05(a)(i)-(iv) and (vi) are in its possession, (ii) each such document has been
reviewed by it and appears, on its face, not to have been mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections shall 

  

 6 

 
not constitute physical alteration if they reasonably appear to have been initialed), appears regular on its face and relates to such Mortgage Loan, and
(iii) based on its examination and only as to the foregoing documents, the information set forth on the Mortgage Loan Schedule as to the information set forth in (i), (ii) (with respect to property address only, excluding zip code), (iii) and (vi)
of the definition of “Mortgage Loan Schedule” accurately reflects the information set forth in the Indenture Trustee’s Mortgage File delivered on such date; provided however, no certification of the Indenture Trustee
shall constitute a determination by the Indenture Trustee of the proper form, adequacy or enforceability of any document included in the Indenture Trustee’s Mortgage File. 
  
 (iii) to review (or cause to be reviewed) each Indenture Trustee’s Mortgage File within one hundred
eighty (180) days after the Closing Date (or, with respect to any Qualified Substitute Mortgage Loans, within one hundred eighty (180) days after receipt thereof), and to deliver to the Master Servicer, the Backup Servicer, the Sponsor and the Note
Insurer a certification in the form attached hereto as Exhibit E to the effect that, except as otherwise noted, as to each Mortgage Loan listed in the related Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage
Loan specifically identified in such certification as not covered by such certification), (i) all documents specified in Section 2.05(a)(i)-(iv) and (vi) are in its possession, (ii) each such document has been reviewed by it and has not been
mutilated, damaged, torn or otherwise physically altered (handwritten additions, changes or corrections shall not constitute physical alteration if they reasonably appear to be initialed by the Mortgagor), appears regular on its face and relates to
such Mortgage Loan, and (iii) based on its examination and only as to the foregoing documents, the information set forth in items (i), (ii) (with respect to property address only, excluding zip code), (iii) and (vi) of the definition of
“Mortgage Loan Schedule” accurately reflects the information set forth in the Indenture Trustee’s Mortgage File delivered on such date. 
  
 In performing any such review, the Indenture Trustee may conclusively rely on the Sponsor as to the purported genuineness of any such document and any
signature thereon. It is understood that the scope of the Indenture Trustee’s review of the Indenture Trustee’s Mortgage Files is limited solely to confirming that the documents listed in Section 2.05 have been executed and received and
relate to the Indenture Trustee’s Mortgage Files identified in the related Mortgage Loan Schedule. The Indenture Trustee shall be under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other
papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they are other than what they purport to be on their face. 
  
 (c) If the Indenture Trustee during the process of reviewing the Indenture Trustee’s Mortgage Files finds any document
constituting a part of a Indenture Trustee’s Mortgage File which is not executed, has not been received, is unrelated to the Mortgage Loan identified in the related Mortgage Loan Schedule, or does not conform to the requirements of Section 2.05
or the description thereof as set forth in the related Mortgage Loan Schedule, the Indenture Trustee shall promptly so notify the Master Servicer, the Backup Servicer, the Sponsor, the Note Insurer and the Indenture Trustee. Upon receipt of such
notice respecting such defect, the Sponsor shall have a sixty (60) day period after such notice within which to 

  

 7 

 
correct or cure any such defect, or if the Master Servicer or the Note Insurer determines that the defect materially and adversely affects the value of the
related Mortgage Loan or the interest of the Noteholders and the Note Insurer in the related Mortgage Loan, to either (i) substitute in lieu of such Mortgage Loan a Qualified Substitute Mortgage Loan in the manner and subject to the conditions set
forth in this Section 2.06 or (ii) purchase such Mortgage Loan at a purchase price equal to the Loan Repurchase Price. Upon receipt by the Indenture Trustee of two copies of a certification, in the form attached hereto as Exhibit F, of a
Servicing Officer of such substitution or purchase and, in the case of a substitution, upon receipt by the Indenture Trustee, of the related Indenture Trustee’s Mortgage File, and the deposit of the Loan Repurchase Price, in the case of a
purchase, or the Substitution Adjustment, if any, in connection with a substitution, in the Collection Account, the Indenture Trustee shall release to the Master Servicer for release to the Sponsor the related Indenture Trustee’s Mortgage File
and the Indenture Trustee shall execute, without recourse, and deliver such instruments of transfer furnished by the Sponsor as may be necessary to transfer such Mortgage Loan to the Sponsor. The Indenture Trustee shall provide notice to the Note
Insurer if the Sponsor fails to repurchase or substitute for a Mortgage Loan in accordance with the foregoing. 
  
 Section 2.07. Grant of Security Interest. (a) It is intended that the conveyance of the Mortgage Loans and other property by the Seller to the
Trust as provided in this Article II be, and be construed for all purposes other than tax and accounting purposes as, a sale of the Mortgage Loans and such other property by the Seller to the Trust. It is, for all purposes other than tax and
accounting purposes further, not intended that such conveyance be deemed a pledge of the Mortgage Loans or such other property by the Seller to the Trust to secure a debt or other obligation of the Seller. However, in the event that the Mortgage
Loans or any of such other property are held to be property of the Seller, or if for any reason this Agreement is held or deemed to create a security interest in the Mortgage Loans or any of such other property, then it is intended that: (i) this
Agreement shall also be deemed to be a security agreement within the meaning of the Uniform Commercial Code; (ii) the conveyance provided for in this Article II shall be deemed to be a grant by the Seller to the Trust of a security interest in all
of the Seller’s right, title and interest in and to the Mortgage Loans and such other property and all amounts payable to the holders of the Mortgage Loans in accordance with the terms thereof and all proceeds of the conversion, voluntary or
involuntary, of the foregoing into cash, instruments, securities or other property, including, without limitation, all amounts from time to time held or invested in the Accounts whether in the form of cash, instruments, securities or other property;
(iii) the possession by the Indenture Trustee, of the Mortgage Notes and such other items of property as constitute instruments, money, negotiable documents or chattel paper shall be deemed to be “possession by the secured party” for
purposes of perfecting the security interest pursuant to the Uniform Commercial Code; and (iv) notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from financial intermediaries, bailees or agents, as applicable, of the Indenture Trustee for the purpose of perfecting such security interest under applicable law. The Seller, the
Sponsor, the Master Servicer, on behalf of the Trust and the Indenture Trustee, shall, to the extent consistent with this Agreement, take such actions as may be reasonably necessary to ensure that, if this Agreement were deemed to create a security
interest in the Mortgage Loans or any of such other property, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of this Agreement.

  

 8 

 (b) The Seller, the Sponsor, the Master Servicer and the Backup Servicer shall take no action
inconsistent with the Trust’s ownership of the Trust Estate and each shall indicate or shall cause to be indicated in its records and records held on its behalf that ownership of each Mortgage Loan and the other assets in the Trust Estate is
vested in the Trust, as owner, and is pledged to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer pursuant to the terms of the Indenture. The Indenture Trustee is authorized to act, pursuant to the terms of this
Agreement for the benefit of the Noteholders and Note Insurer and shall be authorized to act at the direction of such parties. In addition, the Seller, the Sponsor, the Master Servicer and the Backup Servicer shall respond to any inquiries from
third parties with respect to ownership of a Mortgage Loan or any other asset in the Trust Estate by stating that it is not the owner of such asset and that the Trust is the owner of such Mortgage Loan or other asset in the Trust Estate, which is
pledged to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. 
  
 Section 2.08. Further Action Evidencing Assignments. (a) The Master Servicer agrees that, from time to time, at its expense, it shall cause the Sponsor or Seller, as the case may be, to, and each of the Sponsor
and Seller agree that it shall, promptly execute and deliver all further instruments and documents, and take all further action, that may be necessary or appropriate, or that the Master Servicer or the Indenture Trustee may reasonably request, in
order to perfect, protect or more fully evidence the transfer of ownership of the Mortgage Loans and other assets in the Trust Estate or to enable the Indenture Trustee, to exercise or enforce any of its rights hereunder. Without limiting the
generality of the foregoing, the Master Servicer, the Sponsor and the Seller shall, upon the request of the Master Servicer or the Indenture Trustee execute and file (or cause to be executed and filed) such real estate filings, financing or
continuation statements, or amendments thereto or assignments thereof, and such other instruments or notices, as may be necessary or appropriate. 
  
 (b) Each of the Sponsor and the Seller hereby grants to the Master Servicer, the Backup Servicer and the Indenture Trustee powers of attorney to execute
all documents on its behalf under this Agreement as may be necessary or desirable to effectuate the foregoing. 
  
 Section 2.09. Assignment of Agreement. The Sponsor, the Seller and the Master Servicer hereby acknowledge and agree that the Trust may assign its
interest under this Agreement to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, as may be required to effect the purposes of the Indenture, without further notice to, or consent of, the Sponsor or the Master
Servicer, and the Indenture Trustee shall succeed to such of the rights of the Trust hereunder as shall be so assigned. The Trust shall, pursuant to the Indenture, assign all of its right, title and interest in and to the Mortgage Loans and its
right to exercise the remedies created by Section 4.02 of this Agreement for breaches of the representations, warranties, agreements and covenants of the Sponsor contained in Sections 3.02 and 4.01 of this Agreement, assign such right, title and
interest to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer. The Sponsor agrees that, upon such assignment to the Indenture Trustee, such representations, warranties, agreements and covenants will run to and be for the
benefit of the Indenture Trustee and the Indenture Trustee may enforce, without joinder of the Sponsor or the Trust, the repurchase obligations of the Sponsor set forth herein with respect to breaches of such representations, warranties, agreements
and covenants. 
  

 9 

 ARTICLE III 
  
 REPRESENTATIONS, WARRANTIES AND COVENANTS 
  
 Section 3.01. Representations, Warranties and Covenants of the Master Servicer. The Master Servicer hereby
represents, warrants and covenants to the Indenture Trustee, the Seller, the Sponsor, the Trust, the Note Insurer, the Backup Servicer and the Noteholders as of the Closing Date and during the term of this Agreement that: 
  
 (a) The Master Servicer is duly organized, validly existing and in good
standing under the laws of its state of incorporation and has the power to own its assets and to transact the business in which it is currently engaged. The Master Servicer is duly qualified to do business as a foreign corporation and is in good
standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it or the performance of its obligations hereunder requires such qualification and in which the failure so to qualify could
reasonably be expected to have a material adverse effect on the business, properties, assets, or condition (financial or other) of the Master Servicer or the performance of its obligations hereunder. 
  
 (b) The Master Servicer has the power and authority to make, execute, deliver
and perform this Agreement and all of the transactions contemplated under this Agreement, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement, and assuming the due authorization,
execution and delivery hereof by the other parties hereto constitutes, or will constitute, the legal, valid and binding obligation of the Master Servicer, enforceable in accordance with its terms, except as enforcement of such terms may be limited
by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity
or at law). 
  
 (c) The Master Servicer is not required to obtain
the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency which consent already has not been obtained in connection with the execution,
delivery, performance, validity or enforceability of this Agreement, except such as have been obtained prior to the Closing Date. 
  
 (d) The execution, delivery and performance of this Agreement by the Master Servicer will not violate any provision of any existing law or regulation or
any order or decree of any court or the charter or bylaws of the Master Servicer, or constitute a breach of any mortgage, indenture, contract or other Agreement to which the Master Servicer is a party or by which it may be bound. 
  
 (e) Except as set forth in the “Risk Factors” section of the
Prospectus Supplement, there is no action, suit, proceeding or investigation pending or threatened against the Master Servicer which, either in any one instance or in the aggregate, is, in the Master Servicer’s judgment, likely to result in any
material adverse change in the business, operations, financial condition, properties, or assets of the Master Servicer, or in any material impairment of the right or ability of the Master Servicer to carry on its business substantially as now
conducted, 

  

 10 

 
or in any material liability on the part of the Master Servicer, or which would draw into question the validity of this Agreement, the Notes, or the Mortgage
Loans or of any action taken or to be taken in connection with the obligations of the Master Servicer contemplated herein or therein, or which would be likely to impair materially the ability of the Master Servicer to perform its obligations
hereunder. 
  
 (f) Neither this Agreement nor any statement,
report, or other document furnished by the Master Servicer pursuant to this Agreement or in connection with the transactions contemplated hereby, including, without limitation, the sale or placement of the Notes, contains any untrue statement of
fact provided by or on behalf of the Master Servicer or omits to state a fact necessary to make the statements provided by or on behalf of the Master Servicer contained herein or therein not misleading. 
  
 (g) The Master Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant contained in this Agreement. 
  
 (h) The Master Servicer is not an “investment company” or a company “controlled by an investment company,” within the meaning of the Investment Company Act of 1940, as amended. 
  
 (i) The Master Servicer shall take all necessary steps to maintain the
Indenture Trustee’s perfection and priority in the Mortgage Loans. 
  
 (j) The Master Servicer will fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit repositories), on a monthly basis. 
  
 It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.01 shall survive the delivery of the respective
Indenture Trustee’s Mortgage Files to the Indenture Trustee and inure to the benefit of the Indenture Trustee. 
  
 Section 3.02. Representations, Warranties and Covenants of the Sponsor. The Sponsor hereby represents, warrants and covenants to the Indenture
Trustee, the Seller, the Trust, the Backup Servicer, the Note Insurer and the Master Servicer that as of the date of this Agreement or as of such date specifically provided herein: 
  
 (a) The Sponsor is a corporation duly organized, validly existing and in good standing under the laws of the State of
California. 
  
 (b) The Sponsor has the corporate power and
authority to convey the Mortgage Loans and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement. 
  
 (c) This Agreement has been duly and validly authorized, executed and delivered by the Sponsor, all requisite corporate action having been taken, and,
assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Sponsor, enforceable against the Sponsor 

  

 11 

 
in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating
to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). 
  
 (d) No consent, approval, authorization or order of or registration or filing with, or notice to, any governmental authority
or court is required for the execution, delivery and performance of or compliance by the Sponsor with this Agreement or the consummation by the Sponsor of any of the transactions contemplated hereby, except as have been made on or prior to the
Closing Date. 
  
 (e) None of the execution and delivery of this
Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an acceleration under (A) the articles of incorporation or bylaws of the Sponsor, or (B) of any term, condition or provision of any material indenture, deed of trust, contract or
other agreement or instrument to which the Sponsor or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii) results or will result in a violation of any law, rule, regulation, order, judgment or decree
applicable to the Sponsor of any court or governmental authority having jurisdiction over the Sponsor or its subsidiaries; or (iii) results in the creation or imposition of any lien, charge or encumbrance which would have a material adverse effect
upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans. 
  
 (f) Except as set forth in the “Risk Factors” section of the Prospectus Supplement, there are no actions, suits or proceedings before or against
or investigations of, the Sponsor pending, or to the knowledge of the Sponsor, threatened, before any court, administrative agency or other tribunal, and no notice of any such action, which, in the Sponsor’s reasonable judgment, might
materially and adversely affect the performance by the Sponsor of its obligations under this Agreement, or the validity or enforceability of this Agreement. 
  
 (g) The Sponsor is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or
governmental agency that may materially and adversely affect its performance hereunder. 
  
 It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.02 shall survive delivery of the respective Indenture Trustee’s Mortgage Files to the Indenture Trustee
and shall inure to the benefit of the Indenture Trustee. 
  
 Section 3.03. Representations, Warranties and Covenants of the Backup Servicer. The Backup Servicer hereby represents, warrants and covenants to the Indenture Trustee, the Trust, the Master Servicer, the Note Insurer, the Seller and
the Sponsor that as of the date of this Agreement: 
  
 (a)
The Backup Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of California. 
  

 12 

 (b) The Backup Servicer has the corporate power and authority to execute, deliver and perform, and to
enter into and consummate transactions contemplated by this Agreement. 
  
 (c) This Agreement has been duly and validly authorized, executed and delivered by the Backup Servicer, all requisite corporate action having been taken, and, assuming the due authorization, execution and delivery hereof by the other
parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Backup Servicer, enforceable against the Backup Servicer in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). 
  
 (d) No consent, approval, authorization or order of or registration or filing
with, or notice to, any governmental authority or court is required for the execution, delivery and performance of or compliance by the Backup Servicer with this Agreement or the consummation by the Backup Servicer of any of the transactions
contemplated hereby, except as have been made on or prior to the Closing Date. 
  
 (e) None of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i)
conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default or results or will result in an acceleration under (A) the certificate of incorporation or bylaws of the Backup Servicer, or (B) of
any term, condition or provision of any material indenture, deed of trust, contract or other agreement or instrument to which the Backup Servicer or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii) results
or will result in a violation of any law, rule, regulation, order, judgment or decree applicable to the Backup Servicer of any court or governmental authority having jurisdiction over the Backup Servicer or its subsidiaries; or (iii) results in the
creation or imposition of any lien, charge or encumbrance which would have a material adverse effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans; 
  
 (f) There are no actions, suits or proceedings before or against or
investigations of, the Backup Servicer pending, or to the knowledge of the Backup Servicer, threatened, before any court, administrative agency or other tribunal, and no notice of any such action, which, in the Backup Servicer’s reasonable
judgment, might materially and adversely affect the performance by the Backup Servicer of its obligations under this Agreement, or the validity or enforceability of this Agreement; and 
  
 (g) The Backup Servicer is not in default with respect to any order or decree of any court or any order, regulation or
demand of any federal, state, municipal or governmental agency that may materially and adversely affect its performance hereunder. 
  
 It is understood and agreed that the representations, warranties and covenants set forth in this Section 3.03 shall survive delivery of the respective
Indenture Trustee’s Mortgage Files to the Indenture Trustee and shall inure to the benefit of the Indenture Trustee. 
  

 13 

 Section 3.04. Representations, Warranties and Covenants of the Indenture Trustee. The Indenture
Trustee hereby represents, warrants and covenants to the Backup Servicer, the Trust, the Master Servicer, the Seller, the Note Insurer and the Sponsor that as of the date of this Agreement or as of such date specifically provided herein:

  
 (a) The Indenture Trustee is a national banking association
duly organized, validly existing and in good standing under the laws of the United States of America. 
  
 (b) The Indenture Trustee has the requisite power and authority to execute, deliver and perform, and to enter into and consummate transactions
contemplated by this Agreement. 
  
 (c) This Agreement has been
duly and validly authorized, executed and delivered by the Indenture Trustee, all requisite action having been taken, and, assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the
legal, valid and binding agreement of the Indenture Trustee, enforceable against the Indenture Trustee in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). 
  
 (d) No consent, approval, authorization or order of or registration or filing
with, or notice to, any governmental authority or court is required for the execution, delivery and performance of or compliance by the Indenture Trustee with this Agreement or the consummation by the Indenture Trustee of any of the transactions
contemplated hereby, except as have been made on or prior to the Closing Date; 
  
 (e) None of the execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i)
conflicts or will conflict with or results or will result in a breach of, or constitutes or will constitute a default or results or will result in an acceleration under (A) the articles of association or bylaws of the Indenture Trustee, or (B) to
the best of its knowledge, of any term, condition or provision of any material indenture, deed of trust, contract or other agreement or instrument to which the Indenture Trustee is a party or by which it is bound; or (ii) results or will result in a
violation of any statute, rule, regulation, order, judgment or decree applicable to the Indenture Trustee of any court or governmental authority having jurisdiction over the Indenture Trustee or its subsidiaries which violation would materially and
adversely affect the Indenture Trustee’s performance of its duties hereunder; and 
  
 (f) There are no actions, suits or proceedings before or against or investigations of, the Indenture Trustee, pending or to the knowledge of the Indenture Trustee threatened, before any court, administrative agency or
other tribunal, and no notice of any such action, which, in the Indenture Trustee’s reasonable judgment, would materially and adversely affect the performance by the Indenture Trustee of its obligations under this Agreement, or the validity or
enforceability of this Agreement. 
  

 14 

 It is understood and agreed that the representations, warranties and covenants set forth in this Section
3.04 shall survive delivery of the respective Indenture Trustee’s Mortgage Files to the Indenture Trustee. 
  
 Section 3.05. Covenants and Representations of the Sponsor and Master Servicer Regarding Prepayment Charges. The Master Servicer covenants that it
will not waive any Prepayment Charge or part of a Prepayment Charge unless in connection with a Mortgage Loan that is in default or for which a default is reasonably foreseeable. 
  
 (a) The Sponsor hereby represents and warrants that the information set forth in the Prepayment Charge Schedule is complete,
true and correct in all material respects at the date or dates respecting which such information is furnished and each Prepayment Charge is permissible and enforceable in accordance with its terms (except to the extent that the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and other similar laws relating to creditors’ rights generally) under applicable law. 
  
 (b) Upon discovery by the Sponsor or the Indenture Trustee of a breach of the foregoing, the party discovering such breach
shall give prompt written notice to the other parties. Within 60 days of the earlier of discovery by the Master Servicer or receipt of notice by the Master Servicer of breach, the Master Servicer shall cure such breach in all material respects. If
the covenant made by the Master Servicer in clause (a) above is breached the Master Servicer must pay into the Collection Account the amount of the waived Prepayment Charge. If the representation made by the Sponsor in clause (b) above is breached,
the Sponsor must pay into the Collection Account the amount of the scheduled Prepayment Charge, less any amount previously collected and paid by the Master Servicer into the Collection Account. The foregoing obligations of the Master Servicer and
the Sponsor shall be the sole and exclusive remedies for a breach of this Section 3.05(a) or (b). 
  
 Section 3.06. Representations, Warranties and Covenants of the Seller. The Seller, hereby represents, warrants and covenants to the Indenture
Trustee, the Trust, the Sponsor, the Backup Servicer, the Note Insurer and the Master Servicer that as of the date of this Agreement or as of such date specifically provided herein: 
  
 (a) The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of
Delaware. 
  
 (b) The Seller has the corporate power and authority
to convey the Mortgage Loans and to execute, deliver and perform, and to enter into and consummate the transactions contemplated by this Agreement. 
  
 (c) This Agreement has been duly and validly authorized, executed and delivered by the Seller, all requisite corporate action having been taken, and,
assuming the due authorization, execution and delivery hereof by the other parties hereto, constitutes or will constitute the legal, valid and binding agreement of the Seller, enforceable against the Seller in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws relating to or affecting the rights of creditors generally, and by general equity principles (regardless of whether such enforcement is
considered in a proceeding in equity or at law). 
  

 15 

 (d) No consent, approval, authorization or order of or registration or filing with, or notice to, any
governmental authority or court is required for the execution, delivery and performance of or compliance by the Seller with this Agreement or the consummation by the Seller of any of the transactions contemplated hereby, except as have been made on
or prior to the Closing Date. 
  
 (e) None of the execution and
delivery of this Agreement, the consummation of the transactions contemplated hereby or thereby, or the fulfillment of or compliance with the terms and conditions of this Agreement, (i) conflicts or will conflict with or results or will result in a
breach of, or constitutes or will constitute a default or results or will result in an acceleration under (A) the articles of incorporation or bylaws of the Seller, or (B) of any term, condition or provision of any material indenture, deed of trust,
contract or other agreement or instrument to which the Seller or any of its subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii) results or will result in a violation of any law, rule, regulation, order, judgment or
decree applicable to the Seller of any court or governmental authority having jurisdiction over the Seller or its subsidiaries; or (iii) results in the creation or imposition of any lien, charge or encumbrance which would have a material adverse
effect upon the Mortgage Loans or any documents or instruments evidencing or securing the Mortgage Loans. 
  
 (f) There are no actions, suits or proceedings before or against or investigations of, the Seller pending, or to the knowledge of the Seller, threatened,
before any court, administrative agency or other tribunal, and no notice of any such action, which, in the Seller’s reasonable judgment, might materially and adversely affect the performance by the Seller of its obligations under this
Agreement, or the validity or enforceability of this Agreement. 
  
 (g) The Seller is not in default with respect to any order or decree of any court or any order, regulation or demand of any federal, state, municipal or governmental agency that may materially and adversely affect its performance hereunder.

  
 It is understood and agreed that the representations,
warranties and covenants set forth in this Section 3.05 shall survive delivery of the respective Indenture Trustee’s Mortgage Files to the Indenture Trustee and shall inure to the benefit of the Indenture Trustee. 
  
 ARTICLE IV 
  
 THE MORTGAGE LOANS 
  
 Section 4.01. Representations and Warranties Concerning the Mortgage
Loans. The Sponsor makes the following representations and warranties to the Seller, the Master Servicer, the Backup Servicer, the Indenture Trustee, the Note Insurer and the Trust as to the Mortgage Loans on which the Trust relies in accepting
the Mortgage Loans in trust and executing the Notes. With respect to the representations and warranties stated in Sections 4.01(i), (r), (ddd), (eee) and (fff), the Sponsor makes such representations and warranties on behalf of itself and the
Seller. Such representations, warranties and covenants are made or deemed to be made as of the Closing Date. 
  

 16 

 (a) The information with respect to each Mortgage Loan set forth in the Mortgage Loan Schedule is true
and correct as of the Cut-Off Date, based on Cut-Off Date Principal Balances. 
  
 (b) Each Mortgage Loan is being serviced either (i) through the Master Servicer or (ii) a Person controlling, controlled by or under common control with the Master Servicer and qualified to service mortgage loans.

  
 (c) Each Mortgage Loan was underwritten or reunderwritten
pursuant to the Underwriting Guidelines which conform in all material respects to the description thereof set forth in the Prospectus Supplement. 
  
 (d) All of the original or certified documentation required to be delivered to the Indenture Trustee pursuant to this Agreement (including all material
documents related thereto) with respect to each Mortgage Loan has been or will be delivered to the Indenture Trustee in accordance with the terms of this Agreement. Each of the documents and instruments specified to be included therein has been duly
executed and in due and proper form, and each such document or instrument is in a form generally acceptable to prudent mortgage lenders that regularly originate or purchase mortgage loans comparable to the Mortgage Loans for sale to prudent
investors in the secondary market that invest in mortgage loans such as the Mortgage Loans. 
  
 (e) [Reserved]. 
  
 (f) Each
Mortgaged Property is improved by a single (one to four) family residential dwelling, which may include condominiums, individual units in a planned unit development and townhouses but shall not include cooperatives. 
  
 (g) No Mortgage Loan had an LTV in excess of 95%. 
  
 (h) Each Mortgage Loan is a valid and subsisting first lien as identified on
the Mortgage Loan Schedule on the Mortgaged Property and subject in all cases to the exceptions to title set forth in the title insurance policy, with respect to the related Mortgage Loan, which exceptions are generally acceptable to banking
institutions in connection with their regular mortgage lending activities, and such other exceptions to which similar properties are commonly subject and which do not individually, or in the aggregate, materially and adversely affect the benefits of
the security intended to be provided by such Mortgage. At the time each Mortgage Loan was originated, the originator was a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the National Housing
Act or a savings and loan association, a savings bank, a commercial bank or similar banking institution which was supervised and examined by a federal or state authority or a mortgage banker or broker licensed or authorized to do business in the
jurisdiction in which the related Mortgaged Property is located, applying the same standards and procedures used by the Sponsor in originating Mortgage Loans directly. 
  

 17 

 (i) Immediately prior to the transfer and assignment of the Mortgage Loans to the Seller pursuant to the
Master Sale and Purchase Agreement, the Sponsor held good and marketable title to, and was the sole owner of each Mortgage Loan, subject to no liens, charges, mortgages or encumbrances or rights of others, except liens of third party warehouse
lenders that will be released simultaneously with the transfer and assignment contemplated herein; and immediately prior to the transfer and assignment herein contemplated, the Seller held good and marketable title to, and was the sole owner of,
each Mortgage Loan subject to no liens, charges, mortgages, encumbrances or rights of others except liens which will be released simultaneously with such transfer and assignment; and immediately upon the transfer and assignment herein contemplated,
the Indenture Trustee will hold good and marketable title to, and be the sole owner of, each Mortgage Loan subject to no liens, charges, mortgages, encumbrances or rights of others except liens which will be released simultaneously with such
transfer and assignment. 
  
 (j) There is no delinquent tax or
assessment lien on any Mortgaged Property, and each Mortgaged Property is free of substantial damage and is in good repair. 
  
 (k) There is no valid and enforceable right of rescission, offset, defense or counterclaim to any Mortgage Note or Mortgage, including the obligation of
the related Mortgagor to pay the unpaid principal of or interest on such Mortgage Note or the defense of usury, nor will the operation of any of the terms of the Mortgage Note or the Mortgage, or the exercise of any right thereunder, render either
the Mortgage Note or the Mortgage unenforceable in whole or in part, or subject to any right of rescission, set-off, counterclaim or defense, including the defense of usury, and no such right of rescission, set-off, counterclaim or defense has been
asserted with respect thereto. 
  
 (l) There is no mechanics’
lien or claim for work, labor or material affecting any Mortgaged Property which is or may be a lien prior to, or equal with, the lien of the related Mortgage except those which are insured against by any title insurance policy referred to in
paragraph (n) below. 
  
 (m) Each Mortgage Loan at the time it was
made complied with, and each Mortgage Loan at all times was serviced in compliance with, in each case, in all material respects, applicable state and federal laws and regulations, including, without limitation, the federal Truth-in-Lending Act and
other consumer protection laws, the Home Ownership and Equity Protection Act of 1994, real estate settlement procedure, usury, equal credit opportunity, disclosure and recording laws and all applicable predatory and abusive lending laws. 

 
 (n) With respect to each Mortgage Loan, a lender’s title insurance
policy, issued in standard California Land Title Association form or American Land Title Association form, or other form acceptable in a particular jurisdiction by a title insurance company authorized to transact business in the state in which the
related Mortgaged Property is situated, in an amount at least equal to the original Principal Balance of such Mortgage Loan insuring the mortgagee’s interest under the related Mortgage Loan as the holder of a valid first mortgage lien of record
on the real property described in the related Mortgage, as the case may be, subject only to exceptions of the character referred to in paragraph (h) above, was effective on the date of the origination of such Mortgage Loan, and, as of the Closing
Date such policy will be valid and inure to the benefit of the Indenture Trustee on behalf of the Noteholders. 
  

 18 

 (o) The improvements upon each Mortgaged Property are covered by a valid and existing hazard insurance
policy (which may be a blanket policy of the type described in this Agreement) with a generally acceptable carrier that provides for fire and extended coverage representing coverage not less than the least of (i) the outstanding Principal Balance of
the related Mortgage Loan, (ii) the minimum amount required to compensate for damage or loss on a replacement cost basis or (iii) the full insurable value of the Mortgaged Property. 
  
 (p) If any Mortgaged Property is in an area identified in the Federal Register by the Federal Emergency Management Agency as
having special flood hazards, a flood insurance policy (which may be a blanket policy of the type described in this Agreement) in a form meeting the requirements of the current guidelines of the Federal Insurance Administration is in effect with
respect to such Mortgaged Property with a generally acceptable carrier in an amount representing coverage not less than the least of (i) the outstanding Principal Balance of the related Mortgage Loan (together, in the case of a second mortgage loan,
with the outstanding principal balance of the first mortgage loan), (ii) the minimum amount required to compensate for damage or loss on a replacement cost basis or (iii) the maximum amount of insurance that is available under the Flood Disaster
Protection Act of 1973. 
  
 (q) Each Mortgage and Mortgage Note is
the legal, valid and binding obligation of the maker thereof and is enforceable in accordance with its terms, except only as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors’ rights generally and by general principles of equity (whether considered in a proceeding or action in equity or at law), and all parties to each Mortgage Loan had full legal capacity to execute all documents relating
to such Mortgage Loan and convey the estate therein purported to be conveyed. 
  
 (r) The Sponsor has directed and the Seller has caused to be performed any and all acts required to be performed to preserve the rights and remedies of the Indenture Trustee in any Insurance Policies applicable to any
Mortgage Loan delivered by the Sponsor or the Seller including, to the extent such Mortgage Loan is not covered by a blanket policy described in this Agreement, any necessary notifications of insurers, assignments of policies or interests therein,
and establishments of coinsured, joint loss payee and mortgagee rights in favor of the Indenture Trustee. 
  
 (s) The Sponsor has caused or will have caused, within ten days, the filing of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security interest in the original Mortgage Note and all subsequent assignments of the original Mortgage, granted to the Indenture Trustee hereunder, subject to the provisions of
Section 2.05(b) of this Agreement. 
  
 (t) The terms of each
Mortgage Note and each Mortgage have not been impaired, altered or modified in any respect, except by a written instrument which has been recorded, if necessary, to protect the interest of the Noteholders and which has been delivered to the
Indenture Trustee. 
  

 19 

 (u) The proceeds of each Mortgage Loan have been fully disbursed, and there is no obligation on the part
of the mortgagee to make future advances thereunder. All costs, fees and expenses incurred in making or closing or recording such Mortgage Loans were paid. 
  
 (v) Except as otherwise required by law or pursuant to the statute under which the related Mortgage Loan was made, the related Mortgage Note is not and
has not been secured by any collateral, pledged account or other security except the lien of the corresponding Mortgage. 
  
 (w) No Mortgage Loan was originated under a buydown plan. 
  
 (x) No Mortgage Loan provides for negative amortization, has a shared appreciation feature, or other contingent interest feature. 
  
 (y) Each Mortgaged Property is located in the state identified in the
Mortgage Loan Schedule and consists of one or more parcels of real property with a residential dwelling erected thereon. 
  
 (z) Each Mortgage securing a Mortgage Note contains a provision for the acceleration of the payment of the unpaid Principal Balance of the related
Mortgage Loan in the event the related Mortgaged Property is sold without the prior consent of the mortgagee thereunder. 
  
 (aa) Any advances made after the date of origination of a Mortgage Loan but prior to the Cut-Off Date, have been consolidated with the outstanding
principal amount secured by the related Mortgage, and the secured principal amount, as consolidated, bears a single interest rate and single repayment term reflected on the Mortgage Loan Schedule. The consolidated principal amount does not exceed
the original principal amount of the related Mortgage Loan. No Mortgage Note permits or obligates the Seller, the Master Servicer, the Backup Servicer, the Sponsor or any other Person to make future advances to the related Mortgagor at the option of
the Mortgagor. 
  
 (bb) There is no proceeding pending or
threatened for the total or partial condemnation of any Mortgaged Property, nor is such a proceeding currently occurring, and each Mortgaged Property is undamaged by waste, fire, earthquake or earth movement, flood, tornado or other casualty, so as
to affect adversely the value of the Mortgaged Property as security for the Mortgage Loan or the use for which the premises were intended. 
  
 (cc) All of the improvements which were included for the purposes of determining the Appraised Value of any Mortgaged Property lie wholly within the
boundaries and building restriction lines of such Mortgaged Property, and no improvements on adjoining properties encroach upon such Mortgaged Property, except as stated in the related title insurance policy and affirmatively insured. 
  
 (dd) No improvement located on or being part of any Mortgaged Property is in
violation of any applicable zoning law or regulation. As of the related date of origination, all inspections, licenses and certificates required to be made or issued with respect to all occupied portions of each Mortgaged Property and, with respect
to the use and occupancy of the same, 

  

 20 

 
including, but not limited to, certificates of occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities and
such Mortgaged Property is lawfully occupied under the applicable law. 
  
 (ee) With respect to each Mortgage constituting a deed of trust, a trustee, duly qualified under applicable law to serve as such, has been properly designated and currently so serves and is named in such Mortgage, and no fees or expenses
are or will become payable by the Sponsor, the Seller, or the Trust to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the related Mortgagor. 
  
 (ff) [Reserved]. 
  
 (gg) [Reserved]. 
  
 (hh) Each Mortgage contains customary and enforceable provisions which render
the rights and remedies of the holder thereof adequate for the realization against the related Mortgaged Property of the benefits of the security, including (i) in the case of a Mortgage designated as a deed of trust, by trustee’s sale and (ii)
otherwise by judicial foreclosure. There is no homestead or other exemption available which materially interferes with the right to sell the related Mortgaged Property at a trustee’s sale or the right to foreclose the related Mortgage.

  
 (ii) Except for delinquencies identified in the Mortgage Loan
Schedule, there is no default, breach, violation or event of acceleration existing under any Mortgage or the related Mortgage Note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would
constitute a default, breach, violation or event of acceleration; and the Seller has not waived any default, breach, violation or event of acceleration. 
  
 (jj) No instrument of release or waiver has been executed in connection with any Mortgage Loan, and no Mortgagor has been released, in whole or in part.

  
 (kk) [Reserved]. 
  
 (ll) The Sponsor has no actual knowledge that there exists on any Mortgaged
Property any hazardous substances, hazardous wastes or solid wastes, as such terms are defined in the CERCLA, the Resource Conservation and Recovery Act of 1976, or other federal, state or local environmental legislation. 
  
 (mm) No action, error, omission, misrepresentation, negligence, fraud or
similar occurrence with respect to a Mortgage Loan has taken place on the part of any person, including, without limitation, the Mortgagor, any appraiser, any builder or developer, or any other party involved in the origination of the Mortgage Loan
or in the application of any insurance in relation to such Mortgage Loan. 
  
 (nn) The Sponsor has not solicited the Mortgagor in connection with any refinancing. 
  

 21 

 (oo) If the Mortgage Loan is an adjustable rate Mortgage Loan, all of the adjustments to the Mortgage
Interest Rate, to the amount of the monthly payment, and to the principal balance have been made in accordance with the terms of the related Mortgage Note. 
  
 (pp) The origination and collection practices used with respect to the Mortgage Loan have been in all respects legal, proper, prudent and customary in the
mortgage origination and servicing business. 
  
 (qq) An appraisal
of the related Mortgaged Property was made and signed, prior to the approval of the Mortgage Loan application, by a qualified appraiser who met the requirements of the Sponsor’s appraisal policy and procedures and who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security thereof, whose compensation was not affected by the approval or disapproval of the Mortgage Loan. 
  
 (rr) The Mortgagor has received all disclosure materials required by applicable law with respect to the making of adjustable
rate mortgage loans; and if the Mortgage Loan is a refinanced Mortgage Loan, the Mortgagor has received all disclosure and rescission materials required by applicable law with respect to the making of a refinanced Mortgage Loan, and evidence of such
receipt is and will remain in the Master Servicer’s file. 
  
 (ss) If the residential dwelling on the Mortgaged Property is a condominium unit or a unit in a planned unit development (other than a de minimis planned unit development), such condominium or planned unit development project meets the
Sponsor’s eligibility requirements. 
  
 (tt) As of the
Cut-Off Date, none of the Mortgage Loans in Group 1 and Group 3 and no more than 0.13% of the Mortgage Loans in Group 2 were more than 29 days contractually delinquent or had been dishonored. None of the Mortgage Loans have been thirty or more days
delinquent more than one time in the twelve months preceding the Cut-Off Date. 
  
 (uu) The Sponsor has not advanced funds, or induced, solicited or knowingly received any advance of funds by a person other than the Mortgagor, directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest prepaid upon the closing of the Mortgage Loan. No Mortgage Loan contains any provision pursuant to which Monthly Payments are: (i) paid or partially paid with funds deposited in any separate account established by
the Sponsor, the Mortgagor, or anyone on behalf of the Mortgagor or (ii) paid by any source other than the Mortgagor. The Mortgage Loan is not deemed a graduated payment mortgage loan and the Mortgage Loan does not have a shared appreciation or
other contingent interest feature. 
  
 (vv) No foreclosure
proceedings are pending against the Mortgaged Property and the Mortgage Loan is not subject to any pending bankruptcy or insolvency proceeding, and to the Sponsor’s best knowledge, no material litigation or material lawsuit relating to the
Mortgage Loan is pending. 
  
 (ww) Principal payments on the
Mortgage Loan commenced or will commence within sixty days after the proceeds of the Mortgage Loan were disbursed. 
  

 22 

 (xx) With respect to escrow deposits, if any, all such payments are in the possession of, or under the
control of, the Master Servicer and there exists no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made or could be made. No escrow deposits or escrow advances or other charges or payments
due the Master Servicer have been capitalized under any Mortgage or the related Mortgage Note. 
  
 (yy) With respect to the conveyance of the Mortgage Loans by the Sponsor to the Seller, the Sponsor used no selection procedures that identified the Mortgage Loans as being less desirable or valuable than other
comparable mortgage loans originated or acquired by the Sponsor. The Mortgage Loans are representative of the Sponsor’s portfolio of fixed-rate or adjustable-rate mortgage loans, as applicable. With respect to the conveyance of the Mortgage
Loans pursuant to this Agreement, the Seller used no selection procedures that identified the Mortgage Loans as being less desirable or valuable than other comparable mortgage loans originated or acquired by the Seller. The Mortgage Loans are
representative of the Seller’s portfolio of fixed-rate or adjustable-rate mortgage loans, as applicable. 
  
 (zz) Each Mortgage Loan conforms, and all such Mortgage Loans in the aggregate conform in all material respects to the description thereof set forth in
the Prospectus Supplement. 
  
 (aaa) All requirements for the
valid transfer of each Insurance Policy, including any assignments or notices required in each Insurance Policy, have been satisfied. 
  
 (bbb) This Agreement creates a valid and continuing security interest (as defined in the applicable UCC) in the Mortgage Loans 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 Seller. 
  
 (ccc) The Mortgage Loans constitute “instruments” within the meaning of the applicable UCC. 
  
 (ddd) The Sponsor received all consents and approvals required by the terms
of the Mortgage Loans to the sale of the Mortgage Loans pursuant to the Master Sale and Purchase Agreement to the Seller and the Seller has received all consents and approvals required by the terms of the Mortgage Loans to the sale of the Mortgage
Loans hereunder to the Owner Trustee and the subsequent pledge to the Indenture Trustee. 
  
 (eee) Other than the security interest granted to the Indenture Trustee pursuant to the Indenture, neither the Sponsor nor the Seller has pledged, assigned, sold, granted a security interest in, or otherwise conveyed
any of the Mortgage Loans. Neither the Sponsor nor the Seller has authorized the filing of nor is aware of any financing statements against the Sponsor or the Seller that include a description of collateral covering the Mortgage Loans other than any
financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated. Neither the Sponsor nor the Seller is aware of any judgment or tax lien filings affecting the Mortgage Loans against either
the Seller or the Sponsor. 
  
 (fff) All financing statements
filed or to be filed against the Sponsor or the Seller in favor of the Indenture Trustee in connection herewith describing the Mortgage Loans 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 Indenture Trustee.” 
  

 23 

 (ggg) None of the Mortgage Loans are classified as (a) “high cost” loans under the Home
Ownership and Equity Protection Act of 1994 or (b) “high cost,” “threshold,” “covered”, “predatory” or “abusive” loans under any other applicable state, federal or local law. 
  
 (hhh) No proceeds from any Mortgage Loan were used to finance single-premium
credit insurance policies; 
  
 (iii) No Mortgage Loan originated
between October 1, 2002 and March 7, 2003 is secured by a Mortgaged Property located in the state of Georgia. There is no Mortgage Loan that was originated on or after March 7, 2003 that is a “high cost home loan” as defined under the
Georgia Fair Lending Act. 
  
 (jjj) No Mortgage Loan is secured by
a leasehold interest, unless such leasehold interest extends 60 months beyond the stated maturity of the Mortgage Note. 
  
 (kkk) With respect to the Mortgage Loans in Group II, (i) no Mortgage Loan imposes a prepayment premium for a term in excess of three years, (ii) the
servicer for each Mortgage Loan has fully furnished, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (i.e., favorable and unfavorable) on its borrower credit files to Equifax,
Experian, and Trans Union Credit Information Company (three of the credit repositories), on a monthly basis and (iii) the original Principal Balance of each Mortgage Loan is within Freddie Mac’s dollar amount limits for conforming one- to
four-family mortgage loans, as follows: 
  

	 Number of Units

	 	 Maximum Original Loan Amount of First Mortgage

	 	 	 Continental United States or Puerto Rico

	 	 Alaska, Guam, Hawaii or
 Virgin Islands

	 1
	 	$322,700	 	$484,050
	 2
	 	413,100	 	619,650
	 3
	 	499,300	 	748,950
	 4
	 	620,500	 	930,750

  
 It is understood and
agreed that the representations, warranties and covenants set forth in this Section 4.01 shall survive delivery of the respective Indenture Trustee’s Mortgage Files to the Indenture Trustee and shall inure to the benefit of the Indenture
Trustee on behalf of the Noteholders and the Note Insurer. 
  
 Section 4.02. Purchase and Substitution. (a) It is understood and agreed that the representations and warranties set forth in Section 4.01 shall survive the transfer of the Mortgage Loans by the Seller to the Trust, the subsequent
pledge thereof by the Trust to the Indenture Trustee, for the benefit of the Noteholders and the Note Insurer, and the delivery of the Notes to the Noteholders, and shall continue in full force and effect, notwithstanding any restrictive or
qualified endorsement on the Mortgage Notes and notwithstanding subsequent termination of this Agreement. 
  

 24 

 (b) Upon discovery by the Seller, the Sponsor, the Master Servicer, the Indenture Trustee, the Note
Insurer or a Noteholder of a breach of any of the representations and warranties in Section 4.01 which materially and adversely affects the value of any Mortgage Loan, or which materially and adversely affects the interests of the Note Insurer or
the Noteholders in the related Mortgage Loan, the party discovering such breach or failure shall promptly (and in any event within five (5) days of the discovery) give written notice thereof to the others. Within sixty (60) days of the earlier of
its discovery or its receipt of notice of any breach of a representation or warranty, the Sponsor shall (a) promptly cure such breach in all material respects, (b) purchase such Mortgage Loan on the next succeeding Servicer Payment Date, in the
manner and at the price specified in Section 2.06(c) and this Section 4.02, or (c) remove such Mortgage Loan from the Trust Estate (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans
in the manner specified in Section 2.06 and this Section 4.02. The Indenture Trustee shall deliver prompt written notice to the Note Insurer and the Rating Agencies of any repurchase or substitution made pursuant to this Section 4.02 or Section
2.06(c). 
  
 (c) As to any Deleted Mortgage Loan for which the
Sponsor substitutes a Qualified Substitute Mortgage Loan or Loans, the Master Servicer shall cause the Sponsor to effect such substitution by delivering to the Indenture Trustee a certification, in the form attached hereto as Exhibit F,
executed by a Servicing Officer, and the documents described in Sections 2.05(a)(i)-(vi) for such Qualified Substitute Mortgage Loan or Loans. 
  
 (d) The Master Servicer shall deposit in the Collection Account all payments received in connection with such Qualified Substitute Mortgage Loan or Loans
after the date of such substitution. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in or before the Due Period in which the substitution occurs shall not be part of the Trust Estate and will be retained by the Sponsor on
the next succeeding Payment Date. For the Due Period in which the substitution occurs, distributions to Noteholders will include the Monthly Payment due on any Deleted Mortgage Loan for such Due Period and thereafter the Sponsor shall be entitled to
retain all amounts received in respect of such Deleted Mortgage Loan. The Master Servicer shall give written notice to the Backup Servicer, the Indenture Trustee and the Note Insurer that such substitution has taken place and shall amend the
Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans. Upon such substitution, such Qualified Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects. 
  
 (e) With respect to any Mortgage Loan that has been converted to an REO Mortgage Loan, all references in this Section 4.02 or Section 2.06 to “Mortgage Loan” shall be deemed to also refer to the REO Mortgage Loan. With respect to
any Mortgage Loan that the Sponsor is required to repurchase that is or becomes a Liquidated Mortgage Loan, in lieu of repurchasing such Mortgage Loan, the Master Servicer shall deposit into the related Payment Account, pursuant to Section 8.01 of
the Indenture, an amount equal to the amount of the Liquidated Loan Loss, if any, incurred in connection with the liquidation of such Mortgage Loan within the same time period in which the Master Servicer or Sponsor would have otherwise been
required to repurchase such Mortgage Loan. 
  

 25 

 (f) It is understood and agreed that the obligations of the Sponsor set forth in Sections 2.06 and 4.02
to cure, purchase or substitute for a defective Mortgage Loan, or to indemnify as described in Section 4.02(g) constitute the sole remedies of the Indenture Trustee, the Note Insurer and the Noteholders respecting a breach of the representations and
warranties of the Sponsor set forth in Section 4.01 of this Agreement. 
  
 (g) The Sponsor shall be obligated to indemnify the Seller, the Indenture Trustee, the Trust, the Owner Trustee, the Noteholders and the Note Insurer for any third party claims arising out of a breach by the Sponsor of representations or
warranties regarding the Mortgage Loans. 
  
 ARTICLE V

  
 ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS

  
 Section 5.01. The Master Servicer. (a) The Master
Servicer shall service and administer the Mortgage Loans in accordance with this Agreement and in accordance with Accepted Servicing Practices, and shall have full power and authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or desirable. 
  
 (b) The Master Servicer shall exercise its discretion consistent with Accepted Servicing Practices and the terms of this Agreement, with respect to the enforcement of defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest with respect thereto, including but not limited to the sale of such Mortgage Loan to a third party, the modification of such Mortgage Loan, or foreclosure upon the related property with a Mortgage and
disposition thereof. 
  
 (c) The duties of the Master Servicer
shall include collecting and posting of all payments, responding to inquiries of Mortgagors or by federal, state or local government authorities with respect to the Mortgage Loans, investigating delinquencies, reporting tax information to Mortgagors
in accordance with its customary practices and accounting for collections and furnishing monthly and annual statements to the Indenture Trustee with respect to distributions, paying Compensating Interest and making Periodic Advances and Servicing
Advances pursuant hereto. The Master Servicer shall follow its customary standards, policies and procedures in performing its duties as Master Servicer. The Master Servicer shall cooperate with the Indenture Trustee and furnish to the Indenture
Trustee with reasonable promptness information in its possession as may be necessary or appropriate to enable the Indenture Trustee to perform its tax reporting duties hereunder. The Indenture Trustee shall furnish the Master Servicer, or the Backup
Servicer with any powers of attorney and other documents as the Indenture Trustee shall deem necessary or appropriate to enable the Master Servicer, and the Backup Servicer to carry out its servicing and administrative duties hereunder; provided,
however, the Master Servicer, or the Backup Servicer shall prepare for and deliver to the Indenture Trustee for its execution any such powers of attorney; provided, further, that the Indenture Trustee shall not be responsible for any misuse of any
such power of attorney. 
  
 (d) [Reserved]. 
  

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 (e) The Master Servicer shall, in accordance with Accepted Servicing Practices, have the right to approve
requests of Mortgagors for consent to (i) partial releases of Mortgage Loans and (ii) alterations, removal, demolition or division of Mortgaged Properties subject to Mortgage Loans. No such request shall be approved by the Master Servicer unless:
(x) the provisions of the related Mortgage Note have been complied with; (y) the LTV (which may, for this purpose, be determined at the time of any such action in a manner reasonably acceptable to the Note Insurer) after any release does not exceed
the LTV set forth for such Mortgage Loan in the Mortgage Loan Schedule; and (z) the lien priority, monthly payment, Mortgage Interest Rate or maturity date of the related Mortgage is not affected except in accordance with Section 5.01(f);
provided, however, that the foregoing requirements (x), (y) and (z) shall not apply to any such situation described in this paragraph if such situation results from any condemnation or easement activity by a governmental entity.

  
 (f) Notwithstanding anything else contained herein, the Master
Servicer may not, without the consent of the Note Insurer, agree to a modification or extension of any Mortgage Loan unless both (i) such Mortgage Loan is in default or a default thereon is reasonably foreseeable and (ii) such modification or
extension would not result in the Master Servicer agreeing to modifications or extensions on Mortgage Loans with aggregate Cut-Off Date Principal Balances of more than 5.0% of the Maximum Collateral Amount. In addition, the Master Servicer may not
agree to more than (i) one modification or extension with respect to any individual Mortgage Loan in a calendar year or (ii) three modifications or extensions of an individual Mortgage Loan during the life of such Mortgage Loan. 
  
 (g) [Reserved]. 
  
 (h) Without limiting the generality of the foregoing, but subject to Sections 5.05 and 5.06, the Master Servicer in its own
name may be authorized and empowered pursuant to a power of attorney executed and delivered by the Indenture Trustee to execute and deliver, and may be authorized and empowered by the Indenture Trustee, to execute and deliver, on behalf of itself,
the Noteholders and the Indenture Trustee or any of them, (i) any and all instruments of satisfaction or cancellation or of partial or full release or discharge and all other comparable instruments with respect to the Mortgage Loans and with respect
to the Mortgaged Properties, (ii) and to institute foreclosure proceedings or obtain a deed in lieu of foreclosure so as to effect ownership of any Mortgaged Property on behalf of the Indenture Trustee, and (iii) to hold title to any Mortgaged
Property upon such foreclosure or deed in lieu of foreclosure on behalf of the Indenture Trustee; provided, however, that Section 5.07(a) shall constitute a power of attorney from the Indenture Trustee to the Master Servicer to execute
an instrument of satisfaction (or assignment of mortgage without recourse) with respect to any Mortgage Loan paid in full (or with respect to which payment in full has been escrowed). Subject to Sections 5.05 and 5.06, the Indenture Trustee shall
furnish the Master Servicer with any powers of attorney and other documents as the Master Servicer shall reasonably request to enable the Master Servicer to carry out their respective servicing and administrative duties hereunder; provided, however,
the Master Servicer shall prepare for and deliver to the Indenture Trustee for its execution any such powers of attorney; provided, further, that the Indenture Trustee shall not be responsible for any misuse of any such power of attorney.

  

 27 

 (i) The Master Servicer shall give prompt notice to the Backup Servicer, the Indenture Trustee and the
Note Insurer of any action, of which the Master Servicer has actual knowledge, to (i) assert a claim against the Trust or (ii) assert jurisdiction over the Trust. 
  
 (j) Servicing Advances incurred by the Master Servicer in connection with the servicing of the Mortgage Loans (including any
penalties in connection with the payment of any taxes and assessments or other charges) on any Mortgaged Property shall be recoverable by the Master Servicer to the extent described herein. 
  
 (k) The Master Servicer shall be entitled to rely, and shall be fully
protected in relying, upon any promissory note, writing, resolution, notice, consent, certificate, affidavit, letter, e-mail, cablegram, telegram, telecopy, telex or teletype message, statement, order or other document reasonably believed by it to
be genuine and correct and to have been signed, sent or made by the proper person or persons and upon advice and statements of legal counsel (including, without limitation, counsel to the Mortgagor(s)), independent accountants and other experts
selected by the Master Servicer. 
  
 (l) The Master Servicer shall
have no liability to the Seller, the Sponsor, the Indenture Trustee, the Owner Trustee, the Note Insurer, any Noteholder or any other Person for any action taken, or for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that the foregoing shall not apply to any breach of representations or warranties made by the Master Servicer herein, or to any specific liability imposed upon the Master Servicer pursuant to
this Agreement or any liability that would otherwise be imposed upon the Master Servicer by reason of its willful misconduct, bad faith or negligence in the performance of its duties hereunder or by reason of its failure to perform its obligations
or duties hereunder. 
  
 Section 5.02. Collection of Certain
Mortgage Loan Payments; Collection Account. (a) The Master Servicer shall make reasonable efforts to collect all payments called for under the terms and provisions of the Mortgage Loans, and shall, to the extent such procedures shall be
consistent with this Agreement, follow Accepted Servicing Practices. Consistent with the foregoing, the Master Servicer may in its discretion waive any assumption fees or other fees which may be collected in the ordinary course of servicing such
Mortgage Loans. 
  
 (b) The Master Servicer shall establish and
maintain, in the name of the Indenture Trustee, a segregated account (the “Collection Account”), in trust for the benefit of the Noteholders and the Note Insurer. The Collection Account shall be established and maintained as an Eligible
Account. 
  
 (c) The Master Servicer shall deposit in the
Collection Account any amounts representing Monthly Payments on the Mortgage Loans due or to be applied as of a date after the Cut-Off Date on each Business Day, not more than two Business Days after the date of collection, the following payments
and collections received or made by it (other than in respect of monthly payments of principal on and interest of the Mortgage Loans that were due on or before the related Cut-Off Date and Monthly Payments due on November 1, 2003): 
  
 (i) payments of interest on the Mortgage Loans including
Prepayment Charges; 

	

  

 28 

 (ii) payments of principal of the Mortgage Loans, including Principal Prepayments;

  
 (iii) the Loan Repurchase Price of Mortgage
Loans repurchased pursuant to Sections 2.06(c) or 4.02; 
  
 (iv) the Substitution Adjustment received in connection with Mortgage Loans for which Qualified Substitute Mortgage Loans are received pursuant to Sections 2.06 and 4.02; 
  
 (v) all Net REO Proceeds; 
  
 (vi) all Net Liquidation Proceeds; and 
  
 (vii) all Insurance Proceeds (including, for this purpose,
any amounts required to be deposited by the Master Servicer pursuant to Section 5.04 hereof). 
  
 It is understood that the Master Servicer need not deposit amounts representing fees, late payment charges or extension or other administrative charges (other than Prepayment Charges) payable by Mortgagors, or amounts
received by the Master Servicer for the account of Mortgagors for application towards the payment of taxes, insurance premiums, assessments and similar items or foreclosure proceeds to the extent payable to the related Mortgagor. 
  
 (d) The Master Servicer shall invest any funds in the Collection Account in
Permitted Investments, which shall mature not later than the Business Day next preceding the Servicer Payment Date next following the date of such investment (except that any investment held by the Indenture Trustee may mature on such Servicer
Payment Date) and shall not be sold or disposed of prior to its maturity. All net income and gain realized from any such investment shall be for the benefit of the Master Servicer and shall be subject to its withdrawal or order on a Servicer Payment
Date. The Master Servicer shall deposit from its own funds the amount of any loss, to the extent not offset by investment income or earnings, in the Collection Account upon the realization of such loss. 
  
 Section 5.03. Permitted Withdrawals from the Collection Account. The
Master Servicer may make withdrawals from the Collection Account, on or prior to any Servicer Payment Date, for the following purposes: 
  
 (a) to pay to the Sponsor amounts received in respect of any Defective Mortgage Loan purchased or substituted for by the Sponsor to the extent that the
payment of any such amounts on the Servicer Payment Date upon which the proceeds of such purchase are paid would make the total amount distributed in respect of any such Mortgage Loan on such Servicer Payment Date greater than the Loan Repurchase
Price or the Substitution Adjustment therefor; 
  
 (b) to
reimburse the Master Servicer for unreimbursed Periodic Advances and unreimbursed Servicing Advances with respect to the Mortgage Loans for which it has made a 

  

 29 

 
Periodic Advance or Servicing Advance, from late or deferred payments collected, collections other than timely Monthly Payments, Liquidation Proceeds,
Insurance Proceeds and/or the Loan Repurchase Price or Substitution Adjustment of or relating to such Mortgage Loans; 
  
 (c) to reimburse the Master Servicer for any Periodic Advances and Servicing Advances determined in good faith to have become Nonrecoverable Advances,
such reimbursement to be made from any funds in the Collection Account; 
  
 (d) to withdraw any amount received from a Mortgagor that is recoverable and sought to be recovered as a voidable preference by a trustee in bankruptcy pursuant to the Bankruptcy Code in accordance with a final, nonappealable order of a
court having competent jurisdiction; 
  
 (e) to withdraw any funds
deposited in the Collection Account that were not required to be deposited therein; 
  
 (f) to pay the Master Servicer the Servicing Compensation pursuant to Section 5.08 hereof to the extent not retained or paid; 
  
 (g) to pay the Backup Servicer the Backup Servicing Fee pursuant to Section 5.08 hereof to the extent payments in respect of these amounts have not been
previously retained or paid; 
  
 (h) without duplication, and
solely out of amounts which are payable to a former master servicer pursuant to Section 7.02(g), to pay to the Backup Servicer, the Indenture Trustee or any successor master servicer amounts paid by them in connection with the transfer of the Master
Servicer’s servicing obligations pursuant to Article VII hereof and required under such Article VII to be borne by the Master Servicer; 
  
 (i) to withdraw income on the Collection Account as provided in Section 5.02(d); and 
  
 (j) amounts deposited into the Collection Account in respect of late fees, assumption fees and similar fees (other than
Prepayment Charges). 
  
 The Master Servicer shall keep and
maintain a separate accounting for each Mortgage Loan for the purpose of accounting for withdrawals from the Collection Account pursuant to this Section 5.03. Furthermore, in the event that servicing has been transferred to the Backup Servicer, all
reimbursements in respect of Servicer Advances and Periodic Advances shall be made on a first in, first out priority basis (i.e. the longest outstanding reimbursable Servicer Advance or Periodic Advance will be reimbursed first). 
  
 Section 5.04. Hazard Insurance Policies; Property Protection Expenses.
(a) The Master Servicer shall cause to be maintained with respect to each Mortgage Loan a hazard insurance policy with a carrier licensed in the state in which the Mortgaged Property is located that provides for fire and extended coverage, and which
provides for a recovery by the named insured of insurance proceeds relating to such Mortgage Loan in an amount not less than the least of (i) the outstanding Principal Balance of the Mortgage Loan plus the outstanding principal balance of 

  

 30 

 
any mortgage loan senior to such Mortgage Loan, but in no event shall such amount be less than is necessary to prevent the Mortgagor from becoming a
coinsurer thereunder, (ii) the minimum amount required to compensate for loss or damage on a replacement cost basis and (iii) the full insurable value of the related Mortgage Property. The Master Servicer shall also maintain on property acquired
upon foreclosure, or by deed in lieu of foreclosure, hazard insurance with extended coverage in an amount which is at least equal to the lesser of (i) the maximum insurable value from time to time of the improvements which are a part of such
property or (ii) the sum of the Principal Balance of such Mortgage Loan and the principal balance of any mortgage loan senior to such Mortgage Loan at the time of such foreclosure plus accrued interest and the good-faith estimate of the Master
Servicer of related Liquidation Expenses to be incurred in connection therewith. Amounts collected by the Master Servicer under any such policies shall be deposited in the Collection Account to the extent that they constitute Liquidation Proceeds or
Insurance Proceeds. Each hazard insurance policy shall contain a standard mortgage clause naming the Master Servicer, its successors and assigns, as mortgagee. The Master Servicer shall be under no obligation to require that any Mortgagor maintain
earthquake (except as provided herein) or other additional insurance and shall be under no obligation itself to maintain any such additional insurance on property acquired in respect of a Mortgage Loan, other than pursuant to such applicable laws
and regulations as shall at any time be in force and as shall require such additional insurance. 
  
 (b) In the event that the Master Servicer shall obtain and maintain a blanket policy with an insurer either (i) which satisfies the corresponding
requirements of Fannie Mae or Freddie Mac or (ii) approved in writing by the Note Insurer, such approval not to be unreasonably withheld, insuring against fire, flood and hazards of extended coverage on all of the Mortgage Loans, then, to the extent
such policy names the Master Servicer as loss payee and provides coverage in an amount equal to the aggregate unpaid Principal Balance on the Mortgage Loans without co-insurance, and otherwise complies with the requirements of this Section 5.04, the
Master Servicer shall be deemed conclusively to have satisfied its obligations with respect to fire and hazard insurance coverage under this Section 5.04, it being understood and agreed that such blanket policy may contain a deductible clause
(payable by the Master Servicer), in which case the Master Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property a policy complying with the preceding paragraph of this Section 5.04, and there shall
have been a loss which would have been covered by such policy, deposit in the Collection Account from the Master Servicer’s own funds the difference, if any, between the amount that would have been payable under a policy complying with the
preceding paragraph of this Section 5.04 and the amount paid under such blanket policy. Upon the request of the Indenture Trustee or the Note Insurer, the Master Servicer shall cause to be delivered to the Indenture Trustee or the Note Insurer, a
certified true copy of such policy. 
  
 (c) If the Mortgage Loan
at the time of origination relates to a Mortgaged Property in an area identified in the Federal Register by the Federal Emergency Management Agency as having special flood hazards as designated to the Master Servicer by the Sponsor, the Master
Servicer will cause to be maintained with respect thereto a flood insurance policy in a form meeting the requirements of the current guidelines of the Federal Insurance Administration with a generally acceptable carrier in an amount representing
coverage, and which provides for a recovery by the Master Servicer on behalf of the Trust of insurance proceeds relating to such Mortgage Loan of not less than the least of (i) the outstanding Principal Balance of the related 

  

 31 

 
Mortgage Loan, plus the principal balance of the related first lien, if any, (ii) the minimum amount required to compensate for damage or loss on a
replacement cost basis and (iii) the maximum amount of insurance that is available under the Flood Disaster Protection Act of 1973. The Master Servicer shall indemnify the Trust and the Note Insurer out of the Master Servicer’s own funds for
any loss to the Trust and the Note Insurer resulting from the Master Servicer’s failure to maintain the insurance required by this Section. 
  
 Section 5.05. Assumption and Modification Agreements. When a Mortgaged Property has been or is about to be conveyed by the Mortgagor, the Master
Servicer shall, to the extent it has knowledge of such conveyance or prospective conveyance, exercise its rights to accelerate the maturity of the related Mortgage Loan under any “due-on-sale” clause contained in the related Mortgage or
Mortgage Note; provided, however, that the Master Servicer shall not exercise any such right if (i) the “due-on-sale” clause, in the reasonable belief of the Master Servicer, is not enforceable under applicable law or (ii)
the Master Servicer reasonably believes that to permit an assumption of the Mortgage Loan would not materially and adversely affect the interest of the Noteholders or of the Note Insurer. In such event, the Master Servicer shall enter into an
assumption and modification agreement with the Person to whom such property has been or is about to be conveyed, pursuant to which such Person becomes liable under the Mortgage Note and, unless prohibited by applicable law or the mortgage documents,
the Mortgagor remains liable thereon. If the foregoing is not permitted under applicable law, the Master Servicer is authorized to enter into a substitution of liability agreement with such Person, pursuant to which the original Mortgagor is
released from liability and such Person is substituted as Mortgagor and becomes liable under the Mortgage Note; provided, however, that to the extent any such substitution of liability agreement would be delivered by the Master
Servicer outside of its usual procedures for mortgage loans held in its own portfolio the Master Servicer shall, prior to executing and delivering such agreement, obtain the prior written consent of the Note Insurer. The Mortgage Loan, if assumed,
shall conform in all respects to the requirements and representations and warranties of this Agreement. The Master Servicer shall notify the Indenture Trustee that any applicable assumption or substitution agreement has been completed by forwarding
to the Indenture Trustee the original copy of such assumption or substitution agreement, which copy shall be added by the Indenture Trustee to the related Indenture Trustee’s Mortgage File and which shall, for all purposes, be considered a part
of such Indenture Trustee’s Mortgage File to the same extent as all other documents and instruments constituting a part thereof. The Master Servicer shall be responsible for promptly recording any such assumption or substitution agreements. In
connection with any such assumption or substitution agreement, the required monthly payment on the related Mortgage Loan shall not be changed but shall remain as in effect immediately prior to the assumption or substitution, the stated maturity or
outstanding Principal Balance of such Mortgage Loan shall not be changed, the Mortgage Interest Rate shall not be changed nor shall any required monthly payments of principal or interest be deferred or forgiven. Any fee collected by the Master
Servicer for consenting to any such conveyance or entering into an assumption or substitution agreement shall be retained by or paid to the Master Servicer as additional servicing compensation. 
  
 Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any assumption which the Master Servicer may be
restricted by law from preventing, for any reason whatsoever. 
  

 32 

 Section 5.06. Realization Upon Defaulted Mortgage Loans. (a) The Master Servicer shall foreclose
upon or otherwise comparably effect the ownership on behalf of the Trust of Mortgaged Properties relating to defaulted Mortgage Loans as to which no satisfactory arrangements can be made for collection of Delinquent payments and which the Sponsor
has not purchased pursuant to Section 5.15, unless the Master Servicer reasonably believes that Net Liquidation Proceeds with respect to such Mortgage Loan would not be increased as a result of such foreclosure or other action, in which case, such
Mortgage Loan will be charged-off and will become a Liquidated Mortgage Loan. The Master Servicer shall have no obligation to purchase any Mortgaged Property at any foreclosure sale. In connection with such foreclosure or other conversion, the
Master Servicer shall exercise foreclosure procedures with the same degree of care and skill in their exercise or use, as it would ordinarily exercise or use under the circumstances in the conduct of their own affairs. Any amounts including
Liquidation Expenses, advanced by the Master Servicer in connection with such foreclosure or other action shall constitute Servicing Advances. 
  
 Pursuant to its efforts to sell any REO Property, the Master Servicer either itself or through an agent selected by the Master Servicer shall manage,
conserve, protect and operate such REO Property in the same manner and to such extent as is customary in the locality where such REO Property is located and may, incident to its conservation and protection of the interests of the Master Servicer,
rent the same, or any part thereof, as the Master Servicer deems to be in the best interest of the Trust and Note Insurer for the period prior to the sale of such REO Property. The net income generated from the REO Property and the proceeds from a
sale of any REO Property shall be deposited in the Collection Account. 
  
 (b) If the Master Servicer has reason to believe that a Mortgaged Property which the Master Servicer is contemplating acquiring in foreclosure or by deed in lieu of foreclosure contains environmental or hazardous waste risks known to the
Master Servicer, the Master Servicer shall notify the Backup Servicer, the Indenture Trustee and the Note Insurer and obtain the consent of the Note Insurer prior to acquiring the Mortgaged Property. The Master Servicer shall not institute
foreclosure actions with respect to such a property if it reasonably believes that such action would not be consistent with the Accepted Servicing Practices, and in no event shall the Master Servicer be required to manage, operate or take any other
action with respect thereto which the Master Servicer in good faith believes will result in “clean-up” or other liability under applicable law, unless the Master Servicer receives an indemnity acceptable to it in its sole discretion.

  
 (c) The Master Servicer shall determine, with respect to each
defaulted Mortgage Loan, when it has recovered, whether through trustee’s sale, foreclosure sale or otherwise, all amounts if any it expects to recover from or on account of such defaulted Mortgage Loan, whereupon such Mortgage Loan shall
become a Liquidated Mortgage Loan. 
  
 (d) Net Foreclosure
Profits, if any, shall be paid directly to the Sponsor. 
  

 33 

 (e) With respect to its obligations under this Section 5.06, the Master Servicer shall take all such
actions as it reasonably believes are consistent with Accepted Servicing Practices. 
  
 Section 5.07. Indenture Trustee to Cooperate. (a) Upon the payment in full of any Mortgage Loan or the receipt by the Master Servicer of a notification that payment in full will be escrowed in a manner
customary for such purposes, the Master Servicer shall deliver to the Indenture Trustee one copy of a Request for Release. Upon receipt of such copy of the Request for Release, the Indenture Trustee shall promptly release the related Indenture
Trustee’s Mortgage File, in trust to (i) the Master Servicer (ii) an escrow agent or (iii) any employee, agent or attorney of the Indenture Trustee, in each case pending its release by the Master Servicer, such escrow agent or such employee,
agent or attorney of the Indenture Trustee, as the case may be. Upon any such payment in full, or the receipt of such notification that such funds have been placed in escrow, the Master Servicer is authorized to give, as attorney-in-fact for the
Indenture Trustee and the mortgagee under the Mortgage which secured the Mortgage Note, an instrument of satisfaction (or assignment of Mortgage without recourse) regarding the Mortgaged Property relating to such Mortgage, which instrument of
satisfaction or assignment, as the case may be, shall be delivered to the Person or Persons entitled thereto against receipt therefor of payment in full, it being understood and agreed that no expense incurred in connection with such instrument of
satisfaction or assignment, as the case may be, shall be chargeable to the Collection Account. 
  
 (b) (i) From time to time and as appropriate in the servicing of any Mortgage Loan, including, without limitation, foreclosure or other comparable conversion of a Mortgage Loan or collection under any applicable
Insurance Policy, the Indenture Trustee shall (except in the case of the payment or liquidation pursuant to which the related Indenture Trustee’s Mortgage File is released to an escrow agent or an employee, agent or attorney of the Indenture
Trustee), upon request of the Master Servicer and delivery to the Indenture Trustee of one copy of a Request for Release, release the related Indenture Trustee’s Mortgage File to the Master Servicer and shall execute such documents as shall be
necessary to the prosecution of any such proceedings, including, without limitation, an assignment without recourse of the related Mortgage to the Master Servicer. The Indenture Trustee shall complete in the name of the Indenture Trustee any
endorsement in blank on any Mortgage Note prior to releasing such Mortgage Note to the Master Servicer. Such receipt shall obligate the Master Servicer to return the Indenture Trustee’s Mortgage File to the Indenture Trustee when the need
therefor by the Master Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which case, the Master Servicer shall deliver one copy of a Request for Release indicating such loan has been paid in full. 
  
 (ii) Each Request for Release may be delivered to the
Indenture Trustee (x) via mail or courier, (y) via facsimile or (z) by such other means, including, without limitation, electronic or computer readable medium, as the Master Servicer and the Indenture Trustee shall mutually agree. The Indenture
Trustee shall promptly release the related Indenture Trustee’s Mortgage File(s) within three (3) Business Days of receipt of one copy of a properly completed Request for Release pursuant to clauses (x), (y) or (z) above or such shorter period
as may be agreed upon by the Master Servicer and the Indenture Trustee. Receipt of a Request for Release pursuant to clauses (x), (y) or (z) above shall be authorization to the Indenture Trustee to release such Indenture Trustee’s 

  

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Mortgage Files, provided the Indenture Trustee has determined that such Request for Release has been executed, with respect to clauses (x) or (y) above, or
approved, with respect to clause (z) above, by a Servicing Officer of the Master Servicer. If the Indenture Trustee is unable to release the Indenture Trustee’s Mortgage Files within the time frames previously specified, the Indenture Trustee
shall immediately notify the Master Servicer, indicating the reason for such delay, but in no event shall such notification be later than five Business Days after receipt of a Request for Release. If the Master Servicer, is required to pay penalties
or damages due solely to the Indenture Trustee’s negligent failure to release the related Indenture Trustee’s Mortgage File or the Indenture Trustee’s negligent failure to execute and release documents in a timely manner, the
Indenture Trustee shall be liable for such penalties or damages. 
  
 (c) No costs associated with the procedures described in this Section 5.07 shall be an expense of the Trust. 
  
 Section 5.08. Servicing Compensation; Payment of Certain Expenses by Master Servicer. The Master Servicer shall be entitled to receive and retain,
out of collections on the Mortgage Loans for each Due Period, as servicing compensation for such Due Period, an amount (the “Servicing Fee”) equal to the product of one-twelfth of the Servicing Fee Rate and the aggregate Stated
Principal Balance of the Mortgage Loans in each Loan Group as of the beginning of such Due Period. Additional servicing compensation in the form of assumption fees, late payment charges or extension and other administrative charges (other than
Prepayment Charges) shall be retained by the Master Servicer. The Master Servicer shall be required to pay all expenses incurred by it in connection with its activities hereunder (including payment of the Indenture Trustee Fee to the extent that
monies in the Collection Account are insufficient therefor, as provided in Section 6.16 of the Indenture, and all other fees and expenses not expressly stated hereunder to be payable by or from another source) and shall not be entitled to
reimbursement therefor except as specifically provided herein. 
  
 The Backup Servicer shall be entitled to receive, and the Master Servicer shall pay, out of collections on the Mortgage Loans for each Due Period, as servicing compensation for such Due Period, an amount (the “Backup Servicing
Fee”) equal to the product of one-twelfth of the Backup Servicing Fee Rate and the aggregate Stated Principal Balance of the Mortgage Loans in each Loan Group as of the beginning of such Due Period. The Backup Servicer will also be entitled
to an upfront fee of $7,500.00. 
  
 Section 5.09. Annual
Statement as to Compliance. The Master Servicer will deliver to the Backup Servicer, the Trust, the Indenture Trustee, the Rating Agencies, the Note Insurer and, the Sponsor on or before March 15 of each year, beginning March 15, 2004, an
Officer’s Certificate of the Master Servicer stating that (a) a review of the activities of the Master Servicer during the preceding calendar year and of its performance under this Agreement has been made under such officer’s supervision
and (b) to the best of such officer’s knowledge, based on such review, the Master Servicer has fulfilled all its material obligations under this Agreement throughout such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officer and the nature and status thereof. 
  

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 Section 5.10. Annual Independent Public Accountants’ Servicing Report. On or before March 15
of each year, beginning March 15, 2004, the Master Servicer at its expense shall cause a firm of independent public accountants that is a member of the American Institute of Certified Public Accountants (who may also render other services to the
Master Servicer) to furnish a report to the Backup Servicer, the Trust, the Indenture Trustee, the Rating Agencies, the Note Insurer and the Sponsor to the effect that such firm has examined certain documents and records relating to the servicing of
mortgage loans under servicing agreements (including this Agreement) substantially similar to this Agreement, and that such examination, which has been conducted substantially in compliance with the Uniform Single Attestation Program for Mortgage
Bankers or the Audit Guide for Audits of HUD Approved Nonsupervised Mortgagees (to the extent that the procedures in such audit guide are applicable to the servicing obligations set forth in such agreements), has disclosed no items of noncompliance
with the provisions of this Agreement which, in the opinion of such firm, are material, except for such items of noncompliance as shall be set forth in such report. 
  
 Section 5.11. Access to Certain Documentation. The Master Servicer shall provide to the Backup Servicer, the
Indenture Trustee, the Note Insurer, the FDIC and the supervisory agents and examiners (as required in the latter case by applicable State and federal regulations) of each of the foregoing access to the documentation regarding the Mortgage Loans,
such access being afforded without charge but only upon reasonable request and during normal business hours at the offices of the Master Servicer designated by it. 
  
 Upon any change in the format of the computer tape maintained by the Master Servicer in respect of the Mortgage Loans, the
Master Servicer shall deliver a copy of such computer tape to the Indenture Trustee and the Backup Servicer and in addition shall provide a copy of such computer tape to the Indenture Trustee, the Backup Servicer and the Note Insurer at such other
times as the Indenture Trustee or the Note Insurer may reasonably request. 
  
 The Master Servicer shall keep confidential (including from affiliates thereof) information concerning the Mortgage Loans, except as required by law. 
  
 Section 5.12. Maintenance of Fidelity Bond. The Master Servicer and the Backup Servicer shall each, during the term
of its service as Master Servicer and Backup Servicer, respectively, maintain in force a fidelity bond and errors and omissions insurance in respect of their respective officers, employees or agents. Such bond and insurance shall comply with the
requirements from time to time of Fannie Mae for Persons performing servicing for mortgage loans purchased by such association. 
  
 Section 5.13. Subservicing Agreements Between the Master Servicer and Subservicer and Subservicers. (a) The Master Servicer may enter into
subservicing agreements for any servicing and administration of Mortgage Loans with any institution which is in compliance with the laws of each state necessary to enable it to perform its obligations under such subservicing agreement. The Master
Servicer shall give notice to the Backup Servicer, the Note Insurer and the Indenture Trustee of the appointment of any subservicer and shall furnish to the Backup Servicer, the Note Insurer and the Indenture Trustee a copy of the subservicing
agreement. The Master Servicer shall give notice to each Rating Agency of the appointment of any subservicer. No such appointment of a subservicer shall be effective without the consent of the Note Insurer. 

  

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For purposes of this Agreement, the Master Servicer shall be deemed to have received payments on Mortgage Loans when any subservicer has received such
payments. Any such subservicing agreement shall be consistent with and not violate the provisions of this Agreement. 
  
 (b) The Master Servicer may, with the consent of the Note Insurer, terminate any subservicing agreement in accordance with the terms and conditions of
such subservicing agreement and thereafter directly service the related Mortgage Loans itself or enter into a subservicing agreement with a successor subservicer that qualifies under Subsection (a) of this Section 5.13. The Master Servicer shall
give notice to each Rating Agency of the termination of any subservicer and the appointment of any successor subservicer. 
  
 (c) The Master Servicer shall not be relieved of its obligations under this Agreement notwithstanding any subservicing agreement or any of the provisions
of this Agreement relating to agreements or arrangements between the Master Servicer and a subservicer or otherwise, and the Master Servicer shall be obligated to the same extent and under the same terms and conditions as if it alone were servicing
and administering the Mortgage Loans. The Master Servicer shall be entitled to enter into any agreement with a subservicer for indemnification of the Master Servicer by such subservicer and nothing contained in such subservicing agreement shall be
deemed to limit or modify this Agreement. The Trust shall not indemnify the Master Servicer for any losses due to the Master Servicer’s negligence. 
  
 (d) Any subservicing agreement and any other transactions or services relating to the Mortgage Loans involving a subservicer shall be deemed to be between
the subservicer and the Master Servicer alone and the Backup Servicer, the Note Insurer, the Indenture Trustee and the Noteholders shall not be deemed parties thereto and shall have no claims, rights, obligations, duties or liabilities with respect
to any Subservicer except as set forth in Subsection (e) of this Section 5.13 and the related Subservicing Agreement. 
  
 (e) Notwithstanding any contrary provision contained herein, in connection with the assumption of the responsibilities, duties and liabilities and of the
authority, power and rights of the Master Servicer hereunder by the Backup Servicer, the Indenture Trustee or any other successor master servicer pursuant to Section 7.02, it is understood and agreed that the Master Servicer’s rights and
obligations under any subservicing agreement then in force between the Master Servicer and a subservicer may be assumed or terminated (without cost) by the Backup Servicer, the Indenture Trustee or any other successor master servicer at its option
as successor to the Master Servicer. 
  
 The Master Servicer
shall, upon request of the Backup Servicer, the Indenture Trustee or the Note Insurer, but at the expense of the Master Servicer, deliver to the assuming party documents and records relating to each subservicing agreement and an accounting of
amounts collected and held by it and otherwise use its best reasonable efforts to effect the orderly and efficient transfer of the subservicing agreements to the assuming party, without the payment of any fee by the Backup Servicer, the Indenture
Trustee, any Noteholders or the Note Insurer, notwithstanding any contrary provision in any subservicing agreement. 
  
 Section 5.14. Reports to the Indenture Trustee; Collection Account Statements. Not later than twenty-five (25) days after each Payment Date, the
Master Servicer shall provide to the 

  

 37 

 
Indenture Trustee, the Backup Servicer and the Note Insurer a statement, certified by a Servicing Officer, setting forth the status of the Collection Account
as of the close of business on the last day of the Due Period preceding such Payment Date, stating that all payments required by this Agreement to be made by the Master Servicer on behalf of the Indenture Trustee have been made (or if any required
payment has not been made by the Master Servicer, specifying the nature and status thereof) and showing, for the period covered by such statement, the aggregate of deposits into and withdrawals from the Collection Account and the aggregate of
deposits into each Payment Account as specified in Section 6.01. Such statement shall also state the aggregate Stated Principal Balance and the aggregate unpaid principal balance of all the Mortgage Loans as of the close of business on the last day
of the month preceding the month in which such Payment Date occurs. 
  
 Section 5.15. Optional Purchase of Defaulted Mortgage Loans. (a) The Sponsor, in its sole discretion, shall have the right to elect (by written notice sent to the Master Servicer, the Indenture Trustee and the Note Insurer), but
shall not be obligated, to purchase for its own account from the Trust any Mortgage Loan which is ninety (90) days or more Delinquent in the manner at the Loan Repurchase Price (except that the amount described in the definition of Loan Repurchase
Price shall in no case be net of the Servicing Fee and the Backup Servicing Fee). The purchase price for any Mortgage Loan purchased hereunder shall be deposited in the Collection Account and the Indenture Trustee, upon the Indenture Trustee’s
receipt of written notice by the Master Servicer of such deposit, shall release or cause to be released to the purchaser of such Mortgage Loan the related Indenture Trustee’s Mortgage File and shall execute and deliver such instruments of
transfer or assignment prepared by the purchaser of such Mortgage Loan, in each case without recourse, as shall be necessary to vest in the purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and the purchaser of such Mortgage
Loan shall succeed to all the Indenture Trustee’s right, title and interest in and to such Mortgage Loan and all security and documents related thereto. Such assignment shall be an assignment outright and not for security. The purchaser of such
Mortgage Loan shall thereupon own such Mortgage Loan, and all security and documents, free of any further obligation to the Indenture Trustee, the Note Insurer or the Noteholders with respect thereto. The purchaser of such Mortgage Loan shall give
written notice to the Note Insurer of the means by which any Mortgage Loan purchased pursuant to this Section 5.15 is ultimately disposed of and any other information regarding any such Mortgage Loan reasonably requested by the Note Insurer.

  
 (b) After the Sponsor or an Affiliate of the Sponsor has
repurchased any Mortgage Loans which are 90 days or more Delinquent in an aggregate amount equal to 1% of the Maximum Collateral Amount, then notwithstanding the foregoing, unless the Note Insurer consents, the Sponsor or an Affiliate of the Sponsor
may only exercise its option pursuant to this Section 5.15 with respect to the Mortgage Loan or Mortgage Loans (including REO Mortgage Loans) that have been Delinquent for the longest period at the time of such repurchase. Any request by the Sponsor
or an Affiliate of the Sponsor to the Note Insurer for consent to repurchase Mortgage Loans that are not the most Delinquent shall be accompanied by a description of the Mortgage Loans that have been Delinquent longer than the Mortgage Loan or
Mortgage Loans the Sponsor or such Affiliate proposes to repurchase. If the Note Insurer fails to respond to such request within ten (10) Business Days after receipt thereof, the Sponsor or such Affiliate may repurchase the Mortgage Loan or Mortgage
Loans proposed to be repurchased without the consent of, or any further action by, the Note Insurer. Notice to the Note Insurer shall be delivered in accordance with the terms of the Insurance Agreement. 
  

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 Section 5.16. Reports to be Provided by the Master Servicer and the Backup Servicer. (a) By 3:00
p.m. eastern time on the second Business Day following the fifteenth (15th) day of each month (the “Servicer Reporting Date”), the Master Servicer shall deliver to the Indenture Trustee, the Backup Servicer, the Underwriter, Intex,
Bloomberg and the Note Insurer a Servicer Remittance Report for the related Servicer Payment Date setting forth the following information with respect to all Mortgage Loans as well as a break out as to each Loan Group as of the close of business on
the last Business Day of the prior calendar month (except as otherwise provided in clause (v) below): 
  
 (i) the total number of Mortgage Loans and the Aggregate Principal Balances thereof, together with the number, Aggregate Principal
Balances of such Mortgage Loans and the percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans (A) 30-59 days
Delinquent, (B) 60-89 days Delinquent and (C) 90 or more days Delinquent; 
  
 (ii) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the
Aggregate Principal Balance of all Mortgage Loans in foreclosure proceedings and the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage
Loans also included in any of the statistics described in the foregoing clause (i); 
  
 (iii) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate Principal Balances of the
Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans relating to Mortgagors in bankruptcy proceedings and the number, Aggregate Principal Balances of all Mortgage Loans
and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage Loans also included in any of the statistics described in the foregoing clause (i); 
  
 (iv) the number, Aggregate Principal Balances of all Mortgage Loans and percentage (based on the Aggregate
Principal Balances of the Mortgage Loans) of the Aggregate Principal Balances of such Mortgage Loans to the Aggregate Principal Balance of all Mortgage Loans relating to REO Properties and the number, Aggregate Principal Balances of all Mortgage
Loans and percentage (based on the Aggregate Principal Balances of the Mortgage Loans) of any such Mortgage Loans also included in any of the statistics described in the foregoing clause (i); 
  
 (v) the weighted average Mortgage Interest Rate for the
Mortgage Loans in Loan Group 1, Loan Group 2 and Loan Group 3, in each case, as of the Due Date occurring in the Due Period related to such Payment Date; 
  

 39 

 (vi) the weighted average remaining term to stated maturity of all Mortgage Loans;

  
 (vii) the book value of any REO Property;

  
 (viii) the Cumulative Loan Loss Percentage as
of the related Payment Date; 
  
 (ix) the number
and the Aggregate Principal Balance of Mortgage Loans repurchased pursuant to Section 5.15; and 
  
 (x) such other loan level information as either (a) the Indenture Trustee may reasonably request to enable it to prepare the Indenture
Trustee’s Remittance Report or (b) the Note Insurer may reasonably request. 
  
 (b) [Reserved]. 
  
 (c) In
addition to the contingent obligations of the Backup Servicer under this Agreement, the Backup Servicer shall establish and maintain a system of transaction accounting in regard to the Mortgage Loans substantially similar to that maintained by the
Master Servicer and post to such system all information relating to the Mortgage Loans obtained by the Backup Servicer pursuant to Section 5.16 and 5.18, to enable the Backup Servicer to perform the obligations of a successor master servicer
immediately upon any termination or resignation of the Master Servicer. The Backup Servicer’s obligations described in this Section 5.16(c) and its obligations pursuant to Section 7.02 shall be the only obligations of the Backup Servicer under
this Agreement. All such obligations of the Backup Servicer are effective as of the date of this Agreement. 
  
 Section 5.17. [Reserved]. 
  
 Section 5.18. Periodic Advances. If, on any Servicer Payment Date, the Master Servicer determines that any Monthly Payments due during the related
Due Period have not been received as of the end of the related Due Period, the Master Servicer shall determine the amount of any Periodic Advance required to be made with respect to the related Payment Date. The Master Servicer shall deliver, one
(1) Business Day after such Servicer Payment Date, a magnetic tape, diskette (or such other electronic medium used by the Master Servicer for such purpose) to the Backup Servicer indicating the payment status of each Mortgage Loan as of the date
which is two Business Days prior to such Servicer Payment Date. The Master Servicer shall include in the amount to be deposited in the related Payment Account on such Servicer Payment Date an amount equal to the Periodic Advance, if any, which
deposit may be made in whole or in part from funds in the Collection Account being held for future payment or withdrawal on or in connection with Payment Dates in subsequent months, other than any such amounts which are voluntary Principal
Prepayments in full. Any funds being held for future payment to Noteholders and so used shall be replaced by the Master Servicer from its own funds by deposit in the Collection Account on or before the Business Day preceding any future Servicer
Payment Date to the extent that funds in the Collection Account on such Servicer Payment Date shall be less than the Servicer Remittance Amount for such Payment Date. 
  

 40 

 The Master Servicer shall designate on its records the specific Mortgage Loans and related installments
(or portions thereof) as to which such Periodic Advance shall be deemed to have been made, such determination being conclusive for purposes of withdrawals from the Collection Account pursuant to Section 5.03 hereof. 
  
 Section 5.19. Indemnification; Third Party Claims. The Master Servicer
agrees to indemnify and to hold each of the Trust, the Owner Trustee, the Seller, the Sponsor, the Backup Servicer, the Indenture Trustee, the Note Insurer and each Noteholder harmless against any and all claims, losses, penalties, fines,
forfeitures, legal fees and related costs, judgments, and any other costs, fees and expenses (including attorneys’ fees and expenses) that the Trust, the Owner Trustee, the Seller, the Sponsor, the Backup Servicer, the Indenture Trustee, the
Note Insurer and any Noteholder (or any director, officer, employee or agent of the foregoing) may sustain in any way related to the failure of the Master Servicer to perform its duties and service the Mortgage Loans in compliance with the terms of
this Agreement and the other Basic Documents and in connection with the Indenture as provided in Section 6.16 thereof. Each indemnified party and the Master Servicer shall immediately notify the other indemnified parties if a claim is made by a
third party with respect to this Agreement and the other Basic Documents and the Master Servicer shall assume the defense of any such claim and pay all expenses in connection therewith, including reasonable counsel fees, and promptly pay, discharge
and satisfy any judgment or decree which may be entered against the Trust, the Owner Trustee, the Seller, the Sponsor, the Backup Servicer, the Master Servicer, the Indenture Trustee, the Note Insurer and/or a Noteholder (or any director, officer,
employee or agent of the foregoing) in respect of such claim. The obligations of the Master Servicer under this Section 5.19 arising prior to any resignation or termination of the Master Servicer hereunder shall survive the resignation or
termination of the Master Servicer or the termination of this Agreement or the Indenture. 
  
 Section 5.20. Maintenance of Corporate Existence and Licenses; Merger or Consolidation of the Master Servicer and Backup Servicer. (a) Each of the Master Servicer and the Backup Servicer will keep in full
effect its existence, rights and franchises as a corporation, will obtain and preserve its qualification to do business as a foreign corporation in each jurisdiction necessary to protect the validity and enforceability of this Agreement or any of
the Mortgage Loans and to perform its duties under this Agreement and will otherwise operate its business so as to cause the representations and warranties under Section 3.01 hereof to be true and correct at all times under this Agreement.

  
 (b) Any corporation into which the Master Servicer or the
Backup Servicer may be merged or converted or with which it may be consolidated, or any corporation resulting from any merger, conversion or consolidation to which the Master Servicer or the Backup Servicer shall be a party, or any corporation
succeeding to all or substantially all of the business of the Master Servicer or the Backup Servicer, shall be the successor of the Master Servicer or the Backup Servicer, as applicable, hereunder, only with the consent of the Note Insurer but
without the execution or filing of any paper or any further act on the part of any of the parties hereto provided that, in the case of the Master Servicer, such corporation meets the qualifications set forth in Section 7.02(b). The Master Servicer
or the Backup Servicer, as applicable, shall send notice of any such merger or consolidation to the Owner Trustee, the Indenture Trustee, the Note Insurer and the Master Servicer or the Backup Servicer, as applicable. 
  

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 Section 5.21. Assignment of Agreement by Master Servicer and Backup Servicer; Master Servicer and
Backup Servicer Not to Resign. Neither the Master Servicer nor the Backup Servicer shall assign this Agreement nor resign from the obligations and duties hereby imposed on it except with the prior consent of the Note Insurer (a copy of which
will be provided to the Indenture Trustee), or upon the determination that the Master Servicer’s or Backup Servicer’s duties hereunder are no longer permissible under applicable law and that such incapacity cannot be cured by the Master
Servicer or the Backup Servicer, as applicable, without incurring, in the reasonable judgment of the Note Insurer, unreasonable expense. Any such determination that the Master Servicer’s or the Backup Servicer’s duties hereunder are no
longer permissible under applicable law permitting the resignation of the Master Servicer or the Backup Servicer, as applicable, shall be evidenced by a written Opinion of Counsel (who may be counsel for the Master Servicer or the Backup Servicer)
to such effect delivered to the Indenture Trustee, the Trust, the Seller, the Sponsor, the Note Insurer and the Backup Servicer or the Master Servicer, as applicable. No such resignation of the Master Servicer shall become effective until the Backup
Servicer or a successor master servicer appointed in accordance with the terms of this Agreement has assumed the Master Servicer’s responsibilities and obligations hereunder in accordance with Section 7.02. The Master Servicer or the Backup
Servicer, as applicable, shall provide the Indenture Trustee, the Rating Agencies and the Note Insurer with 30 days’ prior written notice of its intention to resign pursuant to this Section 5.21. 
  
 Section 5.22. Periodic Filings with the Securities and Exchange Commission
Additional Information. 
  
 (a) The Indenture Trustee shall
reasonably cooperate with the Master Servicer in connection with the satisfaction of the reporting requirements under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Indenture Trustee shall prepare on behalf of
the Trust Fund any Forms 8-K and 10-K customary for similar securities as required by the Exchange Act and the Rules and Regulations of the Securities and Exchange Commission (the “Commission”) thereunder, and shall file (via the
Commission’s Electronic Data Gathering and Retrieval System) such Forms on behalf of the Master Servicer. The Master Servicer hereby grants to the Indenture Trustee a limited power of attorney to execute and file each such Form 8-K but only to
the extent no accompanying certification is required to be filed on behalf of the Master Servicer. Such power of attorney shall continue until the earlier of (i) receipt by the Indenture Trustee from the Master Servicer of written termination of
such power of attorney and (ii) termination of the Trust Fund. The Master Servicer shall execute the Form 10-Ks. The Indenture Trustee shall have no liability with respect to any failure to properly prepare or file such periodic reports resulting
from or relating to the Indenture Trustee’s inability or failure to obtain any information not resulting from its own negligence or willful misconduct. 
  
 (b) Each Form 8-K shall be filed by the Indenture Trustee within 15 days after each Payment Date, with a copy of the statement to Certificateholders for
such Payment Date as an exhibit thereto. Prior to March 30th of each year (or such earlier date as may be required by the Exchange Act and the Rules and Regulations of the Commission), the Indenture Trustee shall file a Form 10-K, in substance as
required by applicable law or the Commission’s staff interpretations. Such Form 10-K shall include as exhibits the Master Servicer’s annual statement of compliance described under Section 5.09 and the accountant’s report described
under Section 5.10, in each case to the extent they have been timely delivered to the Indenture Trustee. If they 

  

 42 

 
are not so timely delivered, the Indenture Trustee shall file an amended Form 10-K including such documents as exhibits reasonably promptly after they are
delivered to the Indenture Trustee. The Indenture Trustee shall have no liability with respect to any failure to properly prepare or file such periodic reports resulting from or relating to the Indenture Trustee’s inability or failure to obtain
any information not resulting from its own negligence or willful misconduct. The Form 10-K shall also include a certification in the form attached hereto as Exhibit G (the “Certification”), which shall be signed by the senior
officer of the Master Servicer in charge of securitization. The Indenture Trustee shall prepare and deliver each Form 10-K to the Sponsor for execution no later than March 20th of each year. The Master Servicer shall return the executed Form 10-K to
the Indenture Trustee for filing no later than March 25th of each year. 
  
 (c) The Master Servicer shall indemnify and hold harmless the Indenture Trustee and its officers, directors and affiliates from and against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a breach of the Master Servicer’s obligations under this Section or the Sponsor’s negligence, bad faith or willful misconduct in connection therewith. 

 
 (d) Upon any filing with the Commission, the Indenture Trustee shall
promptly deliver to the Master Servicer a copy of any executed report, statement or information. 
  
 Section 5.23. Administrative Duties. (a) Duties with Respect to the Basic Documents. The Master Servicer shall perform all its duties and
the duties of the Trust under the Basic Documents. In addition, the Master Servicer shall consult with the Owner Trustee as the Master Servicer deems appropriate regarding the duties of the Trust under the Basic Documents. The Master Servicer shall
monitor the performance of the Trust and shall advise the Owner Trustee when action is necessary to comply with the Trust’s duties under the Basic Documents. The Master Servicer shall prepare for execution by the Trust or shall cause the
preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and opinions as it shall be the duty of the Trust to prepare, file or deliver pursuant to the Basic Documents. In furtherance of the
foregoing, the Master Servicer shall take all necessary action that is the duty of the Trust to take pursuant to the Basic Documents. 
  
 (b) Duties with Respect to the Trust. In addition to the duties of the Master Servicer set forth in this Agreement or any of the Basic Documents,
the Master Servicer shall perform such calculations and shall prepare for execution by the Trust or the Owner Trustee or shall cause the preparation by other appropriate Persons of all such documents, reports, filings, instruments, certificates and
opinions as it shall be the duty of the Trust or the Owner Trustee to prepare, file or deliver pursuant to this Agreement or any of the Basic Documents or under state and federal tax and securities laws and shall take all appropriate action that it
is the duty of the Trust to take pursuant to this Agreement or any of the Basic Documents. In accordance with the directions of the Trust or the Owner Trustee, the Master Servicer shall administer, perform, or supervise the performance of such other
activities in connection with the Basic Documents as are not covered by any of the foregoing provisions and as are expressly requested by the Trust or the Owner Trustee and are reasonably within the capability of the Master Servicer. 
  

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 In carrying out the foregoing duties under this Agreement, the Master Servicer may enter into
transactions with or otherwise deal with any of its Affiliates; provided, however, that the terms of any such transactions or dealings shall be in accordance with any directions received from the Trust and shall be, in the Master Servicer’s
opinion, no less favorable to the Trust in any material respect. 
  
 (c) Additional Information to be Furnished to the Issuer. The Master Servicer shall furnish to the Owner Trustee from time to time such additional information regarding the Trust or the Basic Documents as the Owner Trustee shall
reasonably request. The Master Servicer shall prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer pursuant to the Sarbanes-Oxley Act of 2002 or the rules and regulations promulgated thereunder.

  
 ARTICLE VI 
  
 APPLICATION OF FUNDS 
  
 Section 6.01. Deposits to the Payment Account. By 12:00 noon (Eastern
Time) on each Servicer Payment Date, the Master Servicer shall cause to be deposited in the related Payment Account, from funds on deposit in the Collection Account, an amount equal to the Servicer Remittance Amount with respect to the related
Payment Date, minus any portion thereof payable to the Master Servicer or the Backup Servicer pursuant to Section 5.03. 
  
 Section 6.02. Collection of Money. Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of all money
and other property payable to or receivable by the Indenture Trustee pursuant to this Agreement, including (a) all payments due on the Mortgage Loans in accordance with the respective terms and conditions of such Mortgage Loans and required to be
paid over to the Indenture Trustee by the Master Servicer and (b) Insured Amounts. 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 the Indenture. 

 
 Section 6.03. Application of Principal and Interest. In the event
that Net Liquidation Proceeds on a Liquidated Mortgage Loan are less than the Principal Balance of the related Mortgage Loan plus accrued interest thereon, or any Mortgagor makes a partial payment of any Monthly Payment due on a Mortgage Loan, such
Net Liquidation Proceeds or partial payment shall be applied to payment of the related Mortgage Note as provided therein, and if not so provided, first to interest accrued at the Mortgage Interest Rate and then to principal. 
  
 Section 6.04. [Reserved]. 
  
 Section 6.05. Compensating Interest. Not later than the Servicer
Payment Date, the Master Servicer shall remit to the Indenture Trustee (without right to reimbursement therefor) for deposit into the related Payment Account, an amount equal to, for all of the Mortgage Loans, the lesser of (a) the Prepayment
Interest Shortfalls for all of the Mortgage Loans for the related Payment Date resulting from Principal Prepayments in full during the related Prepayment Period and (b) its aggregate Servicing Fee with respect to all of the Mortgage Loans for the
related Due Period (the “Compensating Interest”). 
  

 44 

 Section 6.06. Effect of Payments by the Note Insurer; Subrogation. 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 Estate. The Seller,
the Sponsor, the Master Servicer, the Trust and the Indenture Trustee acknowledge and agree, that without the need for any further action on the part of the Note Insurer, the Seller, the Sponsor, the Master Servicer, the Trust, the Indenture Trustee
or the Note Registrar (a) 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
Master Servicer, the Seller, the Sponsor, 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
Estate, 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 (b) the Note Insurer shall be paid such amounts from the sources and in the manner
provided herein for the payment of such amounts and as provided in the Insurance Agreement. The Indenture Trustee and the Master Servicer 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 under this Agreement without limiting the rights or affecting the interests of the Holders as otherwise set forth herein. 
  
 ARTICLE VII 
  
 SERVICER DEFAULT 
  
 Section 7.01. Servicer Events of Default. (a) I. The following events shall each constitute a “Servicer Event of Default” hereunder:

  
 (i) any failure by the Master Servicer to
remit to the Indenture Trustee any payment required to be made by the Master Servicer under the terms of this Agreement (other than Servicing Advances covered by clause (ii) below and Periodic Advances, which shall have no cure period), which
continues unremedied for one (1) Business Day after the date upon which notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Indenture Trustee or to the Master Servicer and Indenture Trustee
by the Note Insurer or Noteholders affected thereby evidencing Percentage Interests of at least 25%; 
  
 (ii) the failure by the Master Servicer to make any required Servicing Advance, which failure continues unremedied for a period of thirty
(30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Master Servicer by the Indenture Trustee or to the Master Servicer and the Indenture Trustee by the Note Insurer or
Noteholders affected thereby evidencing Percentage Interests of at least 25%; 
  
 (iii) any failure on the part of the Master Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Master Servicer contained in this Agreement, or the
failure of any representation and warranty made pursuant to Section 3.01(a) hereof to be true and correct which continues 

  

 45 

 
unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given
to the Master Servicer by the Indenture Trustee or to the Master Servicer and the Indenture Trustee by the Note Insurer or Noteholders affected thereby evidencing Percentage Interests of at least 25%; 
  
 (iv) a decree or order of a court or agency or supervisory
authority having jurisdiction in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law or for the appointment of a conservator or receiver or liquidation in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Master Servicer and such decree or order shall have remained in force, undischarged or unstayed
for a period of ninety (90) days; 
  
 (v) the
Master Servicer shall consent to the appointment of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Master Servicer or of or relating
to all or substantially all of the Master Servicer’s property; 
  
 (vi) the Master Servicer shall admit in writing its inability generally to pay its debts as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment
for the benefit of its creditors, or voluntarily suspend payment of its obligations; 
  
 (vii) the Note Insurer shall notify the Indenture Trustee of any “event of default” under the Insurance Agreement; 

 
 (viii) if on any Payment Date the Rolling Six Month
Delinquency Rate exceeds 14.0%; 
  
 (ix) if on
any Payment Date, the Cumulative Loan Loss Percentage exceeds the following percentages on any Payment Date during the following periods: 
  

	 Payment Date Occurring During

	  	Percentage

	 
	 December 2003 through November 2005
	  	1.70	%
	 December 2005 through November 2006
	  	2.50	%
	 December 2006 through November 2007
	  	3.20	%
	 December 2007 and thereafter
	  	4.50	%

  
 (x)
if the total stockholders’ equity of the Master Servicer, as determined by the Master Servicer’s independent accountants in accordance with generally accepted accounting principles, shall be less than $60 million; 
  
 (xi) if the total on- or off-balance sheet financing
available to the Master Servicer shall be less than $400 million; or 
  
 (xii) the occurrence of an Event of Default under the Indenture. 
  

 46 

 II. The following events shall each constitute a “Backup Servicer Event of Default” hereunder:

  
 (i) any failure on the part of the Backup
Servicer duly to observe or perform in any material respect any other of the covenants or agreements on the part of the Backup Servicer contained in this Agreement, or the failure of any representation and warranty made pursuant to Section 3.03(a)
hereof to be true and correct which continues unremedied for a period of thirty (30) days after the date on which written notice of such failure, requiring the same to be remedied, shall have been given to the Backup Servicer by the Indenture
Trustee or to the Backup Servicer and the Indenture Trustee by the Note Insurer or Noteholders affected thereby evidencing Percentage Interests of at least 25%; 
  
 (ii) a decree or order of a court or agency or supervisory authority having jurisdiction in an involuntary
case under any present or future federal or state bankruptcy, insolvency or similar law or for the appointment of a conservator or receiver or liquidation in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the Backup Servicer and such decree or order shall have remained in force, undischarged or unstayed for a period of ninety (90) days; 
  
 (iii) the Backup Servicer shall consent to the appointment
of a conservator or receiver or liquidator in any insolvency, readjustment of debt, marshalling of assets and liabilities or similar proceedings of or relating to the Backup Servicer or of or relating to all or substantially all of the Backup
Servicer’s property; and 
  
 (iv) the Backup
Servicer shall admit in writing its inability generally to pay its debts as they become due, file a petition to take advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors, or
voluntarily suspend payment of its obligations. 
  
 So long as a
Servicer Event of Default shall have occurred and not have been remedied: (x) with respect solely to Section 7.01(a)(I)(i), if such payment is in respect of Periodic Advances or Compensating Interest owing by the Master Servicer and such payment is
not made by 12:00 noon New York time on the second Business Day prior to the applicable Payment Date, the Indenture Trustee, upon receipt of written notice or discovery by a Responsible Officer of the Indenture Trustee of such failure, shall give
immediate telephonic and facsimile notice of such failure to a Servicing Officer of the Master Servicer and the Backup Servicer and to the Note Insurer, and the Indenture Trustee may, with the consent of the Note Insurer, and shall, at the direction
of the Note Insurer, terminate all of the rights and obligations of the Master Servicer under this Agreement, except for the Master Servicer’s indemnification obligation under Section 5.19, and the Backup Servicer, the Indenture Trustee (if it
is the successor master servicer) or a successor master servicer appointed in accordance with Section 7.02, shall immediately make such Periodic Advance or payment of Compensating Interest as provided in Section 7.02 and assume, pursuant to Section
7.02 hereof, the duties of a successor master servicer; (y) with respect to that portion of Section 7.01(a)(I)(i) not referred to in the preceding clause (x) and with respect to clauses (ii), (iii), (iv), (v), (vi), (vii) and (xii) of Section
7.01(a)(I) or clauses (i) through (iv) of Section 7.01(a)(II), upon receipt of written notice or actual knowledge by a 

  

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Responsible Officer of the Indenture Trustee, the Indenture Trustee shall, but only at the direction of the Note Insurer or the Majority Noteholders, by
notice in writing to the Master Servicer, the Backup Servicer and a Responsible Officer of the Indenture Trustee and subject to the prior written consent of the Note Insurer in the case of any removal at the direction of the Majority Noteholders,
and in addition to whatever rights such Noteholders may have at law or equity to damages, including injunctive relief and specific performance, terminate all the rights and obligations of the Master Servicer or Backup Servicer, as applicable, under
this Agreement, except for the Master Servicer’s indemnification obligations under Section 5.19, and in and to the Mortgage Loans and the proceeds thereof, as Master Servicer; and (z) with respect to clauses (viii)-(xi) of Section 7.01(a)(I),
upon receipt of written notice or actual knowledge by a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall, but only at the direction of the Note Insurer, after notice in writing to the Master Servicer, the Backup Servicer and
a Responsible Officer of the Indenture Trustee, terminate all the rights and obligations of the Master Servicer under this Agreement, except for the Master Servicer’s indemnification obligations under Section 5.19, and in and to the Mortgage
Loans and the proceeds thereof, as Master Servicer. Upon receipt by the Master Servicer of such written notice, all authority and power of the Master Servicer under this Agreement, whether with respect to the Mortgage Loans or otherwise, shall,
subject to Section 7.02, pass to and be vested in the Backup Servicer, or another successor master servicer selected by the Note Insurer, and the Backup Servicer or another successor master servicer is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, at the expense of the Master Servicer, any and all documents and other instruments and do or cause to be done all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, including, but not limited to, the transfer and endorsement or assignment of the Mortgage Loans and related documents. The Master Servicer agrees to cooperate (and to pay any related costs and expenses)
with the Indenture Trustee and the Backup Servicer or another successor master servicer in effecting the termination of the Master Servicer’s responsibilities and rights hereunder, including, without limitation, the transfer to the Backup
Servicer or another successor master servicer, for administration by it of all amounts which shall at the time be credited by the Master Servicer to the Collection Account or thereafter received with respect to the Mortgage Loans. The Indenture
Trustee shall promptly notify the Note Insurer and the Rating Agencies of the occurrence of a Servicer Event of Default upon discovery or receipt of notice by a Responsible Officer of the Indenture Trustee; provided, however, the Indenture Trustee
shall not be obligated to monitor the Master Servicer’s compliance with the terms hereof or to determine the occurrence of any Servicer Event of Default. 
  

Section 7.02. Backup Servicer to Act: Appointment of Successor. (a) (i) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01, or the Indenture Trustee receives the resignation of the Master Servicer evidenced by an Opinion of Counsel pursuant to Section 5.21, or the Master Servicer is removed as Master Servicer pursuant to this Article
VII, in which event the Indenture Trustee shall promptly notify the Rating Agencies, and except as otherwise provided in this Section 7.02, the Backup Servicer (provided the Backup Servicer receives 20 days’ prior written notice) or another
successor master servicer selected by the Note Insurer shall be the successor in all respects to the Master Servicer in its capacity as master servicer under this Agreement and the transactions set forth or provided for in this Agreement, and shall
be subject to all the responsibilities, restrictions, duties, liabilities and termination provisions relating thereto placed on the Master Servicer by the terms and provisions 

  

 48 

 
of this Agreement. The Backup Servicer or another successor master servicer and the Indenture Trustee shall take such action, consistent with this Agreement,
as shall be necessary to effect any such succession. If the Backup Servicer or any other successor master servicer is acting as Master Servicer hereunder, it shall be subject to termination under Section 7.01 upon the occurrence or continuation of a
Servicer Event of Default applicable to it as Master Servicer. The Backup Servicer hereby agrees to act as successor master servicer pursuant to the terms of this Agreement upon the termination or resignation of the Master Servicer as provided in
this Section 7.02, provided that the Backup Servicer receives all of the necessary documents relating to the Mortgage Loans and computer records reflecting the status of the Mortgage Loans as of the date of such transfer of servicing. The Backup
Servicer will not be obligated to incur any expenses or costs (including, without limitation, legal fees and the preparation and recording of all intervening assignments of mortgage) in connection with the transfer of servicing of the Mortgage Loans
to the Backup Servicer, or to compel the performance of any obligations by any party to this Agreement. Any successor master servicer and the Backup Servicer prior to its becoming the successor master servicer shall not be liable for any actions,
omissions or defaults of any master servicer prior to it or breaches of representations and warranties of the master servicer prior to it. The Backup Servicer or any other successor master servicer, as successor master servicer, shall be obligated
to pay Compensating Interest pursuant to Section 6.05 in any event and to make Periodic Advances pursuant to Section 5.18 unless, and only to the extent the Backup Servicer determines reasonably and in good faith that such advances would not be
recoverable from the proceeds of the related Mortgage Loan pursuant to Section 5.03, such determination to be evidenced by a certification of a Responsible Officer of the Backup Servicer delivered to the Note Insurer. Furthermore, the Backup
Servicer shall not be obligated to fund any resulting discrepancy or shortfall in the Collection Account. Upon the transfer of the servicing of the Mortgage Loans, the Indenture Trustee shall provide the Backup Servicer with an officer’s
certificate that contains: (i) a complete description of all material breaches by the Master Servicer under the Agreement known by the Indenture Trustee which have not been fully cured and (ii) confirmation that all reports required to be filed with
the Indenture Trustee have been timely filed by the Master Servicer. 
  
 (ii) In the event that the Backup Servicer is terminated or resigns pursuant to this Agreement or otherwise becomes unable to perform its obligations under this Agreement, the Note Insurer may (or if the Note Insurer
fails to do so promptly the Indenture Trustee will) appoint a successor backup servicer in accordance with the provisions of this Section 7.02; provided, that any successor backup servicer, shall satisfy the requirements set forth in Section 7.02(b)
and shall be approved by the Rating Agencies and the Note Insurer. 
  
 (b) Any successor master servicer or successor backup servicer hereunder (other than the Indenture Trustee) shall be a housing and home finance institution, bank or mortgage servicing institution which has been designated as an approved
seller-servicer by Fannie Mae or Freddie Mac, having equity of not less than $5,000,000 as determined in accordance with GAAP, as the successor to the Master Servicer or the Backup Servicer hereunder in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer or the Backup Servicer, as applicable, hereunder. 
  

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 (c) In the event the Backup Servicer is the successor master servicer, it shall be entitled to the same
Servicing Compensation (including the Servicing Fee as adjusted pursuant to the definition thereof) and other funds pursuant to Section 5.08 hereof as the Master Servicer if the Master Servicer had continued to act as master servicer hereunder, and
shall continue to be entitled to the Backup Servicing Fee. 
  
 (d)
The Indenture Trustee, the Backup Servicer and any successor master servicer or backup servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. The Master Servicer agrees to cooperate
with the Indenture Trustee, the Backup Servicer and any successor master servicer in effecting the termination of the Master Servicer’s servicing responsibilities and rights hereunder and shall promptly provide the Indenture Trustee, the Backup
Servicer or such successor master servicer, as applicable, at the Master Servicer’s cost and expense, all documents and records reasonably requested by it to enable it to assume the Master Servicer’s functions hereunder and shall promptly
also transfer to the Indenture Trustee, the Backup Servicer or such successor master servicer, as applicable, all amounts that then have been or should have been deposited in the Collection Account by the Master Servicer or that are thereafter
received with respect to the Mortgage Loans, including without limitation all Liquidation Proceeds and Insurance Proceeds, and payments of insurance deductible amounts by the Master Servicer pursuant to Section 5.04(b) with respect to all insurance
claims arising during the Master Servicer’s tenure. Any collections received by the Master Servicer after such removal or resignation shall be endorsed by it to the Backup Servicer or (if the Backup Servicer is not the successor master
servicer) to the Indenture Trustee and remitted directly to the Backup Servicer or the Indenture Trustee, as applicable (or, at the direction of the Indenture Trustee, to any other successor master servicer). Neither the Backup Servicer, the
Indenture Trustee nor any other successor master servicer shall be held liable by reason of any failure to make, or any delay in making, any payment hereunder or any portion thereof caused by (i) the failure of the Master Servicer to deliver, or any
delay in delivering, cash, documents or records to it, or (ii) restrictions imposed by any regulatory authority having jurisdiction over the Master Servicer hereunder. Notwithstanding anything to the contrary herein, no appointment of a successor
master servicer under this Agreement shall be effective until the Note Insurer shall have consented thereto, and written notice of such proposed appointment shall have been provided by the Indenture Trustee to the Note Insurer and the Backup
Servicer. The Indenture Trustee shall not resign as Master Servicer until a successor master servicer reasonably acceptable to the Note Insurer has been appointed. The Note Insurer shall have the right to remove the Indenture Trustee as successor
Master Servicer under this Section 7.02 without cause, and the Indenture Trustee shall appoint such other successor master servicer as directed by the Note Insurer. 
  
 (e) In the event that the Master Servicer is terminated hereunder and no Backup Servicer is obligated to act as successor
master servicer and no other successor master servicer has been appointed hereunder, the Indenture Trustee may appoint a successor master servicer (which may be an affiliate of the Indenture Trustee) or petition a court of competent jurisdiction to
appoint a successor master servicer. Pending appointment of such a successor master servicer hereunder, the Indenture Trustee shall be the successor master servicer and act in such capacity; provided, however, that the Indenture Trustee, in its
capacity as successor master servicer pending appointment of another successor master servicer, (i) shall be obligated to make Periodic Advances or Servicing Advances only to the extent that the Indenture Trustee deems 

  

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such advances to be recoverable, (ii) shall be obligated to make Compensating Interest payments in respect of any Payment Date only to the extent of any
Servicing Fee received by the Indenture Trustee in respect of such Payment Date, (iii) shall not be obligated to perform any other duties or obligations of the Master Servicer hereunder until the Indenture Trustee has received all master servicing
records and files from the predecessor master servicer or backup servicer and in no event later than 90 days following the termination of the Master Servicer; provided, however, the Indenture Trustee shall use its reasonable efforts to perform the
duties and obligations of the Master Servicer prior to the end of such 90 day period, (iv) shall not be obligated to perform any of the administrative duties specified in Section 5.23 hereof, and (v) shall be entitled to payment of all Servicing
Compensation and the Backup Servicing Fee. In connection with any appointment and assumption of duties of a successor master servicer, the Indenture Trustee may make such arrangements for the compensation of such successor master servicer out of
payments on Mortgage Loans as the Note Insurer and such successor shall agree; provided, however, that such compensation may not be in excess of that permitted the Master Servicer pursuant to Section 5.08, together with other Servicing Compensation
and the Backup Servicing Fee. The Master Servicer, the Indenture Trustee and such successor Master Servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. 
  
 (f) In the event the Backup Servicer, the Indenture Trustee, or any successor
master servicer incurs out-of-pocket expenses other than Servicing Advances or Periodic Advances in connection with the transfer of master servicing hereunder, which expenses are required to be borne by the Master Servicer hereunder, and such
expenses are not promptly reimbursed by the Master Servicer or recoverable out of amounts reimbursable to the Master Servicer out of the Collection Account, the Indenture Trustee shall make such reimbursement to the applicable party out of funds in
each Payment Account on any Payment Date after all Payments to Noteholders on such Payment Date have been made and the Reserve Payment Amount has been made to the Reserve Account but before any distribution to the Certificateholders. The right of
the Indenture Trustee to reimbursement from any Payment Account for any of the Indenture Trustee’s costs and expenses in connection with the transfer of any master servicing hereunder shall be in addition to any rights of the Indenture Trustee
to indemnification and reimbursement under the Indenture. 
  
 (g)
In the event that the Master Servicer is terminated or resigns hereunder, and at such time the Master Servicer has made unreimbursed Periodic Advances or Servicing Advances out of its own funds, 
  
 (i) any such Periodic Advances or Servicing Advances shall
be allocated by the successor master servicer in whole or in part to specific Mortgage Loans which are delinquent at the time of the transfer of master servicing, which allocation shall be based on loan-level accounts of the portion of each Periodic
Advance or Servicing Advance which has been funded by the Master Servicer from its own funds consistently maintained by the former Master Servicer, or, if no such accounts exist, then in the successor master servicer’s discretion; 

 
 (ii) following the transfer of master servicing, the
successor master servicer shall reimburse the former Master Servicer for such Periodic Advances and Servicing Advances in accordance with the allocations determined in accordance with 

  

 51 

 
clause (i) above only out of the proceeds of the Mortgage Loans to which they relate and otherwise subject to Section 5.03, or, to the extent the successor
master servicer determines any such Periodic Advance or Servicing Advance to be a Nonrecoverable Advance, out of any funds in the Collection Account. 
  
 Section 7.03. Waiver of Defaults. The Note Insurer or the Majority Noteholders may, on behalf of all Noteholders, and subject to the consent of the
Note Insurer, waive any events permitting removal of the Master Servicer as master servicer pursuant to this Article VII; provided, however, that the Majority Noteholders may not waive a default in making a required payment on a Note
without the consent of the Holder of such Note. Upon any waiver of a past default, such default shall cease to exist, and any Servicer Event of Default arising therefrom shall be deemed to have been remedied for every purpose of this Agreement. No
such waiver shall extend to any subsequent or other default or impair any right consequent thereto except to the extent expressly so waived. Notice of any such waiver shall be given by the Indenture Trustee to the Rating Agencies and the Note
Insurer. 
  
 Section 7.04. Rights of the Note Insurer to
Exercise Rights of the Noteholders. By accepting its Note, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall be deemed to be the Noteholders for all purposes (other than with respect to the receipt of
payment on the Notes) and shall have the right to exercise all rights of the Noteholders under this Agreement and under the Notes without any further consent of the Noteholders, including, without limitation: 
  
 (a) the right to require the Sponsor to repurchase or substitute Mortgage
Loans pursuant to Sections 2.06 and 4.02 hereof to the extent set forth therein; 
  
 (b) the right to give notices of breach or to terminate the rights and obligations of the Master Servicer as master servicer pursuant to Section 7.01 hereof and to consent to or direct waivers of Master Servicer
defaults pursuant to Section 7.03 hereof; 
  
 (c) the right to
direct the actions of the Indenture Trustee during the continuance of a Servicer Event of Default pursuant to Sections 7.01 and 7.02 hereof; 
  
 (d) the right to institute proceedings against the Master Servicer pursuant to Section 7.01 hereof; 
  
 (e) the right to remove the Indenture Trustee pursuant to Section 6.09 of the
Indenture; 
  
 (f) the right to direct foreclosures upon the
failure of the Master Servicer to do so in accordance with the provisions of Section 5.06 of this Agreement; and 
  
 (g) any rights or remedies expressly given the Majority Noteholders. 
  
 In addition, each Noteholder agrees that, subject to Section 10.02, unless a Note Insurer Default exists, the rights
specifically enumerated above may only be exercised by the Noteholders with the prior written consent of the Note Insurer. 
  

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 Section 7.05. Indenture Trustee To Act Solely with Consent of the Note Insurer. Unless a Note
Insurer Default exists, the Indenture Trustee shall not, without the Note Insurer’s consent or unless directed by the Note Insurer: 
  
 (a) terminate the rights and obligations of the Master Servicer as master servicer pursuant to Section 7.01 hereof; 
  
 (b) agree to any amendment pursuant to Section 10.03 hereof; or 

 
 (c) undertake any litigation. 
  
 The Note Insurer may, in writing and in its sole discretion renounce all or
any of its rights under Sections 7.04, 7.05 or 7.06 or any requirement for the Note Insurer’s consent for any period of time. 
  
 Section 7.06. Mortgage Loans, Trust Estate and Accounts Held for Benefit of the Note Insurer. (a) 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 Agreement, the Notes and in any of the other Basic Documents to the benefit of Noteholders shall be deemed to
include the Note Insurer. The Indenture Trustee shall cooperate in all reasonable respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer’s rights or interests under this Agreement, the Notes
and in any of the Basic Documents unless, as stated in an Opinion of Counsel addressed to the Indenture Trustee and the Note Insurer, such action is adverse to the interests of the Noteholders or diminishes the rights of the Noteholders or imposes
additional burdens or restrictions on the Noteholders. 
  
 (b) The
Master Servicer hereby acknowledges and agrees that it shall service the Mortgage Loans for the benefit of the Noteholders and for the benefit of the Note Insurer, and all references in this Agreement and in any of the other Basic Documents to the
benefit of or actions on behalf of the Noteholders shall be deemed to include the Note Insurer. 
  
 Section 7.07. Note Insurer Default. During the continuation of a Note Insurer Default, rights granted or reserved to the Note Insurer hereunder
shall vest instead in the Noteholders; 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
10.03 to consent to any amendment of this Agreement. 
  
 At such
time as either (i) the outstanding Note Principal Balance of the Notes has been reduced to zero or (ii) the Note Insurance Policy has been terminated and in either case of (i) or (ii) the Note Insurer has been reimbursed for all amounts owed under
the Note Insurance Policy and the Insurance Agreement (and the Note Insurer no longer has any obligation under the Note Insurance Policy, 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. 
  

 53 

 ARTICLE VIII 
  
 TERMINATION 
  
 Section 8.01. Termination. (a) Subject to Section 8.02, this Agreement shall terminate upon notice to the Indenture Trustee of either: (i) the
disposition of all funds with respect to the last Mortgage Loan and the remittance of all funds due hereunder and the payment of all amounts due and payable to the Note Insurer and the Indenture Trustee or (ii) mutual consent of the Owner Trustee,
on behalf of the Trust, at the direction of all the Certificateholders, the Indenture Trustee, the Master Servicer, the Note Insurer and all Noteholders in writing. 
  
 (b) In addition, subject to Section 8.02, the Sponsor may, at its sole option, cost and expense, terminate the Trust in
accordance with the terms of Section 10.01 of the Indenture. 
  
 (c) If on any date, the Master Servicer determines that there are no outstanding Mortgage Loans and no other funds or assets in the Trust Estate other than funds in the Payment Accounts, the Master Servicer shall send a final payment notice
promptly to the Indenture Trustee, who shall forward notice to each Noteholder in accordance with Section 8.01(d). 
  
 (d) Notice of any termination, specifying the Payment Date upon which the Trust will terminate and the Noteholders shall surrender their Notes to the
Indenture Trustee for final payment and cancellation, shall be given promptly by the Master Servicer to the Indenture Trustee, who shall forward the notice by letter to Noteholders mailed during the month of such final payment before the Servicer
Payment Date in such month, specifying (i) the Payment Date upon which final payment of the Notes will be made upon presentation and surrender of Notes at the office of the Indenture Trustee therein designated, (ii) the amount of any such final
payment and (iii) that the Record Date otherwise applicable to such Payment Date is not applicable, payments being made only upon presentation and surrender of the Notes at the office of the Indenture Trustee therein specified. The obligations of
the Note Insurer hereunder shall terminate upon the deposit by the Sponsor with the Indenture Trustee of a sum sufficient to purchase all of the Mortgage Loans and REO Properties as set forth in Section 10.01 of the Indenture or when the Note
Principal Balance of the Notes has been reduced to zero. 
  
 (e)
In the event that all of the Noteholders do not surrender their Notes for cancellation within six (6) months after the time specified in the above-mentioned written notice, the Indenture Trustee shall give a second written notice to the remaining
Noteholders to surrender their Notes for cancellation and receive the final payment with respect thereto. If within six (6) months after the second notice, all of the Notes shall not have been surrendered for cancellation, the Indenture Trustee may
take appropriate steps, or may appoint an agent to take appropriate steps, to contact the remaining Noteholders concerning surrender of their Notes and the cost thereof shall be paid out of the funds and other assets which remain subject hereto. If
within nine (9) months after the second notice all the Notes shall not have been surrendered for cancellation, the Certificateholders shall be entitled to all unclaimed funds and other assets which remain subject hereto and the Indenture Trustee
upon transfer of such funds shall be discharged of any responsibility for such funds and the Noteholders shall look only to the Certificateholders for payment and not to the Note Insurer. Such funds shall remain uninvested. 
  

 54 

 Section 8.02. Additional Termination Requirements. By their acceptance of the Notes, the Holders
thereof hereby agree to appoint the Master Servicer as their attorney in fact to: (i) adopt a plan of complete liquidation (and the Noteholders hereby appoint the Indenture Trustee as their attorney in fact to sign such plan) as appropriate or upon
the written request of the Note Insurer and (ii) to take such other action in connection therewith as may be reasonably required to carry out such plan of complete liquidation all in accordance with the terms hereof. 
  
 Section 8.03. Accounting Upon Termination of Master Servicer. Upon
termination of the Master Servicer, the Master Servicer shall, at its expense: 
  
 (a) deliver to the successor master servicer or, if none shall yet have been appointed, to the Indenture Trustee, the funds in any Account administered by the Master Servicer; 
  
 (b) deliver to the successor master servicer or, if none shall yet have been
appointed, to the Indenture Trustee all Mortgage Files and related documents and statements held by it hereunder and a Mortgage Loan portfolio computer tape (such delivery to take place within 24 hours if the successor master servicer is the Backup
Servicer); 
  
 (c) deliver to the successor master servicer, or,
if none shall yet have been appointed, to the Indenture Trustee a full accounting of all funds, including a statement showing the Monthly Payments collected by it and a statement of monies held in trust by it for the payments or charges with respect
to the Mortgage Loans; and 
  
 (d) execute and deliver such
instruments and perform all acts reasonably requested in order to effect the orderly and efficient transfer of servicing of the Mortgage Loans to the successor master servicer and to more fully and definitively vest in such successor all rights,
powers, duties, responsibilities, obligations and liabilities of the Master Servicer under this Agreement. 
  
 Section 8.04. Termination of Backup Servicer as Successor Master Servicer. In the event the Backup Servicer becomes the successor master servicer
and is terminated for reasons other than the occurrence of a Servicer Event of Default, then the Backup Servicer will be entitled to a release fee of $10.00 per Mortgage Loan (subject to a minimum of $5,000.00). 
  
 ARTICLE IX 
  
 [RESERVED] 
  
 ARTICLE X 
  
 MISCELLANEOUS PROVISIONS 
  
 Section 10.01. Limitation on Liability. (a) None of the Trust, the
Owner Trustee, the Seller, the Sponsor, the Master Servicer, the Backup Servicer, the Indenture Trustee or any of the 

  

 55 

 
directors, officers, employees or agents of such Persons shall be under any liability to the Trust, the Noteholders or the Note Insurer for any action taken,
or for refraining from the taking of any action, in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Trust, the Owner Trustee, the Seller, the Sponsor, the
Master Servicer, the Backup Servicer, the Indenture Trustee or any such Person against liability for any breach of warranties or representations made herein by such party, or against any specific liability imposed on each such party pursuant to this
Agreement or against any liability which would otherwise be imposed upon such party by reason of willful misfeasance, bad faith or negligence in the performance of duties or by reason of failure to perform its obligations or duties hereunder. The
Trust, the Owner Trustee, the Seller, the Sponsor, the Master Servicer, the Backup Servicer, the Indenture Trustee and any director, officer, employee or agent of such Person may rely in good faith on any document of any kind which, prima facie, is
properly executed and submitted by any appropriate Person respecting any matters arising hereunder. 
  
 (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 under the Trust Agreement, 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 Trust is made and intended not as personal representations, undertakings and agreements by U.S. Bank Trust National Association but is made and intended for the purpose for binding only the Trust, (iii) 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 Trust or be
liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Agreement or any other related documents. 
  
 Section 10.02. Acts of Noteholders. (a) Subject to Section 7.04 and except as otherwise specifically provided herein,
whenever Noteholder action, consent or approval is required under this Agreement, such action, consent or approval shall be deemed to have been taken or given on behalf of, and shall be binding upon, all Noteholders if the Majority Noteholders or
the Note Insurer agrees to take such action or give such consent or approval. 
  
 (b) The death or incapacity of any Noteholder shall not operate to terminate this Agreement or the Trust, nor entitle such Noteholder’s legal representatives or heirs to claim an accounting or to take any action
or proceeding in any court for a partition or winding up of the Trust, nor otherwise affect the rights, obligations and liabilities of the parties hereto or any of them. 
  
 (c) No Noteholder shall have any right to vote (except as expressly provided for herein) or in any manner otherwise control
the operation and management of the Trust, or the obligations of the parties hereto, nor shall anything herein set forth, or contained in the terms of the Notes, be construed so as to constitute the Noteholders from time to time as partners or
members of an association; nor shall any Noteholder be under any liability to any third person by reason of any action taken by the parties to this Agreement pursuant to any provision hereof. 
  

 56 

 Section 10.03. Amendment. (a) This Agreement may be amended from time to time by the Owner
Trustee, on behalf of the Trust, the Master Servicer, the Seller, Sponsor, the Backup Servicer and the Indenture Trustee by written agreement, upon the prior written consent of the Note Insurer, without notice to or consent of the Noteholders to
cure any ambiguity, to correct or supplement any provisions herein, to comply with any changes in the Code, or to make any other provisions with respect to matters or questions arising under this Agreement which shall not be inconsistent with the
provisions of this Agreement; provided, however, that such action shall not adversely affect in any material respect the interests of any Noteholder, as evidenced by (i) an Opinion of Counsel, at the expense of the party requesting the
change, delivered to the Indenture Trustee to such effect or (ii) a letter from each Rating Agency confirming that such action will not result in the reduction, qualification or withdrawal of the then-current ratings on the Notes (without taking
into account the Note Insurance Policy). The Indenture Trustee shall give prompt written notice to the Rating Agencies of any amendment made pursuant to this Section 10.03. 
  
 (b) This Agreement may be amended from time to time by the Owner Trustee, on behalf of the Trust, the Master Servicer, the
Seller, the Sponsor, the Backup Servicer and the Indenture Trustee, with the consent of the Note Insurer, the Noteholders representing at least 51% of the outstanding Principal Balance of the Notes of each affected Class and all of the
Certificateholders; provided, however, that no such amendment shall reduce in any manner the amount of, or delay the timing of, payments received on Mortgage Loans which are required to be paid on any Class of Notes without the consent
of the Holders of such Class of Notes or reduce the percentage for the Holders of which are required to consent to any such amendment without the consent of the Holders of 100% of such Class of Notes affected thereby. 
  
 (c) It shall not be necessary for the consent of Holders under this Section
10.03 to approve the particular form of any proposed amendment, but it shall be sufficient if such consent shall approve the substance thereof. 
  
 (d) In executing, or accepting the additional trusts created by, any supplemental indenture permitted by Article IX of the Indenture or the modifications
thereby of the trusts created by the Indenture, the Indenture Trustee shall be entitled to receive, and (subject to Section 6.01 of the Indenture) shall be fully protected in relying upon, an Opinion of Counsel stating that the execution of such
supplemental indenture is authorized or permitted by the Indenture. 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
the Indenture or otherwise. The Master Servicer, on behalf of the Trust, shall cause executed copies of any supplemental indentures to be delivered to the Note Insurer and the Rating Agencies. 
  
 Section 10.04. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement, or a memorandum thereof if permitted under applicable law, is subject to recordation in all appropriate public offices for real property records in all of the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are 

  

 57 

 
situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the Master Servicer at the Noteholders’
expense on direction and at the expense of Majority Noteholders requesting such recordation, but only when accompanied by an Opinion of Counsel to the effect that such recordation materially and beneficially affects the interests of the Noteholders
or is necessary for the administration or servicing of the Mortgage Loans. 
  
 Section 10.05. Duration of Agreement. This Agreement shall continue in existence and effect until terminated as herein provided. 
  
 Section 10.06. Notices. All demands, notices and communications hereunder shall be in writing and shall be deemed to
have been duly given when delivered to (i) in the case of the Master Servicer, Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: Director of Operations with a copy to General Counsel; (ii) in the case of
the Backup Servicer, Countrywide Home Loans Servicing LP, 7105 Corporate Drive, Plano, Texas 75024, Attention: Accredited Mortgage Loan Trust 2003-3; (iii) in the case of the Trust, Accredited Mortgage Loan Trust 2003-3, c/o the Owner Trustee at its
Corporate Trust Office, Attention: Corporate Trust Administration; (iv) in the case of the Indenture Trustee, Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa Ana, California 92705-4934, Attention: Trust Administration -
AC0303; (v) in the case of the Sponsor, Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: Investor Reporting; (vi) in the case of the Underwriter, Lehman Brothers, Inc., 745 Seventh Avenue, New York, New
York 10019, Attention: Samir A. Tabet; (vii) in the case of the Note Insurer, Ambac Assurance Corporation, One State Street Plaza, New York, New York 10004, Attention: Jeff Nabi (in each case in which notice or other communication to the Note
Insurer refers to an Event of Default, a Servicer Event of Default or 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 each of the General Counsel and the Head- Financial Guaranty Group, and shall be marked to indicate “URGENT MATERIAL ENCLOSED”); (viii) in the case of Standard
& Poor’s Rating Services, 55 Water Street, New York, New York 10004, Attention: Residential Mortgage Surveillance Group; (ix) in the case of Moody’s Investors Service, Inc., 99 Church Street, New York, New York 10007, Attention: Keith
Wofford; (x) in the case of the Seller, Accredited Home Capital, Inc., 15092 Avenue of Science, San Diego, California 92128, Attention: General Counsel and (xi) in the case of the Noteholders, as set forth in the Note Register. Any such notices
shall be deemed to be effective with respect to any party hereto upon the receipt of such notice by such party, except that notices to the Noteholders shall be effective upon mailing or personal delivery. 
  
 Section 10.07. Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be held invalid for any reason whatsoever, then such covenants, agreements, provisions or terms shall be deemed severable from the remaining covenants, agreements, provisions or
terms of this Agreement and shall in no way affect the validity or enforceability of the other covenants, agreements, provisions or terms of this Agreement. 
  
 Section 10.08. No Partnership. Nothing herein contained shall be deemed or construed to create a co-partnership or joint venture between the
parties hereto and the services of the Master Servicer shall be rendered as an independent contractor and not as agent for the Noteholders. 
  

 58 

 Section 10.09. Counterparts. This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so executed, shall be deemed to be an original; such counterparts, together, shall constitute one and the same agreement. 
  
 Section 10.10. Successors and Assigns. This Agreement shall inure to
the benefit of and be binding upon the Trust, the Master Servicer, the Backup Servicer, the Seller, the Sponsor, the Indenture Trustee and the Noteholders and their respective successors and permitted assigns. 
  
 Section 10.11. Headings. The headings of the various sections of this
Agreement have been inserted for convenience of reference only and shall not be deemed to be part of this Agreement. 
  
 Section 10.12. No Petition. The Master Servicer and the Backup Servicer, by entering into this Agreement hereby covenant and agree, and the
Noteholders, by the acceptance of their Notes are deemed to covenant and agree, that they 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, or other proceedings under any United States Federal or state bankruptcy law in connection with any obligations relating to the Certificates, the Notes, this Agreement or any of the other Basic Documents. 
  
 This Section 10.12 will survive for one year and one day following the
termination of this Agreement. 
  
 Section 10.13. Third Party
Beneficiary. The parties agree that each of the Owner Trustee and the Note Insurer is intended and shall have all rights of a third-party beneficiary of this Agreement. Without limiting the generality of the foregoing, all covenants and
agreements in this Agreement that expressly confer rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to rely on and enforce such covenants to the same extent as if
it were a party to this Agreement. 
  
 Section 10.14. Intent of
the Parties. It is the intent of the parties hereto and Noteholders that, for federal income taxes, state and local income or franchise taxes and other taxes imposed on or measured by income, the Notes be treated as debt. The parties to this
Agreement and the Holder of each Note, by acceptance of its Note, and each Beneficial Owner thereof, agree to treat, and to take no action inconsistent with the treatment of, the related Notes in accordance with the preceding sentence for purposes
of federal income taxes, state and local income and franchise taxes and other taxes imposed on or measured by income. 
  
 Section 10.15. GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. (a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF NEW YORK. 
  

 59 

 (b) THE TRUST, THE MASTER SERVICER, THE SELLER, THE SPONSOR, THE BACKUP SERVICER AND THE INDENTURE
TRUSTEE HEREBY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY, AND EACH WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT
AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO THE ADDRESS SET FORTH IN SECTION 10.06 HEREOF AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN DEPOSITED IN THE U.S.
MAILS, POSTAGE PREPAID. THE TRUST, THE SELLER, THE SPONSOR, THE MASTER SERVICER, THE BACKUP SERVICER AND THE INDENTURE TRUSTEE EACH HEREBY WAIVE ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY ACTION INSTITUTED
HEREUNDER AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT. NOTHING IN THIS SECTION 10.15 SHALL AFFECT THE RIGHT OF THE TRUST, THE SELLER, THE SPONSOR, THE MASTER SERVICER, THE BACKUP SERVICER OR
THE INDENTURE TRUSTEE TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY OF THEIR RIGHTS TO BRING ANY ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION. 
  
 (c) THE TRUST, THE SELLER, THE SPONSOR, THE MASTER SERVICER, THE BACKUP SERVICER AND THE INDENTURE TRUSTEE EACH HEREBY
WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH, RELATED TO, OR IN CONNECTION WITH THIS AGREEMENT. INSTEAD, ANY DISPUTE WILL BE RESOLVED IN A BENCH
TRIAL WITHOUT A JURY. 
  
 [Remainder of Page Intentionally Left
Blank] 
  

 60 

 IN WITNESS WHEREOF, the Master Servicer, the Backup Servicer, the Trust, the Indenture Trustee, the
Seller and the Sponsor have caused their names to be signed hereto by their respective officers thereunto duly authorized as of the day and year first above written. 
  

	 ACCREDITED HOME LENDERS, INC.,
as Sponsor and Master Servicer

		
	 By:
	 	 /s/    RAY W.
MCKEWON

	 	 	 Name: Ray W. McKewon

	 	 	 Title: Executive Vice President

	
	 ACCREDITED MORTGAGE LOAN TRUST
2003-3

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

	 	 	 Name: Nancie J. Arvin

	 	 	 Title: Vice President

	
	 ACCREDITED HOME CAPITAL, INC.,
as Seller

		
	 By:
	 	 /s/    DAVID E. HERTZEL

	 	 	 Name: David E. Hertzel

	 	 	 Title: GC, AVP & Ass’t Sec’y

	
	 DEUTSCHE BANK NATIONAL TRUST
 COMPANY, as Indenture Trustee

		
	 By:
	 	 /s/    BARBARA CAMPBELL

	 	 	 Name: Barbara Campbell

	 	 	 Title: Assistant Vice President

		
	 By:
	 	 /s/    RONALDO REYES

	 	 	 Name: Ronaldo Reyes

	 	 	 Title: Assistant Vice President

  

 61 

	 COUNTRYWIDE HOME LOANS SERVICING LP, as Backup Servicer

		
	 By:
	 	 /s/    CELIA COULTER

	 	 	 Name: Celia Coulter

	 	 	 Title: Senior Vice President

  
 [Signature Page
to Sale and Servicing Agreement] 
  

 62 

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

 A-1 

 APPENDIX I 
  
 DEFINED TERMS 
  
 [See Appendix I to Indenture] 

 EXHIBIT A 
  
 CONTENTS OF THE MORTGAGE FILE 
  
 With respect to each Mortgage Loan, the Mortgage File shall include each of the following items (copies to the extent the originals have been delivered to
the Indenture Trustee for the benefit of the Noteholders and the Note Insurer, pursuant to Section 2.05 of the Sale and Servicing Agreement), all of which shall be available for inspection by the Noteholders, to the extent required by applicable
laws: 
  
 1. the original Mortgage Note, endorsed without
recourse in blank from the last endorsee thereof, including all intervening endorsements showing a complete chain of endorsement; 
  
 2. the related original Mortgage with evidence of recording indicated thereon or a copy thereof certified by the applicable recording office; 

 
 3. each intervening mortgage assignment, with evidence of recording
indicated thereon or if the original is not available, a copy thereof certified by the applicable recording office, if any, showing a complete chain of assignment from the last assignee thereof of the related Mortgage Loan to the Seller (which
assignment may, at the Sponsor’s option, be combined with the assignment referred to in subpart (4) hereof, in which case it must be in recordable form, but need not have been previously recorded); 
  
 4. a mortgage assignment in recordable form (which, if acceptable for
recording in the relevant jurisdiction as evidenced by an opinion of counsel addressed to the Indenture Trustee, may be included in a blanket assignment or assignments) of each Mortgage from the Sponsor to the Indenture Trustee; 
  
 5. originals of all assumption, modification and substitution agreements in
those instances where the terms or provisions of a Mortgage or Mortgage Note have been modified or such Mortgage or Mortgage Note has been assumed (if any); and 
  

6. an original title insurance policy or title opinion (or (A) a copy of the title insurance policy or title opinion, or (B) the related binder,
commitment or preliminary report, or copy thereof in which case the Sponsor hereby certifies that the original Mortgage has been delivered to the title insurance company that issued such binder, commitment or preliminary report). 
  
 In instances where the original recorded Mortgage or any intervening mortgage
assignment or a completed assignment of the Mortgage in recordable form cannot be delivered by the Sponsor to the Indenture Trustee prior to or concurrently with the execution and delivery of this Agreement, due to a delay in connection with
recording, the Sponsor may: 
  
 (a) with respect to item (3)
above, in lieu of delivering such original recorded Mortgage or intervening mortgage assignment, deliver to the Indenture Trustee, a copy thereof; provided, that the Sponsor certifies that the original Mortgage has been delivered to a title
insurance company for recordation after receipt of its policy of title insurance or the related binder, commitment or preliminary report; and 
  
 (b) in lieu of delivering the completed assignment in recordable form, deliver to the Indenture Trustee, the assignment in recordable form, otherwise
complete except for recording information. 
  

 A-1 

 EXHIBIT B 
  
 INDENTURE TRUSTEE’S ACKNOWLEDGMENT OF RECEIPT 
  

	 	 	 November 25, 2003

		
	 Lehman Brothers Inc.
 745 Seventh Avenue
 New York, New York 10019
	 	 Accredited Home Lenders, Inc.
 15090 Avenue of Science
 San Diego, California 92128

		
	 Countrywide Home Loans Servicing LP
 4500 Park Granada, Mail Stop CH-143,
 Calabasas, California 91302
	 	 Ambac Assurance Corporation
 One State Street Plaza
 New York, New York 10022

		
	 Accredited Home Capital, Inc.
 15092 Avenue of Science
 San Diego, California 92128
	 	 

  

	 Re:
	  	 Sale and Servicing Agreement, dated as of November 1, 2003
 among Accredited Home Lenders, Inc., as Sponsor and Master
 Servicer, Accredited Home Capital, Inc., as seller, Accredited
 Mortgage Loan Trust 2003-3, Countrywide Home Loans Servicing
 LP, as Backup Servicer, and Deutsche Bank National Trust 
 Company, as Indenture Trustee 

  
 Ladies and Gentlemen: 
  
 In accordance with Section 2.06(a) of the above-captioned Sale and Servicing
Agreement, the undersigned, as Indenture Trustee, hereby acknowledges receipt by it in good faith without notice of adverse claims, of the Note Insurance Policy and declares that it holds and will hold such Note Insurance Policy in trust for the
exclusive use and benefit of all present and future Noteholders pursuant to the terms of the Indenture dated as of November 1, 2003, by and between Accredited Mortgage Loan Trust 2003-3 and the Indenture Trustee. 
  
 Capitalized words and phrases used herein shall have the respective meanings
assigned to them in Appendix I to the Indenture. 
  

	DEUTSCHE BANK NATIONAL TRUST COMPANY,
	 as Indenture Trustee

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  

 B-1 

 EXHIBIT C 
  
 INDENTURE TRUSTEE’S ACKNOWLEDGEMENT OF RECEIPT 
  

	 	 	 November 25, 2003

		
	 Lehman Brothers Inc.
 745 Seventh Avenue New York,
 New York 10019
	 	 Accredited Home Lenders, Inc.
 15090 Avenue of Science
 San Diego, California 92128

		
	 Countrywide Home Loans Servicing LP
 4500 Park Granada, Mail Stop CH-143,
 Calabasas, California 91302
	 	 Ambac Assurance Corporation
 One State Street Plaza
 New York, New York 10022

		
	 Accredited Home Capital, Inc.
 15092 Avenue of Science
 San Diego, California 92128
	 	 

  

	 Re:
	  	 Sale and Servicing Agreement, dated as of November 1, 2003
 among Accredited Home Lenders, Inc., as Sponsor and Master
 Servicer, Accredited Home Capital, Inc., as seller, Accredited
 Mortgage Loan Trust 2003-3, Countrywide Home Loans Servicing
 LP, as Backup Servicer, and Deutsche Bank National Trust 
 Company, as Indenture Trustee 

  
 Ladies and Gentlemen:

  
 In accordance with Section 2.06(b)(i) of the above-captioned
Sale and Servicing Agreement, the undersigned, as Indenture Trustee, hereby acknowledges receipt by it in good faith without notice of adverse claims, subject to the provisions of Sections 2.04 and 2.05 of the Sale and Servicing Agreement (as such
provisions relate to the Mortgage Loan), of, with respect to each Mortgage Loan, a Mortgage File containing the original Mortgage Note, except with respect to the list of exceptions attached hereto, and based on its examination and only as to the
foregoing, the information set forth in items (i), (ii) (with respect to property address only, excluding zip code), (iii) and (vi) of the definition of the “Mortgage Loan Schedule” accurately reflects information set forth in the Mortgage
Note, and declares that it holds and will hold such documents and the other documents delivered to it constituting the Indenture Trustee’s Mortgage Files, and that it holds or will hold all such assets and such other assets included in the
definition of “Trust Estate” that are delivered to it for the exclusive use and benefit of all present and future Noteholders and the Note Insurer. 

 The Indenture Trustee has made no independent examination of any such documents beyond the review
specifically required in the above-referenced Sale and Servicing Agreement. The Indenture Trustee makes no representations as to: (i) the validity, legality, sufficiency, perfection, priority, enforceability or genuineness of any such documents or
any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (ii) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan. 
  
 The Mortgage Loan Schedule is attached to this Receipt. 
  
 Capitalized words and phrases used herein shall have the respective meanings assigned to them in Appendix I to the
Indenture, dated as of November 1, 2003, by and between Accredited Mortgage Loan Trust 2003-3 and the Indenture Trustee. 
  

	DEUTSCHE BANK NATIONAL TRUST COMPANY,
	 as Indenture Trustee

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

 EXHIBIT D 
  
 INITIAL CERTIFICATION OF INDENTURE TRUSTEE 
  

	 	 	             , 2003

		
	 Lehman Brothers Inc.
 745 Seventh Avenue
 New York, New York 10019
	 	 Accredited Home Lenders, Inc.
 15090 Avenue of Science
 San Diego, California 92128

		
	 Countrywide Home Loans Servicing LP,
 as Backup Servicer
 4500 Park Granada, Mail Stop CH-143,
 Calabasas, California 91302
	 	 Ambac Assurance Corporation
 One State Street Plaza
 New York, New York 10022

		
	 Accredited Home Capital, Inc.
 15092 Avenue of Science
 San Diego, California 92128
	 	 

  

	 Re:
	  	 Sale and Servicing Agreement, dated as of November 1, 2003
 among Accredited Home Lenders, Inc., as Sponsor and Master
 Servicer, Accredited Home Capital, Inc., as seller, Accredited
 Mortgage Loan Trust 2003-3, Countrywide Home Loans Servicing
 LP, as Backup Servicer, and Deutsche Bank National Trust
 Company, as Indenture Trustee 

  
 Ladies and Gentlemen: 
  
 In accordance with the provisions of Section 2.06(b)(ii) of the
above-referenced Sale and Servicing Agreement, the undersigned, as Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the
attachment hereto), it has reviewed the documents delivered to it pursuant to Section 2.05(a) of the Sale and Servicing Agreement and has determined that, except as noted on the attachment hereto, (i) all documents required to be delivered to it
pursuant to Section 2.05(a)(i)-(iv) and (vi) of the above-referenced Sale and Servicing Agreement are in its possession, (ii) such documents have been reviewed by it and appear regular on their face and have not been mutilated, damaged, torn or
otherwise physically altered (handwritten additions, changes or corrections do not constitute physical alteration if they reasonably appear to have been initialed by the Mortgagor) and relates to such Mortgage Loan and (iii) based on its examination
and only as to the foregoing documents, the information set forth in the Mortgage Loan Schedule as to the information in clauses (i), (ii) (with respect to property address only, excluding zip code), (iii) and (vi) of the definition of
“Mortgage Loan Schedule” respecting such Mortgage Loan accurately reflects the information set forth in Indenture Trustee’s Mortgage 
  

 D-1 

 
File. The Indenture Trustee has made no independent examination of such documents beyond the review specifically required in the above-referenced Sale and
Servicing Agreement. The Indenture Trustee makes no representations as to: (x) the validity, legality, recordability, sufficiency, perfection, priority, enforceability or genuineness of any such documents contained in each or any of the Mortgage
Loans identified on the Mortgage Loan Schedule, or (y) the collectability, insurability, effectiveness or suitability of any such Mortgage Loan. 
  
 Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Sale and Servicing Agreement.

  

	 DEUTSCHE BANK NATIONAL TRUST
 COMPANY, as Indenture Trustee

		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  
  

 D-2 

 EXHIBIT E 
  
 FINAL CERTIFICATION OF INDENTURE TRUSTEE 
  

	 	 	                 ,
2003

		
	 Lehman Brothers Inc.
 745 Seventh Avenue
 New York, New York 10019
	 	 Accredited Home Lenders, Inc.
 15090 Avenue of Science
 San Diego, California 92128

		
	 Countrywide Home Loans Servicing LP,
 as Backup Servicer
 4500 Park Granada, Mail Stop CH-143,
 Calabasas, California 91302
	 	 Ambac Assurance Corporation
 One State Street Plaza
 New York, New York 10022

		
	 Accredited Home Capital, Inc.
 15092 Avenue of Science
 San Diego, California 92128
	 	 

  

	 Re:
	  	 Sale and Servicing Agreement, dated as of November 1, 2003
 among Accredited Home Lenders, Inc., as Sponsor and Master
 Servicer, Accredited Home Capital, Inc., as seller, Accredited
 Mortgage Loan Trust 2003-3, Countrywide Home Loans Servicing
 LP, as Backup Servicer, and Deutsche Bank National Trust
 Company, as Indenture Trustee 

  
 Ladies and Gentlemen: 
  
 In accordance with the provisions of Section 2.06(b)(iii) of the
above-referenced Sale and Servicing Agreement, the undersigned, as Indenture Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan listed on the
attachment hereto), it has reviewed the documents delivered to it pursuant to Section 2.05(a) of the Sale and Servicing Agreement and has determined that (i) all documents required to be delivered to it pursuant to Section 2.05(a)(i)-(iv) and (vi)
of the above referenced Sale and Servicing Agreement are in its possession, (ii) such documents have been reviewed by it and appear regular on their face and have not been mutilated, damaged, torn or otherwise physically altered (handwritten
additions, changes or corrections do not constitute physical alteration if they reasonably appear to have been initialed by the Mortgagor) and relates to such Mortgage Loan and (iii) based on its examination and only as to the foregoing documents,
the information set forth in items (i), (ii) (with respect to property address only, excluding zip code), (iii) and (vi) of the definition of the Mortgage Loan Schedule respecting 

  

 E-1 

 
such Mortgage Loan that can be determined from the face of such documents accurately reflects the information set forth in the Indenture Trustee’s
Mortgage File. The Indenture Trustee has made no independent examination of such documents beyond the review specifically required in the above-referenced Sale and Servicing Agreement. The Indenture Trustee makes no representations as to: (x) the
validity, legality, recordability, sufficiency, perfection, priority, enforceability or genuineness of any such documents contained in each or any of the Mortgage Loans identified on the Mortgage Loan Schedule, or (y) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan. 
  
 Capitalized words and phrases used herein shall have the respective meanings assigned to them in the above-captioned Sale and Servicing Agreement. 
  

	DEUTSCHE BANK NATIONAL TRUST COMPANY, as Indenture Trustee
		
	 By:
	 	  

	 	 	 Name:

	 	 	 Title:

  

 E-2 

 EXHIBIT F 
  
 REQUEST FOR RELEASE OF DOCUMENTS 
  

	To:	Deutsche Bank National Trust Company 

	    	1761 East St. Andrew Place 

	    	Santa Ana, California 92705 

	    	Attention: Trust Administration—AC0303 

  

	 Re:
	  	 Sale and Servicing Agreement, dated as of November 1, 2003
 among Accredited Home Lenders, Inc., as Sponsor and Master
 Servicer, Accredited Home Capital, Inc., as seller, Accredited
 Mortgage Loan Trust 2003-3, Countrywide Home Loans Servicing
 LP, as Backup Servicer, and Deutsche Bank National Trust 
 Company, as Indenture Trustee (“Custodian/Indenture Trustee”) 

  
 In connection with the
administration of the Mortgage Loans held by you as Indenture Trustee for the Issuer pursuant to the above-captioned Sale and Servicing Agreement, we request the release, and hereby acknowledge receipt, of the Indenture Trustee’s Mortgage File
for the Mortgage Loan described below, for the reason indicated. 
  
 Mortgage
Loan Number: 
  
 Mortgagor Name, Address & Zip Code: 

 
 Reason for Requesting Documents (check one): 
  

	                 1.
	  	 Mortgage Paid in Full
	  	 
	                 2.
	  	 Foreclosure
	  	 
	                 3.
	  	 Substitution
	  	 
	                 4.
	  	 Other Liquidation (Repurchases, etc.)
	  	 
	                 5.
	  	 Nonliquidation Reason:
	  	 Reason:                        

  
 Address to which
Indenture Trustee should 
  

	 Deliver the Mortgage File:
	 	  

	 	 	  

	 	 	  

	 By:

	(authorized signer)
	
	 Issuer:

	 Address:

	
	

	
	 Date:

 EXHIBIT G 
  
 ACCREDITED HOME LENDERS, INC. 
 OFFICER’S CERTIFICATE 
  
 I,
            , certify that: 
  

	1.	I have reviewed this annual report on Form 10-K, and all reports on Form 8-K containing distribution or servicing reports filed in respect of periods included in the year covered by
this annual report, of Accredited Mortgage Loan Trust 2003-3; 

  

	2.	Based on my knowledge, the information in these reports, taken as a whole, does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading as of the last day of the period covered by this annual report; 

  

	3.	Based on my knowledge, the distribution or servicing information required to be provided to the trustee by the servicer under the pooling and servicing, or similar, agreement is
included in these reports; 

  

	4.	Based on my knowledge and upon the annual compliance statement included in the report and required to be delivered to the trustee in accordance with the terms of the pooling and
servicing, or similar, agreement, and except as disclosed in the reports, the servicer has fulfilled its obligations under the servicing agreement; and 

  

	5.	The reports disclose all significant deficiencies relating to the servicer’s compliance with the minimum servicing standards based upon the report provided by an independent
public accountant, after conducting a review in compliance with the Uniform Single Attestation Program for Mortgage Bankers or similar procedure, as set forth in the pooling and servicing, or similar, agreement that is included in these reports.

  
 In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties:             . 
  
 Date: 
  

	
	

	 Name:

	 Title:

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