Document:

Form of Indenture (Insured)

 Exhibit 4.6 
 INDENTURE 
 dated as of [DATE] 
 by and between 
 NOVASTAR MORTGAGE FUNDING TRUST 200[    ]-[    ],

 as Issuing Entity 
 and

 [                                      
          ] 
 as Indenture Trustee 

 TABLE OF CONTENTS 
  

					
	ARTICLE I
	
	DEFINITIONS
			
	 Section 1.01.
	  	General Definitions	  	3
	ARTICLE II
	
	THE NOTES
			
	 Section 2.01.
	  	Forms Generally	  	3
	 Section 2.02.
	  	Form of Certificate of Authentication	  	3
	 Section 2.03.
	  	General Provisions with Respect to Principal and Interest Payment	  	3
	 Section 2.04.
	  	Denominations	  	4
	 Section 2.05.
	  	Execution, Authentication, Delivery and Dating	  	4
	 Section 2.06.
	  	Registration, Registration of Transfer and Exchange	  	5
	 Section 2.07.
	  	Mutilated, Destroyed, Lost or Stolen Notes	  	6
	 Section 2.08.
	  	Payments of Principal and Interest	  	7
	 Section 2.09.
	  	Persons Deemed Owner	  	9
	 Section 2.10.
	  	Cancellation	  	9
	 Section 2.11.
	  	Authentication and Delivery of Notes	  	9
	 Section 2.12.
	  	Book-Entry Note	  	11
	 Section 2.13.
	  	Termination of Book Entry System	  	11
	
	ARTICLE III
	
	COVENANTS, REPRESENTATIONS AND WARRANTIES
			
	 Section 3.01.
	  	Payment of Notes	  	12
	 Section 3.02.
	  	Maintenance of Office or Agency	  	12
	 Section 3.03.
	  	Money for Note Payments to Be Held in Trust	  	12
	 Section 3.04.
	  	Existence of Issuing Entity	  	14
	 Section 3.05.
	  	Protection of Trust Estate	  	15
	 Section 3.06.
	  	Opinions as to the Trust Estate	  	16
	 Section 3.07.
	  	Performance of Obligations	  	16
	 Section 3.08.
	  	Investment Company Act	  	16
	 Section 3.09.
	  	Negative Covenants	  	16
	 Section 3.10.
	  	Annual Statement as to Compliance	  	17
	 Section 3.11.
	  	Restricted Payments	  	18
	 Section 3.12.
	  	Treatment of Notes as Debt for Tax Purposes	  	18
	 Section 3.13.
	  	Notice of Events of Default	  	18
	 Section 3.14.
	  	Further Instruments and Acts	  	18
	 Section 3.15.
	  	Representation and Warranties of the Issuing Entity.	  	18

  

 i 

					
	ARTICLE IV
	
	SATISFACTION AND DISCHARGE
			
	 Section 4.01.
	  	Satisfaction and Discharge of Indenture	  	20
	 Section 4.02.
	  	Application of Issuing Entity Money	  	21
	 Section 4.03.
	  	Subrogation and Cooperation.	  	21
	
	ARTICLE V
	
	DEFAULTS AND REMEDIES
			
	 Section 5.01.
	  	Event of Default	  	22
	 Section 5.02.
	  	Acceleration of Maturity; Rescission and Annulment	  	23
	 Section 5.03.
	  	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	  	24
	 Section 5.04.
	  	Remedies	  	25
	 Section 5.05.
	  	Indenture Trustee May File Proofs of Claim	  	25
	 Section 5.06.
	  	Indenture Trustee May Enforce Claims Without Possession of Notes	  	26
	 Section 5.07.
	  	Application of Money Collected	  	26
	 Section 5.08.
	  	Limitation on Suits	  	28
	 Section 5.09.
	  	Unconditional Rights of Noteholders to Receive Principal and Interest	  	28
	 Section 5.10.
	  	Restoration of Rights and Remedies	  	29
	 Section 5.11.
	  	Rights and Remedies Cumulative	  	29
	 Section 5.12.
	  	Delay or Omission Not Waiver	  	29
	 Section 5.13.
	  	Control by Noteholders	  	29
	 Section 5.14.
	  	Waiver of Past Defaults	  	30
	 Section 5.15.
	  	Undertaking for Costs	  	30
	 Section 5.16.
	  	Waiver of Stay or Extension Laws	  	30
	 Section 5.17.
	  	Sale of Trust Estate	  	30
	 Section 5.18.
	  	Action on Notes	  	32
	 Section 5.19.
	  	No Recourse	  	32
	 Section 5.20.
	  	Application of the Trust Indenture Act	  	32
	 Section 5.21.
	  	Suspension and Termination of Note Insurer’s Rights	  	32
	
	ARTICLE VI
	
	THE INDENTURE TRUSTEE
			
	 Section 6.01.
	  	Duties of Indenture Trustee	  	33
	 Section 6.02.
	  	Notice of Default	  	35
	 Section 6.03.
	  	Rights of Indenture Trustee	  	35
	 Section 6.04.
	  	Not Responsible for Recitals, Issuance of Notes or Mortgage Loans	  	36
	 Section 6.05.
	  	May Hold Notes	  	37
	 Section 6.06.
	  	Money Held in Trust	  	37
	 Section 6.07.
	  	Eligibility, Disqualification	  	37
	 Section 6.08.
	  	Indenture Trustee’s Capital and Surplus	  	37
	 Section 6.09.
	  	Resignation and Removal; Appointment of Successor	  	38

  

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	 Section 6.10.
	  	Acceptance of Appointment by Successor Indenture Trustee	  	39
	 Section 6.11.
	  	Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee	  	39
	 Section 6.12.
	  	Preferential Collection of Claims Against Issuing Entity	  	40
	 Section 6.13.
	  	Co-Indenture Trustees and Separate Indenture Trustees	  	40
	 Section 6.14.
	  	Authenticating Agents	  	41
	 Section 6.15.
	  	Review of Mortgage Files	  	42
	 Section 6.16.
	  	Indenture Trustee Fees and Expenses Indemnification	  	42
	
	ARTICLE VII
	
	NOTEHOLDERS’ LISTS AND REPORTS
			
	 Section 7.01.
	  	Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders	  	43
	 Section 7.02.
	  	Preservation of Information: Communications to Noteholders	  	44
	 Section 7.03.
	  	Reports by Indenture Trustee	  	44
	 Section 7.04.
	  	Reports by Issuing Entity	  	45
	
	ARTICLE VIII
	
	ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES
			
	 Section 8.01.
	  	Accounts; Investment; Collection of Moneys	  	46
	 Section 8.02.
	  	Payments; Statements	  	49
	 Section 8.03.
	  	Claims against the Note Insurance Policy	  	50
	 Section 8.04.
	  	General Provisions Regarding the Payment Accounts and Mortgage Loans	  	53
	 Section 8.05.
	  	Releases of Deleted Mortgage Loans	  	54
	 Section 8.06.
	  	Reports by Indenture Trustee to Noteholders; Access to Certain Information	  	54
	 Section 8.07.
	  	Release of Trust Estate	  	55
	 Section 8.08.
	  	Amendment to Sale and Servicing Agreement	  	55
	 Section 8.09.
	  	Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement	  	55
	 Section 8.10.
	  	Servicer as Agent	  	55
	 Section 8.11.
	  	Termination of Servicer	  	56
	 Section 8.12.
	  	Opinion of Counsel	  	56
	 Section 8.13.
	  	Appointment of Collateral Agents	  	56
	 Section 8.14.
	  	Rights of the Note Insurer to Exercise Rights of Noteholders	  	56
	 Section 8.15.
	  	Trust Estate and Accounts Held for Benefit of the Note Insurer	  	57
	
	ARTICLE IX
	
	SUPPLEMENTAL INDENTURES
			
	 Section 9.01.
	  	Supplemental Indentures Without Consent of Noteholders	  	57
	 Section 9.02.
	  	Supplemental Indentures with Consent of Noteholders	  	58
	 Section 9.03.
	  	Execution of Supplemental Indentures	  	59

  

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	 Section 9.04.
	  	Effect of Supplemental Indentures	  	60
	 Section 9.05.
	  	Conformity With Trust Indenture Act	  	60
	 Section 9.06.
	  	Reference in Notes to Supplemental Indentures	  	60
	 Section 9.07.
	  	Amendments to Governing Documents	  	60
	
	ARTICLE X
	
	REDEMPTION OF NOTES
			
	 Section 10.01.
	  	Redemption of Notes	  	61
	 Section 10.02.
	  	Form of Redemption Notice	  	61
	 Section 10.03.
	  	Notes Payable on Optional Redemption	  	62
	
	ARTICLE XI
	
	MISCELLANEOUS
			
	 Section 11.01.
	  	Compliance Certificates and Opinions	  	62
	 Section 11.02.
	  	Form of Documents Delivered to Indenture Trustee	  	64
	 Section 11.03.
	  	Acts of Noteholders	  	64
	 Section 11.04.
	  	Notices, etc., to Indenture Trustee, the Note Insurer and Issuing Entity	  	65
	 Section 11.05.
	  	Notices and Reports to Noteholders; Waiver of Notices	  	66
	 Section 11.06.
	  	Rules by Indenture Trustee	  	67
	 Section 11.07.
	  	Conflict with Trust Indenture Act	  	67
	 Section 11.08.
	  	Effect of Headings and Table of Contents	  	67
	 Section 11.09.
	  	Successors and Assigns	  	67
	 Section 11.10.
	  	Separability	  	67
	 Section 11.11.
	  	Benefits of Indenture	  	67
	 Section 11.12.
	  	Legal Holidays	  	67
	 Section 11.13.
	  	Governing Law	  	67
	 Section 11.14.
	  	Counterparts	  	68
	 Section 11.15.
	  	Recording of Indenture	  	68
	 Section 11.16.
	  	Issuing Entity Obligation	  	68
	 Section 11.17.
	  	No Petition	  	69
	 Section 11.18.
	  	Inspection	  	69
	 Section 11.19.
	  	Usury	  	69
	 Section 11.20.
	  	Note Insurer Default	  	70
	 Section 11.21.
	  	Third-Party Beneficiary	  	70

 APPENDICES, SCHEDULES AND EXHIBITS 
  

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

  

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 CROSS-REFERENCE TABLE 
 Cross-reference sheet showing the location in the Indenture of the provisions inserted pursuant to Sections 310 through 318(a) inclusive of the Trust
Indenture Act of 1939.1 
  

			
	 Trust Indenture Act of 1939
	 	 Indenture Section

	 Section 310
	 	
	 (a) (1)
	 	6.07
	 (a) (2)
	 	6.08
	 (a) (3)
	 	6.13
	 (a) (4)
	 	Not Applicable
	 (a) (5)
	 	6.07
	 (b)
	 	6.07
	 (c)
	 	Not Applicable
	 Section 311
	 	
	 (a)
	 	6.12
	 (b)
	 	6.12
	 (c)
	 	Not Applicable
	 Section 312
	 	
	 (a)
	 	7.01(A), 7.02(a)
	 (b)
	 	7.02(b)
	 (c)
	 	7.02(c)
	 Section 313
	 	
	 (a)
	 	7.03
	 (b)
	 	7.03
	 (c)
	 	7.03
	 (d)
	 	7.03
	 Section 314
	 	
	 (a)(1)
	 	7.04
	 (a)(2)
	 	7.04
	 (a)(3)
	 	7.03, 7.04
	 (a)(4)
	 	3.10
	 (b)(1)
	 	2.11(b)
	 (b)(2)
	 	3.06
	 (c)(1)
	 	2.11,4.01, 11.01
	 (c)(2)
	 	2.11, 4.01, 11.01
	 (c)(3)
	 	4.01
	 (d)(1)
	 	11.01
	 (d)(2)
	 	11.01
	 (d)(3)
	 	11.01
	 (e)
	 	11. 01(b)
	 Section 315
	 	
	 (a)
	 	6.01(b)(ii), 6.01(c)(i)
	 (b)
	 	6.02
	 (c)
	 	6.01(a)

	1	This Cross-Reference Table is not part of the Indenture. 

  

 v 

			
	 (d)(1)
	  	6.01(b), 6.01(c)
	 (d)(2)
	  	6.01(c)(iii)
	 (d)(3)
	  	6.01(c)(iv)
	 (e)
	  	5.15
	 Section 316
	  	
	 (a)
	  	5.13
	 (b)
	  	5.09
	 (c)
	  	10.02
	 Section 317
	  	
	 (a)(1)
	  	5.03
	 (a)(2)
	  	5.05
	 (b)
	  	3.03
	 Section 318
	  	
	 (a)
	  	11.07

  

 vi 

 This INDENTURE, dated as of [DATE] (as amended or supplemented from time to time as permitted hereby,
this “Indenture”), is between NOVASTAR MORTGAGE FUNDING TRUST 200[    ]-[    ], a Delaware statutory trust (together with its permitted successors and assigns, the
“Issuing Entity”), and [                                ], a
[national banking association], as Indenture Trustee (together with its permitted successors in the trusts hereunder, the “Indenture Trustee”). 
 Preliminary Statement 
 The Issuing Entity has duly authorized the execution and delivery of this
Indenture to provide for its Asset-Backed Notes, Series 200[    ]-[    ] (the “Notes”), issuable as provided in this Indenture. All covenants and agreements made by the Issuing
Entity herein are for the benefit and security of the Holders of the Notes and the Note Insurer. The Issuing Entity is entering into this Indenture, and the Indenture Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged. 
 All things necessary to make this Indenture a valid agreement
of the Issuing Entity in accordance with its terms have been done. 
 Granting Clause 
 Subject to the terms of this Indenture, the Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the
benefit of the Class A-1 Noteholders and the Note Insurer, all of the Issuing Entity’s right, title and interest in and to: (i) the Trust Estate relating to Loan Group 1; (ii) all right, title and interest of the Issuing Entity
in the Sale and Servicing Agreement with respect to the Group 1 Mortgage Loans (including the Issuing Entity’s right to cause the Sponsor to repurchase Group 1 Mortgage Loans from the Issuing Entity under certain circumstances described
therein); (iii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all
of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts,
insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the
foregoing, each with respect to Loan Group 1; (iv) all funds on deposit from time to time in (a) the Collection Account relating to Loan Group 1 and (b) the Payment Account relating to Loan Group 1; (v) all other property of the
Issuing Entity relating to Loan Group 1 from time to time; and (vi) any and all proceeds of the foregoing (collectively with respect to Loan Group 1, the “Group 1 Collateral”). 
 The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Class A-1
Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture. 
  

 1 

 Subject to the terms of this Indenture, the Issuing Entity hereby Grants to the Indenture Trustee at the
Closing Date, as Indenture Trustee for the benefit of the Class A-2 Noteholders and the Note Insurer, all of the Issuing Entity’s right, title and interests in and to: (i) the Trust Estate relating to Loan Group 2; (ii) all
right, title and interest, of the Issuing Entity in the Sale and Servicing Agreement with respect to the Group 2 Mortgage Loans (including the Issuing Entity’s right to cause the Sponsor to repurchase Group 2 Mortgage Loans from the Issuing
Entity under certain circumstances described therein); (iii) all present and future claims, demands, causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and
nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts,
acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or
part of or are included in the proceeds of any of the foregoing, each with respect to Loan Group 2; (iv) all funds on deposit from time to time in (a) the Collection Account relating to Loan Group 2 and (b) the Payment Account
relating to Loan Group 2; (v) all other property of the Issuing Entity relating to Loan Group 2 from time to time; and (vi) any and all proceeds of the foregoing (collectively with respect to Loan Group 2, the “Group 2
Collateral”. 
 The foregoing Grant is made in trust to secure the payment of principal of and interest on, and any), other amounts
owing in respect of, the Class A-2 Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as provided in this Indenture. 
 [Subject to the terms of this Indenture, the Issuing Entity hereby Grants to the Indenture Trustee at the Closing Date, as Indenture Trustee for the
benefit of the Class A-1 Noteholders, the Class A-2 Noteholders and the Note Insurer, all of the Issuing Entity’s right, title and interest in and to the Reserve Account; provided, however, that with respect to the
Available Funds Cap Carry Forward Amount related to a Class of Notes, only amounts on deposit in the related sub-account of the Reserve Account and the related Yield Maintenance Account are available to pay the related Available Funds Cap
Carry-Forward Amount.] 
 The foregoing Grants shall inure to the benefit of the Note Insurer in respect of draws made on the Note Insurance
Policy and amounts owing from time to time pursuant to the Insurance Agreement, and such Grants shall continue in full force and effect for the benefit of the Note Insurer until all such amounts owing to it have been repaid in full. 
 The Indenture Trustee, as Indenture Trustee on behalf of the holders of each Group of Notes, acknowledges the foregoing Grants, accepts the trusts
hereunder in good faith and without notice of any adverse claim or liens and agrees to perform its duties required in this Indenture as specifically set forth herein to the end that the interests of the holders of the related Notes and the Note
Insurer may be adequately and effectively protected. The Indenture Trustee agrees and acknowledges that each item of Collateral that is physically delivered to the Indenture Trustee will be held by the Indenture Trustee in California. The Indenture
Trustee agrees that it will hold the Note Insurance Policy in trust and that it will hold any proceeds of any claim upon the Note Insurance Policy, solely for the use and benefit of the Noteholders in accordance with the terms hereof and the Note
Insurance Policy. 
  

 2 

 ARTICLE I 
 DEFINITIONS 
 Section 1.01. General Definitions. Except as otherwise specified or as the
context may otherwise require, the terms defined in Appendix I have the respective meanings set forth in such Appendix I for all purposes of this Indenture, and the definitions of such terms are applicable to the singular as well as to the plural
forms of such terms and to the masculine as well as to the feminine genders of such terms. Whenever reference is made herein to an Event of Default or a Default known to the Indenture Trustee or of which the Indenture Trustee has notice or
knowledge, such reference shall be construed to refer only to an Event of Default or Default of which the Indenture Trustee is deemed to have notice or knowledge pursuant to Section 6.01(d). All other terms used herein that are defined in the
Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein. 
 ARTICLE II 
 THE NOTES 
 Section 2.01. Forms Generally. The Notes shall be substantially in the form set forth as Exhibit A attached hereto. Each Note may have such letters, numbers or other marks of indemnification
and such legends or endorsements placed thereon as may be required to comply with the rules of any securities exchange on which the Notes may be listed, or as may, consistently herewith, be determined by the Issuing Entity, as evidenced by its
execution thereof. Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate reference on the face of the Note. 
 The Definitive Notes may be produced in any manner determined by the Issuing Entity, as evidenced by its execution thereof. 
 Section 2.02. Form of Certificate of Authentication. The form of the Authenticating Agent’s certificate of authentication is as set forth on the signature page of the form of the Note attached hereto
as Exhibit A. 
 Section 2.03. General Provisions with Respect to Principal and Interest Payment. The Notes shall be
designated generally as the “NovaStar Mortgage Funding Trust 200[    ]-[    ], Asset-Backed Notes, Series 200[    ]-[    ]”.

 The Notes shall be issued in the form specified in Section 2.01 hereof. The Notes shall be issued in two Classes, the Class A-1
Notes, and Class A-2 Notes. The aggregate Original Note Principal Balance of Notes that may be authenticated and delivered under the Indenture is 
  

 3 

 limited to
$[                    ] of Class A-1 Notes and
$[                    ]of Class A-2 Notes, except for the Notes authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture. 
 Subject to the provisions of Sections
3.01, 5.07, 5.09 and 8.02 of this Indenture, the principal of each Class of Notes shall be payable in installments ending no later than the related Final Stated Maturity Date, unless the unpaid principal of such Notes become due and payable at an
earlier date by declaration of acceleration or call for redemption or otherwise. 
 All payments made with respect to any Note shall be
applied first to the interest then due and payable on such Note and then to the principal thereof. All computations of interest accrued on any Note shall be made on the basis of a year of 360 days and the actual number of days elapsed in the related
Accrual Period. 
 Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the
Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity and its consequences have not been rescinded and annulled, then payments of principal of and interest on the Notes shall be made in
accordance with Section 5.07 hereof. 
 Section 2.04. Denominations. The Notes shall be issuable only as registered Notes in
the denominations equal to the Authorized Denominations. 
 Section 2.05. Execution, Authentication, Delivery and Dating. The
Notes shall be executed on behalf of the Issuing Entity by an Authorized Officer of the Owner Trustee, acting at the direction of the Certificateholders. The signature of such Authorized Officer of the Owner Trustee on the Notes may be manual or by
facsimile. 
 Notes bearing the manual or facsimile signature of an individual who was at any time an Authorized Officer of the Owner Trustee
shall bind the Issuing Entity, notwithstanding that such individual has ceased to be an Authorized Officer of the Owner Trustee prior to the authentication and delivery of such Notes or was not an Authorized Officer of the Owner Trustee at the date
of such Notes. 
 At any time and from time to time after the execution and delivery of this Indenture, the Issuing Entity may deliver Notes
executed on behalf of the Issuing Entity to the Authenticating Agent for authentication, and the Authenticating Agent shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. 
 Each Note authenticated on the Closing Date shall be dated the Closing Date. All other Notes that are authenticated after the Closing Date for any other
purpose hereunder shall be dated the date of their authentication. 
 No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a certificate of authentication substantially in the form provided for in Section 2.02 hereof, executed by the Authenticating Agent by the manual signature of one of its
Authorized Officers or employees, and such certificate of authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. 
  

 4 

 Section 2.06. Registration, Registration of Transfer and Exchange. The Issuing Entity shall
cause to be kept a register (the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuing Entity shall provide for the registration of Notes and the registration of transfers of Notes. The
Indenture Trustee is hereby initially appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Indenture Trustee shall remain the Note Registrar throughout the term hereof. Upon
any resignation of the Indenture Trustee, the Servicer, on behalf of the Issuing Entity, shall promptly appoint a successor, with the approval of the Note Insurer, or, in the absence of such appointment, the Servicer, on behalf of the Issuing
Entity, shall assume the duties of Note Registrar. 
 If a Person other than the Indenture Trustee is appointed by the Issuing Entity as Note
Registrar, the Issuing Entity will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right
to inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Authorized Officer thereof as to the names
and addresses of the Holders of the Notes and the principal amounts and number of such Notes. 
 Upon surrender for registration of transfer
of any Note at the office or agency of the Issuing Entity to be maintained as provided in Section 3.02 hereof, the Owner Trustee on behalf of the Issuing Entity, acting at the direction of the Certificateholders, shall execute, and the
Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees; one or more new Notes of any authorized denominations and of a like aggregate initial Note Principal Balance. 
 At the option of the Holder, Notes may be exchanged for other Notes of any authorized denominations, and of a like aggregate Note Principal Balance, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Owner Trustee shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making
the exchange is entitled to receive. 
 All Notes issued upon any registration of transfer or exchange of Notes shall be the valid
obligations of the Issuing Entity, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Notes surrendered upon such registration of transfer or exchange. 
 Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of
transfer in the form included in Exhibit A attached hereto, duly executed by the Holder thereof or its attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the
requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Exchange Act. 
  

 5 

 No service charge shall be made for any registration of transfer or exchange of Notes, but the Note
Registrar may require payment of a sum sufficient to cover any tax or other governmental charge as may be imposed in connection with any registration of transfer or exchange of Notes, other than exchanges pursuant to Section 2.07 or
Section 9.06 hereof not involving any transfer or any exchange made by the Note Insurer. 
 The Note Registrar shall not register the
transfer of a Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is a Plan and is not, directly or indirectly, acquiring the Note or any interest therein on
behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Plan or (ii) the acquisition and holding of the Note by the transferee qualifies for exemptive relief under a United States Department of Labor
prohibited transaction class exemption (or, if the transferee is a Governmental Plan, will not result in a violation of applicable law). Each Beneficial Owner of a Note which is a Book-Entry Note shall be deemed to make one of the foregoing
representations. 
 Section 2.07. Mutilated, Destroyed, Lost or Stolen Notes. If (1) any mutilated Note is surrendered to
the Note Registrar or the Note Registrar receives evidence to its satisfaction of the destruction, loss or theft of any Note, and (2) there is delivered to the Note Registrar such security or indemnity as may be required by the Note Registrar
to save each of the Issuing Entity, the Owner Trustee, the Note Insurer and the Note Registrar harmless, then, in the absence of notice to the Note Registrar that such Note has been acquired by a bona fide purchaser, the Owner Trustee on behalf of
the Issuing Entity, acting at the direction of the Certificateholders, shall execute and upon its delivery of a Trust Request the Authenticating Agent shall authenticate and deliver, in exchange for or in lieu of any such mutilated, destroyed, lost
or stolen Note, a new Note or Notes of the same tenor and aggregate initial principal amount bearing a number not contemporaneously outstanding. If, after the delivery of such new Note, a bona fide purchaser of the original Note in lieu of which
such new Note was issued presents for payment such original Note, the note Registrar, shall be entitled to recover such new Note from the person to whom it was delivered or any person taking therefrom, except a bona fide purchaser, and shall be
entitled to recover upon the security or indemnity provided therefor to the extent of any loss, damage, cost or expenses incurred by the Issuing Entity, the Owner Trustee, the Note Insurer or the Note Registrar in connection therewith. If any such
mutilated, destroyed, lost, or stolen Note shall have become or shall be about to become due and payable, or shall have become subject to redemption in full, instead of issuing a new Note, the Issuing Entity may pay such Note without surrender
thereof, except that any mutilated Note shall be surrendered. 
 Upon the issuance of any new Note under this Section 2.07, the Note
Registrar, may require the payment of a sum sufficient to cover any tax or other governmental charge that may be imposed in relation thereto and any other reasonable expenses (including the fees and expenses of the Issuing Entity, the Indenture
Trustee or the Note Registrar) connected therewith. 
 Every new Note issued pursuant to this Section 2.07 in lieu of any destroyed,
lost or stolen Note shall constitute an original contractual obligation of the Issuing Entity, whether or 
  

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 not the destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the
benefits of this Indenture equally and proportionately with any and all other Notes duly issued hereunder. 
 The provisions of this
Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes. 
 Section 2.08. Payments of Principal and Interest. (a) Payments on Notes issued as Book-Entry Notes will be made by or on behalf of the
Indenture Trustee to the Clearing Agency or its nominee. Any installment of interest or principal payable on any Definitive Notes that is punctually paid or duly provided for by the Issuing Entity on the applicable Payment Date shall be paid to the
Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Class of Notes and such Payment Date by either (i) wire transfer of immediately available funds to the account
of a Noteholder, if such Noteholder has provided the Indenture Trustee with wiring instructions in writing by five (5) Business Days prior to the related Record Date or has provided the Indenture Trustee with such instructions for any previous
Payment Date or (ii) check mailed to such Person’s address as it appears in the Note Register on such Record Date, except for the final installment of principal payable with respect to such Note, which shall be payable as provided in
subsection (b) of this Section 2.08. A fee may be charged by the Indenture Trustee to a Holder of Definitive Notes for any payment made by wire transfer. Any installment of interest or principal not punctually paid or duly provided for
shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07 applies, pursuant to Section 5.07. 
 Payments on Certificates will be made by or on behalf of the Indenture Trustee to or at the direction of the Person in whose name such Certificate is registered by either (i) wire transfer of immediately
available funds to the account directed by a Certificateholder, if such Certificateholder (A) is NovaStar Mortgage Inc. or its affiliate and (B) has provided the Indenture Trustee with wiring instructions in writing by five
(5) Business Days prior to the related payment Date or has provided the Indenture Trustee with such instructions for any previous Payment Date or (ii) check mailed to such Person’s address as it appears in the Certificate Register on
such Record Date. A fee may be charged by the Indenture Trustee to a Certificateholder for any payment made by wire transfer. The Indenture Trustee shall be entitled to rely on information provided by the Owner Trustee as Certificate Registrar as to
all matters related to the Certificate Registrar and the Certificates. 
 (b) All reductions in the Note Principal Balance of a Note (or one
or more Predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu
thereof, whether or not such payment is noted on such Note. The final installment of principal of each Note shall be payable only upon presentation and surrender thereof on or after the Payment Date therefor at the designated office of the Indenture
Trustee located within the United States of America pursuant to Section 3.02. 
 Whenever the Indenture Trustee expects that the entire
unpaid Note Principal Balance of any Note will become due and payable on the next Payment Date, other than pursuant to a 
  

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 redemption pursuant to Article X, it shall, no later than two (2) Business Days prior to such Payment Date, mail to
each Person in whose name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a notice to the effect that: 
 (i) the Indenture Trustee expects that funds sufficient to pay such final installment will be available in the related Payment Account on
such Payment Date; and 
 (ii) if such funds are available, (a) such final installment will be payable on such Payment
Date, but only upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained for such purpose pursuant to Section 3.02 (the address of which shall be set forth in such notice) and (b) no interest
shall accrue on such Note after such Payment Date. 
 A copy of such form of notice shall be sent to the Note Insurer by the Indenture
Trustee. 
 Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with Section 10.02 hereof.

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

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 Section 2.09. Persons Deemed Owner. Prior to due presentment for registration of transfer of
any Note, any agent on behalf of the Issuing Entity including but not limited to the Indenture Trustee, or the Note Insurer, may treat the Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date
for the purpose of receiving payments of the principal of and interest on such Note and (b) on any other date for all other purposes whatsoever, and none of the Issuing Entity, the Indenture Trustee or any other agent of the Issuing Entity, or
the Note Insurer shall be affected by notice to the contrary. 
 Section 2.10. Cancellation. All Notes surrendered for payment,
registration of transfer, exchange or redemption shall, if surrendered to any Person other than the Note Registrar, be delivered to the Note Registrar and shall be promptly canceled by it. The Owner Trustee, on behalf of the Issuing Entity, shall
deliver to the Note Registrar for cancellation any Note previously authenticated and delivered hereunder which the Owner Trustee, on behalf of the Issuing Entity may have acquired in any manner whatsoever, and all Notes so delivered shall be
promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange for any Notes canceled as provided in this Section 2.10, except as expressly permitted by this Indenture. All canceled Notes held by the Note
Registrar shall be held by the Note Registrar in accordance with its standard retention policy, unless the Owner Trustee, on behalf of the Issuing Entity shall direct within 5 Business Days of receipt of the cancelled Note by a Trust Order that they
be destroyed or returned to it. 
 Section 2.11. Authentication and Delivery of Notes. The Notes shall be executed by an
Authorized Officer of the Owner Trustee, on behalf of the Issuing Entity; and delivered to the Authenticating Agent for authentication, and thereupon the same shall be authenticated and delivered by the Authenticating Agent, upon a Trust Request and
upon receipt by the Authenticating Agent of all of the following: 
 (a) A Trust Order authorizing the execution, authentication and delivery
of the Notes and specifying the Note Principal Balance and the Percentage Interest of such Notes to be authenticated and delivered. 
 (b) If
required, one or more Opinions of Counsel (which opinion shall not be at the expense of the Indenture Trustee or the Issuing Entity) addressed to the Authenticating Agent and the Note Insurer or upon which the Authenticating Agent and the Note
Insurer are expressly permitted to rely, complying with the requirements of Section 11.01, reasonably satisfactory in form and substance to the Authenticating Agent and the Note Insurer. 
 In rendering the opinions set forth above, such counsel may rely upon Officer’s Certificates of the Issuing Entity, the Owner Trustee, the
Depositor, the Sponsor, the Servicer and the Indenture Trustee, without independent confirmation or verification with respect to factual matters relevant to such opinions. In rendering the opinions set forth above, such counsel need express no
opinion as to (a) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests that arise by operation of law and that do not require any filing or similar action in order to take
priority over a perfected security interest or 
  

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 (b) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of tile
United States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title IV of ERISA). 
 The
acceptability to the Note Insurer of the Opinion of Counsel delivered to the Authenticating Agent and the Note Insurer at the Closing Date shall be conclusively evidenced by the delivery on the Closing Date of the Note Insurance Policy. 

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

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 (i) A copy of a letter from each of the Rating Agencies that it has assigned the ratings to each Class of
the Notes as set forth in the Prospectus Supplement. 
 (j) Evidence of the establishment of the Accounts. 
 Section 2.12. Book-Entry Note. The Notes will be issued initially as one or more certificates in the name of Cede & Co., as nominee
for the Clearing Agency maintaining book-entry records with respect to ownership and transfer of such Notes, and registration of the Notes may not be transferred by the Note Registrar except upon the termination of the book-entry system as described
in Section 2.13. In such case, the Note Registrar shall deal with the Clearing Agency as representative of the Beneficial Owners of such Notes for purposes of exercising the rights of Noteholders hereunder. Each payment of principal of and
interest on a Book-Entry Note shall be paid to the Clearing Agency, which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance with its normal procedures. Each Clearing Agency Participant shall
be responsible for disbursing such payments to the Beneficial Owners of the Book-Entry Notes that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”)
for which it acts as agent. Each brokerage firm shall be responsible for disbursing funds to the Beneficial Owners of the Book-Entry Notes that it represents. All such credits and disbursements are to be made by the Clearing Agency and the Clearing
Agency Participants in accordance with the provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if any, the Issuing Entity or the Note Insurer shall have any responsibility therefor except as otherwise provided by applicable
law. Requests and directions from, and votes of, such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners. 
 Section 2.13. Termination of Book Entry System. (a) The book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated upon the happening of any of the following:

 (i) The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able to discharge
properly its responsibilities as nominee and depository with respect to the Notes and a qualified successor Clearing Agency satisfactory to the Servicer is not located, on behalf of the Issuing Entity; or 
 (ii) After the occurrence of an Event of Default (at which time the Indenture Trustee shall promptly notify the Clearing Agency of such
Event of Default and instruct the Clearing Agency to forward such notice to the Beneficial Owners), the Beneficial Owners representing in the aggregate more than 50% of the Note Principal Balance of the Book-Entry Notes advise the Indenture Trustee
in writing, through the related Clearing Agency Participants and the Clearing Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any Definitive Notes being issued to any person other than the
Clearing Agency or its nominee is no longer in the best interests of the Beneficial Owners. 
 (b) Upon the occurrence of any event described
in subsection (a) of this Section 2.13, the Indenture Trustee shall instruct the Clearing Agency to notify all Beneficial Owners, of the occurrence of such event and of the availability of Definitive Notes to Beneficial 
  

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 Owners requesting the same, in an aggregate outstanding Note Principal Balance representing the interest of each, making
such adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous calls for redemption. Definitive Notes shall be issued only upon surrender to the Indenture Trustee of the global Note by the Clearing
Agency, accompanied by registration instructions for the Definitive Notes. Neither the Issuing Entity nor the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon issuance of the Definitive Notes, all references herein to obligations imposed upon or to be performed by the Clearing Agency shall cease to be applicable and the provisions relating to Definitive Notes shall be
applicable. 
 ARTICLE III 
 COVENANTS, REPRESENTATIONS AND WARRANTIES 
 Section 3.01. Payment of Notes. The Issuing Entity will pay or cause
to be duly and punctually paid the principal of, and interest on, the Notes in accordance with the terms of the Notes and this Indenture. The Notes shall be non-recourse obligations of the Issuing Entity and shall be limited in right of payment to
amounts available from the Trust Estate as provided in this Indenture and the Issuing Entity shall not otherwise be liable for payments on the Notes. No person shall be personally liable for any amounts payable under the Notes. If any other
provision of this Indenture conflicts or is deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control. 
 Section 3.02. Maintenance of Office or Agency. The Indenture Trustee will always maintain an office at a location in the United States of America where Notes may be surrendered for registration of transfer
or exchange, which as of the Closing Date shall be located at the Corporate Trust Office. Notices and demands to or upon the Issuing Entity in respect of the Notes and this Indenture may be delivered at the Corporate Trust Office of the Indenture
Trustee. 
 The Owner Trustee, at the direction of the Certificateholders, on behalf of the Issuing Entity may also from time to time, at the
expense of the Certificateholders, designate one or more other offices or agencies within the United States of America where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations;
provided, however, any designation of an office or agency for payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at the direction of the Certificateholders, on behalf of the Issuing Entity will give prompt written
notice to the Indenture Trustee and the Note Insurer of any such designation or rescission and of any change in the location of any such other office or agency. 
 Section 3.03. Money for Note Payments to Be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be made from amounts withdrawn from the related Payment Account
pursuant to Sections 5.07 or 8.02 hereof shall be made on behalf of the Issuing Entity by the Indenture Trustee, and no amounts so withdrawn from the related Payment Account for payments on the Notes shall be paid over to the Issuing Entity under
any circumstances except as provided in this Section 3.03 or in Sections 5.07 or 8.02 hereof. 
  

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 With respect to Definitive Notes, if the Issuing Entity shall have a Note Registrar that is not also the
Indenture Trustee, such Note Registrar shall furnish, no later than the fifth (5th) calendar day after each Record Date, a list, in such form as such Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes
and of the number of Individual Notes held by each such Holder. 
 Whenever the Issuing Entity shall have a Paying Agent other than the
Indenture Trustee, the Servicer, on behalf of the Issuing Entity, will, on or before the Business Day next preceding each Payment Date, direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the amounts
then becoming due (to the extent funds are then available for such purpose in the related Payment Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any moneys deposited with a Paying Agent in excess of an amount
sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Trust Order, be paid over by such Paying Agent to the Indenture Trustee for application in accordance with Article VIII hereof.

 Subject to the prior written consent of the Note Insurer, any Paying Agent other than the Indenture Trustee, may be appointed by Trust
Order and at the expense of the Issuing Entity. The Issuing Entity shall not appoint any Paying Agent (other than the Indenture Trustee) that is not, at the time of such appointment, a depository institution or trust company whose obligations would
be Permitted Investments pursuant to clause (b) of the definition of the term “Permitted Investments”. The Servicer, on behalf of the Issuing Entity, will cause each Paying Agent other than the Indenture Trustee to execute and deliver
to the Indenture Trustee and the Owner Trustee, on behalf of the Issuing Entity, an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the
provisions of this Section 3.03, that such Paying Agent will: 
 (a) allocate all sums received for payment to the Holders of Notes on
each Payment Date among such Holders in the proportion specified in the applicable Indenture Trustee’s Remittance Report, in each case to the extent permitted by applicable law; 
 (b) hold all sums held by it for the payment of amounts due with respect to the Notes in trust for the benefit of the Persons entitled thereto until such
sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; 
 (c)
if such Paying Agent is not the Indenture Trustee, immediately resign as a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time the Paying Agent ceases to meet the standards
set forth above required to be met by a Paying Agent at the time of its appointment; 
 (d) if such Paying Agent is not the Indenture
Trustee, give the Indenture Trustee notice of any Default by the Issuing Entity (or any other obligor upon the Notes) in the making of any payment required to be made with respect to any Notes for which it is acting as Paying Agent; 
  

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

 14 

 consolidated, or any entity resulting from any merger or consolidation to which the Issuing Entity shall be a party,
shall be the successor issuing entity under this Indenture without the execution or filing of any paper, instrument or further act to be done on the part of the parties hereto, anything in any agreement relating to such merger or consolidation, by
which any such Issuing Entity may seek to retain certain powers, rights and privileges therefore obtaining for any period of time following such merger or consolidation to the contrary notwithstanding (other than Section 3.09(g)). 

(c) Upon any consolidation or merger of or other succession to the Issuing Entity in accordance with this Section 3.04, the Person formed by or
surviving such consolidation or merger (if other than the Issuing Entity) may exercise every right and power of, and shall have all of the obligations of, the Issuing Entity under this Indenture with the same effect as if such Person had been named
as the issuing entity herein. 
 Section 3.05. Protection of Trust Estate. (a) The Issuing Entity will, from time to time,
execute and deliver all such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or advisable to:

 (i) Grant more effectively all or any portion of the Trust Estate as made by this Indenture; 
 (ii) maintain or preserve the lien of this Indenture or carry out more effectively the purposes hereof; 
 (iii) perfect, publish notice of or protect the validity of any Grant made or to be made by this Indenture; 
 (iv) enforce any of the Mortgage Loans or the Sale and Servicing Agreement; or 
 (v) preserve and defend title to the Trust Estate and the rights of the Indenture Trustee, the Noteholders and the Note Insurer in the
Mortgage Loans and the other property held as part of the Trust Estate against the claims of all Persons and parties. 
 (b) The Indenture
Trustee shall not remove any portion of the Trust Estate that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the Closing Date (provided that the Indenture Trustee may
allow for the release of the Indenture Trustee’s Mortgage File as provided in the Sale and Servicing Agreement and may also move its files to the State of California) or cause or permit ownership or the pledge of any portion of the Trust Estate
that consists of book-entry securities to be recorded on the books of a Person located in a different jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have first
received an Opinion of Counsel to the effect that the lien and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions. 
  

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 Section 3.06. Opinions as to the Trust Estate. On or before March 15th in each calendar
year, beginning in 200[_], the Servicer, on behalf of the Issuing Entity, shall furnish to the Indenture Trustee and the Note Insurer an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee and the Note Insurer
either stating that, in the opinion of such counsel, such action has been taken as is necessary to maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such
counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel shall also describe all such action, if any, that will, in the opinion of such counsel, be required to be taken to maintain the lien and
security interest of this Indenture with respect to the Trust Estate until May 1st in the following calendar year. 
 Section 3.07.
Performance of Obligations. (a) The Issuing Entity shall punctually perform and observe all of its obligations under this Indenture and the other Basic Documents. 
 (b) The Issuing Entity shall not take any action and will use its Best Efforts not to permit any action to be taken by others that would release any
Person from any of such Person’s covenants or obligations under any of the Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or
impair the validity or effectiveness of, any of the documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the other Basic Documents or such document included in the Mortgage File or other
instrument or unless such action will not adversely affect the interests of the Noteholders and the Note Insurer. 
 (c) If the Servicer or
the Owner Trustee, on behalf of the Issuing Entity, shall have actual knowledge of the occurrence of a Servicer Event of Default, the Servicer or the Owner Trustee, as applicable, shall promptly notify the Indenture Trustee, the Note Insurer and the
Rating Agencies thereof, and, in the case of the Servicer, shall specify in such notice the action, if any, the Servicer is taking with respect to such default. 
 (d) Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify the Note Insurer and the Rating Agencies. As soon as any
successor Servicer is appointed, the Indenture Trustee shall notify the Note Insurer and the Rating Agencies, specifying in such notice the name and address of such successor Servicer. 
 Section 3.08. Investment Company Act. The Issuing Entity shall at all times conduct its operations so as not to be subject to, or shall
comply with, the requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder. 
 Section 3.09. Negative Covenants. The Issuing Entity shall not: 
 (a) sell, transfer, exchange or
otherwise dispose of any portion of the Trust Estate, except as expressly permitted by this Indenture and the other Basic Documents; 
 (b)
claim any credit on, or make any deduction from, the principal of, or interest on, any of the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present or former Noteholder by reason of
the payment of any taxes levied or assessed upon any portion of the Trust Estate; 
  

 16 

 (c) engage in any business or activity other than as permitted by the Trust Agreement or other than in
connection with, or relating to, the issuance of the Notes pursuant to this Indenture, or amend the Trust Agreement, as in effect on the Closing Date, other than in accordance with Section 12.01 of the Trust Agreement; 
 (d) incur, issue, assume or otherwise become liable for any indebtedness other than the Notes; 
 (e) incur, assume, guaranty or agree to indemnify any Person with respect to any indebtedness of any Person, except for such indebtedness as may be
incurred by the Issuing Entity in connection with the issuance of the Notes pursuant to this Indenture; 
 (f) subject to Article X of the
Trust Agreement, dissolve or liquidate in whole or in part (until the Notes are paid in full); 
 (g) (i) permit the validity or
effectiveness of this Indenture or any Grant to be impaired, or permit the lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations
under this Indenture, except as may be expressly permitted hereby, (ii) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any pall thereof or any interest therein or the proceeds thereof; or (iii) permit the lien of this Indenture not to constitute a valid perfected first priority (other than with respect to any such tax, mechanics’
or other lien) security interest in the Trust Estate; or 
 (h) take any other action that should reasonably be expected to, or fail to take
any action if such failure should reasonably be expected to, cause the Issuing Entity to be subject to federal income tax. 
 Section 3.10. Annual Statement as to Compliance. On or before March 15, 200[_], and each March 15 thereafter, the Servicer, on behalf of the Issuing Entity, shall deliver to the Indenture Trustee, the Note Insurer and
the Sponsor a written statement, signed by an Authorized Officer of the Servicer, on behalf of the Issuing Entity, stating that: 
 (i) a review of the fulfillment by the Issuing Entity during such year of its obligations under this Indenture has been made under such Authorized Officer’s supervision; and 
 (ii) to the best of such Authorized Officer’s knowledge, based on such review, the Issuing Entity has complied with all conditions
and covenants under this Indenture throughout such year, or, if there has been a Default in the fulfillment of any such covenant or condition, specifying each such Default known to such Authorized Officer and the nature and status thereof.

  

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 Section 3.11. Restricted Payments. The Issuing Entity shall not, directly or indirectly,
(i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuing Entity or otherwise
with respect to any ownership or equity interest or security in or of the Issuing Entity or to the Servicer, (ii) redeem, purchase, retire or otherwise acquire for value any such ownership or equity interest or security or (iii) set aside
or otherwise segregate any amounts for any such purpose; provided, however, that the Issuing Entity may make, or cause to be made, distributions to the Servicer, the Indenture Trustee, the Owner Trustee, the Note Insurer, the Noteholders and the
Certificateholders as contemplated by, and to the extent funds are available for such purpose under this Indenture and the other Basic Documents and the Issuing Entity will not, directly or indirectly, make or cause to be made payments to or
distributions from any Payment Account except in accordance with this Indenture. 
 Section 3.12. Treatment of Notes as Debt for Tax
Purposes. For purposes of federal, state and local income, franchise and any other income taxes, the Issuing Entity will treat the Notes, other than Notes held by the Depositor, as indebtedness, and hereby instructs the Indenture Trustee, Paying
Agent and the Servicer, on behalf of the Issuing Entity to treat the Notes, other than Notes held by the Depositor, as indebtedness for all applicable tax reporting purposes. 
 Section 3.13. Notice of Events of Default. The Servicer, on behalf of the Issuing Entity, shall give the Indenture Trustee, the Note Insurer,
the Rating Agencies and the Sponsor prompt written notice of each Event of Default hereunder of which it has knowledge, each default on the part of the Servicer of its obligations under the Sale and Servicing Agreement and each default on the part
of the Sponsor of its obligations under the Sale and Servicing Agreement. 
 Section 3.14. Further Instruments and Acts. Upon
written request of the Indenture Trustee or the Note Insurer, the Owner Trustee, on behalf of the Issuing Entity, will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture. 
  

	Section	3.15. Representation and Warranties of the Issuing Entity. 

 (a) The Issuing Entity represents and warrants to the Indenture Trustee, the Depositor, the Sponsor, the Note Insurer and the Servicer that the Issuing Entity is duly authorized under applicable law and the Trust Agreement to create and
issue the Notes, to execute and deliver this Indenture, the Sale and Servicing Agreement and the other documents referred to herein to which it is a party and all instruments included in the Collateral which it has executed and delivered, and that
all Issuing Entity action and governmental consents, authorizations and approvals necessary or required therefor have been duly and effectively taken or obtained. The Notes, when issued, will be, and this Indenture and such other documents are,
valid and legally binding obligations of the Issuing Entity enforceable in accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance or other similar laws
affecting the enforcement of creditors’ rights in general and by general principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or in law. 
  

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 (b) The Issuing Entity represents and warrants that, immediately prior to its Grant of the Collateral
provided for herein, it had good title to, and was the sole owner of, the Mortgage Loans, free and clear of any pledge, lien, encumbrance or security interest. 
 (c) The Issuing Entity represents and warrants that the Indenture Trustee has a valid and enforceable first priority security interest in the Mortgage Loans, subject only to exceptions permitted hereby. 
 (d) The Issuing Entity represents and warrants it is not required to be registered as an “investment company” under the 1940 Act. 

(e) This Indenture shall constitute a security agreement under applicable law and shall be deemed to create valid and continuing security interests
(as defined in the applicable UCC) in the 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 Issuing Entity; 

(f) Other than the security interest granted to the Indenture Trustee pursuant to this Indenture, the Issuing Entity has not pledged, assigned, sold,
granted a security interest in, or otherwise conveyed any of the Mortgage Loans, has not authorized the filing of and is not aware of any financing statements against the Mortgage Loans that includes a description of collateral covering the Mortgage
Loans other than any financing statements relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated. The Issuing Entity is not aware of any judgment or tax lien filings against the Issuing Entity;

 (g) The Issuing Entity owns and has good and marketable title to the Mortgage Loans free and clear of any Lien, claim or encumbrance of
any Person; 
 (h) The Issuing Entity has caused or will have caused, within ten days, the filing of all appropriate financing statements in
the proper filing offices in the appropriate jurisdictions under applicable law in order to perfect the security interest in the Mortgage Loans granted to the Indenture Trustee hereunder. The Issuing Entity has in its possession all original copies
of the mortgage notes that constitute or evidence the Mortgage Loans. The mortgage notes that constitute or evidence the Mortgage Loans do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed to any
Person other than the Indenture Trustee. All financing statements filed or to be filed against the Issuing Entity in favor of the Indenture Trustee (or any subsequent assignee, without limitation) 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;” and 
 (i) The mortgage notes evidencing the Mortgage Loans constitute instruments within the meaning of the applicable UCC. 
 (j) The Issuing Entity shall, to the extent consistent with this Indenture, take such additional reasonable actions as may be necessary to ensure that,
if this Indenture were deemed to create a security interest in the Mortgage Loans and the other assets of the Collateral, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as
such throughout the life of this Indenture. 
  

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 The foregoing representations and warranties may not be waived and shall survive the issuance of the
Notes. 
 ARTICLE IV 
 SATISFACTION AND DISCHARGE 
 Section 4.01. Satisfaction and Discharge of Indenture. Whenever the following
conditions shall have been satisfied: 
 (a) either; 
 (i) all Notes theretofore authenticated and delivered (other than (x) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.07 hereof, and (y) Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuing Entity, as provided in Section 3.03 hereof) have been
delivered to the Note Registrar for cancellation; or 
 (ii) all Notes not theretofore delivered to the Note Registrar for
cancellation, (a) have become due and payable, or (b) will become due and payable at the Final Stated Maturity Date within one (1) year, or (c) are to be called for redemption pursuant to Section 10.01 hereof within one
(1) year under irrevocable arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the Sponsor, 
 and the Sponsor, in the case of clause ii(c), or Servicer, in the case of clauses (ii)(a) or (ii)(b) above, has irrevocably deposited or caused to be deposited with the
Indenture Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire unpaid Note Principal Balance of such Notes not theretofore delivered to the Indenture Trustee for cancellation, for principal and interest to the
Final Stated Maturity Date or to the applicable Redemption Date, as the case may be, and in the case of Notes that were not paid at the Final Stated Maturity Date of their entire unpaid Note Principal Balance, for all overdue principal and all
interest payable on such Notes to the next succeeding Payment Date therefor; 
 (b) the Servicer, on behalf of the Issuing Entity, has paid
or caused to be paid all other sums payable hereunder by the Issuing Entity (including, without limitation, amounts due the Note Insurer); 
 (c) the Servicer, on behalf of the Issuing Entity, has delivered to the Indenture Trustee and the Note Insurer an Officer’s Certificate and an Opinion of Counsel and, if the Servicer determines that TIA Section 314(c)(3) requires
it, a certificate from a firm of certified 
  

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 public accountants, satisfactory in form and substance to the Indenture Trustee and the Note Insurer each stating that
all conditions precedent herein providing for the satisfaction and discharge of this Indenture have been complied with, 
 then, upon a Trust Request, this
Indenture and the lien, rights and interests created hereby and thereby shall cease to be of further effect, and the Indenture Trustee and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the
Issuing Entity, execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and shall pay, or assign or transfer and deliver, to the Issuing Entity or upon Trust Order all cash,
securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in paragraphs (a) and (b) above. 
 Notwithstanding the satisfaction and discharge of this Indenture, the obligations of the Indenture Trustee and any Paying Agent to the Issuing Entity and the Holders of Notes under Section 3.03 hereof, the
obligations of the Indenture Trustee to the Holders of Notes under Section 4.02 hereof and the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes, registration of transfers of Notes and rights to
receive payments of principal of and interest on the Notes shall survive. 
 Section 4.02. Application of Issuing Entity Money.
All money deposited with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any
Paying Agent, as the Indenture Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Indenture Trustee. 
 Section 4.03. Subrogation and Cooperation. 
 (a) The Issuing Entity and the Indenture Trustee acknowledge that (i) to the extent the Note Insurer makes payments under the Note Insurance Policy on account of principal of or interest on the Notes the Note
Insurer will be fully subrogated to the rights of the Noteholders to receive such principal of and interest on the Notes, and (ii) the Note Insurer shall be paid such principal and interest only from the sources and in the manner provided
herein and in the Insurance Agreement for the payment of such principal and interest. 
 (b) The Indenture Trustee shall cooperate in all
respects with any reasonable written request or direction by the Note Insurer for action to preserve or enforce the Note Insurer’s rights or interest under this Indenture, the Sale and Servicing Agreement or the Insurance Agreement, consistent
with this Indenture and without limiting the rights of the Noteholders as otherwise set forth in the Indenture, including without limitation upon the occurrence and continuance of a Default, a request to take any one or more of the following
actions: 
 (i) institute proceedings for the collection of all amounts then payable on the Notes or under this Indenture in
respect to the Notes and all amounts payable under the Insurance Agreement and to enforce any judgment obtained and collect from the Issuing Entity monies adjudged due; 
  

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 (ii) sell any Trust Estate or any portion thereof or rights or interest therein, at one
or more public or private sales called and conducted in any manner permitted by law; 
 (iii) cause the Sponsor to record all
assignments that have not previously been recorded; 
 (iv) institute proceedings from time to time for the complete or
partial foreclosure of this Indenture; and 
 (v) exercise any remedies of a secured party under the Uniform Commercial Code
and take any other appropriate action to protect and enforce the rights and remedies of the Note Insurer hereunder. 
 (c) Following the
payment in full of the Notes, the Note Insurer shall continue to have all rights and privileges provided to it under this Section 4.03 and in all other provisions of this Indenture, until all amounts owing to the Note Insurer have been paid in
full. 
 ARTICLE V 
 DEFAULTS AND REMEDIES 
 Section 5.01. Event of Default. “Event of Default”, wherever used
herein, means, with respect to Notes issued hereunder, any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or regulation of any administrative or governmental body): 
 (a) if the Issuing Entity shall
fail to distribute or cause to be distributed to the Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Payment Date, any Interest Payment Amount due and payable on such Payment Date and such failure continues for three
Business Days or (y) on the applicable Final Stated Maturity Date for each of the Class A-1 Notes and Class A-2 Notes, any remaining Class A-1 Available Funds Cap Carry-Forward Amount or any remaining Class A-2 Available
Funds Cap Carry-Forward Amount, as applicable; 
 (b) if the Issuing Entity shall fail to distribute or cause to be distributed to the
Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Payment Date, (other than the Final Stated Maturity Date), an amount equal to the Base Principal Payment Amount due on the Notes on such Payment Date, to the extent
that, after application in the order specified in section 8.02 hereof, sufficient funds are on deposit in the Collection Account and such failure continues for three Business Days or (y) on the Final Stated Maturity Date for either Class of
Notes, the aggregate outstanding Note Principal Balance of such Class of Notes; 
 (c) if the Issuing Entity shall breach or default in the
due observance of any one or more of the covenants hereof and such breach or default continues unremedied for a period of 30 Business Days; 
  

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 (d) if the Issuing Entity shall consent to the appointment of a custodian, receiver, trustee or
liquidator (or other similar official) of itself, or of a substantial part of its property, or shall admit in writing, its inability to pay its debts generally as they come due, or a court of competent jurisdiction shall determine that the Issuing
Entity is generally not paying its debts as they come due, or the Issuing Entity shall make a general assignment for the benefit of creditors; 
 (e) if the Issuing Entity shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization in a proceeding under any bankruptcy laws (as now or hereafter in effect) or an answer admitting the
material allegation of a petition filed against the Issuing Entity in any, such proceeding, or the Issuing Entity shall, by voluntary petition, answer or consent, seek relief under the provisions of any now existing or future bankruptcy or other
similar law providing for the reorganization or winding-up of debtors, or providing for an agreement, composition, extension or adjustment with its creditors; 
 (f) if an order, judgment or decree shall be entered in any proceeding by any court of competent jurisdiction appointing, without the consent (express or legally implied) of the Issuing Entity, a custodian, receiver,
trustee or liquidator (or other similar official) of the Issuing Entity or any substantial part of its property, or sequestering any substantial part of its respective property, and any such order, judgment or decree or appointment or sequestration
shall remain in force undismissed, unstayed or unvacated for a period of ninety (90) days after the date of entry thereof; 
 (g) if a
petition against the Issuing Entity in a proceeding under applicable bankruptcy laws or other insolvency laws, as now or hereafter in effect, shall be filed and shall not be stayed, withdrawn or dismissed within ninety (90) days thereafter, or
if, under the provisions of any law providing for reorganization or winding-up of debtors which may apply to the Issuing Entity, any court of competent jurisdiction shall assume jurisdiction, custody or control of the Issuing Entity or any
substantial part of its property, and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or unterminated for a period of ninety (90) days; or 
 (h) an event of default under the Insurance Agreement. 
 Section 5.02. Acceleration of Maturity; Rescission and Annulment. If an Event of Default occurs and is continuing, then and in every such case, but with the consent of the Note Insurer in the absence of a
Note Insurer Default, the Indenture Trustee may, and at the written direction of the Note Insurer, in the absence of a Note Insurer Default, or, with the prior written consent of the Note Insurer, at the direction of Holders of Notes representing
more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, shall, declare all the Notes to be immediately due and payable by a notice in writing to the Issuing Entity (and to the Indenture Trustee if given by Noteholders),
and upon any such declaration such Notes, in an amount equal to the entire unpaid Note Principal Balance of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration, shall become immediately due and payable, all
subject to the prior written consent of the Note Insurer in the absence of a Note Insurer Default. 
  

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 At any time after such a declaration of acceleration of maturity of the Notes has been made and before a
judgment or decree for payment of the money due has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Note Insurer, in the absence of a Note Insurer Default, or the Holders of Notes representing more than 50% of
the Note Principal Balance of the Outstanding Notes of all both Classes, with the prior written consent of the Note Insurer in the absence of a Note Insurer Default, by written notice to the Issuing Entity and the Indenture Trustee, may rescind and
annul such declaration and its consequences if: 
 (a) the Issuing Entity has paid or deposited with the Indenture Trustee a sum sufficient to
pay: 
 (i) all payments of principal of, and interest on, all Outstanding Notes and all other amounts that would then be due
hereunder or upon such Notes if the Event of Default giving rise to such acceleration had not occurred; and 
 (ii) all sums
paid or advanced by the Indenture Trustee hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel; and 
 (b) all Events of Default, other than the nonpayment of the principal of Notes that have become due solely by such acceleration, have been cured or
waived as provided in Section 5.14 hereof. 
 No such rescission shall affect any subsequent Default or impair any right consequent
thereon. 
 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. Subject to the provisions of
Section 3.01 hereof and the following sentence, if an Event of Default occurs and is continuing, the Indenture Trustee may, with the prior written consent of the Note Insurer, and shall at the written direction of the Note Insurer or of the
Holders of Notes representing at least 50% of the Note Principal Balance of the Outstanding Notes of all of both Classes, with the consent of the Note Insurer, proceed to protect and enforce its rights and the rights of the Noteholders and the Note
Insurer by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any power granted herein, or
enforce any other proper remedy. Any Proceedings brought by the Indenture Trustee; on behalf of the Noteholders and the Note Insurer, or any Noteholder against the Issuing Entity shall be limited to the preservation, enforcement and foreclosure of
the liens; assignments, rights and security interests under the Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any assets, properties or funds of the Issuing Entity, other than the Trust Estate
relative to the Notes in respect of which such Event of Default has occurred. If there is a foreclosure of any such liens, assignments, rights and security interests under this Indenture, by private power of sale or otherwise, no judgment for any
deficiency upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any Noteholder against the Issuing Entity. The Indenture Trustee shall be entitled to recover the costs and expenses expended by it
pursuant to this Article V including reasonable compensation, expenses, or disbursements incurred of the Indenture Trustee, its agents and counsel from the Trust Estate. 
  

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 Section 5.04. Remedies. If an Event of Default shall have occurred and be continuing and the
Notes been declared due and payable and such declaration and its consequences have not been rescinded and annulled, the Indenture Trustee, at the direction of the Note Insurer (subject to Section 5.17 hereof, to the extent applicable) shall,
for the benefit of the Noteholders and the Note Insurer, do one or more of the following: 
 (a) institute Proceedings for the collection of
all amounts then payable on the Notes, or under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuing Entity moneys adjudged due, subject in all cases to the provisions of Sections 3.01 and
5.03 hereof; 
 (b) in accordance with Section 5.17 hereof, sell the Trust Estate or any portion thereof or rights or interest therein,
at one or more public or private Sales called and conducted in any manner permitted by law; 
 (c) institute Proceedings from time to time
for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; 
 (d) exercise any remedies of a secured party
under the Uniform Commercial Code and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Holders of the Notes and the Note Insurer hereunder; and 
 (e) refrain from selling the Trust Estate and apply all funds on deposit in each of the Accounts pursuant to Section 5.07 hereof. 
 Section 5.05. Indenture Trustee May File Proofs of Claim. In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, composition or other judicial Proceeding relative to the Issuing Entity or any other obligor upon any of the Notes or the property of the Issuing Entity or of such other obligor or their creditors, the Indenture Trustee
irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any demand on the Issuing Entity for the payment of any overdue
principal or interest shall, with the prior written consent of the Note Insurer be entitled and empowered, by intervention in such Proceeding or otherwise to: 
 (a) file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Notes and file such other papers or documents as may be necessary or advisable in order to have the claims
of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel), the Noteholders and the Note Insurer allowed in such Proceeding, and 

(b) collect and receive any moneys or other property payable or deliverable on any such claims and to distribute the same; and any receiver, assignee,
trustee, liquidator, or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each 
  

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 Noteholder and the Note Insurer to make such payments to the Indenture Trustee and, in the event that the Indenture
Trustee shall consent to the making of such payments directly to the Noteholders and the Note Insurer, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee, its agents and counsel. 
 Nothing herein contained shall be deemed to authorize the Indenture Trustee to authorize or consent to or
accept or adopt on behalf of any Noteholder or the Note Insurer any plan of reorganization, arrangement, adjustment or composition affecting any of the Notes or the rights of any Holder thereof, or the Note Insurer, or to authorize the Indenture
Trustee to vote in respect of the claim of any Noteholder or the Note Insurer in any such Proceeding. 
 Section 5.06. Indenture
Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or any of the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production
thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture Trustee, at the written direction of the Note Insurer, shall be brought in its own name as trustee of an express trust, and any recovery of judgment
shall be for the ratable benefit of the Holders of the Notes and the Note Insurer in respect of which such judgment has been recovered after payment of amounts required to be paid pursuant to paragraph (a) of Section 5.07 hereof.

 Section 5.07. Application of Money Collected. If the Notes have been declared due and payable following an Event of Default
and such declaration and its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee with respect to each Class of Notes pursuant to this Article V or otherwise and any other monies that may then be held or
thereafter received by the Indenture Trustee as security for such Class of Notes shall be applied in the following order, at the date or dates fixed by the Indenture Trustee and, in case of the payment of the entire amount due on account of
principal of, and interest on, such Class of Notes, upon presentation and surrender thereof: 
 (a) first, to the Indenture Trustee,
any unpaid Indenture Trustee Fees then due and any other amounts payable and due to the Indenture Trustee with respect to such Class under this Indenture including any amounts in respect of indemnification or reimbursement of costs and expenses
including costs or expenses incurred by it in connection with the enforcement of the remedies provided for in this Article V (subject to Section 6.16 herein), to the Note Insurer, any unpaid Premium with respect to such Class then due, and to
the Owner Trustee, any Owner Trustee Fees with respect to such Class then due to the extent not already paid pursuant to Section 9.01 of the Trust Agreement and to the Owner Trustee, any amounts in respect of indemnification then due under
Section 9.02 of the Trust Agreement to the extent not already paid pursuant to Section 9.02 of the Trust Agreement, in an amount not to exceed $50,000 in any calendar year; 
 (b) second, from amounts then on deposit in the related Payment Account, to the Holders of the related Class of Notes, the Interest Payment Amount
for such Class; 
 (c) third, from amounts then on deposit in the related Payment Account, to the Holders of the related Class of
Notes, the Base Principal Payment Amount for such Class; 
  

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 (d) fourth, from amounts then on deposit in the related Payment Account, the allocable portion of
the Overcollateralization Deficit, if any, for the related Class of Notes; 
 (e) fifth, from amounts then on deposit in the related
Payment Account, to the Holders of the other Class of Notes, the Shortfall Amount for the other Class of Notes; 
 (f) sixth, from
amounts then on deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the related Class as of such Payment Date; 
 (g) seventh, from amounts then on deposit in the related Payment Account, to the Note Insurer, the Reimbursement Amount with respect to the other Class of Notes as of such Payment Date to the extent not already
paid pursuant to clause (f) above; 
 (h) eighth, from amounts then on deposit in the related Payment Account, to the payment of
the Note Principal Balance of the Outstanding Notes of such Class, up to the amount of their unpaid Note Principal Balance, ratably, without preference or priority of any kind; 
 (i) [ninth, from amounts then on deposit in the related Payment Account, to the related sub-account of the Reserve Account, such Loan Group’s
pro rata share of the Reserve Payment Amount based on the amount of Net Monthly Excess Cashflow;] 
 (j) tenth, from amounts then on
deposit in the related Payment Account, the related Yield Maintenance Account [and amounts released from the related sub-account of the Reserve Account], to the Holders of the Class A-1 Notes and the Class A-2 Notes, the Class A-1
Available Funds Cap Carry-Forward Amount or the Class A-2 Available Funds Cap Carry-Forward Amount, respectively; 
 (k)
eleventh, from amounts then on deposit in the related Payment Account, to the Servicer, any amount due to it with respect to the related Group of Mortgage Loans; 
 (l) twelfth, to the Indenture Trustee, any amounts in respect of indemnity or reimbursement due the Indenture Trustee under any of the Basic Documents to the extent not previously paid or reimbursed under
paragraph (a) hereof; 
 (m) thirteenth, to the Owner Trustee, any amounts due and owing to the Owner Trustee under Article IX of
the Trust Agreement or the other Basic Documents, to the extent not already paid by the Servicer pursuant to Section 9.02 of the Trust Agreement; and 
 (n) fourteenth, following the making by the Indenture Trustee of all allocations, transfers and disbursements described above, from amounts then on deposit in each Payment Account, the Indenture Trustee shall
distribute to or at the direction of the Certificateholders (as identified in the Certificate Register maintained by the Owner Trustee), the amount remaining on such Payment Date in each Payment Account, if any. 
  

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 Section 5.08. Limitation on Suits. No Holder of a Note shall have any right to institute any
Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: 
 (a) such Holder has previously given written notice to the Indenture Trustee and the Note Insurer of a continuing Event of Default; 
 (b) the Holders of Notes representing not less than 25% of the Note Principal Balance of the Outstanding Notes of both Classes shall have made written request to the Indenture Trustee to institute Proceedings in
respect of such Event of Default in its own name as Indenture Trustee hereunder; 
 (c) such Holder or Holders have offered to the Indenture
Trustee indemnity satisfactory to it in full against the costs, expenses and liabilities to be incurred in compliance with such request; 
 (d) the Indenture Trustee, for sixty (60) days after its receipt of such notice, request and offer of indemnity, has failed to institute any such Proceeding; 
 (e) no direction inconsistent with such written request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of
Notes representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes; and 
 (f) the consent of the Note
Insurer shall have been obtained; it being understood and intended that no one or more Holders of Notes shall have any right in any manner whatever by virtue of, or by availing of, any provision of this Indenture to affect, disturb or prejudice the
rights of any other Holders of Notes or to obtain or to seek to obtain priority or preference over any other Holders or to enforce any right under this Indenture, except in the manner herein provided and for the equal and ratable benefit of all the
Holders of Notes. 
 (g) In the event the Indenture Trustee shall receive conflicting or inconsistent requests and indemnity from two or more
groups of Holders of Notes, each representing less than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, the Indenture Trustee shall take the action prescribed by the group representing a greater percentage of the Note
Principal Balance of the Outstanding Notes of both Classes. 
 Section 5.09. Unconditional Rights of Noteholders to Receive Principal
and Interest. Subject to the provisions in this Indenture (including Sections 3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to recovery from amounts in the portion of the Trust Estate relating to such Note, the Holder
of any Note shall have the right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment of each installment of interest on such Note on the respective Payment Date for such installments of interest,
to receive payment of each installment of principal of such Note when due (or, in the case of any Note called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall
not be impaired without the consent of such Holder. 
  

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 Section 5.10. Restoration of Rights and Remedies. If the Indenture Trustee, the Note Insurer
or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has been determined to be adverse to the Indenture Trustee, the Note
Insurer or to such Noteholder, then and in every such case the Indenture Trustee, the Note Insurer and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Indenture Trustee, the Note Insurer and the Noteholders shall continue as though no such Proceeding had been instituted. 
 Section 5.11. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the Indenture Trustee, the Note Insurer
or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of a, right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. 
 Section 5.12. Delay or Omission Not Waiver. No delay or omission of the Indenture Trustee, the Note Insurer or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every right and remedy given by this Article V or by law to the
Indenture Trustee, the Note Insurer or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee, the Note Insurer or by the Noteholders with the prior consent of the Note Insurer, as
the case may be. 
 Section 5.13. Control by Noteholders. The Holders of Notes representing more than 50% of the Note Principal
Balance of the Outstanding Notes of both Classes on the applicable Record Date shall, with the written consent of the Note Insurer (a copy of which shall be provided to the Indenture Trustee), have the right to direct the time, method and place of
conducting any Proceeding for any remedy available to the Indenture Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that: 
 (a) such written direction shall not be in conflict with any rule of law or with this Indenture; 
 (b) any
direction to the Indenture Trustee to undertake a Sale of the Trust Estate shall be by the Holders of Notes representing the percentage of the Note Principal Balance of the Outstanding Notes specified in Section 5.17(b)(i) hereof, unless
Section 5.17(b)(ii) hereof is applicable; and 
 (c) the Indenture Trustee may take any other action deemed proper by the Indenture
Trustee that is not inconsistent with such direction; provided, however, that, subject to Section 6.01 hereof, the Indenture Trustee need not take any action that it determines might involve it in liability or be unjustly prejudicial to the
Noteholders not consenting. 
  

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 Section 5.14. Waiver of Past Defaults. The Holders of Notes representing more than 50% of the
Note Principal Balance of the Outstanding Notes of both Classes on the applicable Record Date may on behalf of the Holders of all the Notes, and with the written consent of the Note Insurer, waive any past Default hereunder and its consequences,
except a Default: 
 (a) in the payment of principal or any installment of interest on any Note; or 
 (b) in respect of a covenant or provision hereof that under Section 9.02 hereof cannot be modified or amended without the consent of the Holder of
each Outstanding Note affected. 
 Upon any such waiver, such Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured for every purpose of this Indenture; but no such waiver shall extend to any subsequent or other Default or impair any right consequent thereon. 
 Section 5.15. Undertaking for Costs. All parties to this Indenture agree, and each Holder of any Note by his acceptance thereof shall be
deemed to have agreed, that any court may in its discretion require, in any suit for the enforcement of any right or remedy under this Indenture, or in any suit against the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an undertaking to pay the costs of such suit, and that such court may in its discretion assess reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the claims or defenses made by such party litigant; but the provisions of this Section 5.15 shall not apply to any suit instituted by the Indenture Trustee or the Note
Insurer, to any suit instituted by any Noteholder, or Group of Noteholders, holding in the aggregate Notes representing more than 10% of the Note Principal Balance of the Outstanding Notes of both Classes, or to any suit instituted by any Noteholder
for the enforcement of the payment of any Interest Payment Amount or Base Principal Payment Amount on any Note on or after the related Payment Date or for the enforcement of the payment of principal of any Note on or after the Final Stated Maturity
Date (or, in the case of any Note called for redemption, on or after the applicable Redemption Date). 
 Section 5.16. Waiver of Stay
or Extension Laws. The Issuing Entity covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension of law
wherever enacted, now or at any time hereafter in force, that may affect the covenants in, or the performance of, this Indenture; and the Issuing Entity (to the extent that it may lawfully do so) hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Indenture Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted. 

Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a “Sale”) of any portion of the Trust Estate
pursuant to Section 5.04 hereof shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire Trust Estate shall have been sold or all amounts payable on
the Notes and under this Indenture with respect thereto shall have been paid. The Indenture Trustee may, with the consent of the Note Insurer, from time to time postpone any public Sale by public announcement made at the time and place of such Sale.

  

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 (b) To the extent permitted by law, the Indenture Trustee shall not in any private Sale sell or otherwise
dispose of the Trust Estate, or any portion thereof, unless: 
 (i) the Holders of Notes representing more than 50% of the
Note Principal Balance of the Notes of the Class or Classes then Outstanding and the Note Insurer consents to or directs the Indenture Trustee in writing to make such Sale; or 
 (ii) the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders of the Notes and the Note
Insurer in respect of Reimbursement Amounts, in full payment thereof in accordance with Section 5.07 hereof, on the Payment Date next succeeding the date of such Sale. 
 The purchase by the Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof for
purposes of this Section 5.17(b). In the absence of a Note Insurer Default, no Sale hereunder shall be effective without the consent of the Note Insurer. 
 (c) Unless the Holders of all Outstanding Notes or the Note Insurer have otherwise consented or directed the Indenture Trustee, at any public Sale of all or any portion of the Trust Estate at which a minimum bid equal
to or greater than the amount described in paragraph (b)(ii) of this Section 5.17 has not been established by the Indenture Trustee and no Person bids an amount equal to or greater than such amount, the Indenture Trustee, acting in its capacity
as Indenture Trustee (i) on behalf of the Noteholders and the Note Insurer, shall prevent such Sale and bid an amount (which shall include the Indenture Trustee’s right, in its capacity as Indenture Trustee, to credit bid) at least $1.00
more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders and the Note Insurer. 
 (d) In connection
with a Sale of all or any portion of the Trust Estate: 
 (i) any Holder or Holders of Notes may bid for and purchase the
property offered for Sale, and upon compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or claims
for interest thereon in lieu of cash up to the amount that shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be
returned to the Holders thereof after being appropriately stamped to show such partial payment; 
 (ii) the Indenture Trustee
may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by crediting the gross Sale price against the sum of (a) the
amount that would be payable to the Holders of the Notes as a result of such Sale in accordance with Section 5.07 hereof on the Payment Date next succeeding the date of such Sale and (b) the expenses of the Sale and of any Proceedings in
connection therewith which are reimbursable to it, without being required to produce the Notes in 
  

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 order to complete any such Sale or in order for the net Sale price to be credited against such Notes, and
any property so acquired by the Indenture Trustee shall be held and dealt with by it in accordance with the provisions of this Indenture; 
 (iii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale thereof; 
 (iv) the Indenture Trustee is hereby irrevocably appointed the agent and attorney in-fact of the Issuing Entity to transfer and convey its
interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and 
 (v) no purchaser or transferee at such a Sale shall be bound to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys.

 Section 5.18. Action on Notes. The Indenture Trustee’s right to seek and recover judgment under this Indenture shall not
be affected by the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee, the Note Insurer or the Holders of Notes shall
be impaired by the recovery of any judgment by the Indenture Trustee against the Issuing Entity or by the levy of any execution under such judgment upon any portion of the Trust Estate. Any money or property collected by the Indenture Trustee shall
be applied in accordance with Section 5.07 hereof. 
 Section 5.19. No Recourse. The Trust Estate Granted to the Indenture
Trustee as security for the Notes serves as security only for the Notes. The Noteholders shall have no recourse against the Owner Trustee, the Indenture Trustee, the Note Registrar, the Authenticating Agent, the Depositor, the Sponsor, the Servicer
or any of their respective Affiliates, or to the assets of any of the foregoing entities. 
 Section 5.20. Application of the Trust
Indenture Act. Pursuant to Section 316(a) of the TIA, all provisions automatically provided for in Section 316(a) are hereby expressly excluded. 
 Section 5.21. Suspension and Termination of Note Insurer’s Rights. During the continuation of a Note Insurer Default, rights granted or reserved to the Note Insurer hereunder shall vest instead in the
Noteholders, and may be exercised at the direction of Holders of Notes representing at least 51% of the Note Principal Balance of the Outstanding Notes of both Classes; provided, that the Note Insurer shall be entitled to any distributions of
reimbursements as set forth in the Indenture and the Insurance Agreement and the Note Insurer shall retain those rights under Section 9.01 to consent to any amendment of this Agreement. 
 At such time as either (i) the outstanding Note Principal Balance of the Notes has been reduced to zero or (ii) the Note Insurance Policy has
been terminated and in either case of (i) or (ii) the Note Insurer has been reimbursed for all amounts owed to it under the Note Insurance Policy and the Insurance Agreement (and the Note Insurer no longer has any obligation under the Note
Insurance Policy, except for breach thereof by the Note Insurer), then the rights and 
  

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 benefits granted or reserved to the Note Insurer hereunder (including the rights to direct certain actions and receive
certain notices) shall terminate and the Certificateholders shall be entitled to the exercise of such rights and to receive such benefits of the Note Insurer following such termination to the extent that such rights and benefits are applicable to
the Certificateholders. 
 ARTICLE VI 
 THE INDENTURE TRUSTEE 
 Section 6.01. Duties of Indenture Trustee. (a) If an Event
of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall exercise such of the rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 
 (b) Except during the continuance of an Event of Default: 
 (i) the Indenture Trustee need perform only those duties
that are expressly set forth in this Indenture and no others and no implied covenants or obligations shall be read into this Indenture against the Indenture Trustee; and 
 (ii) in the absence of bad faith on its part, the Indenture Trustee may request and conclusively rely, as to the truth of the statements
and the correctness of the opinions expressed therein, upon certificates, opinions, resolutions, statements, reports, instruments or other documents furnished to the Indenture Trustee and conforming, on their faces, to the requirements of this
Indenture. The Indenture Trustee shall, however, examine such certificates and opinions to determine whether they conform on their face to the requirements of this Indenture. 
 (c) The Indenture Trustee may not be relieved from liability for its own negligent action, its own negligent failure to act or its own willful
misconduct, except that: 
 (i) The duties and obligations of the Indenture Trustee shall be determined solely by the express
provisions of this Indenture, the Indenture Trustee shall not be liable except for the performance of such duties and obligations as are specifically set forth in this Indenture, no implied covenants or obligations shall be read into this Indenture
against the Indenture Trustee and, in the absence of bad faith on the part of the Indenture Trustee, the Indenture Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any
certificates, opinions or other documents (including, but not limited to, any reports or statements furnished by the Servicer) reasonably believed by the Indenture Trustee to be genuine and to have been furnished by the proper party to the Indenture
Trustee and which on their face, do not contradict the requirements of this Indenture; 
 (ii) this paragraph (c) does
not limit the effect of paragraph (a) of this Section 6.01; 
  

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 (iii) the Indenture Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer, unless it is proved that the Indenture Trustee was negligent in ascertaining the pertinent facts; 
 (iv) the Indenture Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction of the Noteholders or the Note Insurer (including directions pursuant to Sections 5.13 or 5.17
hereof or in accordance with the direction of the Note Insurer) or exercising any trust or power or remedy conferred upon the Indenture Trustee under this Indenture; and 
 (v) The Indenture Trustee shall not be charged with knowledge of any failure by the Servicer to comply with any of its obligations under
the Sale and Servicing Agreement or any breach of representations or warranties under the Sale and Servicing Agreement unless a Responsible Officer of the Indenture Trustee obtains actual knowledge of such failure or breach or the Indenture Trustee
receives written notice of such failure or breach from the Servicer or the Note Insurer. 
 (d) Except with respect to duties of the
Indenture Trustee prescribed by the TIA, as to which this Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed to have notice or knowledge of any Event of Default described in
Sections 5.01(c), 5.01(d), 5.01(e), 5.01(f), 5.01(g) or 5.01(h) hereof or any Default described in Sections 5.01(c) hereof or of any event described in Section 3.05 hereof unless a Responsible Officer assigned to and working in the Indenture
Trustee’s corporate trust department and having direct responsibility for this Indenture has actual knowledge thereof or unless written notice of any event that is in fact such an Event of Default or Default is received by the Indenture Trustee
at the Corporate Trust Office, and such notice references the Notes generally, the Issuing Entity, the Trust Estate or this Indenture. 
 (e)
No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or powers, if it
shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under this Indenture or the other Basic Documents. 
 (f) Every provision of this Indenture that in any way relates to the Indenture Trustee is subject to the provisions of this Section 6.01 and to the
provisions of the TIA. 
 (g) Notwithstanding any extinguishment of all right, title and interest of the Issuing Entity in and to the Trust
Estate following an Event of Default and a consequent declaration of acceleration of the maturity of the Notes, whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the Trust Estate by the
Indenture Trustee or otherwise, the rights, powers and duties of the Indenture Trustee with respect to the Trust Estate (or the proceeds thereof), the Noteholders and the Note Insurer and the rights of Noteholders and the Note Insurer shall continue
to be governed by the terms of this Indenture. 
  

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 (h) The Indenture Trustee shall at all times retain possession of the Indenture Trustee’s Mortgage
Files in the State of Illinois or the State of California, except for those Indenture Trustee’s Mortgage Files or portions thereof released to the Servicer or the Note Insurer pursuant to this Indenture or the Sale and Servicing Agreement.

 (i) Subject to the other provisions of this Indenture and without limiting the generality of this Section 6.01, the Indenture Trustee
shall have no duty (a) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing statement or continuation statement evidencing a security interest, or to see to the maintenance of any
such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof, (b) to see to any insurance, (c) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or
encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate from funds available in the Payment Accounts or (d) to confirm or verify the contents of any reports or certificates of the Servicer
delivered to the Indenture Trustee pursuant to this Indenture believed by the Indenture trustee to be genuine and to have been signed or presented by the proper party or parties. 
 Section 6.02. Notice of Default. Immediately after the occurrence of any Default known to a Responsible Officer of the Indenture Trustee, the
Indenture Trustee shall transmit by mail to the Note Insurer and the Sponsor notice of each such Default and, within ninety (90) days after the occurrence of any Default known to a Responsible Officer of the Indenture Trustee, the Indenture
Trustee shall transmit by mail to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived; provided, however, that in no event shall the Indenture Trustee provide notice, or fail to provide
notice of a Default of which a Responsible Officer of the Indenture Trustee has actual knowledge in a manner contrary to the requirements of the Trust Indenture Act. Concurrently with the mailing of any such notice to the Holders of the Notes, the
Indenture Trustee shall transmit by mail a copy of such notice to the Rating Agencies. 
 Section 6.03. Rights of Indenture
Trustee. (a) Except as otherwise provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be protected in acting or refraining to act upon any document believed by it to be genuine and to have been signed or presented by
the proper Person. The Indenture Trustee need not investigate any fact or matter stated in any such document. 
 (b) Before the Indenture
Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee. The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on any such Officer’s Certificate or Opinion of Counsel. 
 (c) With the consent of the Note
Insurer, which consent shall not be unreasonably withheld, the Indenture Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care. 
 (d) The Indenture Trustee shall not be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its
rights or powers. 
  

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 (e) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in
it by this Indenture or to institute, conduct or defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders or the Note Insurer, pursuant to the provisions of this Indenture, unless such
Noteholders or the Note Insurer shall have offered to the Indenture Trustee reasonable security or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the
Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a Responsible Officer of the Indenture Trustee shall have actual knowledge (which has not been cured), to exercise such of the rights and powers vested in it by
this Indenture, and to use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. 
 (f) The Indenture Trustee shall not be bound to make any investigation into the facts of the matters stated in any resolution, certificate, statement,
instrument, opinion, report notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Noteholders or the Note Insurer and provided further that payment within a reasonable time to the
Indenture Trustee of the costs, expenses or liabilities likely to be incurred by it in tile making of such investigation is, in the opinion of the Indenture Trustee, reasonably assured to the Indenture Trustee by the security afforded to it by the
terms of this Indenture or such other security or indemnity as the Indenture Trustee may reasonably require as a condition to taking any such action. 
 (g) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture shall not be construed as a duty, and the Indenture Trustee shall not be answerable for anything other than its
negligence or willful misconduct in the performance of such act. 
 Section 6.04. Not Responsible for Recitals, Issuance of Notes or
Mortgage Loans. The recitals contained herein and in the Notes, except, with respect to the Indenture Trustee, the certificates of authentication on the Notes, shall be taken as the statements of the Issuing Entity, and the Owner Trustee, the
Indenture Trustee and the Authenticating Agent assume no responsibility for their correctness. The Owner Trustee and the Indenture Trustee make no representations with respect to the Trust Estate or as to the validity or sufficiency of this
Indenture or of the Notes. Neither the Indenture Trustee nor the Owner Trustee shall be accountable for the use or application by the Issuing Entity of the Notes or the proceeds thereof or any money paid to the Issuing Entity or upon a Trust Order
pursuant to the provisions hereof. 
 The Indenture Trustee shall at no time have any responsibility or liability for or with respect to the
legality, validity and enforceability of any Mortgage or any Mortgage Loan, or the recordability, sufficiency, perfection and priority of any mortgage or the maintenance of any such perfection and priority or for or with respect to the sufficiency
of the Trust Estate or its ability to generate the payments to be distributed to Noteholders under this Indenture, including, without limitation: the existence, condition and ownership of any Mortgaged Property; the existence and enforceability of
any hazard insurance or primary mortgage insurance thereon; the validity of the assignment of any Mortgage Loan to the Indenture Trustee or of any intervening assignment; the completeness of any Mortgage Loan; the performance or enforcement of any
Mortgage Loan; the compliance by the Depositor, the Sponsor, Issuing Entity, Servicer, Note 
  

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 Insurer with any warranty or representation made under this Indenture, the Sale and Servicing Agreement, the Insurance
Agreement or in any related document or the accuracy of any such warranty or representation; any investment of monies by or at the direction of the Sponsor or the Servicer or any loss resulting therefrom; the acts or omissions of any of the Sponsor,
the Servicer or any Mortgagor; any action of the Servicer taken in the name of the Indenture Trustee; the failure of the Servicer to act or perform any duties acquired of it as agent of the Indenture Trustee hereunder; or any action by the Indenture
Trustee taken at the instruction of the Servicer or the Note Insurer. The Indenture Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or otherwise to perfect or maintain the
perfection of any security interest or lien granted to it hereunder. 
 Section 6.05. May Hold Notes. The Indenture Trustee,
any Agent, or any other agent of the Issuing Entity, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 6.07, 6.09 and 6.12 hereof, may otherwise deal with the Issuing Entity or any Affiliate
of the Issuing Entity with the same rights it would have if it were not Indenture Trustee, Agent or such other agent. 
 Section 6.06.
Money Held in Trust. Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds except to the extent required by this Indenture or by law. The Indenture Trustee shall be under no liability for interest on
any money received by it hereunder except as otherwise agreed with the Issuing Entity and except to the extent of income or other gain on investments that are obligations of the Indenture Trustee, in its commercial capacity, and income or other gain
actually received by the Indenture Trustee on investments, which are obligations of others. 
 Section 6.07. Eligibility,
Disqualification. Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have an indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and 310(a)(5). The Indenture Trustee shall always
have a combined capital and surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject to TIA Section 310(b). 
 Section 6.08. Indenture Trustee’s Capital and Surplus. The Indenture Trustee shall at all times (a)(i) have a combined capital and surplus of at least $550,000,000, or (ii) be a member of a bank holding company system,
the aggregate combined capital and surplus of which is at least $100,000,000 and (b) be rated (or have long- term debt rated) “BBB” or better by S&P and “Baa2” by Moody’s; provided, however, that the Indenture
Trustee’s separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2). If the Indenture Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(1), its
combined capital and surplus for purposes of this Section 6.08 shall be as set forth in the latest such report. The Indenture Trustee shall at all times be a corporation or association organized or doing business under the laws of a state or of
the United States; authorized to exercise corporate powers and subject to supervision or examination by federal or state authority. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this
Section 6.08 and TIA Section 310(a)(2), it shall resign immediately in the manner and with the effect hereinafter specified in this Article VI. 
  

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 Section 6.09. Resignation and Removal; Appointment of Successor. (a) No resignation or
removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article VI shall become effective until the acceptance of appointment by the successor Indenture Trustee under Section 6.10 hereof.

 (b) The Indenture Trustee may resign at any time by giving written notice thereof to the Issuing Entity, the Note Insurer and each Rating
Agency. If an instrument of acceptance by a successor Indenture Trustee shall not have been delivered to the Indenture Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Indenture Trustee may petition
any court of competent jurisdiction for the appointment of a successor Indenture Trustee. 
 (c) The Indenture Trustee may be removed at any
time by the Note Insurer or, with the consent of the Note Insurer, by Act of the Holders representing more than 50% of the Note Principal Balance of the Outstanding Notes of both Classes, by written notice delivered to the Indenture Trustee and to
the Issuing Entity. 
 (d) If at any time: 
 (i) the Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 hereof and shall fail to resign or eliminate such conflicting interest in accordance with Section 6.07 hereof after
written request therefor by the Issuing Entity, the Note Insurer or by any Noteholder; or 
 (ii) the Indenture Trustee shall
cease to be eligible under Section 6.08 hereof or shall become incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public officer shall take charge
or control of the Indenture Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation; 
 then, in any such case,
(x) the Owner Trustee, on behalf of the Issuing Entity, by a Trust Order, with the written consent of, or at the written direction of the Note Insurer, may remove the Indenture Trustee, and the Owner Trustee, on behalf of the Issuing Entity, by
a Trust Order, shall join with the Indenture Trustee in the execution, delivery and performance of all instruments and agreements necessary or proper to appoint a successor Indenture Trustee acceptable to the Note Insurer and to vest in such
successor Indenture Trustee any property, title, right or power deemed necessary or desirable, subject to the other provisions of this Indenture; provided, however, if the Owner Trustee, on behalf of the Issuing Entity, and the Note Insurer do not
join in such appointment within thirty (30) days after the receipt by it of a request to do so, (either by reason of resignation or removal) or in case an Event of Default has occurred and is continuing, the Indenture Trustee may petition a
court of competent jurisdiction to make such appointment, or (y) subject to Section 5.15 hereof, and, in the case of a conflicting interest as described in clause (i) above, unless the Indenture Trustee’s duty to resign has been
stayed as provided in TIA Section 310(b), the Note Insurer or any Noteholder who has been a bona fide Holder of a Note for at least six (6) months may, on behalf of himself and all others similarly situated, with the consent of the Note
Insurer, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. 
  

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 (e) If the Indenture Trustee shall resign, be removed or become incapable of acting, or if a vacancy
shall occur in the office of the Indenture Trustee for any cause, the Note Insurer may, and if the Note Insurer fails to do so, the Servicer, on behalf of the Issuing Entity, by a Trust Order, shall promptly, appoint a successor Indenture Trustee
acceptable to the Note Insurer and reasonably acceptable to the Sponsor. 
 (f) The Servicer, on behalf of the Issuing Entity, shall give
notice of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee to the Holders of Notes and the Note Insurer. Each notice shall include the name of the successor Indenture Trustee and the
address of its Corporate Trust Office. 
 Section 6.10. Acceptance of Appointment by Successor Indenture Trustee. Every successor
Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuing Entity, the Note Insurer and the retiring Indenture Trustee an instrument accepting such appointment, and thereupon the resignation or removal of the
retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties of the retiring Indenture Trustee.
Notwithstanding the foregoing, upon a Trust Request of the Owner Trustee or the Note Insurer, on behalf of the Issuing Entity, or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges and any fees,
expenses or other amounts owing the Indenture trustee, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee hereunder. Upon a written request of any such successor Indenture Trustee, the Owner Trustee, on behalf of the Issuing Entity, shall, with the
written consent of the Note Insurer, execute and deliver any and all instruments for more fully and certainly vesting in and confirming to such successor Indenture Trustee all such rights, powers and trusts. 
 No successor Indenture Trustee shall accept its appointment unless at the time of such acceptance such successor Indenture Trustee shall be qualified and
eligible under this Article VI. 
 Section 6.11. Merger, Conversion, Consolidation or Succession to Business of Indenture
Trustee. Any corporation or banking association into which the Indenture Trustee may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, conversion or consolidation to
which the Indenture Trustee shall be a party, or any corporation or banking association succeeding to all or substantially all of the corporate trust business of the Indenture Trustee, shall be the successor of the Indenture Trustee hereunder,
provided, that such corporation or banking association shall be otherwise qualified and eligible under this Article VI, without the execution or filing of any paper or any further act on the part of any of the parties hereto. In case any Notes have
been authenticated, but not delivered, by the Indenture Trustee then in office, any successor by merger, conversion or consolidation to such authenticating Indenture Trustee may adopt such authentication and deliver the Notes so authenticated with
the same effect as if such successor Indenture Trustee had authenticated such Notes. 
  

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 Section 6.12. Preferential Collection of Claims Against Issuing Entity. The Indenture Trustee
(and any co-trustee or separate trustee) shall be subject to TIA Section 311(a), excluding any creditor relationship listed in TIA Section 311(b), and an Indenture Trustee (and any co-trustee or separate trustee) who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated. 
 Section 6.13. Co-Indenture Trustees and Separate
Indenture Trustees. At any time or times, for the purpose of meeting the legal requirements of the TIA or of any jurisdiction in which any of the Trust Estate may at the time be located, the Indenture Trustee shall have power and shall execute
and deliver all instruments necessary to appoint one or more Persons approved by the Indenture Trustee either to act as co-trustee, jointly with the Indenture Trustee, of all or any part of the Trust Estate, or to act as separate trustee of any such
property, in either case with such powers as may be provided in the instrument of appointment, and to vest in such Person or Persons in the capacity aforesaid, any property, title, right or power deemed necessary or desirable, subject to the other
provisions of this Section 6.13. All fees and expenses of any co-trustee or separate trustee shall be payable by the Issuing Entity. 
 Should any written instrument from the Issuing Entity be required by any co-trustee or separate trustee so appointed for more fully confirming to such co-trustee or separate trustee such property, title, right or power, any and all such
instruments shall, on written request, be executed, acknowledged and delivered by the Owner Trustee, on behalf of the Issuing Entity, with the written consent of the Note Insurer. 
 Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be appointed subject to the following terms:

 (a) The Notes shall be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder, shall be exercised, solely by the Indenture Trustee. 
 (b) As required by TIA Section 310(a)(3), the rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in
respect of any property covered by such appointment shall be conferred or imposed upon and exercised or performed by the Indenture Trustee or by the Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any jurisdiction in which any particular act is to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in
which event such rights, powers, duties and obligations shall be exercised and performed by such co-trustee or separate trustee. 
 (c) The
Indenture Trustee at any time may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 6.13. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner
provided in this Section 6.13. 
  

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 (d) The Indenture Trustee shall not be liable by reason of any act or omission of a co-trustee or
separate trustee appointed by the Indenture Trustee with due care. No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Indenture Trustee, or any other such trustee hereunder. 
 (e) Any Act of Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee.

 (f) Any co-trustee or separate trustee appointed hereunder shall be afforded the same rights, protections and immunities as the Indenture
Trustee. 
 Section 6.14. Authenticating Agents. The Owner Trustee, acting at the direction of the Certificateholders, shall
appoint an Authenticating Agent with power to act on the Issuing Entity’s behalf, subject to the direction of the Certificateholders, in the authentication and delivery of the Notes designated for such authentication and, containing provisions
therein for such authentication (unless the Owner Trustee, acting at the direction of the Certificateholders, has made other arrangements, satisfactory to the Indenture Trustee and such Authenticating Agent, for notation on the Notes of the
authority of an Authenticating Agent appointed after the initial authentication and delivery of such Notes) in connection with transfers and exchanges under Section 2.06 hereof, as fully to all intents and purposes as though the Authenticating
Agent had been expressly authorized by Section 2.06 hereof to authenticate and deliver Notes. For all purposes of this Indenture (other than in connection with the authentication and delivery of Notes pursuant to Sections 2.05 and 2.11 hereof
in connection with their initial issuance), the authentication and delivery of Notes by the Authenticating Agent pursuant to this Section 6.14 shall be deemed to be the authentication and delivery of Notes “by the Indenture Trustee.”
Such Authenticating Agent shall at all times be a Person that both meets the requirements of Section 6.07 hereof for the Indenture Trustee hereunder and has an office for presentation of Notes in the United States of America. The Indenture
Trustee, shall initially be the Authenticating Agent and shall be the Note Registrar as provided in Section 2.06 hereof. The office from which the Indenture Trustee shall perform its duties as Note Registrar and Authenticating Agent shall be
its Corporate Trust Office. Any Authenticating Agent appointed pursuant to the terms of this Section 6.14 or pursuant to the terms of any supplemental indenture shall deliver to the Indenture Trustee as a condition precedent to the
effectiveness of such appointment an instrument accepting the trusts, duties and responsibilities of Authenticating Agent and of Note Registrar or co-Note Registrar and indemnifying the Indenture Trustee for and holding the Indenture Trustee
harmless against, any loss, liability or expense (including reasonable attorneys’ fees) incurred without negligence or bad faith on its part, arising out of or in connection with the acceptance, administration of the trust or exercise of
authority by such Authenticating Agent, Note Registrar or co-Note Registrar. 
 Any corporation or banking association into which any
Authenticating Agent may be merged or converted or with which it may be consolidated, or any corporation or banking association resulting from any merger, consolidation or conversion to which any Authenticating Agent shall be a party, or any
corporation or banking association succeeding to the corporate trust business of any Authenticating Agent, shall be the successor of the Authenticating Agent hereunder, if such successor corporation is otherwise eligible under this
Section 6.14, without the execution or filing of any further act on the part of the parties hereto or the Authenticating Agent or such successor corporation or banking association. 
  

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 Any Authenticating Agent may at any time resign by giving written notice of resignation to the Issuing
Entity. The Owner Trustee, acting at the direction of the Certificateholders, may at any time with the consent of the Note Insurer terminate the agency of any Authenticating Agent by giving written notice of termination to such Authenticating Agent
and the Indenture Trustee. Upon receiving such a notice of resignation or upon such a termination, or in case at any time any Authenticating Agent shall cease to be eligible under this Section 6.14, the Owner Trustee, acting at the direction of
the Certificateholders, shall promptly appoint a successor Authenticating Agent acceptable to the Note Insurer, shall give written notice of such appointment to the Indenture Trustee, and shall mail notice of such appointment to all Holders of
Notes. 
 The Indenture Trustee agrees, subject to Section 6.01(e) hereof to pay to any Authenticating Agent from time to time
reasonable compensation for its services and the Indenture Trustee shall be entitled to be reimbursed for such payments pursuant to Section 6.16 hereof. The provisions of Sections 2.09, 6.04 and 6.05 hereof shall be applicable to any
Authenticating Agent. 
 Section 6.15. Review of Mortgage Files. (a) The Indenture Trustee shall, on or prior to the Closing
Date, execute and deliver the acknowledgement of receipt of the Note Insurance Policy required by Section 2.06(a) of the Sale and Servicing Agreement. 
 (b) The Indenture Trustee shall (i) on or prior to the Closing Date execute and deliver the acknowledgement of receipt of the Mortgage Loans required by Section 2.06(b)(i) of the Sale and Servicing
Agreement, (ii) on or prior to sixty (60) days following the Closing Date execute and deliver the Initial Certification required by Section 2.06(b)(ii) of the Sale and Servicing Agreement, and (iii) on or prior to one hundred
eighty (180) days following the Closing Date execute and deliver the Final Certification required by Section 2.06(b)(iii) of the Sale and Servicing Agreement. 
 (c) In giving each of the acknowledgements, the Initial Certification and the Final Certification referred to in paragraphs (a) and (b) of this Section 6.15, the Indenture Trustee shall not be under any
duty or obligation (i) to inspect, review or examine any such documents, instruments, securities or other papers to determine that they or the signatures thereto are genuine, enforceable, or appropriate for the represented purpose or that they
have actually been recorded or that they are other than what they purport to be on their face, (ii) to determine whether any Mortgage File should include a flood insurance policy, any rider, addenda, surety or guaranty agreement, power of
attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement, or (iii) to determine the validity, sufficiency, recordability, perfection, or priority of any document in the Mortgage
File. 
 Section 6.16. Indenture Trustee Fees and Expenses Indemnification. The Indenture Trustee shall be entitled to receive
the Indenture Trustee Fee on each Payment Date as provided herein. The Indenture Trustee also shall be entitled to (i) payment of or reimbursement for expenses and disbursements incurred or made by the Indenture Trustee in accordance with any
of 
  

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 the provisions of this Indenture or the Sale and Servicing Agreement (including, but not limited to, the reasonable
compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), and (ii) indemnification against losses, liability costs and expenses, including reasonable attorney’s fees, incurred, arising
out of or in connection with this Indenture, the Notes, the Certificates, the Sale and Servicing Agreement or any other documents or agreements relating to the Issuing Entity or the Notes, other than any loss, liability, cost or expense incurred
solely by reason of willful malfeasance, bad faith or negligence of the Indenture Trustee in the performance of its duties under the Basic Documents or by reason of its failure to perform its obligations hereunder. The Indenture Trustee and any
director, officer, employee or agent of the Indenture Trustee shall be indemnified by, first, the Trust Estate, in an amount not to exceed $125,000 in any calendar year as a first-priority expense pursuant to the first sentence of
Section 8.02 hereof and Section 5.07(a) hereof; provided, that the maximum amount of such cap may be increased with the prior consent of the Note Insurer; second, the Trust Estate on any Payment Date, to the extent that the
Indenture Trustee’s claims for indemnification exceed $125,000 in any calendar year, pursuant to Sections 8.02(xii) and 5.07(l) hereof, and third, the Servicer, to the extent that the Indenture Trustee’s claims for indemnification
exceed $125,000 in any calendar year and there are no funds available at priority second above available for such purpose, and held harmless against any loss, liability costs or reasonable expense incurred in connection with this Indenture or
the Notes, other than any loss, liability, cost or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance by the Indenture Trustee of its duties hereunder or by reason of its failure to perform its obligations
hereunder. The obligations of the Servicer and the Issuing Entity under this Section 6.16 shall survive termination of the Issuing Entity and payment of the Notes, and shall extend to any co-Indenture Trustee or separate-Indenture Trustee
appointed pursuant to this Article VI. 
 The Indenture Trustee or its Affiliates are permitted to receive additional compensation that could
be deemed to be in the Indenture Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or sub-custodian with respect to certain Permitted Investments, (ii) using
Affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. Such compensation is not payable pursuant to this Indenture. 
 ARTICLE VII 
 NOTEHOLDERS’ LISTS
AND REPORTS 
 Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders. (a) The
Note Registrar shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less than forty-five (45) days nor more than sixty (60) days after the Payment Date occurring closest to six (6) months after
the Closing Date and each Payment Date occurring at six (6) month intervals thereafter, all information in the possession or control of the Note Registrar, in such form as the Indenture Trustee may reasonably require, as to names and addresses
of the Noteholders, and (ii) at such other times, as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Note Registrar of any such request, a list of 
  

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 similar form and content as of a date not more than ten (10) days prior to the time such list is furnished;
provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. 
 (b) In
addition to furnishing to the Indenture Trustee the Noteholder lists, if any, required under paragraph (a) of this Section 7.01, the Note Registrar shall also furnish all Noteholder lists, if any, required under Section 3.03 hereof at
the times required by such Section 3.03. 
 Section 7.02. Preservation of Information: Communications to Noteholders.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee as provided in
Section 7.01 hereof and the names and addresses of the Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01 hereof upon
receipt of a new list so furnished. 
 (b) Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with
respect to their rights under this Indenture or under the Notes. To the extent that the Notes are Book Entry, upon the request of such Noteholders, the Indenture Trustee will obtain for such Noteholders at such Noteholders’ expense, the names
and addresses of the Clearing Agency Participants needed to allow such Noteholders to communicate. 
 (c) The Issuing Entity, the Indenture
Trustee and the Note Registrar shall have the protection of TIA Section 312(c). 
 Section 7.03. Reports by Indenture
Trustee. 
 (a) Within sixty (60) days after December 31 of each year (the “reporting date”), commencing
December 31, 200[_], (i) the Indenture Trustee shall, if required by TIA Section 313(a), mail to all Noteholders described in TIA Section 313(c) a brief report dated as of such reporting date that complies with TIA
Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the Indenture Trustee’s Remittance Report pursuant to Section 2.08(d) hereof, also mail to Noteholders described in TIA Section 313(c) and the
Note Insurer with respect to which it has made advances, any reports with respect to such advances that are required by TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Noteholders described in TIA Section 313(c) and
the Note Insurer any reports required by TIA Section 313(b)(1). For purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if applicable), or 313(b)(2), the principal amount of
indenture securities outstanding on the date as of which such information is provided shall be the Note Principal Balance of the then Outstanding Notes covered by the report. 
 A copy of each report at the time of its mailing to Noteholders will be filed by the Trustee with the Commission and each stock exchange, if any, on
which the Notes are listed. The Issuing Entity will notify the Trustee if and when the Notes are listed on any stock exchange. 
  

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 (b) If required under Regulation AB, the Indenture Trustee will: 
 (i) deliver to the Depositor, the Owner Trustee and the Servicer, a report, dated as of December 31 of the preceding calendar year,
on its assessment of compliance with the minimum servicing criteria regarding cash and collection administration during the preceding calendar year, including disclosure of any material instance of non-compliance identified by the Indenture Trustee,
as required by Rule 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB under the Securities Act, and such additional provisions of Item 1122 as may be agreed among the Depositor, the Servicer and the Indenture Trustee to
comply with the provisions of Regulation AB. 
 (ii) cause a firm of registered public accountants that is qualified and
independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver to the Depositor, Owner Trustee and the Servicer an attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange
Act, as applicable, on the assessment of compliance with servicing criteria with respect to the prior calendar year. Such attestation report will be addressed to the board of directors of the Servicer and to the Depositor and Owner Trustee. Such
attestation report will be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act. The firm may render other services to the Indenture Trustee, but the firm must indicate in each attestation
report that it is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act. 
 (iii) The reports referred to in this Section [    ] will be delivered on or before March 15 of each year in which a Form 10-K is required to be filed, beginning March 15, 2007. 
 (c) The Indenture Trustee will furnish to the Depositor or the Issuing Entity, in writing, the necessary disclosure describing the legal proceedings
required to be disclosed under Item 1117 of Regulation AB with respect to the Indenture Trustee, for inclusion in reports, so long as such reports are required to be filed, pursuant to the Exchange Act. 
 Section 7.04. Reports by Issuing Entity. The Issuing Entity shall cause the Servicer, on behalf of the Issuing Entity, (a) to deliver to
the Indenture Trustee at least five days before the Issuing Entity is required to file the same with the Commission copies of the annual reports and of the information, documents and other reports (or copies of such portions of any of the foregoing
as the Commission may by rules and regulations prescribe) that the Issuing Entity is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, and (b) to also comply with the other provisions of TIA
Section 314(a). 
 A copy of each report required under this Section 7.04 shall, at the time of such transmission to Holders of
Notes and the Note Insurer be filed by the Sponsor with the Commission and with each securities exchange upon which the Notes are listed. The Servicer, on behalf of the Issuing Entity, will notify the Indenture Trustee when the Notes are listed on
any securities exchange. 
  

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 ARTICLE VIII 
 ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES 
 Section 8.01. Accounts;
Investment; Collection of Moneys. (a) The Issuing Entity hereby directs the Indenture Trustee to establish, on or before the Closing Date, two Eligible Accounts that shall be the “Payment Accounts” for the Notes. Each Payment
Account shall relate to one of the two Classes of Notes. The Indenture Trustee shall promptly deposit in the related Payment Account: 
 (i) the Servicer Remittance Amount for the related Group received by it from the Servicer on the Servicer Remittance Date pursuant to the Sale and Servicing Agreement; 
 (ii) any other funds from any deposits for such Group to be made by the Servicer pursuant to the Sale and Servicing Agreement; 

(iii) any amount for such Group required to be deposited in such Payment Account pursuant to Section 8.01(c); 
 (iv) all amounts for such Group received pursuant to Section 8.03 hereof; 
 (v) the Termination Price received by it from the Depositor on the Clean-up Call Date pursuant to Section 10.01; 
 (vi) on each Payment Date, in accordance with the Indenture Trustee’s Remittance Report, (A) until the Shortfall Amount for the
related Class is paid in full, and (B) until the amount specified in clause (vi) of Section 8.02 for such group is paid in full, in each case, first, from the Payment Account relating to the other Class of Notes, to the extent
of the Net Monthly Excess Cashflow from the Group of Mortgage Loans relating to the other Class of Notes [and second, from each sub-account of the Reserve Account, an amount equal to the product of (A) a fraction, the numerator of which
is the amount on deposit in the such sub-account of the Reserve Account and the denominator of which is the aggregate amount on deposit in the Reserve Account and (B) the Shortfall Amount after giving effect to this Section 8.01(a)(vi)(B)
first]; 
 (vii) [on each Payment Date, from each sub-account of the Reserve Account, an amount equal to the product of
(A) a fraction, the numerator of which is the amount on deposit in each such sub-account of the Reserve Account and the denominator of which is the aggregate amount on deposit in the Reserve Account and (B) the Reserve Account Release
Amount; and ] 
 (viii) all other amounts for such Group received for deposit in such Payment Account from the Servicer and
the payment of any Loan Repurchase Price or Substitution Adjustment for a Mortgage Loan in such Group received by the Indenture Trustee. 
 All amounts that are deposited from time to time in a Payment Account are subject to withdrawal by the Indenture Trustee for the purposes set forth in Section 8.02 hereof. All funds withdrawn from a Payment Account pursuant to
Section 8.02 hereof for the purpose of making payments to the Holders of Notes shall be applied in accordance with Sections 3.03 and 8.02 hereof. 
  

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 (b) [The Issuing Entity hereby directs the Indenture Trustee to establish, on or before the Closing Date,
an Eligible Account that shall be the “Reserve Account” for the Notes. The Reserve Account will consist of two sub-accounts, each of which shall relate to a Class of Notes and the related Loan Group. The Indenture Trustee shall deposit and
withdraw funds in the Reserve Account, and the sub-accounts thereof, in accordance with the provisions of Section 8.01(a) and Section 8.02 hereof. Amounts in the Reserve Account can be used to (i) pay Shortfall Amounts in accordance
with Section 8.01 and (ii) to pay Class A-1 Available Funds Cap Carry-forward Amounts and Class A-2 Available Funds Cap Carry-forward Amounts. Amounts on deposit in either sub-account of the Reserve Account may be used to pay
Shortfall Amounts for either Class of Notes, provided, that to the extent that funds are on deposit in both sub-accounts, funds will be withdrawn pursuant to Section 8.01(a)(vi). Available Funds Cap Carry-Forward Amounts can only be paid from
funds released from each related sub-account of the Reserve Account pursuant to Section 8.01(a)(vii).] 
 (c) The Issuing Entity hereby
directs the Indenture Trustee to establish, on or before the Closing Date, two Eligible Accounts that shall be the “Yield Maintenance Accounts” for the Notes. Each Yield Maintenance Account shall relate to one of the two Classes of Notes
and the related Loan Group. The Indenture Trustee shall deposit into each Yield Maintenance Account, on each Payment Date, from the total amount, if any, received by it under the related Cap Agreement, an amount equal to the product of (x) the
excess, if any, of (i) the lesser of one-month LIBOR and the maximum rate (as such terms are used in the related Cap Agreement) over (ii) the strike rate with respect to such Payment Date and the related Note Balance immediately prior to
such Payment Date. Any excess over the amount payable under the related Cap Agreement over the amount described in the prior sentence will be distributed on such Payment Date to the Certificateholder. The Indenture Trustee shall withdraw funds in
each Yield Maintenance Account in accordance with the provisions of Section 8.02 hereof. Amounts in each Yield Maintenance Account can only be used on each Payment Date to pay the related Available Funds Cap Carry-forward Amounts: any remaining
amounts will be released on each Payment Date to the Certificateholders pursuant to Section 8.02(xv) hereof. 
 (d) So long as no
Default or Event of Default shall have occurred and be continuing, amounts held in the Accounts, other than the Payment Account or the Note Insurance Payment Account, shall at the written direction of the Servicer be invested in Permitted
Investments, which Permitted Investments shall mature no later than the Business Day preceding the immediately following Payment Date; provided, however, that the Indenture Trustee shall have no obligation to invest funds deposited into the Accounts
later than 12:15 p.m. (Pacific Time) on the day of receipt. Absent written direction, all such amounts shall be held uninvested. Amounts in the Payment Account may be invested in Permitted Investments at the direction of the Indenture Trustee or
remain uninvested. 
 All income or other gains, if any, from investment of moneys deposited in the Collection Account shall be for the
benefit of the Servicer, and in the Payment Account for the benefit of the Indenture Trustee, respectively and on or after each Payment Date, any such amounts may be released from such Accounts and paid to the Servicer or Indenture Trustee, as
applicable, as part 
  

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 of its compensation hereunder. Any loss resulting from such investment of moneys deposited in the Collection Account or
the Payment Account, respectively, shall be reimbursed immediately as incurred to the related Account by the Servicer or Indenture Trustee, respectively. Subject to Section 6.01 hereof and the preceding sentence, neither the Indenture Trustee
nor the Servicer shall in any way be held liable by reason of any insufficiency in the Accounts. 
 The Indenture Trustee shall not in any
way be held liable by reason of any insufficiency in any Account (other than the Payment Account) held by the Indenture Trustee resulting from any investment loss on any Permitted Investment included therein (except to the extent that the Indenture
Trustee is the obligor and has defaulted thereon). 
 In order to comply with its duties under the U.S.A. Patriot Act, of 2001, the Indenture
Trustee shall obtain and verify certain information and documentation from the other party to this Indenture including, but not limited to, such party’s name, address, and other identifying information. 
 (e) Except as otherwise expressly provided herein, the Indenture Trustee may demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold all such money and property
received by it as part of the Trust Estate and shall apply it as provided in this Indenture. 
 If the Indenture Trustee shall not have
received the Servicer Remittance Amount by close of business on any related Servicer Remittance Date, the Indenture Trustee shall, unless the Servicer shall have made provisions satisfactory to the Indenture Trustee for delivery to the Indenture
Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice, with a copy to the Note Insurer, to the Servicer of the Servicer’s failure to remit such Servicer Remittance Amount and that such failure, if not remedied by the
close of business on the Business Day after the date upon which such notice is delivered to the Servicer, shall constitute a Servicer Event of Default under the Sale and Servicing Agreement. If the Indenture Trustee shall subsequently receive any
such Servicer Remittance Amount by the close of business on such Business Day (along with interest at the Prime Rate as set forth in the Wall Street Journal, accruing from the Servicer Remittance Date to the date such Servicer Remittance Amount was
actually received, and payable to the Indenture Trustee) such Servicer Event of Default shall not be deemed to have occurred. Notwithstanding any other provision hereof, the Indenture Trustee shall deliver to the Servicer, or its designee or
assignee, any Servicer Remittance Amount received with respect to a Mortgage Loan after the related Servicer Remittance Date to the extent that the Servicer previously made payment or provision for payment with respect to such Servicer Remittance
Amount in accordance with this Section 8.01, and any such Servicer Remittance Amount shall not be deemed part of the Trust Estate. 
 Except as otherwise expressly provided in this Indenture and the Sale and Servicing Agreement, if, following delivery by the Indenture Trustee of the notice described above, the Servicer shall fail to remit the Servicer Remittance Amount on
any Servicer Remittance Date, the Indenture Trustee shall deliver a second notice to the Servicer, the Issuing Entity and the Note Insurer by the close of business on the Business Day immediately prior to the related 
  

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

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 (vii) from amounts then on deposit in the related Payment Account, to the Note Insurer,
the Reimbursement Amount with respect to the other Class of Notes as of such Payment Date to the extent not already reimbursed pursuant to clause (iv) above; 
 (viii) from amounts then on deposit in the related Payment Account, as a payment of the principal, an amount equal to the
Overcollateralization Increase Amount for the related Class of Notes; 
 (ix) [from amounts then on deposit in the related
Payment Account, to the related sub-account of the Reserve Account, the Reserve Payment Amount;] 
 (x) with respect to each
class of Notes, from amounts then on deposit in the related Payment Account, the related Yield Maintenance Account [and amounts released from the related sub-account of the Reserve Account], to the Holders of such Class of Notes, the related
Available Funds Cap Carry-Forward Amount; 
 (xi) from amounts then on deposit in the Payment Account related to a Class of
Notes, to the Servicer, any amount due to it with respect to the related Group of Mortgage Loans; 
 (xii) pro rata, from
aggregate amounts then on deposit in both Payment Accounts, any amounts in respect of indemnity or reimbursement due the Indenture Trustee under any of the Basic Documents to the extent not previously paid or reimbursed hereunder; 
 (xiii) from aggregate amounts then on deposit in both Payment Accounts, to the Owner Trustee, its Expenses as defined in Section 9.02
of the Trust Agreement, to the extent the Sponsor has not already paid to the Owner Trustee such Expenses; 
 (xiv) from the
aggregate amounts then on deposit in the related Payment Account, to the Holders of the other Class of Notes, any amount due to them as an Interest Reduction Carryforward Amount; and 
 (xv) following the making by the Indenture Trustee of all allocations, transfers and disbursements described above, from amounts then on
deposit in each Payment Account and the Yield Maintenance Accounts, the Indenture Trustee shall distribute to the Certificateholders (as identified in the Certificate Register maintained by the Owner Trustee), the amount remaining on such Payment
Date in each Payment Account and the Yield Maintenance Accounts, if any. 
 Section 8.03. Claims against the Note Insurance
Policy. (a) No later than two (2) Business Days prior to each Payment Date, the Indenture Trustee shall determine with respect to the immediately following Payment Date, the amount required to be on deposit in each Payment Account on
such Payment Date as a result of the Servicer’s remittance of the Servicer Remittance Amount on the related Servicer Remittance Date. 
 (b) If the Servicer Remittance Report with respect to any Payment Date indicates that an Insured Amount shall be payable for any Group, after giving effect to the 
  

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 distributions specified in Section 8.02 (calculating such distributions without giving effect to any Insured Amount
to be paid by the Note Insurer on such Payment Date), the Indenture Trustee shall complete a Notice in the form of Exhibit A to the Note Insurance Policy and submit such notice to the Note Insurer no later than 12:00 noon New York City time (9:00
Los Angeles time) on the second Business Day preceding such Payment Date as a claim for an Insured Amount. 
 (c) The Indenture Trustee shall
establish an Eligible Account (which may be a subaccount of the Payment Account) for the benefit of Holders of the Notes and the Note Insurer referred to herein as the “Note Insurance Payment Account” over which the Indenture Trustee shall
have exclusive control and sole right of withdrawal. The Indenture Trustee shall deposit upon receipt any amount paid under the Note Insurance Policy in the Note Insurance Payment Account and distribute such amount only for purposes of payment to
the Noteholders of the related Group of the Insured Amount for such Group for which a claim was made and such amount may not be applied to satisfy any costs, expenses or liabilities of the Servicer, the Indenture Trustee or the Issuing Entity.
Amounts paid under the Note Insurance Policy, to the extent needed to pay the Insured Amount shall be disbursed by the Indenture Trustee to the Noteholders in accordance with Section 8.02. It shall not be necessary for such payments to be made
by checks or wire transfers separate from the checks or wire transfers used to pay the Insured Amount with other funds available to make such payment. However, the amount of any payment of principal of or interest on the Notes to be paid from funds
transferred from the Note Insurance Payment Account shall be noted as provided in subsection (d) of this Section 8.03 in the Note Register and in the Indenture Trustee’s Remittance Report. Funds held in the Note Insurance Payment
Account shall not be invested. Any funds remaining in the Note Insurance Payment Account on the first Business Day following a Payment Date shall be returned to the Note Insurer pursuant to the written Instructions of the Note Insurer by the end of
such Business Day. 
 (d) The Indenture Trustee shall keep a complete and accurate record of the amount of interest and principal paid in
respect of any Note from moneys received under the Note Insurance Policy. The Note Insurer shall have the right to inspect such records at reasonable times during normal business hours upon one (1) Business Day’s prior written notice to
the Indenture Trustee. 
 (e) In the event that the Indenture Trustee has received a certified copy of an order of the appropriate court that
any Insured Amount has been voided in whole or in part as a preference payment under applicable bankruptcy law, the Indenture Trustee shall so notify the Note Insurer, shall comply with the provisions of the Note Insurance Policy to obtain payment
by the Note Insurer of such voided Insured Amount, and shall, at the time it provides notice to the Note Insurer, notify, by mail to the Noteholders of the affected Notes that, in the event any Noteholder’s Insured Amount is so recovered, such
Noteholder will be entitled to payment pursuant to the Note Insurance Policy, a copy of which shall be made available through the Indenture Trustee, the Note Insurer or the Note Insurer’s fiscal agent, if any, and the Indenture Trustee shall
furnish to the Note Insurer or its fiscal agent, if any, its records evidencing the payments which have been made by the Indenture Trustee and subsequently recovered from the Noteholders, and dates on which such payments were made. 
  

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 (f) The Indenture Trustee shall promptly notify the Note Insurer of any proceeding or the institution of
any action, of which a Responsible Officer of the Indenture Trustee has actual knowledge, seeking the avoidance as a preferential transfer under applicable bankruptcy, insolvency, receivership or similar law (a “Preference Claim”)
of any payment made with respect to the Notes. Each Noteholder, by its purchase of Notes, the Servicer and the Indenture Trustee agree that, the Note Insurer (so long as no Note Insurer Default exists) may at any time during the continuation of any
proceeding relating to a Preference Claim direct all matters relating to such Preference Claim, including, without limitation, (i) the direction of any appeal of any order relating to such Preference Claim and (ii) the posting of any
surety, supersede as or performance bond pending any such appeal. In addition and without limitation of the foregoing, the Note Insurer shall be subrogated to, and each Noteholder, the Servicer and the Indenture Trustee hereby delegate and assign to
the Note Insurer, to the fullest extent permitted by law, the rights of the Servicer, the Indenture Trustee and each Noteholder in the conduct of any such Preference Claim, including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with any such Preference Claim. 
 (g) The Indenture Trustee shall,
upon retirement of the Notes, furnish to the Note Insurer a notice of such retirement, and, upon retirement of the Notes and the expiration of the term of the Note Insurance Policy, surrender the Note Insurance Policy to the Note Insurer for
cancellation. 
 (h) Unless a Note Insurer Default exists and is continuing, the Indenture Trustee and the Issuing Entity shall cooperate in
all respects with any reasonable request by the Note Insurer for action to preserve or enforce the Note Insurer’s rights or interests hereunder without limiting the rights or affecting the interests of the Noteholders as otherwise set forth
herein. 
 (i) Each Noteholder, by its purchase of Notes, and the Indenture Trustee hereby agrees that, unless a Note Insurer Default exists
and is continuing, the Note Insurer shall have the right to direct all matters relating to the Notes in any proceeding in a bankruptcy of the Issuing Entity, including without limitation any proceeding relating to a Preference Amount and the posting
of any surety or Note pending any such appeal. 
 (j) Anything herein to the contrary notwithstanding, any payment with respect to principal
of or interest on the Notes which is made with moneys received pursuant to the terms of the Note Insurance Policy shall not be considered payment of the Notes from the Issuing Entity. The Issuing Entity and the Indenture Trustee acknowledge, and
each Holder by its acceptance of a Note agrees, that without the need for any further action on the part of the Note Insurer, the Issuing Entity, the Indenture Trustee or the Note Registrar (x) to the extent the Note Insurer makes payments,
directly or indirectly, on account of principal of or interest on the Notes to the Holders of such Notes, the Note Insurer will be fully subrogated to, and each Noteholder, the Issuing Entity 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 Issuing Entity, including, without limitation, any amounts due to the Noteholders in respect of securities law
violations arising from the offer and sale of the Notes, and (y) the Note Insurer shall be paid such amounts from the sources and in the manner provided herein for the payment of such amounts. 
  

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 Section 8.04. General Provisions Regarding the Payment Accounts and Mortgage Loans.
(a) Each Payment Account shall relate solely to the Notes of the related Class and to the Mortgage Loans in the related Group, Permitted Investments and other property securing the related Notes. Funds and other property in each Payment Account
shall not be commingled with the other Payment Account or any other moneys or property of the Issuing Entity or any Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other property received or held by it
as part of a Payment Account in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other Persons (which may include the Issuing Entity or an Affiliate); provided, that such
accounts are under the sole control of the Indenture Trustee and the Indenture Trustee maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to the related Payment Account.

 (b) If any amounts are needed for payment from a Payment Account and sufficient uninvested funds are not available therein to make such
payment, the Indenture Trustee shall cause to be sold or otherwise converted to cash, to the extent available, a sufficient amount of the investments in such Payment Account. 
 (c) The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its possession, or in the possession of an agent whose actions
with respect to such items are under the sole control of the Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Payment Accounts. The Indenture Trustee shall relinquish possession of such
items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in the Payment Accounts, against delivery of the amount
receivable in connection with any sale. 
 (d) The Servicer shall not direct the Indenture Trustee to invest any part of the Trust Estate in
Permitted Investments that constitute uncertificated securities (as defined in Section 8-102 of the Uniform Commercial Code, as enacted in the relevant jurisdiction) unless it has delivered an Opinion of Counsel addressed to the Indenture
Trustee and reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each type of security for which authority to invest is being sought, the procedures that must be followed to maintain the lien and
security interest created by this Indenture with respect to the Trust Estate. 
 (e) With respect to any portion of the Trust Estate invested
in Permitted Investments, the Indenture Trustee acknowledges and agrees that: 
 (i) any Permitted Investment that is held in
a deposit account shall be held solely in an Eligible Account; and each such Eligible Account shall be subject to the sole and exclusive dominion, custody and control of the Indenture Trustee; and, without limitation on the foregoing, the Indenture
Trustee shall have sole signature authority with respect thereto; 
  

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 (ii) any Permitted Investment that constitutes Physical Property shall be delivered to
the Indenture Trustee in accordance with paragraph (a) and/or (b) of the definition of “Delivery,” as applicable, and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a securities intermediary
(as such term is defined in Section 8-102(a)(14) of the Uniform Commercial Code) acting solely for the Indenture Trustee; and 
 (iii) any Permitted Investment that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations shall be delivered in accordance with paragraph (c) of the definition of
“Delivery” and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Permitted Investment as described in such paragraph. 
 Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or discovery by a Responsible Officer of the Indenture Trustee that any of the
representations or warranties of the Sponsor set forth in Section 4.01 of the Sale and Servicing Agreement was materially incorrect or otherwise misleading with respect to any Mortgage Loan as of the time made, the Indenture Trustee shall
direct the Sponsor to either cure, repurchase or substitute for such Mortgage Loan as provided in Section 4.02 of the Sale and Servicing Agreement. Upon any purchase of or substitution for a Deleted Mortgage Loan by the Sponsor in accordance
with Section 2.06 or Section 4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall deliver the Indenture Trustee’s Mortgage File relating to such Deleted Mortgage Loan to the Sponsor, and the Issuing Entity and the
Indenture Trustee shall execute such instruments of transfer as are necessary to convey title to such Deleted Mortgage Loan to the Sponsor from the lien of this Indenture. Nothing in this Section 8.05 should be construed to obligate the
Indenture Trustee to actively monitor the correctness or accuracy of the representations and warranties of the Sponsor. 
 Section 8.06.
Reports by Indenture Trustee to Noteholders; Access to Certain Information. On each Payment Date, the Indenture Trustee, shall provide the written reports required by the first paragraph of Section 2.08(d) to Noteholders of record as of
the related Record Date (including the Clearing Agency, if any) and the Note Insurer. The Indenture Trustee will make available the Indenture Trustee’s Remittance Report (and, at its option, any additional files containing the same information
in an alternative format) to any interested person via the Indenture Trustee’s internet website. The Indenture Trustee’s internet website shall initially be located at
https://www                     and assistance in using the website can be obtained by calling the Indenture Trustee’s investor relations
desk at [                    ]. The Indenture Trustee shall have the right to alter the manner in which it provides its Indenture
Trustee’s Remittance Reports to Noteholders upon notice to Noteholders in the manner in which such Indenture Trustee’s Remittance Reports are then being provided. 
 The Indenture Trustee shall make available at its Corporate Trust Office, during normal business hours, for review by any Noteholder, designees of the
Issuing Entity, or the Note Insurer, originals or copies of the following items: (a) the Indenture and any amendments thereto, (b) all Indenture Trustee’s Remittance Reports and other reports delivered since the Closing Date pursuant
to Section 2.08(d) hereof, (c) any Officers’ Certificates delivered to the Indenture Trustee since the Closing Date as described in the Indenture and (d) any Accountants’ reports delivered to the Indenture Trustee since the
Closing Date as required under the Sale and 
  

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 Servicing Agreement. Copies of any and all of the foregoing items will be available from the Indenture Trustee upon
request; however, the Indenture Trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing such copies and shall not be required to provide such copies without reasonable assurances that
such sum will be paid. 
 Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at such time as there are no Notes
Outstanding, release all of the Trust Estate to the Issuing Entity (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02 hereof and amounts due to the Indenture Trustee hereunder). 
 Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture Trustee may, without the consent of any Holder, enter into or consent
to any amendment or supplement to the Sale and Servicing Agreement for the purpose of increasing the obligations or duties of any party other than the Indenture Trustee or the Holders of the Notes. The Indenture Trustee shall not enter into or
consent to any such supplement or amendment unless the Indenture Trustee receives (i) an Opinion of Counsel that the position of the Holders would not be materially adversely affected or written confirmation of satisfaction of the Rating Agency
Condition has been delivered to it and (ii) an Opinion of Counsel experienced in federal income tax matters that such amendment or supplement will not prevent the Notes from being characterized as debt for United States federal income tax
purposes and will not cause the Issuing Entity to be subject to federal income tax. The Indenture Trustee may in its discretion decline to enter into any such supplement or amendment if its own rights, duties or immunities would be adversely
affected. Prior to entering into any supplement or amendment an Opinion of Counsel shall be delivered to the Indenture Trustee (upon which it may conclusively rely) to the effect that such amendment or supplement is permitted and authorized by this
Indenture and the Sale and Servicing Agreement. 
 Section 8.09. Delivery of the Mortgage Files Pursuant to Sale and Servicing
Agreement. As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall deliver to the Servicer (if directed in writing by the Servicer) the Indenture Trustee’s Mortgage Files for such Mortgage Loan
upon receipt by the Indenture Trustee on or prior to the date such release is to be made of: 
 (a) such Officer’s Certificates, if any,
as are required by the Sale and Servicing Agreement; and 
 (b) a Request for Release, executed by the Servicer, providing that the Servicer
(if directed in writing by the Servicer) will hold or retain the Indenture Trustee’s Mortgage Files in trust for the benefit of the Indenture Trustee, the Note Insurer and the Holders of Notes. 
 Section 8.10. Servicer as Agent. In order to facilitate the servicing of the Mortgage Loans by the Servicer of such Mortgage Loans, the
Servicer of the Mortgage Loans has been appointed by the Issuing Entity to retain, in accordance with the provisions of the Sale and Servicing Agreement and this Indenture, all Servicer Remittance Amounts on such Mortgage Loans prior to their
deposit into the related Payment Account on or prior to the related Servicer Remittance Date. 
  

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 Section 8.11. Termination of Servicer. In the event of the occurrence of a Servicer Event of
Default specified in Section 7.01 of the Sale and Servicing Agreement, the Indenture Trustee may, with the consent of the Note Insurer or, with the prior written consent of the Note Insurer, the Holders of Notes representing more than 50% of
the Note Principal Balance of the Outstanding Notes of both Classes, and shall, upon the written direction of the Note Insurer (or as otherwise provided in the Sale and Servicing Agreement), terminate the Servicer as provided in Section 7.01 of
the Sale and Servicing Agreement. If the Indenture Trustee terminates the Servicer, the Indenture Trustee as successor servicer shall, pursuant to Section 7.02 of the Sale and Servicing Agreement, assume the duties of the Servicer or appoint a
successor servicer acceptable to the Rating Agencies in accordance with the directions of the Note Insurer and meeting the requirements set forth in the Sale and Servicing Agreement. 
 Section 8.12. Opinion of Counsel. The Indenture Trustee shall be entitled to receive at least five (5) Business Days’ notice of any
action to be taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection with releases of Mortgage Loans that were subject to a prepayment in full), accompanied by copies of any instruments involved, and the Indenture Trustee shall be
entitled to receive an Opinion of Counsel, in form and substance reasonably satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions
precedent to the taking of such action have been complied with. Counsel rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in
connection with any such action. 
 Section 8.13. Appointment of Collateral Agents. The Indenture Trustee may, at no additional
cost to the Issuing Entity or to the Indenture Trustee, with the consent of the Note Insurer, appoint one or more Collateral Agents to hold all or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture Trustee. Such Collateral
Agent shall meet the requirements of Article IX of the Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be governed by said Article IX. 
 Section 8.14. Rights of the Note Insurer to Exercise Rights of Noteholders. By accepting its Notes, each Noteholder agrees that unless a Note Insurer Default exists, the Note Insurer shall have the right
to exercise all rights of the Noteholders under this Indenture, without any further consent of the Noteholders, including, without limitation: 
 (a) the right to require the Servicer to effect foreclosures upon Mortgage Loans upon failure of the Servicer to do so; 
 (b) the
right to require the Sponsor to repurchase or substitute for Deleted Mortgage Loans pursuant to Section 8.05; 
 (c) the right to direct
the actions of the Indenture Trustee during the continuance of an Event of Default; and 
 (d) the right to vote on proposed amendments to
this Indenture. 
  

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 In addition, each Noteholder agrees that, unless a Note Insurer Default exists, the rights specifically
set forth above may be exercised by the Noteholders only with the prior written consent of the Note Insurer. 
 Except as otherwise provided
in Section 8.03 hereof and notwithstanding any provision in this Indenture to the contrary, so long as a Note Insurer Default has occurred and is continuing, the Note Insurer shall have no rights to exercise any voting rights of the Noteholders
hereunder, nor shall the Indenture Trustee be required to obtain the consent of, or act at the direction of, the Note Insurer. 
 All
notices, statements, reports, certificates or opinions required by this Indenture to be sent to any other party hereto or to the Noteholders shall also be sent to the Note Insurer. 
 Section 8.15. Trust Estate and Accounts Held for Benefit of the Note Insurer. The Indenture Trustee shall hold the Trust Estate and the
Indenture Trustee’s Mortgage Files, for the benefit of the Noteholders and the Note Insurer, and all references in this Indenture and in the Notes to the benefit of Holders of the Notes shall be deemed to include the Note Insurer (provided
there does not exist a Note Insurer Default). 
 ARTICLE IX 
 SUPPLEMENTAL INDENTURES 
 Section 9.01. Supplemental Indentures Without
Consent of Noteholders. With the consent of the Note Insurer and without the consent of the Holders of any Notes, the Issuing Entity and the Indenture Trustee, at any time and from time to time, may enter into one or more indenture supplemental
hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes: 
 (a) to correct or amplify the description of any
property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property; 
 (b) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of
the issuance, authentication and delivery of any Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; 
 (c) to evidence the succession of another Person to the Issuing Entity to the extent permitted herein, and the assumption by any such successor of the covenants of the Issuing Entity herein and in the Notes contained;

 (d) to add to the covenants of the Issuing Entity, for the benefit of the Holders of all Notes and the Note Insurer, or to surrender any
right or power herein conferred upon the Issuing Entity; 
  

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 (e) to cure any ambiguity, to correct or supplement any provision herein that may be defective or
inconsistent with any other provision herein, or to amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture, provided that such action shall
not adversely affect in any material respect the interests of the Holders of the Notes or the Certificateholders and will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuing
Entity to be subject to federal income tax; provided, that the amendment shall be deemed not to adversely affect in any material respect the interests of the Holders of the Notes and the Note Insurer and will not prevent the Notes from being
characterized as debt for United States federal income tax purposes or cause the Issuing Entity to be subject to federal income tax if the Person requesting the amendment obtains either (i) an Opinion of Counsel delivered to, but not at the
expense of, the Indenture Trustee or to the Note Insurer, to such effect or (ii) written confirmation of the satisfaction of the Rating Agency Condition; or 
 (f) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the qualification of this Indenture under the TIA or under any similar federal statute hereafter
enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA. 
 Section 9.02. Supplemental
Indentures with Consent of Noteholders. With the consent of the Note Insurer and with the consent of Holders of Notes representing not less than a majority of the Note Principal Balance of all Outstanding Notes of the Classes affected thereby by
Act of said Holders delivered to the Issuing Entity and the Indenture Trustee, the Issuing Entity and the Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any
manner or eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder
of each Outstanding Note affected thereby: 
 (a) change any Payment Date or the Final Stated Maturity Date of the Notes or, with respect to
the Notes, reduce the Note Principal Balance thereof or the Note Rate thereon, change the earliest date on which any Note may be redeemed at the option of the Sponsor, change payment where, or the coin or currency in which, any Note or any interest
thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Note on or after the Final Stated Maturity Date thereof or for the enforcement of the payment of the entire
remaining unpaid principal amount of any Note on or after the Final Stated Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date); 
 (b) reduce the percentage of the Note Principal Balance of the Outstanding Notes, the consent of the Holders of which is required for any such supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with provisions of this Indenture or Defaults hereunder and their consequences provided for in this Indenture; 
 (c) modify any of the provisions of this Section 9.02 or Sections 5.13 or 5.17(b) hereof, except to increase any percentage specified therein or to provide that certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Note affected thereby; 
  

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 (d) modify or alter the provisions of the proviso to the definition of the term “Outstanding;”

 (e) permit the creation of any lien other than the lien of this Indenture with respect to any part of the Trust Estate or terminate the
lien of this Indenture on any property at any time subject hereto or deprive the Holder of any Note of the security afforded by the lien of this Indenture; 
 (f) modify any of the provisions of this Indenture in such manner as to affect the calculation of the Interest Payment Amount or Base Principal Payment Amount for any Payment Date and either Class (including the
calculation of any of the individual components of such amounts) or to affect rights of the Holders of the Notes to the benefits of any provisions for the redemption of Notes contained herein. 
 The Indenture Trustee may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination
shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered hereunder. The Indenture Trustee shall not be liable for any such determination made in good faith. 
 It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof. 
 Promptly after the execution by the Issuing Entity and the
Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Notes to which such supplemental indenture relates a notice setting forth in general terms the substance of
such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such supplemental indenture. 
 Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modifications thereby of the trusts created by this Indenture, the Indenture Trustee shall be entitled to receive, and shall be fully protected in relying upon, (i) an Opinion of Counsel stating that the
execution of such supplemental indenture is authorized or permitted by this Indenture and such supplemental indenture does not adversely affect the interests of the Noteholders or the Note Insurer in any material respect; (ii) an Opinion of
Counsel experienced in federal income tax matters stating that the execution of such supplemental indenture will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuing Entity to be
subject to federal income tax; or (iii) written confirmation of satisfaction of the Rating Agency Condition. The Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture
Trustee’s own rights, duties or immunities under this Indenture or otherwise. The Servicer, on behalf of the Issuing Entity, shall cause executed copies of any supplemental indentures to be delivered to the Note Insurer and the Rating Agencies.

  

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 Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental
indenture under this Article IX, this Indenture shall be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes to which such supplemental indenture relates
that have theretofore been or thereafter are authenticated and delivered hereunder shall be bound thereby. 
 Section 9.05.
Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be qualified under the TIA. 

Section 9.06. Reference in Notes to Supplemental Indentures. Notes authenticated and delivered after the execution of any supplemental
indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental indenture. If the Owner Trustee, acting at the
direction of the Certificateholders, shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Owner Trustee, acting at the direction of the Certificateholders, to any such supplemental indenture may be
prepared by the Servicer and executed by the Owner Trustee, acting at the direction of the Certificateholders, on behalf of the Issuing Entity, and authenticated and delivered by the Indenture Trustee in exchange for Outstanding Notes. 

Section 9.07. Amendments to Governing Documents. The Indenture Trustee shall, upon a Trust Request, consent to any proposed amendment to
the Issuing Entity’s governing documents, or an amendment to or waiver of any provision of any other document relating to the Issuing Entity’s governing documents, such consent to be given without the necessity of obtaining the consent of
the Holders of any Notes upon receipt by the Indenture Trustee of: 
 (a) an Officer’s Certificate, to which such proposed amendment or
waiver shall be attached, stating that such attached copy is a true copy of the proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; 
 (b) written confirmation of the satisfaction of the Rating Agency Condition with respect to such proposed amendment; and, 
 (c) written consent of the Note Insurer. 
 Notwithstanding the foregoing, the Indenture Trustee may decline to consent to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise. 
 Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the
proposed amendment or waiver. 
  

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 ARTICLE X 
 REDEMPTION OF NOTES 
 Section 10.01. Redemption of Notes. (a) The Depositor may, at
its sole cost and expense, terminate this Indenture and all the Notes may be redeemed in whole, but not in part, on any Redemption Date on and after the Clean-Up Call Date at the Termination Price. 
 (b) Any such purchase or redemption shall be accomplished by deposit by the Depositor, into the related Payment Account of the Termination Price on the
Servicer Remittance Date preceding the Redemption Date. The amounts on deposit therein shall be distributed by the Indenture Trustee on such Redemption Date in accordance with the priority set forth in Section 8.02 hereof. No termination or
redemption is permitted without the prior written consent of the Note Insurer if it would result in a draw on the Note Insurance Policy. 
 (c) [Reserved]. 
 (d) Upon the redemption of the Notes, the Mortgage Loans in the Trust Estate shall be released and delivered to
the Depositor. 
 (e) Upon receipt of the written notice from the Depositor of its election to redeem the Notes pursuant to
Section 10.01 (a) hereof (which shall state that the Depositor has determined that the conditions to redemption at the option of the Depositor have been satisfied and setting forth information as may be required to accomplish such
redemption), the Indenture Trustee shall prepare and deliver to the Issuing Entity, the Sponsor, the Servicer and the Note Insurer, no later than the related Redemption Date, an Indenture Trustee’s Remittance Report. 
 Section 10.02. Form of Redemption Notice. Notice of redemption shall be given by the Indenture Trustee in the name of and at the expense of
the Issuing Entity by first class mail, postage prepaid, mailed not less than ten days prior to the Redemption Date to each Holder of Notes to be redeemed, such Holders being determined as of the Record Date for such Payment Date, and to the Note
Insurer. 
 All notices of redemption shall state: 
 (a) the Redemption Date; 
 (b) the price at which the Notes of such Class will be redeemed; and 

(c) the fact of payment in full on such Notes, the place where such Notes are to be surrendered for final payment (which shall be the office or agency
of the Issuing Entity to be maintained as provided in Section 3.02 hereof), and that no interest shall accrue on such Note for any period after the date fixed for redemption. 
  

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 Failure to give notice of redemption, or any defect therein, to any Holder of any Note selected for
redemption shall not impair or affect the validity of the redemption of any other Note. 
 Section 10.03. Notes Payable on Optional
Redemption. Notice of redemption having been given as provided in Section 10.02 hereof, the Notes to be redeemed shall, on the applicable Redemption Date, become due and payable and (unless the Issuing Entity shall default in such payment)
no interest shall accrue on such Notes for any period after such Redemption Date; provided, however, that if such payment is not made on the Redemption Date, the Note Principal Balance shall, until paid, bear interest from the Redemption Date at the
applicable Note Rate. 
 ARTICLE XI 
 MISCELLANEOUS 
 Section 11.01. Compliance Certificates and Opinions. (a) Upon any application or request by
any Person to the Indenture Trustee to take any action under any provision of this Indenture, such Person shall furnish to the Indenture Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this
Indenture relating to the proposed action have been complied with and an Opinion of Counsel, if requested by the Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion
need be furnished. 
 (b) Every certificate, opinion or letter with respect to compliance with a condition or covenant provided for in this
Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request (other than certificates provided pursuant to TIA Section 314(a)(4)) shall include and shall be deemed to
include (regardless of whether specifically stated therein) the following: 
 (i) a statement that each individual signing
such certificate, opinion or letter has read such covenant or condition and the definitions herein relating thereto; 
 (ii) a
brief statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based; 
 (iii) a statement that, in the opinion of each such individual, he has made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
 (iv) a
statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. 
  

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 (c) (i) Other than with respect to the release of any Liquidated Mortgage Loans, Mortgage Loans that
are purchased pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or in connection with the Optional Redemption contemplated by Article X hereof, prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the release of any Collateral or other property or securities subject to the lien of this Indenture, the Issuing Entity shall, in addition to any obligation imposed in
Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such deposit) to
the Issuing Entity of the Collateral or other property or securities to be so deposited. 
 (ii) Whenever the Issuing Entity is required to
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer thereof as to the matters described in clause (i) above, the Issuing Entity shall also deliver to the Indenture Trustee a certificate
of a firm of independent public accountants as to the same matters, if the fair value to the Issuing Entity of the property to be so deposited and of all other such property (other than Liquidated Mortgage Loans, Mortgage Loans that are sold
pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or Mortgage Loans to be sold in connection with the Optional Redemption contemplated by Article X hereof) made the basis of any such withdrawal or release since
the commencement of the then-current fiscal year of the Issuing Entity, as set forth in the certificates delivered pursuant to clause (i) above and this clause (ii), is 10% or more of the aggregate outstanding Class Note Balances of the Notes,
but such a certificate need not be furnished with respect to any property so deposited, if the fair value thereof to the Issuing Entity as set forth in the related Officer’s Certificate is less than $25,000 or less than 1% percent of the
aggregate outstanding Class Note Balances of the Notes. 
 (iii) Other than with respect to the release of any Liquidated Mortgage Loans,
Mortgage Loans that are purchased pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or in connection with the Optional Redemption contemplated by Article X hereof, whenever any property or securities are to be
released from the lien of this Indenture, the Issuing Entity shall also furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of
such release) of the property or securities proposed to be released and stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof. 
 (iv) Whenever the Issuing Entity is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any
signer thereof as to the matters described in clause (iii) above, the Issuing Entity shall also furnish to the Indenture Trustee an a certificate of a firm of independent public accountants as to the same matters if the fair value of the
property or securities and of all other property or securities (other than Liquidated Mortgage Loans, Mortgage Loans that are sold pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or Mortgage Loans to be sold
in connection with the Optional Redemption contemplated by Article X hereof) released from the lien of this Indenture since the commencement of the then current calendar year, as set forth in the certificates required by clause (iii) above and
this clause (iv), equals 10% or more of the aggregate outstanding Class Note Balances of the Notes, but such certificate need not be furnished in the case of any release 
  

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 of property or securities if the fair value thereof as set forth in the related Officer’s Certificate is less than
$25,000 or less than 1 percent of the then aggregate outstanding Class Note Balances of the Notes. 
 Section 11.02. Form of
Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion
of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents. 
 Any certificate or opinion of the Issuing Entity may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in the exercise of reasonable care should know, that the certificate or opinion or representations with respect
to the matters upon which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other
counsel’s opinion and shall include a statement to the effect that such counsel believes that such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel. 
 Where any Person is required to make, give or execute two or more applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and form one instrument. 
 Wherever in this Indenture, in
connection with any application or certificate or report to the indenture Trustee, it is provided that the Issuing Entity shall deliver any document as a condition of the reporting of such application, or as evidence of the Issuing Entity’s
compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the effective date of such certificate or report (as the case may be), of the facts and opinions stated in such
document shall in such case be conditions precedent to the right of the Issuing Entity to have such application granted or to the sufficiency of such certificate or report. The foregoing shall not, however, be construed to affect the Indenture
Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(ii) hereof. 
 Whenever in this Indenture it is provided that the absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the
request or direction of the Issuing Entity, then, notwithstanding that the satisfaction of such condition is a condition precedent to the Issuing Entity’s right to make such request or direction, the Indenture Trustee shall be protected in
acting in accordance with such request or direction if it does not have knowledge of the occurrence and continuation of such Default or Event of Default as provided in Section 6.01 (d) hereof. 
 Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially 
  

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 similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuing Entity. Such instrument or instruments (and the
action embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent
shall be sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Issuing Entity, if made in the manner provided in this Section 11.03. 
 (b) The fact and date of the execution by any Person of any such instrument or writing may be proved by the affidavit of a witness of such execution or
by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or writing acknowledged to him the execution thereof. Whenever such execution is by
an officer of a corporation or a member of a partnership on behalf of such corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. 
 (c) The ownership of Notes shall be proved by the Note Register. 
 (d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every Note issued upon the registration of transfer thereof or in exchange
therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuing Entity in reliance thereon; whether or not notation of such action is made upon such Notes. 
 Section 11.04. Notices, etc., to Indenture Trustee, the Note Insurer and Issuing Entity. Any request, demands authorization, direction,
notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or filed with: 
 (a) the Indenture Trustee by any Noteholder or by the Issuing Entity shall be sufficient for every purpose hereunder if in writing and made, given, furnished or filed and received by the Indenture Trustee at its
Corporate Trust Office; or 
 (b) the Issuing Entity by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder (except as provided in Section 5.01 (c) and (d)) hereof if in writing and mailed, first-class postage prepaid, to the Issuing Entity addressed to it at NovaStar Mortgage Funding Trust
200[    ]-[    ], in care of [            
                                ], Attn:
[                                ], or at any other address previously furnished
in writing to the Indenture Trustee by the Issuing Entity. 
 (c) the Note Insurer by the Indenture Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and faxed to [        
                    ] or mailed, first-class, postage prepaid, to
[                                        
            ], Attn: [                    ], or at any other address previously
furnished in writing to the Indenture Trustee by the Note Insurer; or 
  

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 (d) the Sponsor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage paid, to NovaStar Mortgage Inc., 8140 Ward Parkway, Suite 300, Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder, or at any other address previously furnished in writing to the
Indenture Trustee by the Sponsor; or 
 (e) the Servicer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage paid, to NovaStar Mortgage Inc., 8140 Ward Parkway, Suite 300, Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder or at any other address previously furnished in writing to the
Indenture Trustee by the Servicer; or 
 (f) the Depositor by the Indenture Trustee or by any Noteholder shall be sufficient for every
purpose hereunder if in writing and mailed, first-class, postage paid, to NovaStar Mortgage Inc., 8140 Ward Parkway, Suite 300, Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder or at any other address previously furnished in writing to the
Indenture Trustee by the Depositor; or 
 (g) the Underwriter by any party or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage prepaid, to
[                                        
                        ], Attn:
[                            ], or at any other address previously furnished in writing to the
Indenture Trustee by the Underwriter. 
 Notices required to be given to the Rating Agencies by the Issuing Entity or the Indenture Trustee
shall be in writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of [                ], at the following address:
[                                        
    ], Attn: [                        ], (ii) in the case of
[            ], at the following address:
[                                        
                ], Attn: [                    ] and
(iii) in the case of [                    ] at the following address:
[                                        
            ], Attn: [                    ]; or as to each of the foregoing, at
such other address as shall be designed by written notice to the other parties. 
 Section 11.05. Notices and Reports to Noteholders;
Waiver of Notices. Where this Indenture provides for notice to Noteholders of any event or the mailing of any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed,
first-class postage prepaid, to each Noteholder affected by such event or to whole such report is required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the
earliest date, prescribed for the giving of such notice or the mailing of such report. In any case where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in
any notice or report so mailed, to any particular Noteholder shall affect the sufficiency of such notice or report with respect to other Noteholders, and any notice or report that is mailed in the manner herein provided shall be conclusively
presumed to have been duly given or provided. 
 Where this Indenture provides for notice in any manner, such notice may be waived in writing
by any Person entitled to receive such notice, either before or after the event, and such 
  

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 waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture
Trustee, but such filing shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 
 In case, by
reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail notice of any event to Noteholders when such notice is required to be given pursuant to any provision of
this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient giving of such notice. 
 Section 11.06. Rules by Indenture Trustee. The Indenture Trustee may (but is not obligated to) make reasonable rules for any meeting of Noteholders. 
 Section 11.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies or conflicts with another provision hereof that
is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control. 
 Section 11.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table of Contents are for convenience only and shall not affect the construction hereof. 
 Section 11.09. Successors and Assigns. All covenants and agreements in this Indenture by the Issuing Entity shall bind its successors and
assigns, whether so expressed or not. 
 Section 11.10. Separability. In case any provision in this Indenture or in the Notes
shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
 Section 11.11. Benefits of Indenture. Nothing in this Indenture or in the Notes, expressed or implied, shall give to any Person, other than the Note Insurer, the parties hereto and their successors
hereunder, any separate trustee or co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit or any legal or equitable right, remedy or claim under this Indenture. 
 Section 11.12. Legal Holidays. In any case where the date of any Payment Date, Redemption Date or any other date on which principal of or
interest on any Note is proposed to be paid shall not be a Business Day, then (notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day, with the
same force and effect as if made on the nominal date of any such Payment Date, Redemption Date or other date for the payment of principal of or interest on any Note and no interest shall accrue for the period from and after any such nominal date,
provided such payment is made in full on such next succeeding Business Day. 
 Section 11.13. Governing Law. IN VIEW OF THE FACT
THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND 
  

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 FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED
IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER
SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 Section 11.14. Counterparts. This instrument may be executed in any number
of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
 Section 11.15. Recording of Indenture. This Indenture is subject to recording in any appropriate public recording offices, such recording to be effected by the Servicer, on behalf of the Issuing Entity,
and at its expense in compliance with any Opinion of Counsel delivered pursuant to Sections 2.11 (c) or 3.06 hereof. 
 Section 11.16. Issuing Entity Obligation. (a) No recourse, may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity, the Owner Trustee or the Indenture Trustee on the Notes or under this
Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee (except as expressly stated herein regarding performance of its own obligations) Owner Trustee in its individual
capacity, (ii) any manner of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any
holder of a beneficial interest in the Issuing Entity, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly
agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable
law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all purposes of this Indenture, in the performance of any duties or obligations of the Issuing Entity
hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement. 
 (b) It
is expressly understood and agreed by the parties hereto that (i) this Agreement is executed and delivered by
[                        ], not individually or personally but solely as Owner Trustee of the Issuing Entity, 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 Issuing Entity is made and intended not as personal
representations, undertakings and agreements by [                        ] but is made and intended for the purpose for
binding only the Issuing Entity, (iii) nothing herein contained shall be construed as creating any liability on
[                        ], 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
[                    ] be personally liable for the payment of any indebtedness or 
  

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

 This Section 11.17 will survive for one year and one day following the termination of this indenture. 
 Section 11.18. Inspection. The Issuing Entity agrees that, on reasonable prior notice, it will permit any representative of the Indenture
Trustee and the Note Insurer, during the Issuing Entity’s normal business hours, to examine all of books of account, records, reports and other papers of the Issuing Entity, to make copies and extracts therefrom, to cause such books to be
audited by Independent Accountants selected by the Indenture Trustee or the Note Insurer, as the case may be, and to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by this provision the
Issuing Entity hereby authorizes its Accountants to discuss with such representatives such affairs, finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any expense incident to the exercise by the
Indenture Trustee of any right under this Section 11.18 shall be borne by the Issuing Entity. 
 Section 11.19. Usury. The
amount of interest payable or paid on any Note under the terms of this Indenture shall be limited to an amount that shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New
York (whichever shall permit the higher rate), that could lawfully be contracted for, charged or received (the “Highest Lawful Rate”). In the event any payment of interest on any Note exceeds the Highest Lawful Rate, the Issuing
Entity stipulates that such excess amount will be deemed to have been paid as a result of an error on the part of both the Indenture Trustee, acting on behalf of the Holder of such Note, and the Issuing Entity, and the Holder receiving such excess
payment shall promptly, upon discovery of such error or upon notice thereof from the Issuing Entity or the Indenture Trustee, refund the amount of such excess or, at the option of the Indenture Trustee, apply the excess to the payment of principal
of such Note, if any, remaining unpaid. In addition, all sums paid or agreed to be paid to the Indenture Trustee for the benefit of Holders of Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be
amortized, prorated, allocated and spread throughout the full term of such Notes. 
  

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 Section 11.20. Note Insurer Default. Any right conferred to the Note Insurer shall be
suspended during any period in which a Note Insurer Default exists other than its right to receive Reimbursement Amounts and to consent to amendments. At such time as the Notes are no longer Outstanding under this Indenture, and no amounts owed to
the Note Insurer under the Basic Documents remain unpaid, the Note Insurer’s rights under this Indenture shall terminate. 
 Section 11.21. Third-Party Beneficiary. The Note Insurer is intended as a third-party beneficiary of this Indenture which shall be binding upon and inure to the benefit of the Note Insurer; provided, that, notwithstanding the
foregoing, for so long as a Note Insurer Default is continuing with respect to its obligations under the Note Insurance Policy, the Noteholders, subject to Section 11.20, shall succeed to the Note Insurer’s rights hereunder. Without
limiting the generality of the foregoing, all covenants and agreements in this Indenture that expressly confer rights upon the Note Insurer shall be for the benefit of and run directly to the Note Insurer, and the Note Insurer shall be entitled to
rely on and enforce such covenants to the same extent as if it were a party to this Indenture. 
 [Remainder of Page Intentionally Left Blank]

  

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

					
	 NOVASTAR MORTGAGE FUNDING TRUST 200[    ]-[    ]

		
	 By:
	 	 [                                      
                                     
 ],

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

		 	 Name:

		 	 Title:

	
	 [                                      
                              ],

	 as Indenture Trustee

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 [Signature page to Indenture] 
  

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

 “Authenticating Agent”: The Person, if any, appointed as Authenticating Agent by the
Owner Trustee on behalf of the Issuing Entity, acting at the direction of the Certificateholders, pursuant to Section 6.14 of the Indenture, until any successor Authenticating Agent for the Notes is named, and thereafter “Authenticating
Agent” shall mean such successor. The initial Authenticating Agent shall be the Indenture Trustee. Any Authenticating Agent other than the Indenture Trustee shall sign an instrument under which it agrees to be bound by all of the terms of this
Indenture applicable to the Authenticating Agent. 
 “Authorized Denominations”: Each Class of Notes is issuable only in the
minimum Percentage Interest corresponding to a minimum denomination of $25,000 or integral multiples of $1,000 in excess thereof; provided, however, that one Note of each Class is issuable in a denomination equal to any such multiple
plus an additional amount such that the aggregate denomination of all Notes of such Class shall be equal to the Original Note Principal Balance of such Class, and further provided that the underwriter will only sell offered notes to initial
investors in minimum total investment amounts of $100,000. 
 “Authorized Officer”: With respect to (i) the Indenture
Trustee, any Responsible Officer, (ii) the Owner Trustee, the president, any vice president, any assistant vice president, the secretary, any assistant secretary, the treasurer, any assistant treasurer, any trust officer, any financial services
officer or any other officer of the Owner Trustee customarily performing functions similar to those performed by the above officers and (iii) any other Person, the chairman, chief operating officer, president or any vice president of such
Person. 
 “Available Funds”: With respect to any Payment Date and either Group, the amount to be on deposit in the related
Payment Account on such Payment Date less any payments in respect of the indemnification and other expenses (subject to Section 6.16 of the Indenture) due to the Indenture Trustee pursuant to the Indenture or the Sale and Servicing Agreement,
in each case with respect to the related Group (excluding the amount of any Insured Amounts and prior to the application of such amounts as described in Section 8.02 of the Indenture for such Payment Date) as a result of: 
 (i) the Servicer Remittance Amount for the related Group received by the Indenture Trustee from the Servicer on the Servicer Remittance
Date pursuant to the Sale and Servicing Agreement, 
 (ii) any other funds from any deposits for such Group to be made by the
Servicer pursuant to the Sale and Servicing Agreement, 
 (iii) the Termination Price received from the Depositor on the
Clean-up Call Date pursuant to Section 10.01 of the Indenture, 
 (iv) on each Payment Date, in accordance with the
Indenture Trustee’s Remittance Report, (A) until the Shortfall Amount for the related Class is paid in full, and (B) until the amount specified in clause (vi) of Section 8.02 of the Indenture for such Class is paid in full,
in each case, first, from the Payment Account relating to the other Class of Notes, to the extent of the Net Monthly Excess Cashflow from the Loan Group relating to the other Class of Notes [and second, from each sub-account of the
Reserve 
  

 A-2 

 Account, an amount equal to the product of (A) a fraction, the numerator of which is the amount on
deposit in such sub-account of the Reserve Account and the denominator of which is the aggregate amount on deposit in the Reserve Account and (B) the Shortfall Amount after giving effect to Section 8.01(a)(vi)(B) first of the
Indenture; 
 (v) on each Payment Date, from each sub-account of the Reserve Account, an amount equal to the product of
(A) a fraction, the numerator of which is the amount on deposit in each such sub-account of the Reserve Account and the denominator of which is the aggregate amount on deposit in the Reserve Account and (B) the Reserve Account Release
Amount, and 
 (vi) all other amounts for such Group received for deposit in such Payment Account, including the payment of
any Loan Repurchase Price or Substitution Adjustment for a Mortgage Loan in such Group received by the Indenture Trustee. 
 For purposes of calculating the Available Funds, any Loan Repurchase Price or Substitution Adjustment that is paid shall be deemed deposited in the Payment Account in the Due Period preceding such Servicer Remittance Date. 
 “Available Funds Cap Carry-Forward Amount” means, with respect to (i) the Class A-1 Notes, the Class A-1 Available Funds
Cap Carry-Forward Amount and (ii) the Class A-2 Notes, the Class A-2 Available Funds Cap Carry-Forward Amount. 
 “Balloon Mortgage Loan”: A Mortgage Loan that provides for the payment of the unamortized principal balance of such Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is greater than the preceding
Monthly Payment. 
 “Balloon Payment”: A payment of the unamortized principal balance of a Mortgage Loan in a single payment
at the maturity of such Mortgage Loan that is greater than the preceding Monthly Payment. 
 “Bankruptcy Code”: The
Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended. 
 “Base Principal Payment Amount”: For any
Payment Date and either Class of Notes will be the lesser of: 
 (a) the excess of (x) the sum, as of such Payment Date,
of (A) the Available Funds for the related Group of Mortgage Loans and (B) any Insured Amount with respect to the related Class of Notes over (y) the sum of the Interest Payment Amount for such Group; and 
 (b) the sum, without duplication, of: 
  

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

  

 A-3 

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

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

  

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

  

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

  

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

  

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

  

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

 minus 
  

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

 In no event will the Base Principal Payment Amount for a Group with respect to any Payment Date be (x) less than zero or (y) greater than the
then aggregate outstanding Note Principal Balance of the related Class of Notes. 
 “Basic Documents”: The Indenture, the
Trust Agreement, the Sale and Servicing Agreement, the Insurance Agreement, the Contribution Agreements and Assignment, the Cap Agreements and the Indemnification Agreement. 
  

 A-4 

 “Beneficial Owner”: With respect to a Book-Entry Note, the Person who is the beneficial
owner of such Note as reflected on the books of the Clearing Agency for the Notes or on the books of a Person maintaining an account with such Clearing Agency (as either a Direct Participant or an Indirect Participant, in accordance with the rules
of such Clearing Agency). 
 “Best Efforts”: Efforts determined to be in good faith and reasonably diligent by the Person
performing such efforts, specifically the Issuing Entity or the Servicer or any other agent of the Issuing Entity, as the case may be, in its reasonable discretion. Such efforts do not require the Issuing Entity or the Servicer or any other agent of
the Issuing Entity, as the case may be, to enter into any litigation, arbitration or other legal or quasi-legal proceeding, nor do they require the Issuing Entity or the Servicer or any other agent of the Issuing Entity, as the case may be, to
advance or expend fees or sums of money in addition to those specifically set forth in the Indenture and the Sale and Servicing Agreement. 
 “Book-Entry Notes”: Any Notes registered in the name of the Clearing Agency or its nominee, ownership of which is reflected on the books of the Clearing Agency or on the books of a person maintaining an account with such
Clearing Agency (as either a Direct Participant or an Indirect Participant in accordance with the rules of such Clearing Agency). 
 “Business Day”: Any day other than (i) a Saturday or Sunday or (ii) a day that is either a legal holiday or a day on which the Note Insurer or banking institutions in the State of New York, the State of Delaware,
the State of California, or the state in which the Indenture Trustee’s office from which payments will be made to Noteholders, are authorized or obligated by law, regulation or executive order to be closed. 
 “Cap Agreements”: Each of the interest rate cap agreements, dated as of [DATE], between the Indenture Trustee, in its capacity as
indenture trustee, and the Cap Counterparty. 
 “Cap Counterparty”:
[                    ], a
[                    ]. 
 “CERCLA”: The Comprehensive Environmental Response, Compensation and Liability Act of 1980. 
 “Certificates”: Each Trust Certificate issued pursuant to the Trust Agreement and which represents ownership in the Issuing Entity. 
 “Class”: Each class of Notes designated as the Class A-1 Notes and the Class A-2 Notes. 
 “Class A-1 Available Funds Cap Carry-Forward Amount”: With respect to the Class A-1 Notes and any Payment Date, the sum of 
 (a) the excess, if any, of (x) the Current Interest for the Class A-1 Notes calculated at the Class A-1 Formula Rate over (y) the Current Interest for the Class A-1 Notes calculated at the
Class A-1 Available Funds Cap Rate, in each case as of such Payment Date, and 
  

 A-5 

 (b) the Class A-1 Available Funds Cap Carry-Forward Amount for the previous Payment Date not
previously paid, together with interest thereon at the Class A-1 Formula Rate for the most recently ended Accrual Period. 
 “Class A-1 Available Funds Cap Rate”: For any Payment Date, a per annum rate equal to the product of (1) the excess of (A) a fraction, expressed as a percentage, equal to (i) the product of (a) the
mortgage interest due with respect to the Mortgage Loans in Group I for that Payment Date, less the Note Insurer Premium and Servicing Fees allocated to Group I and (b) 12, divided by (ii) the Principal Balance of the Class A-1 Notes
as of the first day of the related Accrual Period, over (B) 0.25% and (2) a fraction, expressed as a percentage, the numerator of which is 30 and the denominator of which is the number of days in the related Accrual Period. 
 “Class A-1 Base Principal Payment Amount”: The Base Principal Payment Amount for the Class A-1 Notes. 
 “Class A-1 Carry-Forward Amount”: For any Payment Date, the sum of (a) the amount, if any, by which (x) the Class A-1
Interest Payment Amount as of the immediately preceding Payment Date exceeded (y) the amount of interest actually paid to the holders of the Class A-1 Notes on such immediately preceding Payment Date (including from amounts paid by the
Note Insurer) and (b) interest for the actual number of days in the related Accrual Period on the amount described in clause (a), calculated at an interest rate equal to the Class A-1 Formula Rate applicable to the related Accrual Period.

 “Class A-1 Formula Rate”: A per annum rate equal to the lesser of (i) LIBOR plus
[        ]% per annum; provided, that, on any Payment Date after the Clean-up Call Date, such rate will be equal to LIBOR plus [        ]% per annum
and (ii) [        ]%. 
 “Class A-1 Interest Payment Amount”: For any
Payment Date is an amount equal to the Current Interest for the Class A-1 Notes on such Payment Date, plus the Class A-1 Carry-Forward Amount as of such Payment Date. 
 “Class A-1 Interest Remittance Amount”: With respect to the Class A-1 Notes for any Payment Date, the portion of the Interest
Remittance Amount that was collected or advanced on Loan Group I. 
 “Class A-1 Net Interest Amount”: With respect to the
Class A-1 Notes and for any Payment Date, the Class A-1 Interest Remittance Amount minus the Class A-1 Notes’ pro rata share of the Administrative Fees and Premium (based on the Loan Group 1 share of the aggregate Principal
Balance of the Mortgage Loans). 
 “Class A-1 Note”: Any Note designated as a “Class A-1 Note” on the face
thereof, in the form of Exhibit A to the Indenture. The Class A-1 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. 
 “Class A-1 Note Principal Balance”: As of any date of determination, the Original Note Principal Balance of the Class A-1 Notes
less any amounts actually paid with respect to principal thereon on all prior Payment Dates. 
  

 A-6 

 “Class A-1 Note Rate”: With respect to any Payment Date, the per annum rate equal to the
lesser of (i) the Class A-1 Formula Rate and (ii) the Class A-1 Available Funds Cap Rate for such Payment Date. 
 “Class A-2 Available Funds Cap Carry-Forward Amount”: With respect to the Class A-2 Notes and any Payment Date, the sum of 
 (a) the excess, if any, of (x) the Current Interest for the Class A-2 Notes calculated at the Class A-2 Formula Rate over (y) the Current Interest for the Class A-2 Notes calculated at the
Class A-2 Available Funds Cap Rate, in each case as of such Payment Date, and 
 (b) the Class A-2 Available Funds Cap
Carry-Forward Amount for the previous Payment Date not previously paid, together with interest thereon at the Class A-2 Formula Rate for the most recently ended Accrual Period. 
 “Class A-2 Available Funds Cap Rate”: For any Payment Date, a per annum rate equal to the product of (1) the excess of (A) a
fraction, expressed as a percentage, equal to (i) the product of (a) the mortgage interest due with respect to the Mortgage Loans in Group II for that Payment Date, less the Note Insurer Premium and Servicing Fees allocated to Group II and
(b) 12, divided by (ii) the Principal Balance of the Class A-2 Notes as of the first day of the related Accrual Period, over (B) 0.25% and (2) a fraction, expressed as a percentage, the numerator of which is 30 and the
denominator of which is the number of days in the related Accrual Period. 
 “Class A-2 Base Principal Payment Amount”: The
Base Principal Payment Amount for the Class A-2 Notes. 
 “Class A-2 Carry-Forward Amount”: For any Payment Date, the
sum of (a) the amount, if any, by which (x) the Class A-2 Interest Payment Amount as of the immediately preceding Payment Date exceeded (y) the amount of interest actually paid to the holders of the Class A-2 Notes on such
immediately preceding Payment Date (including from amounts paid by the Note Insurer) and (b) interest for the actual number of days in the related Accrual Period on the amount described in clause (a), calculated at an interest rate equal to the
Class A-2 Formula Rate applicable to the related Accrual Period. 
 “Class A-2 Formula Rate”: A per annum rate equal to
the lesser of (i) LIBOR plus [        ]% per annum; provided, that, on any Payment Date after the Clean-up Call Date, such rate will be equal to LIBOR plus
[        ]% per annum and (ii) [        ]%. 
 “Class A-2 Interest Payment Amount”: With respect to the Class A-2 Notes for any Payment Date, an amount equal to (a) the Current Interest for the Class A-2 Notes, plus (b) the Class A-2
Carry-Forward Amount remaining unpaid as of such Payment Date. 
 “Class A-2 Interest Remittance Amount”: With respect to
the Class A-2 Notes for any Payment Date, the portion of the Interest Remittance Amount that was collected or advanced on Loan Group II. 
 “Class A-2 Net Interest Amount”: With respect to the Class A-2 Notes and for any Payment Date, the Class A-2 Interest Remittance Amount minus the Class A-2 Notes’ pro rata share of the Administrative
Fees and Premium (based on the Loan Group 2 share of the aggregate Principal Balance of the Mortgage Loans). 
  

 A-7 

 “Class A-2 Available Funds Cap Carry-Forward Amount”: With respect to the Class A-2
Notes and any Payment Date, the sum of (a) the excess of (x) the Current Interest for the Class A-2 Notes calculated at the Class A-2 Formula Rate over (y) the Current Interest for the Class A-2 Notes calculated at the
Class A-2 Available Funds Cap Rate, in each case as of such Payment Date and (b) the amount of any Class A-2 Available Funds Cap Carry-Forward Amount remaining unpaid from any previous Payment Date, with interest thereon at the
Class A-2 Formula Rate. 
 “Class A-2 Note”: Any Note designated as a “Class A-2 Note” on the face thereof,
in the form of Exhibit A to the Indenture. The Class A-2 Notes shall be issued with an initial aggregate Note Principal Balance equal to the Original Note Principal Balance therefor. 
 “Class A-2 Note Principal Balance”: As of any date of determination, the Original Note Principal Balance of the Class A-2 Notes
less any amounts actually paid with respect to principal thereon on all prior Payment Dates. 
 “Class A-2 Note
Rate”: With respect to any Payment Date, the per annum rate equal to the lesser of (i) the Class A-2 Formula Rate and (ii) the Class A-2 Available Funds Cap Rate for such Payment Date. 
 “Clean-Up Call Date”: The first Payment Date on which the aggregate outstanding Principal Balance of both Classes of Notes is equal to
or less than 10% of the sum of (a) the original Aggregate Principal Balance of the Class A-1 Notes and (b) the original Aggregate Principal Balance of the Class A-2 Notes. 
 “Clearing Agency”: An organization registered as a “clearing agency” pursuant to Section 17A of the Securities Exchange
Act of 1934, as amended, and the regulations of the Commission thereunder and shall initially be The Depository Trust Company of New York, the nominee for which is Cede & Co. 
 “Clearing Agency Participants”: The entities for whom the Clearing Agency will maintain book-entry records of ownership and transfer of
Book-Entry Notes, which may include securities brokers and dealers, banks and trust companies and clearing corporations and certain other organizations. 
 “Closing Date”: [DATE]. 
 “Code”: The Internal Revenue Code of 1986, as
amended. 
 “Collection Account”: The Eligible Account established and maintained by the Servicer pursuant to
Section 5.02(b) of the Sale and Servicing Agreement. 
 “Collection Period”: With respect to each Payment Date, the
calendar month preceding the related Payment Date. 
  

 A-8 

 “Commission”: The United States Securities and Exchange Commission. 
 “Compensating Interest”: As defined in Section 6.05 of the Sale and Servicing Agreement. 
 “Contribution Agreements and Assignment”: Shall mean collectively the Contribution Agreement and Assignment, dated as of [DATE], between
the Sponsor and the Depositor. 
 “Corporate Trust Office”: With respect to (y) the Indenture Trustee, the principal
office of the Indenture Trustee at which at any particular time its corporate trust business shall be principally administered, which office at the date of the execution of the Basic Documents is located at:
[                    ], Attention:
[                    ], where it conducts its trust administration services; and (z) the Owner Trustee, the office of the Owner Trustee
at which at any particular time its corporate trust business shall be administered, which office at the date of the execution of the Basic Documents is located at
[                    ], Attention:
[                    ]. 
 “Credit Enhancement Amount”: With respect to any Payment Date, the sum of (a) the aggregate Overcollateralization Amount of Group 1 and Group 2 for such Payment Date (after taking into account any Overcollateralization
Increase Amount) [and (b) the amount on deposit in the Reserve Account after giving effect to any deposit to or withdrawal (not related to the Reserve Account Release Amount) of funds from the Reserve Account on such Payment Date]. 

“Cumulative Loan Loss Percentage”: As of any Payment Date, a fraction, the numerator of which is the sum of all Liquidated Loan
Losses which have occurred between the Cut-Off Date and the last day of the immediately preceding month and the denominator of which is the Cut-off Date Aggregate Principal Balance of the Mortgage Loans. 
 “Current Interest”: With respect to either Class of Notes and any Payment Date, the interest accrued during the related Accrual Period
at the related Note Rate on the related Note Principal Balance as of such Payment Date (and prior to making any payments on such Payment Date) reduced by the sum of Relief Act Interest Shortfalls and Net Prepayment Interest Shortfalls, in each case,
related to the Mortgage Loans in the related Group. 
 “Curtailment”: With respect to a Mortgage Loan, any payment of
principal received in advance of its Monthly Payment and which is not accompanied by an amount as to interest representing scheduled interest due on any date or dates in any month or months subsequent to the month of prepayment. 
 “Cut-Off Date”: With respect to the mortgage loans originated on or before [DATE], the close of business on [DATE]. With respect to the
mortgage loans originated after [DATE], the origination date of such mortgage loan. 
 “Cut-Off Date Aggregate Principal
Balance”: With respect to each Loan Group or both Loan Groups, the aggregate of the Cut-Off Date Principal Balance of the Mortgage Loans in such Loan Group or both Loan Groups, as required by the context. The Cut-Off Date 
  

 A-9 

 Aggregate Principal Balance of the Mortgage Loans for the Issuing Entity is
$[                    ]. The Cut-Off Date Aggregate Principal Balance for the Mortgage Loans in Loan Group 1 and Loan Group 2 is
$[                    ]and
$[                    ]. 
 “Cut-Off Date Principal Balance”: Means as to any Mortgage Loan, the unpaid principal balance of such Mortgage Loan as of the related Cut-Off Date as specified in the amortization schedule at the time relating thereto
(before any adjustment to such amortization schedule by reason of any moratorium or similar waiver or grace period) (or, with respect to Mortgage Loans which were originated after the Cut-Off Date, as of the date of origination) and after giving
effect to any previous Curtailments and Liquidation Proceeds allocable to principal (other than with respect to any Liquidated Mortgage Loan), irrespective of any delinquency in payment by the related Mortgagor. 
 “Debt Service Reduction”: With respect to any Mortgage Loan, a reduction by a court of competent jurisdiction of the Monthly Payment due
on such Mortgage Loan in a proceeding under the Bankruptcy Code, except such a reduction that constitutes a Deficient Valuation or a permanent forgiveness of principal. 
 “Default”: Any occurrence that is, or with notice or the lapse of time or both would become, an Event of Default. 
 “Deficient Valuation”: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding Principal
Balance of the Mortgage Loan, or that results in a permanent forgiveness of principal, which valuation in either case results from a proceeding initiated under the Bankruptcy Code. 
 “Definitive Notes”: Notes other than Book-Entry Notes. 
 “Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan. 
 “Delinquency Advance”: The aggregate of the advances required to be made by the Servicer on any Servicer Remittance Date pursuant to Section 5.18 of the Sale and Servicing Agreement, the amount
of any such advances being equal to the sum of: 
 (i) with respect to each Mortgage Loan, other than an REO Mortgage Loan, that was
Delinquent as of the close of business on the last day of the Due Period preceding the related Servicer Remittance Date, the aggregate amount of Monthly Payments (with interest thereon calculated at the Mortgage Interest Rate (or at such lower rate
as may be in effect for such Mortgage Loan pursuant to application of the Relief Act, any Deficient Valuation and/or any Debt Service Reduction), net of the related Servicing Fee) due during the related Due Period, and 
 (ii) with respect to each REO Property which was acquired during or prior to the related Collection Period and as to which an REO Disposition did not
occur during the related Collection Period, an amount equal to the excess, if any, of (i) interest on the Principal Balance of the related REO Mortgage Loan at the Mortgage Interest Rate (or at such lower rate as may be in effect for such
Mortgage Loan pursuant to application of the Relief Act, any Deficient 
  

 A-10 

 Valuation and/or any Debt Service Reduction) for such REO Mortgage Loan net of the related Servicing Fee, for the most
recently ended Due Period over (ii) the Net REO Proceeds transferred to the Payment Account for such Payment Date; 
 provided, however,
that in each such case such advance has not been determined by the Servicer to be a Nonrecoverable Advance. For purposes of the preceding sentence, the Monthly Payment on each Balloon Mortgage Loan with a delinquent Balloon Payment is equal to the
assumed monthly payment that would have been due on the related Due Date based on the original principal amortization schedule for such Balloon Mortgage Loan. 
 “Delinquency Ratio”: With respect to any Payment Date, the percentage equivalent of a fraction (a) the numerator of which equals the Aggregate Principal Balances of all Mortgage Loans that are
sixty (60) or more days Delinquent (whether or not such Mortgage Loans are in bankruptcy), in foreclosure or converted to REO Property as of the close of business on the last day of such Due Period and (b) the denominator of which is the
Aggregate Principal Balance of the Mortgage Loans as of the close of business on the last day of such Due Period. 
 “Delinquent”: A Mortgage Loan is “delinquent” if any payment due thereon is not made by the close of business on the day such payment is scheduled to be due. A Mortgage Loan is “30 days delinquent” if
such payment has not been received by the close of business on the corresponding day of the month immediately succeeding the month in which such payment was due, or, if there is no such corresponding day (e.g., as when a 30-day month follows
a 31-day month in which a payment was due on the 31st day of such month) then on the last day of such immediately succeeding month. Similarly for “60 days delinquent,” “90 days delinquent” and so on. 
 “Delivery”: When used with respect to Permitted Investments means: 
 (a) with respect to bankers’ acceptances, commercial paper, negotiable certificates of deposit and other obligations that constitute
“instruments” within the meaning of Section 9-102(a)(47) of the Uniform Commercial Code and are susceptible of physical delivery (except with respect to Permitted Investments consisting of certificated securities
(as defined in Section 8-102(a)(4) of the Uniform Commercial Code)), physical delivery to the Indenture Trustee or its custodian endorsed to the Indenture Trustee or its custodian or endorsed in blank; 
 (b) with respect to a certificated security (as defined in Section 8-102(a)(4) of the Uniform Commercial Code) (i) delivery of such
certificated security, not containing any evidence of a right or interest inconsistent with the Indenture Trustee’s interest therein, endorsed to, or registered in the name of, the Indenture Trustee or endorsed in blank to a securities
intermediary (as defined in Section 8-102(a)(14) of the Uniform Commercial Code) and the making by such securities intermediary of appropriate entries in its records identifying such certificated securities as credited to the securities account
(as defined in Section 8-501(a) of the Uniform Commercial Code) of the Indenture Trustee, or (ii) by delivery thereof to a “clearing corporation” (as defined in Section 8-102(5) of the Uniform Commercial Code) and the making
by such clearing corporation of appropriate entries in its records crediting the securities account of a securities intermediary by the amount of such certificated security and the making by such securities intermediary of appropriate entries in its
records identifying such certificated securities 
  

 A-11 

 as credited to the securities account of the Indenture Trustee (all Permitted Investments described in subsections
(a) and (b), and “Physical Property”); and, in any event, any such Physical Property in registered form shall be registered in the name of the Indenture Trustee or its nominee or custodian; and such additional or alternative
procedures as may hereafter become appropriate to effect the complete transfer of ownership of any such Permitted Investments to the Indenture Trustee or its nominee or custodian, consistent with then applicable law or regulations or the
interpretation thereof; and 
 (c) with respect to any security issued by the U.S. Treasury, Fannie Mae or Freddie Mac that is a book-entry
security held through the Federal Reserve System pursuant to federal book-entry regulations, the following procedures, all in accordance with applicable law, including applicable federal regulations and Articles 8 and 9 of the Uniform Commercial
Code: the making by a Federal Reserve Bank of an appropriate entry crediting such Permitted Investment to an account of a securities intermediary that is also a “participant” pursuant to applicable federal regulations; the making by such
securities intermediary of appropriate entries in its records crediting such book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations and Articles 8 and 9 of the Uniform Commercial Code to the securities
account of the Indenture Trustee; and such additional or alternative procedures as may hereafter become appropriate to effect complete transfer of ownership of any such Permitted Investments to the Indenture Trustee or its nominee or custodian,
consistent with then applicable law or regulations or the interpretation thereof. 
 “Depositor”: [NovaStar Mortgage Funding
Corporation, a Delaware corporation][NovaStar Certificates Financing LLC, a Delaware limited liability company]. 
 “Direct
Participant”: Any broker-dealer, bank or other financial institution for which the Clearing Agency holds Notes from time to time as a securities depositary. 
 [“Dominion”: Dominion Bond Rating Service, Inc., a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the
services of a securities rating agency, “Dominion” shall be deemed to refer to any other nationally recognized rating agency.] 
 “Due Date”: With respect to any Mortgage Loan and any Monthly Payment, the date on which such Monthly Payment is due from the related Mortgagor. 
 “Due for Payment”: With respect to (i) an Insured Amount, the Payment Date on which Insured Amounts are due and payable pursuant to the terms of the Indenture and (ii) a Preference Amount,
the Business Day on which the documentation required by the Note Insurer has been received by the Note Insurer. 
 “Due
Period”: With respect to any Payment Date, the period commencing on the second day of the month preceding the month in which such Payment Date occurs and ending on the first day of the month in which such Payment Date occurs. 
 “Eligible Account”: Either (A) an account or accounts (including any sub-account or sub-accounts) maintained with an institution
(which may include the Indenture Trustee; provided, that the Indenture Trustee otherwise meets these requirements) whose 
  

 A-12 

 deposits are insured by the FDIC, the unsecured and uncollateralized debt obligations of which institution shall be rated
“AA” or better by S&P and “Aa2” or better by Moody’s and in the highest short term rating by S&P and Moody’s, and which is (i) a federal savings and loan association duly organized, validly existing and in
good standing under the federal banking laws, (ii) an institution (including the Indenture Trustee) duly organized, validly existing and in good standing under the applicable banking laws of any state, (iii) a national banking association
duly organized, validly existing and in good standing under the federal banking laws, (iv) a principal subsidiary of a bank holding company, or (v) approved in writing by the Note Insurer and the Rating Agencies or (B) a trust account
or accounts maintained with the trust department of a federal or state chartered depository institution or trust company (which may include the Indenture Trustee; provided, that the Indenture Trustee otherwise meets these requirements),
having capital and surplus of not less than $50,000,000, acting in its fiduciary capacity. 
 “ERISA”: The Employee
Retirement Income Security Act of 1974, as amended. 
 “Event of Default”: As defined in Section 5.01 of the Indenture.

 “Excess Overcollateralization Amount”: With respect to each Group of Mortgage Loans and any Payment Date, the excess, if
any, of (a) the Overcollateralization Amount that would apply to that Group on such Payment Date after giving effect to the payment of the Base Principal Payment Amount for such Group calculated without reduction for any Overcollateralization
Reduction Amounts, over (b) the Specified Overcollateralization Amount for such Group. 
 “Excess Spread”: With respect
to any Payment Date and each Loan Group, an amount equal to the excess of (A) the sum of (x) the product of (i) the aggregate Principal Balances of Mortgage Loans as of the first day of the immediately preceding Collection Period and
(ii) one-twelfth of the weighted average Mortgage Interest Rate for the Mortgage Loans, as the case may be, as of the first day of the related Collection Period to the extent that interest payments that are due during the related Collection
Period are either received or advanced and (y) any Prepayment Charges collected during the related Prepayment Period over (B) the sum of (i) the aggregate Interest Payment Amount for the related Class of Notes for such Payment Date
and (ii) the sum of the Servicing Fee and the Premium in each case for the Mortgage Loans in such Loan Group with respect to such Payment Date. 
 “Exchange Act”: Means the Securities Exchange Act of 1934, as amended. 
 “Fannie
Mae”: Fannie Mae, formerly known as, The Federal National Mortgage Association, and any successor thereto. 
 “FDIC”: The Federal Deposit Insurance Corporation, and any successor thereto. 
 “Final
Certification”: A certification as to the completeness of each Indenture Trustee’s Mortgage File prepared by the Indenture Trustee, and provided by the Indenture Trustee within one hundred eighty (180) days of the Closing Date
pursuant to Section 2.06(b)(iii) of the Sale and Servicing Agreement. 
 “Final Stated Maturity Date”: The Payment Date
occurring in [MO/YR]. 
  

 A-13 

 “Foreclosure Profits”: As to any Payment Date, the excess, if any, of (i) Net
Liquidation Proceeds in respect of each Mortgage Loan that became a Liquidated Mortgage Loan during the Collection Period immediately preceding such Payment Date over (ii) the sum of the unpaid Principal Balance of each such Liquidated Mortgage
Loan plus accrued and unpaid interest at the applicable Mortgage Interest Rate on the unpaid Principal Balance thereof from the Due Date on which interest was last paid by the Mortgagor (or, in the case of a Liquidated Mortgage Loan that had been an
REO Mortgage Loan, from the Due Date on which interest was last deemed to have been paid pursuant to Section 5.06 of the Sale and Servicing Agreement) to the next succeeding Due Date following the date such Loan became a Liquidated Mortgage
Loan, plus any amounts required by applicable law to be paid to the related Mortgagors. 
 “Formula Rate”: With respect to
the Class A-1 Notes, the Class A-1 Formula Rate and with respect to the Class A-2 Notes, the Class A-2 Formula Rate. 
 “Freddie Mac”: Freddie Mac, formerly known as The Federal Home Loan Mortgage Corporation, and any successor thereto. 
 “GAAP”: Generally accepted accounting principles, consistently applied. 
 “Governmental Plan”: A
governmental plan within the meaning of Section 3(32) of ERISA. 
 “Grant”: To assign, transfer, mortgage, pledge,
create and grant a security interest in, deposit, set-over and confirm. A Grant of a Mortgage Loan and the related Mortgage Files, a Permitted Investment, the Sale and Servicing Agreement, or any other instrument shall include all rights, powers and
options (but none of the obligations) of the Granting party thereunder, including, without limitation, the immediate and continuing right to claim for, collect, receive and give receipts for principal and interest payments thereunder, Insurance
Proceeds, Loan Repurchase Prices and all other moneys payable thereunder and all proceeds thereof, to give and receive notices and other communications, to make waivers or other agreements, to exercise all rights and options, to bring Proceedings in
the name of the Granting party or otherwise, and generally to do and receive anything that the Granting party is or may be entitled to do or receive thereunder or with respect thereto. 
 “Group”: With respect to the Notes, either Group 1 or Group 2, as the context requires. With respect to the Mortgage Loans, either Loan
Group 1 or Loan Group 2, as the context requires. 
 “Group 1”: With respect to the Notes, the Class A-1 Notes. The
related Loan Group for Group 1 is Loan Group 1. 
 “Group 2”: With respect to the Notes, the Class A-2 Notes. The
related Loan Group for Group 2 is Loan Group 2. 
 “Highest Lawful Rate”: As defined in Section 11.19 of the Indenture.

  

 A-14 

 “Indemnification Agreement”: The Indemnification Agreement dated as of [DATE], among the
Note Insurer and the Underwriters, as such agreement may be amended or supplemented in accordance with the provisions thereof. 
 “Indenture”: The Indenture, dated as of [DATE], between the Issuing Entity and the Indenture Trustee, relating to the issuance of the Notes. 
 “Indenture Trustee”: [            ], a [            ], or its
successor-in-interest, or any successor Indenture Trustee appointed as provided for in Section 6.09 of the Indenture. 
 “Indenture Trustee Fee”: As to any Payment Date, the fee payable to the Indenture Trustee in respect of its services as Indenture Trustee pursuant to Section 6.16 of the Indenture as set forth in a separate fee
agreement. 
 “Indenture Trustee’s Mortgage File”: The documents delivered to the Indenture Trustee, pursuant to
Section 2.05 of the Sale and Servicing Agreement. 
 “Indenture Trustee’s Remittance Report”: The statement
prepared pursuant to Section 2.08(d) of the Indenture, containing the following information with respect to each Class: 
 (a) the amount
of the payment with respect to each Class of Notes and Certificates; 
 (b) the amount of such payments allocable to principal, separately
identifying the aggregate amount of any Principal Prepayments or other unscheduled recoveries of principal included therein and separately identifying any Overcollateralization Increase Amounts for each Group; 
 (c) the amount of such payments allocable to interest and the calculation thereof; 
 (d) the Class A-1 Carry Forward Amount, the Class A-2 Carry Forward Amount and the Available Funds Cap Carry-Forward Amount [(both covered and
not covered from the Reserve Account for that Payment Date)]; 
 (e) the Note Principal Balance of each Class of Notes as of such Payment
Date, together with the Note Principal Balance of each Class of Notes (based on a Note in an original Note Principal Balance of $1,000) then outstanding, in each case after giving effect to any payment of principal on such Payment Date; 

(f) the amount of any Insured Amounts included in the amounts paid to the Noteholders on such Payment Date; 
 (g) the total of any Substitution Adjustments and any Loan Repurchase Price amounts included in such payment; 
  

 A-15 

 (h) the amounts, if any, of any Liquidated Loan Losses for the related Collection Period and cumulative
Liquidated Loan Losses since the Closing Date; 
 (i) LIBOR for such Payment Date; 
 (j) the aggregate Stated Principal Balance of the Mortgage Loans for the following Payment Date; 
 (k) the amount of the aggregate Servicing Fees paid to or retained by the Servicer with respect to such Payment Date; 
 (l) for each of the preceding 12 calendar months, or all calendar months since the related Cut-off Date, whichever is less, the aggregate dollar amount
of the Scheduled Payments (A) due on all outstanding Mortgage Loans on each of the Due Dates in each such month and (B) delinquent 60 days or more on each of the Due Dates in each such month; 
 (m) whether a Step-Up Test Event has occurred and is continuing (including the calculation of thereof and the related Rolling Three Month Delinquency
Ratio); 
 (n) [the amount on deposit in the Reserve Account (after giving effect to distributions on such Payment Date);] 
 (o) the Overcollateralization Amount and Specified Overcollateralization Amount; 
 (p) Prepayment Charges collected and paid by the Servicer; and 
 (q) the Interest Rate Cap Payments, if any, for such Payment Date. 
 Items (a), (b) and (c) above
shall, with respect to each Class of Notes, be presented on the basis of a Note having a $1,000 denomination. 
 “Independent”: When used with respect to any specified Person, means such a Person who (i) is in fact independent of the Issuing Entity and any other obligor upon the Notes, (ii) does not have any direct financial
interest or any material indirect financial interest in the Issuing Entity or in any such other obligor or in an Affiliate of the Issuing Entity or such other obligor, and (iii) is not connected with the Issuing Entity or any such other obligor
as an officer, employee, promoter, underwriter, trustee, partner, director or person performing similar functions. Whenever it is herein provided that any Independent Person’s opinion or certificate shall be furnished to the Indenture Trustee,
such Person shall be appointed by a Trust Order and such opinion or certificate shall state that the signer has read this definition and that the signer is Independent within the meaning hereof. 
 “Indirect Participant”: Any financial institution for whom any Direct Participant holds an interest in a Note. 
 “Individual Note”: A Note of an Original Note Principal Balance of $25,000; a Note of an Original Note Principal Balance in excess of
$25,000 shall be deemed to be a number of Individual Notes equal to the quotient obtained by dividing such Original Note Principal Balance amount by $25,000. 
  

 A-16 

 “Initial Certification”: A certification as to the completeness of each Indenture
Trustee’s Mortgage File prepared by the Indenture Trustee, and provided by the Indenture Trustee within sixty (60) days of the Closing Date pursuant to Section 2.06(b)(ii) of the Sale and Servicing Agreement. 
 “Insurance Agreement”: The Insurance and Indemnity Agreement dated as of [DATE] among the Depositor, the Indenture Trustee, the Note
Insurer, the Sponsor, the Servicer and the Issuing Entity as such agreement may be amended or supplemented in accordance with the provisions thereof. 
 “Insurance Proceeds”: Proceeds paid by any insurer pursuant to any insurance policy covering a Mortgage Loan to the extent such proceeds are not applied to the restoration of the related Mortgaged
Property or released to the related Mortgagor in accordance with the express requirements of law or in accordance with prudent and customary servicing practices. “Insurance Proceeds” do not include “Insured Amounts.” 

“Insured Amounts”: With respect to any Payment Date and the Notes, the sum of (i) any Insured Interest Payment for such Payment
Date and (ii) any Insured Principal Payment for such Payment Date. 
 “Insured Interest Payment”: With respect to any
Payment Date and the Notes, the excess, if any, of Required Interest Distributions over the Available Funds then remaining in accordance with the priority of payments for the related Group for such Payment Date. 
 “Insured Payments”: The aggregate amount actually paid by the Note Insurer to the Indenture Trustee in respect of (i) Insured
Amounts for a Payment Date and (ii) Preference Amounts for any given Business Day. 
 “Insured Principal Payment”:
(i) for any Payment Date prior to the Payment Date occurring in July 2034, the Remaining Overcollateralization Deficit allocable to the Notes, if any, for such Payment Date and (ii) with respect to the Payment Date occurring in July 2034,
the outstanding Note Principal Balance of such Class of Notes (after giving effect to all distributions to be made thereon on such Payment Date other than any portion thereof consisting of an Insured Principal Payment). 
 “Interest Determination Date”: With respect to any Accrual Period for the Class A-1 Notes or Class A-2 Notes, the second
London Business Day prior to the immediately preceding Payment Date; provided, however, that with respect to the [MO/YR] Payment Date, the Interest Determination Date shall be [DATE]. 
 “Interest Payment Amount”: The Class A-1 Interest Payment Amount or Class A-2 Interest Payment Amount, as applicable.

 “Interest Reduction Carryforward Amount”: For any Payment Date and with respect to a Class of Notes, the amount, if any,
by which the related Interest Payment Amount for 
  

 A-17 

 such Payment Date was reduced by the sum of any Relief Act Interest Shortfalls and Net Prepayment Interest Shortfalls, in
each case, related to the Mortgage Loans in the related Group. To the extent that an Interest Reduction Carryforward Amount remains unpaid on a Payment Date, any such remaining amount will be carried forward and interest shall accrue thereon for the
actual number of days in the related Accrual Period on such unpaid amount, and such interest will be calculated at an interest rate equal to the related Formula Rate applicable to the related Accrual Period. 
 “Interest Remittance Amount”: As of any Payment Date and any Group, is an amount equal to (1) the product of (x) 1/12 of the
Weighted Average Mortgage Interest Rate of the related Group as of the beginning of the prior Collection Period and (y) the Principal Balance related to that Group as of the beginning of the prior Collection Period minus (2) the aggregate
amount of Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such Group for the prior period. 
 “Issuing
Entity”: NovaStar Mortgage Funding Trust 200[    ]-[    ], a Delaware statutory trust. 
 “Late Payment Rate”: Has the meaning ascribed thereto in the Insurance Agreement. 
 “Letter Agreement”: The Letter of Representations to the Clearing Agency from the Indenture Trustee and the Issuing Entity dated [DATE]. 
 “LIBOR”: With respect to any Accrual Period, the rate determined by the Indenture Trustee on the related Interest Determination Date on the basis of the posted rate U.S. dollar deposits for one month
which appears on Telerate Page 3750, as of 11:00 a.m. (London time) on such Interest Determination Date. If no such posted rate appears, LIBOR will be determined on the basis of the offered quotation of the Reference Banks for U.S. dollar deposits
for one month to prime banks in the London interbank market as of 11:00 a.m. London time, on such date. If fewer than two Reference Banks provide such offered quotations on that date, LIBOR will be calculated as the offered rate which one or more
leading banks in The City of New York selected by the Indenture Trustee (after consultation with the Servicer) are quoting as of 11:00 a.m., New York City time, on such date to leading European banks for U.S. dollar deposits for one month;
provided, however, that if such banks are not quoting as described above, LIBOR will be equal to the value calculated for the immediately preceding Accrual Period. 
 In any event, LIBOR is calculated as the arithmetic mean (rounded, if necessary, to the nearest 1/100th of a percent (0.0001), with upwards rounding of amounts equal to or in excess of 5/1,000th of a percent (0.00005) of all such quotations. 
 “Liquidated Loan Loss”: With respect to any Payment Date, the aggregate of the amount of losses with respect to each Mortgage Loan which became a Liquidated Mortgage Loan on or prior to the last day of the calendar month
preceding such Payment Date, equal to the excess of (i) the unpaid Principal Balance of each such Liquidated Mortgage Loan, plus accrued interest thereon in accordance with the amortization schedule at the time applicable thereto at the

  

 A-18 

 applicable Mortgage Interest Rate from the Due Date as to which interest was last paid with respect thereto through the
next succeeding Due Date following the date such Loan became a Liquidated Mortgage Loan, over (ii) Net Liquidation Proceeds with respect to such Liquidated Mortgage Loan. 
 “Liquidated Mortgage Loan”: A Mortgage Loan with respect to which the related Mortgaged Property has been acquired, liquidated or
foreclosed and with respect to which the Servicer determines that all Liquidation Proceeds which it expects to recover have been recovered and for which the Servicer has so designated on its Servicer Remittance Report. 
 “Liquidation Expenses”: Expenses incurred by the Servicer in connection with the liquidation of any defaulted Mortgage Loan or property
acquired in respect thereof (including, without limitation, legal fees and expenses, committee or referee fees, and, if applicable, brokerage commissions and conveyance taxes), any unreimbursed amount expended by the Servicer pursuant to Sections
5.04 and 5.06 of the Sale and Servicing Agreement respecting the related Mortgage Loan and any unreimbursed expenditures for real property taxes or for property restoration or preservation of the related Mortgaged Property. Liquidation Expenses
shall not include any previously incurred expenses in respect of an REO Mortgage Loan which have been netted against related REO Proceeds. 
 “Liquidation Proceeds”: The amount received by the Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the
liquidation of a defaulted Mortgage Loan through an Indenture Trustee’s sale, foreclosure sale, REO Disposition or otherwise or (iii) the liquidation of any other security for such Mortgage Loan, including, without limitation, pledged
equipment, inventory and working capital and assignments of rights and interests made by the related Mortgagor. 
 “Loan
Group”: Any of Loan Group 1 or Loan Group 2. 
 “Loan Group 1”: The pool of Mortgage Loans identified in the
Mortgage Loan Schedule for Group 1. 
 “Loan Group 2”: The pool of Mortgage Loans identified in the Mortgage Loan Schedule
for Group 2. 
 “Loan Repurchase Price”: With respect to any Mortgage Loan, the Principal Balance of such Mortgage Loan as
of the date of repurchase, plus the greater of (x) all accrued and unpaid interest thereon and (y) thirty (30) days’ interest thereon, computed, as of the next succeeding Due Date for such repurchased Mortgage Loan, at the
Mortgage Interest Rate, plus the amount of any unreimbursed Delinquency Advances and Servicing Advances made by the Servicer with respect to such Mortgage Loan, plus any costs and damages incurred by the Issuing Entity in connection with any
violation by such mortgage loan of any predatory or abusive lending law, which purchase price shall be deposited in the Collection Account on the next succeeding Servicer Remittance Date, after deducting therefrom any amounts received in respect of
such repurchased Mortgage Loan or Loans and being held in the Collection Account for future payment to the extent such amounts have not yet been applied to principal or interest on such Mortgage Loan. 
  

 A-19 

 “Loan-to-Value Ratio” or “LTV”: With respect to any Mortgage Loan as of
its date of origination, the ratio on such date borne by the original Principal Balance of the Mortgage Loan to the Appraised Value of the related Mortgaged Property. 
 “London Business Day”: A day on which banking institutions in the City of London, England, are not required or authorized to be closed. 
 “Majority Noteholders”: With respect to the Notes, the Holder or Holders of Notes evidencing Percentage Interests in excess of 51% in
the aggregate. With respect to the Class A-1 Notes or Class A-2 Notes, the Holder or Holders of Class A-1 Notes or Class A-2 Notes, as applicable, evidencing Percentage Interests in excess of 51% in the aggregate. 
 “Maximum Collateral Amount”: With respect to each Loan Group or both Loan Groups, the Cut-Off Date Aggregate Principal Balance for the
related Loan Group or both Loan Groups, as required by the context. 
 “MERS”: Mortgage Electronic Registration Systems,
Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto. 
 “MERS
System”: The system of recording transfers of Mortgages electronically maintained by MERS. 
 “MIN: The Mortgage
Identification Number for Mortgage Loans registered with MERS on the MERS System. 
 “MOM Loan”: A Mortgage Loan for which
MERS is acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof. 
 “Monthly Payment”: As to any Mortgage Loan (including any REO Mortgage Loan) and any Due Date, the payment of principal and interest due
thereon as specified for such Due Date in the related amortization schedule at the time applicable thereto (after adjustment for any Curtailments and Deficient Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than Deficient Valuations, or similar proceeding or any moratorium or similar waiver or grace period). 
 [“Moody’s”: Moody’s Investors Service, Inc., a corporation organized and existing under Delaware law, or any successor thereto and if such corporation no longer for any reason performs the
services of a securities rating agency, “Moody’s” shall be deemed to refer to any other nationally recognized rating agency designated by the Note Insurer.] 
 “Mortgage”: The mortgage, deed of trust or other instrument creating a first or second lien on the Mortgaged Property. 
 “Mortgage File”: As described in Exhibit A to the Sale and Servicing Agreement. 
 “Mortgage Interest Rate”: As to any Mortgage Loan, the per annum rate at which interest accrues on the unpaid Principal Balance thereof.

  

 A-20 

 “Mortgage Loan Schedule”: The schedule of Mortgage Loans as of the Cut-Off Date attached
as Schedule I to the Indenture, which will be deemed to be modified automatically to reflect any replacement, sale, substitution, liquidation, transfer or addition of any Mortgage Loan. The Mortgage Loan Schedule sets forth as to each Mortgage Loan:
(i) its identifying number and the name of the related Mortgagor; (ii) the billing address, mailing address and property address for the related Mortgaged Property including the state and zip code; (iii) its date of origination;
(iv) the original number of months to stated maturity; (v) a designation indicating whether or not such Mortgage Loan is a Balloon Loan; (vi) the original Principal Balance; (vii) its Principal Balance as of the applicable
Cut-Off Date and its Cut-Off Date Principal Balance; (viii) the Mortgage Interest Rate and margin; (ix) the scheduled monthly payment of principal and interest; (x) a Group designation; (xi) the LTV; (xii) if the Mortgage
Loan is registered with MERS on the MERS System, the MIN; and (xiii) whether such Mortgage Loan is secured by a first lien on the related Mortgage Property. 
 “Mortgage Loans”: The mortgage loans (together with any Qualified Substitute Mortgage Loans substituted therefor in accordance with the Basic Documents, as from time to time are held as a part of the
Issuing Entity), so being identified in the Mortgage Loan Schedule on the Closing Date. When used in respect of any Payment Date, the term Mortgage Loans shall mean all Mortgage Loans (including those in respect of which the Indenture Trustee has
acquired the related Mortgaged Property) which have not been repaid in full prior to the related Due Period, did not become Liquidated Mortgage Loans prior to such related Due Period or were not repurchased or replaced by the Sponsor prior to such
related Due Period. 
 “Mortgage Note”: The original, executed note or other evidence of any indebtedness of a Mortgagor
under a Mortgage Loan. 
 “Mortgaged Property”: The underlying property or properties securing a Mortgage Loan, consisting
of a fee simple or leasehold interest in one or more parcels of land. 
 “Mortgagor”: The obligor on a Mortgage Note.

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

 A-21 

 “Net Prepayment Interest Shortfalls”: For any Payment Date and either Group of Mortgage
Loans, the amount by which the aggregate Prepayment Interest Shortfalls for such Group during the related Prepayment Period exceeds available Compensating Interest for such Group. 
 “Net REO Proceeds”: As to any REO Mortgage Loan, REO Proceeds net of any related expenses of the Servicer. 
 “Nonpayment”: Means, with respect to any Payment Date, an Insured Amount is Due for Payment but has not been paid pursuant to the
Indenture. 
 “Nonrecoverable Advances”: Means, with respect to any Mortgage Loan, (a) any Delinquency Advance or
Servicing Advance previously made and not reimbursed pursuant to Section 5.03 of the Sale and Servicing Agreement, or (b) a Delinquency Advance proposed to be made in respect of a Mortgage Loan or REO Property either of which, in the good
faith business judgment of the Servicer, as evidenced by an Officer’s Certificate delivered to the Note Insurer and the Indenture Trustee no later than the Business Day following such determination, would not ultimately be recoverable pursuant
to Section 5.03 of the Sale and Servicing Agreement. 
 “Note”: Any Class A-1 Note or Class A-2 Note executed
by the Owner Trustee on behalf of the Issuing Entity and authenticated by the Indenture Trustee. 
 “Noteholder” or
“Holder”: Each Person in whose name a Note is registered in the Note Register, except that, solely for the purposes of giving any consent, waiver, request or demand pursuant to the Indenture, any Note registered in the name of the
Servicer or the Sponsor, or any Affiliate of any of them, shall be deemed not to be outstanding and the undivided Percentage Interest evidenced thereby shall not be taken into account in determining whether the requisite percentage of Notes
necessary to effect any such consent, waiver, request or demand has been obtained. For purposes of any consent, waiver, request or demand of Noteholders pursuant to the Indenture, upon the Indenture Trustee’s request, the Servicer and the
Sponsor shall provide to the Indenture Trustee a notice identifying any of their respective Affiliates that is a Noteholder as of the date(s) specified by the Indenture Trustee in such request. Any Notes on which payments are made under the Note
Insurance Policy shall be deemed to be Outstanding and held by the Note Insurer to the extent of such payment. 
 “Note Insurance
Payment Account”: The Note Insurance Payment Account established in accordance with Section 8.03(c) of the Indenture and maintained by the Indenture Trustee. 
 “Note Insurance Policy”: The financial guarantee insurance policy, number 04030011, and all endorsements thereto dated the Closing Date,
issued by the Note Insurer for the benefit of the Noteholders. 
 “Note Insurer”: Financial Guaranty Insurance Company, a
New York stock insurance corporation, and any successors thereto. 
 “Note Insurer Default”: The existence and continuance
of any of the following: 
 (i) the Note Insurer shall have failed to make a required payment when due under the Note Insurance Policy;

  

 A-22 

 (ii) the Note Insurer shall have (i) filed a petition or commenced any case or proceeding under any
provision or chapter of the Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation, or reorganization, (ii) made a general assignment for the
benefit of its creditors or (iii) had an order for relief entered against it under the Bankruptcy Code, the New York State Insurance Law or any other similar federal or state law relating to insolvency, bankruptcy, rehabilitation, liquidation,
or reorganization that is final and nonappealable; or 
 (iii) a court of competent jurisdiction, the New York Department of Insurance or any
other competent regulatory authority shall have entered a final and nonappealable order, judgment or decree (i) appointing a custodian, indenture trustee, agent, or receiver for the Note Insurer or for all or any material portion of its
property or (ii) authorizing the taking of possession by a custodian, indenture trustee, agent, or receiver of the Note Insurer or of all or any material portion of its property. 
 “Note Principal Balance”: With respect to a Class of Notes on any date of determination, the Class A-1 Note Principal Balance or
the Class A-2 Note Principal Balance. As to any particular Note and date of determination, the product of the Percentage Interest evidenced thereby and the aggregate principal balance of all Notes of the same Class as of such date of
determination. The Certificates do not have a “Note Principal Balance.” 
 “Note Rate”: The Class A-1 Note
Rate or Class A-2 Note Rate, as applicable. 
 “Note Register”: As defined in Section 2.06 of the Indenture.

 “Note Registrar”: As defined in Section 2.06 of the Indenture. 
 “Notice”: The telephonic or telegraphic notice, promptly confirmed in writing by telecopy substantially in the form of Exhibit A to the
Note Insurance Policy, the original of which is subsequently delivered by registered or certified mail, from the Indenture Trustee specifying the Insured Amount or Preference Amount which shall be due and owing on the applicable Payment Date.

 “Officer’s Certificate”: A certificate signed by the chairman of the board, the president or a vice president and
the treasurer, the secretary or one of the assistant treasurers or assistant secretaries of the Sponsor or the Servicer, or, with respect to the Issuing Entity, a certificate signed by a Responsible Officer of the Owner Trustee, at the direction of
the Certificateholders as required by any Basic Document. 
 “Opinion of Counsel”: A written opinion of counsel, who may,
without limitation, be counsel for the Sponsor, the Servicer, the Indenture Trustee, the Owner Trustee, a Noteholder or a Noteholder’s prospective transferee or the Note Insurer (including except as otherwise provided herein, in-house counsel)
reasonably acceptable to each addressee of such opinion and experienced in matters relating to the subject of such opinion. 
  

 A-23 

 “Original Note Principal Balance”: As of the Closing Date and as to the Class A-1 Notes,
$[            ] and as to the Class A-2 Notes, $[            ]. The Certificates do not have an “Original
Note Principal Balance.” 
 “Outstanding”: As of the date of determination, all Notes theretofore authenticated and
delivered under the Indenture except: 
 (i) Definitive Notes theretofore canceled by the Note Registrar or delivered to the Note Registrar
for cancellation; 
 (ii) Notes or portions thereof for whose payment or redemption money in the necessary amount has been theretofore
deposited with the Indenture Trustee in trust for the Holders of such Notes; provided, however, that if such Notes are to be redeemed, notice of such redemption has been duly given pursuant to this Indenture or provision therefor,
satisfactory to the Indenture Trustee, has been made; 
 (iii) Notes in exchange for or in lieu of which other Notes have been authenticated
and delivered pursuant to this Indenture unless proof satisfactory to the Indenture Trustee is presented that any such Notes are held by a bona fide purchaser (as defined by the Uniform Commercial Code of the applicable jurisdiction); and

 (iv) Notes alleged to have been destroyed, lost or stolen that have been paid as provided for in Section 2.07 of the Indenture;

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

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 payment of all principal payments for such Group on such Payment Date, except for any portion thereof related to any
Overcollateralization Increase Amount for such Payment Date); provided, however, that such amount shall not be less than zero. 
 “Overcollateralization Deficiency Amount”: With respect to any Payment Date and either Group, the difference, if greater than zero, between (a) the Specified Overcollateralization Amount for such Group applicable to
such Payment Date and (b) the Overcollateralization Amount for such Group applicable to such Payment Date prior to taking into account the payment of any related Overcollateralization Increase Amount for such Group on such Payment Date.

 “Overcollateralization Deficit”: As of any Payment Date, the amount, if any, by which (a) the aggregate Note
Principal Balance of the Notes, after taking into account the payment of the Base Principal Payment Amount for each Group on such date, but before taking into account any principal payment funded from Net Monthly Excess Cashflow, [the Reserve
Account] or any Insured Principal Payment exceeds (b) the aggregate Stated Principal Balance of the Mortgage Loans determined as of the end of the immediately preceding Prepayment Period. For purposes of determining the amount to be paid on
account of the Overcollateralization Deficit to the Noteholders of each Class of Notes on the Payment Date, the Overcollateralization Deficit will be allocated to each Class pro rata based on the amount by which the Note Principal Balance of
each class on such payment date, after payment of the Base Principal Payment Amount but before taking into account any principal payment funded from Net Monthly Excess Cashflow, [any amounts released from the Reserve Account] or any Insured
Principal Payment, exceeds the aggregate Stated Principal Balance of the Mortgage Loans in the related group as of the end of the immediately preceding Payment Date. 
 “Overcollateralization Increase Amount”: With respect to any Payment Date and either Group, the lesser of: 
 (i) the Overcollateralization Deficiency Amount for such Group as of such Payment Date (after taking into account the payment of the Base Principal Payment Amount for such Group on such Payment Date); and 

(ii) 100% of the amount of Net Monthly Excess Cashflow on such Payment Date. 
 “Overcollateralization Reduction Amount”: With respect to any Payment Date and either Group, the lesser of (a) the Excess
Overcollateralization Amount for such Group and Payment Date and (b) the Base Principal Payment Amount for such group and Payment Date, calculated without reduction for any Overcollateralization Reduction Amounts. 
 “Overcollateralized Percentage”: As to any Payment Date, and with respect to either Loan Group, the percentage equivalent of a fraction,
the numerator of which is the Overcollateralization Amount for such Loan Group as of such Payment Date and the denominator of which is the Aggregate Principal Balance of the Mortgage Loans in such Loan Group as of the end of the related
Collection Period; as to both Loan Groups, the percentage equivalent of a fraction, numerator of which is the Overcollateralization Amounts for both Loan Groups and the denominator of which is the Aggregate Principal Balance of the Mortgage Loans in
both Loan Groups as of the end of the related Collection Period. 
  

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 “Owner-Occupied Mortgaged Property”: A Residential Dwelling as to which (a) the
related Mortgagor represented an intent to occupy as such Mortgagor’s primary residence at the origination of the Mortgage Loan, and (b) the Sponsor has no actual knowledge that such Residential Dwelling is not so occupied. 
 “Ownership Interest”: As to any Note, any ownership or security interest in such Note, including any interest in such Note as the Holder
thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee. 
 “Owner
Trustee”: [            ], a Delaware trust company, not in its individual capacity, but solely as owner trustee under the Trust Agreement, and any successor owner trustee
thereunder. 
 “Owner Trustee Fee”: As defined in Section 9.01 of the Trust Agreement. 
 “Paying Agent”: The Indenture Trustee or any other depository institution or trust company that is authorized by the Issuing Entity
pursuant to Section 3.03 of the Indenture to pay the principal of, or interest on, any Notes on behalf of the Issuing Entity, which agent, if not the Indenture Trustee, shall have signed an instrument agreeing to be bound by the terms of the
Indenture applicable to such Paying Agent. 
 “Payment Account”: With respect to each Class of Notes, the segregated trust
account, which shall be an Eligible Account, established and maintained pursuant to Section 8.01(a) of the Indenture and entitled “[            ]”, as Indenture
Trustee for NovaStar Mortgage Funding Trust 200[  ]-[  ] Asset-Backed Notes, Series 200[  ]-[  ], Class A-[1][2], Payment Account,” as the case may be, on behalf of the
related Noteholders and the Note Insurer. 
 “Payment Amount”: The Class A-1 Payment Amount or the Class A-2
Payment Amount, as applicable. 
 “Payment Date”: The [25th] day of any month or if such [25th] day is not a Business Day,
the first Business Day immediately following, commencing on [DATE]. 
 “Percentage Interest”: With respect to a Note of
either Class, the portion evidenced by such Note, expressed as a percentage rounded to four decimal places, equal to a fraction the numerator of which is the denomination represented by original principal balance of such Note and the denominator of
which is the Original Note Principal Balance of such Class. With respect to the Certificates, the portion evidenced thereby as stated on the face of such Certificate. 
 “Permitted Investments”: As used herein, Permitted Investments shall include the following: 
 (i) obligations of, or guaranteed as to timely payments of principal and interest by, the United States or any agency or instrumentality thereof when such obligations are backed by the full faith and credit of the United States; 

 

 A-26 

 (ii) repurchase agreements on obligations specified in clause (i) maturing not more than three
months from the date of acquisition thereof, provided that the unsecured obligations of the party agreeing to repurchase such obligations are at the time rated at least A-l+ by S&P and in one of the two highest ratings by Moody’s;

 (iii) certificates of deposit, time deposits and bankers’ acceptances (which, in the case of bankers’ acceptances, shall in no
event have an original maturity of more than 365 days) of any U.S. depository institution or trust company, incorporated under the laws of the United States or any state; provided, that the debt obligations of such depository institution or
trust company at the date of acquisition thereof have been rated in one of the two highest ratings by Moody’s and S&P. 
 (iv)
commercial paper (having original maturities of not more than 270 days) of any corporation incorporated under the laws of the United States or any state thereof which on the date of acquisition has been rated in the highest short-term rating by each
of the Rating Agencies; and 
 (v) units of money market funds registered under the Investment Company Act of 1940, investing in any
of the foregoing, including any funds managed or advised by the Indenture Trustee or any affiliate of the Indenture Trustee; provided, such money market funds are at the time rated at least “AAAm” or “AAAm-G” by S&P,
and in one of the two highest short-term ratings by Moody’s; 
 provided, that no instrument described hereunder shall evidence either the right
to receive (x) only interest with respect to the obligations underlying such instrument or (y) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to
such instrument provided a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations; and provided, further, that no instrument described hereunder may be purchased at a price greater than
par if such instrument may be prepaid or called at a price less than its purchase price prior to stated maturity. 
 “Person”: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, national banking association, unincorporated organization or government or any agency or
political subdivision thereof. 
 “Physical Property”: As defined in clause (b) of the definition of
“Delivery.” 
 “Plan”: Either (i) an employee benefit plan (within the meaning of Section 3(3) of ERISA)
that is subject to Title I of ERISA, (ii) a plan (within the meaning of Section 4975(e)(1) of the Code) that is subject to Section 4975 of the Code or (iii) a Governmental Plan that is subject to any federal, state or local law
that is, to a material extent, similar to Title I of ERISA or Section 4975 of the Code. 
  

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 “Predecessor Notes”: With respect to any particular Note, every previous Note evidencing
all or a portion of the same debt as that evidenced by such particular Note; and, for the purpose of this definition, any Note authenticated and delivered under Section 2.07 of the Indenture in lieu of a lost, destroyed or stolen Note shall be
deemed to evidence the same debt as the lost, destroyed or stolen Note. 
 “Preference Amount”: Any payment of principal or
interest on a Note, which would have been covered under the Note Insurance Policy as any Insured Amount, which is made to an owner of a Note by or on behalf of the Indenture Trustee and which has been deemed a preferential transfer and was
previously recovered from its owner pursuant to the United States Bankruptcy Code in accordance with a final, non appealable order from a court of competent jurisdiction. 
 “Preference Claim”: As defined in Section 8.03(f) of the Indenture. 
 “Premium”: The product of the Premium Percentage and the aggregate outstanding Note Principal Balance for the related Class on the related Payment Date, but after giving effect to any payments on such Payment Date.

 “Premium Percentage”: The rate at which the “Premium” is determined (including any “premium
supplement”), as defined in the Insurance Agreement. 
 “Prepayment Charge”: As to a Mortgage Loan, any charge paid by
a Mortgagor in connection with Principal Prepayment made within the related Prepayment Charge Period, the Prepayment Charges with respect to each applicable Mortgage Loan so held by the Issuing Entity being identified in a Prepayment Charge Schedule
(other than any Servicer Prepayment Charge Payment Amount). 
 “Prepayment Charge Period”: As of any Mortgage Loan, the
period of time, if any, during which a Prepayment Charge may be imposed. 
 “Prepayment Charge Schedule”: As of any date,
the list of Prepayment Charges on the Mortgage Loans included in the Issuing Entity on such date, attached as Exhibit H to the Sale and Servicing Agreement. The Prepayment Charge Schedule shall set forth the following information with respect to
each Prepayment Charge: 
 (i) the Mortgage Loan identifying number; 
 (ii) a code indicating the term of the Prepayment Charge; 
 (iii) the state of origination of the related Mortgage Loan; 
 (iv) the date on which the first Monthly Payment was due on the related Mortgage Loan; 
 (v) the term of the related Mortgage Loan; and 
 (vi) the Cut-Off Date Principal Balance of the related Mortgage Loan. 
  

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 “Prepayment Interest Shortfall”: With respect to any Payment Date, for each Mortgage
Loan that was the subject during the related Prepayment Period of a Principal Prepayment in full, an amount equal to the excess, if any, of (a) 30 days’ interest on the Principal Balance of such Mortgage Loan at a per annum rate equal to
(i) the Mortgage Interest Rate (or at such lower rate as may be in effect for such Mortgage Loan pursuant to application of the Relief Act, any Deficient Valuation and/or any Debt Service Reduction) minus (ii) the Servicing Fee
Rate, over (b) the amount of interest actually remitted by the related Mortgagor in connection with such Principal Prepayment in full, less the Servicing Fee for such Mortgage Loan in such month. 
 “Prepayment Period”: With respect to any Payment Date and Principal Prepayments in full, the period commencing on the 16th day of the month preceding the month in which such Payment Date occurs (or, in the case of the first Payment Date, the day
following the Cut-Off Date) and ending on the 15th day of the month in which such Payment Date occurs. 

“Principal Balance”: As to any Mortgage Loan and any date of determination, the outstanding principal balance of such Mortgage Loan
as of such date of determination. 
 “Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage
Loan which is received in advance of its scheduled Due Date. 
 “Proceeding”: Any suit in equity, action at law or other
judicial or administrative proceeding. 
 “Prospectus Supplement”: The Prospectus Supplement dated [DATE] relating to the
Notes filed with the Commission in connection with the Registration Statement heretofore filed or to be filed with the Commission pursuant to Rule 424(b)(5). 
 “Qualified Appraiser”: An appraiser, duly appointed by the Sponsor, who had no interest, direct or indirect, in the Mortgaged Property or in any loan made on the security thereof, and whose
compensation is not affected by the approval or disapproval of the Mortgage Loan, and such appraiser and the appraisal made by such appraiser both satisfy the requirements of Title XI of the Federal Institutions Reform, Recovery and Enforcement Act
of 1989 and the regulations promulgated thereunder, all as in effect on the date the Mortgage Loan was originated. 
 “Qualified REIT
Subsidiary”: Has the meaning set forth in Section 856(i) of the Code. 
 “Qualified Substitute Mortgage Loan”:
A mortgage loan or mortgage loans substituted for a Deleted Mortgage Loan pursuant to Section 2.06 or 4.02(b) of the Sale and Servicing Agreement, which (a) has or have an interest rate greater than or equal to those applicable to the
Deleted Mortgage Loan, (b) relates or relate to a detached one- to four-family residence and has or have the same or a better lien priority as the Deleted Mortgage Loan and has or have the same occupancy status as the Deleted Mortgage Loan or
is or are Owner-Occupied Mortgaged Property(ies), (c) matures or mature no later than (and not more than one year earlier than) the Deleted Mortgage Loan, (d) has or have a Loan-to-Value Ratio or Loan-to-Value Ratios at the time of such
substitution no higher than the Loan-to-Value Ratio of the Deleted 
  

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 Mortgage Loan, (e) has or have a Stated Principal Balance or Stated Principal Balances, after deduction of the
principal portion of the Monthly Payment due in the month of substitution (or, in the case of a substitution of more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal balance) not more than the Stated Principal Balance of
the Deleted Mortgage Loan as of such date, (f) complies or comply as of the date of substitution with each representation and warranty set forth in Section 4.01 of the Sale and Servicing Agreement, and (g) is otherwise acceptable to
the Note Insurer. 
 “Rating Agency”: [            ] or
[            ]. 
 “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 Servicer, the Sponsor, the Depositor, the Note Insurer and the Issuing Entity in writing that such action will not result in a reduction, qualification or withdrawal of the then current
“implied” rating of the Notes that it maintains without taking into account the Note Insurance Policy. 
 “Record
Date”: With respect to the Notes, the last Business Day immediately preceding the related Payment Date so long as the Notes are in book-entry form and for Notes in definitive form, the last Business Day of the month immediately preceding
the month in which the Payment Date occurs. 
 “Redemption Date”: The Payment Date, if any, on which all of the Notes are
redeemed, in each case, pursuant to Article X of the Indenture, which date may occur on or after the Clean-Up Call Date. 
 “Reference Banks”: Citibank, Barclay’s Bank PLC, The Bank of Tokyo-Mitsubishi and National Westminster Bank PLC; provided, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then
any leading banks selected by the Indenture Trustee (after consultation with the Servicer) which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London,
(ii) not controlling, under the control of or under common control with the Servicer or the Indenture Trustee or any affiliate thereof and (iii) whose quotations appear on the Telerate Page 3750 on the relevant Interest Determination Date.

 “Regulation AB”: Subpart 229.1100 – Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release
No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time. 
 “Reimbursement Amount”: Means, as to any Payment Date, the sum of (x) (i) all Insured Payments paid by the Note Insurer, but for which the Note Insurer has not been reimbursed prior to such
Payment Date pursuant to Section 8.02(v) and (vi) of the Indenture or 5.07(e) and (f) of the Indenture, plus (ii) interest accrued on such Insured Payments not 
  

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 previously repaid calculated at the Late Payment Rate from the date the Indenture Trustee received the related Insured
Payments or the date such Insured Payments were made, and (y) without duplication (i) any amounts then due and owing to the Note Insurer under the Insurance Agreement, as certified to the Indenture Trustee by the Note Insurer plus
(ii) interest on such amounts at the Late Payment Rate. In the event any amounts due under the Insurance Agreement are not clearly allocable to a particular Group, those amounts shall be allocated between the Groups pro rata based on the
aggregate unpaid Principal Balance of the related Notes. 
 “REIT”: A real estate investment trust within the meaning of
section 856(a) of the Code that satisfies the requirements of section 857(a). 
 “Relevant Servicing Criteria”: The
Servicing Criteria applicable to the various parties, as set forth on Exhibit [    ] attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria. With
respect to a Servicing Function Participant engaged by the Servicer [and the Indenture Trustee], the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties. 
 “Relief Act”: The Servicemembers Civil Relief Act. 
 “Relief Act Interest Shortfall”: With respect to any Payment Date, for any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently
ended Due Period as a result of the application of the Relief Act or similar state law, the amount, if any, by which (a) interest collectible on such Mortgage Loan during the most recently ended calendar month is less than (b) one
month’s interest on the Principal Balance of such Mortgage Loan, calculated at a rate equal to the related Mortgage Interest Rate. 
 “Remaining Overcollateralization Deficit”: With respect to any Payment Date, the excess, if any, of (a) the aggregate Note Principal Balances of both Classes of Notes, after payment of the Base Principal Payment Amount
for both Groups and after taking into account any principal payment funded from Net Monthly Excess Cashflow [and from amounts released from the Reserve Account], but before taking into account the principal portion of any Insured Principal Payment,
over (b) the aggregate Stated Principal Balance of the Mortgage Loans as of the close of business on the last day of the prior Prepayment Period. For purposes of determining the amount to be paid on account of the Remaining
Overcollateralization Deficit to the Noteholders of each Class of Notes on the Payment Date, the Remaining Overcollateralization Deficit will be allocated to each Class pro rata based on the amount by which the Note Principal Balance of each
Class on such Payment Date, after payment of the Base Principal Payment Amount but after taking into account any principal payment funded from Net Monthly Excess Cashflow [and from amounts released from the Reserve Account], but before taking into
account any Insured Principal Payment, exceeds the aggregate Stated Principal Balances of the Mortgage Loans in the related Group as of the end of the immediately preceding Payment Date. 
  

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 “REO Disposition”: The final sale by the Servicer of a REO Property acquired by the
Servicer in foreclosure or by deed in lieu of foreclosure. 
 “REO Mortgage Loan”: Any Mortgage Loan which is not a
Liquidated Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage Note is discharged and the related Mortgaged Property is held as part of the Issuing Entity. 
 “REO Proceeds”: Proceeds received in respect of any REO Mortgage Loan (including, without limitation, proceeds from the rental of the
related Mortgaged Property). 
 “REO Property”: A Mortgaged Property acquired by the Servicer in the name of the Indenture
Trustee on behalf of the Noteholders through foreclosure or deed-in-lieu of foreclosure. 
 “Required Interest
Distributions”: (i) with respect to the Class A-1 Notes and any Payment Date, the Class A-1 Interest Payment Amount for such Payment Date, and (ii) with respect to the Class A-2 Notes and any Payment Date, the
Class A-2 Interest Payment Amount for such Payment Date. 
 “Request for Release”: A request for release in
substantially the form attached as Exhibit F of the Sale and Servicing Agreement. 
 [“Reserve Account”: The trust
account consisting of two segregated trust sub-accounts relating to the two Loan Groups, which shall be an Eligible Account (or subaccount of the Payment Account), established and maintained pursuant to Section 8.01(b) of the Indenture and
entitled
“[                                       
 ], as Indenture Trustee for NovaStar Mortgage Funding Trust 200[    ]-[    ], Asset-Backed Notes, Series 200[    ]-[    ],
Cross-collateralization Reserve Account, Class A-1 and Class A-2” on behalf of the Noteholders and the Note Insurer. 
 “Reserve Account Release Amount”: With respect to any Payment Date, the lesser of (a) the aggregate amounts on deposit in the Reserve Account and (b) and the amount by which the Credit Enhancement Amount exceeds
the Specified Credit Enhancement Amount. 
 “Reserve Payment Amount”: With respect to any Payment Date and either Loan
Group, the amount necessary for the aggregate funds on deposit in the Reserve Account to equal the Specified Reserve Amount.] 
 “Residential Dwelling”: A one- to four-family dwelling, a unit in a planned unit development, a unit in a condominium development or a townhouse. 
 “Responsible Officer”: When used with respect to the Indenture Trustee or the Owner Trustee, any officer assigned to the Corporate Trust
Office (or any successor thereto), including any Vice President, Second or Assistant Vice President, Senior Trust Officer, Trust Officer, Assistant Trust Officer, any Assistant Secretary, associate, any trust officer or any other officer of the
Indenture Trustee or the Owner Trustee customarily performing functions similar to those performed by any of the above designated officers and to whom, with respect to a particular matter, such matter is referred because of such officer’s
knowledge of and familiarity with the particular subject. When used with respect to the Sponsor or the Servicer, the chief executive officer, the president or any vice president, assistant vice president, or any secretary or assistant secretary.

  

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 “Rolling Three Month Delinquency Ratio”: With respect to any Payment Date, the average
of the Delinquency Ratios for the three (or one and two, in the case of the first and second Payment Dates, respectively) immediately preceding Due Periods. 
 “Rolling Six Month Delinquency Ratio”: For any Payment Date, the fraction, expressed as a percentage, equal to the average of the Delinquency Ratio for each of the six immediately preceding Collection
Periods (or for each Payment Date starting in [MO/YR] through [MO/YR], the corresponding number of preceding Collection Periods). 
 “Sale”: The meaning specified in Section 5.17 of the Indenture. 
 “Sale and Servicing
Agreement”: The Sale and Servicing Agreement, dated as of [DATE], among the Issuing Entity, the Servicer, the Sponsor, the Depositor, and the Indenture Trustee, providing for, among other things, the sale of the Mortgage Loans from the
Depositor to the Issuing Entity and the servicing of the Mortgage Loans. 
 “Securities Act”: Means the Securities Act of
1933, as amended. 
 “Servicer”: NovaStar Mortgage Inc., a Virginia corporation, or any successor appointed as provided in
the Sale and Servicing Agreement. 
 “Servicer Event of Default”: As defined in Section 7.01 of the Sale and Servicing
Agreement. 
 “Servicer Prepayment Charge Amount”: The amounts payable by the Servicer in respect of any waived Prepayment
Charges pursuant to Section 3.05 of the Sale and Servicing Agreement. 
 “Servicer Remittance Amount”: With respect to
any Servicer Remittance Date, an amount equal to the sum of (i) all Monthly Payments on the Mortgage Loans collected by the Servicer during the related Due Period, (ii) all Curtailments and other amounts collected on account of principal
(including Net REO Proceeds, Net Liquidation Proceeds and Insurance Proceeds, if any) by the Servicer during the related Collection Period, (iii) all Principal Prepayments in full (including Prepayment Charges) collected by the Servicer during
the related Prepayment Period, (iv) all Delinquency Advances made by the Servicer with respect to Monthly Payments due to be received on the Mortgage Loans during the related Due Period and (v) any other amounts required to be placed in
the Collection Account by the Servicer pursuant to the Sale and Servicing Agreement but excluding the following: 
 (a)
amounts received on a Mortgage Loan, other than timely Monthly Payments, and including late payments, Liquidation Proceeds and Insurance Proceeds, to the extent the Servicer has previously made an unreimbursed Delinquency Advance or an unreimbursed
Servicing Advance with regard to such Mortgage Loan, to the extent of such unreimbursed Delinquency Advance or unreimbursed Servicing Advance as applicable; 
  

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 (b) those portions of each payment of interest on a particular Mortgage Loan which
represent the Servicing Fee; 
 (c) that portion of Liquidation Proceeds and REO Proceeds to the extent of any unpaid
Servicing Fee; 
 (d) all income from Permitted Investments that is held in the Collection Account for the account of the
Servicer; 
 (e) all amounts actually recovered by the Servicer in respect of late fees, assumption fees and similar fees;

 (f) certain other amounts which are reimbursable to the Servicer, as provided in this Sale and Servicing Agreement;

 (g) all amounts previously advanced by the Servicer as Delinquency Advances or Servicing Advances that are determined in
good faith by the Servicer to be unrecoverable from the proceeds of the particular Mortgage Loan to which they relate; and 
 (h) Net Foreclosure Profits. 
 “Servicer Remittance Date”: With respect to any Payment Date, the second Business
Day preceding the Payment Date. 
 “Servicer Remittance Report”: The monthly report prepared by the Servicer and delivered
to the parties specified in Section 5.16(a) of the Sale and Servicing Agreement. 
 “Servicer Reporting Date”: As
defined in Section 5.16(a) of the Sale and Servicing Agreement. 
 “Service(s)(ing)”: In accordance with Regulation AB,
the act of servicing and administering the Mortgage Loans or any other assets of the Trust by an entity that meets the definition of “servicer” set forth in Item 1101 of Regulation AB and is subject to the disclosure requirements set
forth in 1108 of Regulation AB. For clarification purposes, any uncapitalized occurrence of this term shall have the meaning commonly understood by participants in the residential mortgage-backed securitization market. 
 “Servicing Advances”: All reasonable and customary “out-of-pocket” costs and expenses incurred in the performance by the
Servicer of its servicing obligations, including, but not limited to, the cost of (a) the preservation, restoration and protection of the Mortgaged Property, including, without limitation, real estate taxes and insurance premiums, (b) any
enforcement, collection and judicial proceedings, including foreclosures and liquidations, (c) the management and liquidation of the REO Property, including reasonable fees paid to any independent contractor in connection therewith,
(d) compliance with the obligations under Sections 5.04 and 5.06 of the Sale and Servicing Agreement, all of which reasonable and customary out-of-pocket costs and expenses are reimbursable to the Servicer to the extent provided in Sections
5.03 and 5.06 of the Sale and Servicing Agreement and (e) expenses incurred in connection with any Mortgage Loan being registered on the MERS System. 
  

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 “Servicing Criteria”: The criteria set forth in paragraph (d) of Item 1122 of
Regulation AB, as such may be amended from time to time. 
 “Servicing Compensation”: The Servicing Fee and other amounts to
which the Servicer is entitled pursuant to Section 5.08 of the Sale and Servicing Agreement. 
 “Servicing Fee”: As
defined in Section 5.08 of the Sale and Servicing Agreement. 
 “Servicing Fee Rate”: The product of
(i) [    ]% per annum and (ii) the stated principal balance of the Mortgage Loans at the beginning of the related Due Period. 
 “Servicing Function Participant”: Any sub-servicer, subcontractor or any other Person, other than the Servicer and the Indenture Trustee, that is performing activities addressed by the Servicing
Criteria, unless such Person’s activities relate only to 5% or less of the Mortgage Loans. 
 “Servicing Officer”: Any
officer of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans whose name and specimen signature appear on a list of servicing officers furnished to the Indenture Trustee and the Note Insurer by the
Servicer, as such list may from time to time be amended. 
 “Shortfall Amount”: With respect to any Payment Date and either
Class of Notes, an amount, not less than zero, equal to the excess, if any, of (A) the sum of (i) the Interest Payment Amount and the Base Principal Payment Amount, in each case, for such Group and such Payment Date and (ii) the
amount of any Overcollateralization Deficit allocable to such Class and such Payment Date over (B) the Available Funds (without taking into account the portion thereof referred to in clause (iv) of the definition “Available
Funds”) remaining in accordance with the priority of payments for such Class and such Payment Date. 
 “Specified Credit
Enhancement Amount”: With respect to any Payment Date, the sum of the Specified Overcollateralization Amounts for both Groups. 
 “Specified Overcollateralization Amount”: The greatest of (i) (a) with respect to each of Loan Group 1 and Loan Group 2 and any Payment Date on which the Step Down Requirement has not been satisfied, an
amount equal to [    ]% of the Maximum Collateral Amount for each such Group, respectively, (b) with respect to any Payment Date on which the Step Down Requirement has been satisfied, the related Stepped Down Required
Over-collaterized Percentage, or (c) with respect to any Payment Date on which a Step-up Test Event has occurred, the related Stepped Up Required Overcollateralization Percentage, (ii) the sum of the three largest Mortgage Loans by
outstanding Aggregate Principal Balance in the related Loan Group, (iii) the product of two and the excess of (x) 50% of the Aggregate Principal Balance of the Mortgage Loans (including Mortgage Loans in foreclosure) and any REO Mortgage
Loans in the related Loan Group that are 90 days or more delinquent over (y) three times the related Excess Spread, and (iv) 0.50% of the aggregate Maximum Collateral Amount for each Loan Group. 
  

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 “Specified Reserve Amount”: Means, with respect to any Payment Date, the excess, if any,
of (x) the sum of Specified Overcollateralization Amounts for both Groups on such Payment Date, over (y) the sum of Overcollateralization Amounts for both Groups and such Payment Date. 
 “Sponsor”: NovaStar Mortgage Inc., a Virginia corporation. 
 [“Standard & Poor’s” or “S&P”: Standard & Poor’s Ratings Services, a division of The
McGraw-Hill Companies, Inc. or any successor thereto and if such corporation no longer for any reason performs the services of a securities rating agency, “S&P” shall be deemed to refer to any other nationally recognized statistical
rating organization designated by the Note Insurer.] 
 “Stated Principal Balance”: As to any Mortgage Loan and Payment
Date, the unpaid principal balance of such Mortgage Loan as of the Due Date in the related Collection Period as specified in the amortization schedule at the time relating thereto (before any adjustment to such amortization schedule by reason of any
moratorium or similar waiver or grace period) after giving effect to (i) any previous Principal Prepayments in full received during the related Prepayment Period, (ii) any previous Curtailments and Liquidation Proceeds allocable to
principal received during the prior calendar month (other than with respect to any Liquidated Mortgage Loan) and (iii) the payment of principal due on the Due Date in the related Collection Period and irrespective of any delinquency in payment
by the related Mortgagor. 
 “Statutory Trust Statute”: Chapter 38 of Title 12 of the Delaware Code, 12 Del. Code
§ 3801 et seq., as the same may be amended from time to time. 
 “Step Down Requirement”: The Step Down
Requirement is satisfied on or after the later of (a) the [    ]th Payment Date or (b) the Payment Date upon which the Aggregate Principal Balance of the Mortgage Loans is equal to or less than 50% of the initial
aggregate Maximum Collateral Amount. 
 “Stepped Down Required Overcollateralized Percentage”: For any Payment Date for
which the Step Down Requirement is satisfied, (A) with respect to Loan Group 1, [    ]% of the Aggregate Principal Balance of the related Mortgage Loans and (B) with respect to Loan Group 2,
[    ]% of the Aggregate Principal Balance of the related Mortgage Loans. 
 “Step-Up Test
Event”: On any Payment Date, if either of the following events occur: (i) the Rolling Six Month Delinquency Rate exceeds [    ]% or (ii) the Cumulative Loan Loss Percentage exceeds the following
percentages on any Payment Date during the following periods: 
  

				
	 Payment Date Occurring During
	  	Percentage	 
	 [MO/YR] - [MO/YR]
	  	[    	]%
	 [MO/YR] - [MO/YR]
	  	[    	]%
	 [MO/YR] - [MO/YR]
	  	[    	]%
	 [MO/YR] and thereafter
	  	[    	]%

  

 A-36 

 “Stepped Up Required Overcollateralized Percentage”: On any Payment Date on which a
Step-Up Test Event exists, the Overcollateralization target will increase (x) with respect to Loan Group 1, from [    ]% to [    ]% of the initial Maximum Collateral Amount of Loan
Group 1 (or from [    ]% to [    ]% of the Aggregate Principal Balance of the Mortgage Loans on the related Payment Date if the Step Down Requirement has been met) and (y) with respect to
Loan Group 2, from [    ]% to [    ]% of the initial Maximum Collateral Amount of Loan Group 2 of the related Mortgage Loans (or from [    ]% to
[    ]% of the Aggregate Principal Balance of the Mortgage Loans on the related Payment Date of the Step Down Requirement has been met). 
 “Substitution Adjustment”: As to any date on which a substitution occurs pursuant to Sections 2.06 or 4.02(b) of the Sale and Servicing Agreement, the amount (if any) by which the aggregate principal
balances (after application of principal payments received on or before the date of substitution) of any Qualified Substitute Mortgage Loans as of the date of substitution, are less than the aggregate Stated Principal Balance of the related Deleted
Mortgage Loans (after application of the scheduled principal portion of the Monthly Payments due in the month of substitution) together with 30-days’ interest thereon at the Mortgage Interest Rate. 
 “Telerate Page 3750”: The display designated as Telerate Page 3750 on the Telerate Service (or such other page as may replace the
Telerate page on that service for the purpose of displaying London interbank offered rates of major banks). 
 “Termination
Price”: The greater of (A) the sum of (i) 100% of the Note Principal Balance of the related Class of Notes, (ii) the aggregate amount of accrued and unpaid interest on the related Class of Notes through the related Due Period
(including with respect to the Class A-1 Notes, any Class A-1 Available Funds Cap Carry-Forward Amount and with respect to the Class A-2 Notes, any Class A-2 Available Funds Cap Carry-Forward Amount), (iii) any related
Indenture Trustee’s fees and expenses, (iv) any related Owner Trustee Fees or Expenses that have not been paid by the Sponsor, (v) any related unreimbursed advances due and owing to the Servicer, (vi) any Reimbursement
Amount due the Note Insurer, as applicable and (vii) any costs and damages incurred by the Issuing Entity in connection with any violation by such mortgage loan of any predatory or abusive lending law and (B) the fair market value of the
Mortgage Loans in the related Group. 
 “Trust Agreement”: The Trust Agreement, dated as of [DATE], as amended and restated
as of [DATE], between the Sponsor, the Depositor and the Owner Trustee, relating to the establishment of the Issuing Entity. 
 “Trust Certificate”: A certificate evidencing the beneficial interest of a Trust Certificateholder in the Issuing Entity consisting of the Mortgage Loans in Loan Group 1 and the Mortgage Loans in Loan Group 2, substantially
in the form of Exhibit A to the Trust Agreement. 
 “Trust Certificateholder,”
“Certificateholder” or “Holder”: A Person in whose name a Trust Certificate is registered. 
  

 A-37 

 “Trust Estate”: All money, instruments and other property subject or intended to be
subject to the lien of the Indenture, for the benefit of the Noteholders and the Note Insurer, as of any particular time, including, without limitation, all property and interests, including all proceeds thereof, granted to the Indenture Trustee,
for the benefit of the Noteholders and the Note Insurer, pursuant to the Granting Clauses of the Indenture. 
 “Trust Indenture
Act” or “TIA”: The Trust Indenture Act of 1939, as it may be amended from time to time. 
 “Trust
Order” and “Trust Request”: A written order or request of the Issuing Entity signed on behalf of the Issuing Entity by an Authorized Officer of the Owner Trustee, at the direction of the Certificateholders and delivered to
the Indenture Trustee or the Authenticating Agent, as applicable. 
 “Underwriters”:
[                                       
 ],
[                                       
 ],
[                                        ]
and
[                                       
 ]. 
 “Underwriting Guidelines”: The underwriting guidelines of the Sponsor as approved by the Note Insurer.

 “United States Person”: A citizen or resident of the United States, a corporation, a partnership or other entity treated
as a corporation or a partnership organized in or under the laws of, the United States or any state thereof including the District of Columbia, or an estate or trust whose income from sources without the United States is includible in gross income
for United States federal income tax purposes regardless of its connection with the conduct of a trade or business within the United States or a trust if a court within the United States can exercise primary jurisdiction over its administration and
at least one United States Person has the authority to control all substantial decisions of the trust. Notwithstanding the last clause of the preceding sentence, to the extent provided in Treasury Regulations, certain trusts in existence on
August 20, 1996 and treated as United States Persons prior to such date, may elect to continue to be United States Persons. 
 “Weighted Average Mortgage Interest Rate”: With respect to any Due Period, the weighted average Mortgage Interest Rates (weighted by Principal Balances) of the Mortgage Loans in Loan Group 1 and Loan Group 2, as applicable,
calculated at the opening of business on the first day of such Due Period. 
 “Yield Maintenance Accounts”: Each of the
Yield Maintenance Accounts established in accordance with Section 8.01(b) of the Indenture and maintained by the Indenture Trustee. 
  

 A-38 

 SCHEDULE I 
 MORTGAGE LOAN SCHEDULE 
 [Please See Schedule I to Sale and Servicing Agreement.] 

 EXHIBIT A 
 FORM OF NOTE 
 NOVASTAR MORTGAGE FUNDING TRUST
200[    ]-[    ] 
 CLASS A-[1][2] NOTE 
 UNLESS THIS NOTE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE TRUST OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY NOTE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF,
CEDE & CO., HAS AN INTEREST HEREIN. 
 THE NOTE IS A NON-RECOURSE OBLIGATION OF THE TRUST, AND IS LIMITED IN RIGHT OF PAYMENT TO
AMOUNTS AVAILABLE FROM THE TRUST ESTATE AND THE NOTE INSURANCE POLICY AS PROVIDED IN THE INDENTURE REFERRED TO BELOW. THE TRUST IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON THIS NOTE. 
 THE PRINCIPAL OF THIS NOTE IS PAYABLE IN INSTALLMENTS AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING PRINCIPAL AMOUNT OF THIS NOTE AT ANY TIME MAY BE
LESS THAN THE AMOUNT SHOWN ON THE FACE HEREOF. 
  

  

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

  

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

  

					
	 Date of Indenture:
       As of [DATE]
	  	 First Payment Date:
       [DATE]

  

  

 EX A-1 

 NOVASTAR MORTGAGE FUNDING TRUST 200[_]-[_] 
 ASSET-BACKED NOTES, SERIES 200[_]-[_], CLASS A-[1][2] 
 NovaStar Mortgage Funding Trust
200[    ]-[    ], a statutory trust organized and existing under the laws of the State of Delaware (herein referred to as the “Issuing Entity”), for value received, hereby
promises to pay to CEDE & CO., or registered assigns, the principal sum of $                    
(                     Thousand Dollars) payable on each Payment Date in an amount equal to the result obtained by multiplying (x) the
Percentage Interest of this Note set forth on the cover page hereof, by (y) the aggregate amount, if any, payable from the related Payment Account in respect of principal on the Class A-[1][2] Notes, pursuant to the Indenture, dated as of
[DATE], between the Issuing Entity and [                    ], a national trust company, as Indenture Trustee (the “Indenture
Trustee”); provided, however, that the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of (i) the Payment Date occurring in [MO/YR] (the “Final Stated Maturity
Date”), (ii) the Redemption Date, if any, applicable to this Notes pursuant to Article X of the Indenture or (iii) the date on which an Event of Default shall have occurred and be continuing, if the Notes have been declared to be
immediately due and payable in the manner provided in Section 5.02 of the Indenture. Capitalized terms used but not defined herein are defined in Appendix I to the Indenture. 
 Pursuant to the terms of the Indenture, payments will be made on the [25th] day of each month or, if such day is not a Business Day, on the Business Day
immediately following such [25th] day (each a “Payment Date”), commencing on the first Payment Date specified on the cover page hereof, to the Person in whose name this Note is registered at the close of business on the applicable
Record Date, in an amount equal to the product of (a) the Percentage Interest evidenced by this Note and (b) the sum of the amounts to be paid on the Class A-[1][2] Notes with respect to such Payment Date, all as more specifically set
forth in the Indenture. 
 Notwithstanding the foregoing, in the case of Definitive Notes, upon written request at least five (5) days
prior to the related Record Date with appropriate instructions by the Holder of this Note (holding an aggregate initial Note Principal Balance of at least $1,000,000), any payment of principal or interest, other than the final installment of
principal or interest, shall be made by wire transfer to an account in the United States of America designated by such Holder reasonably satisfactory to the Indenture Trustee. 
 On each Payment Date, Noteholders will be entitled to receive interest payments in an aggregate amount equal to the Interest Payment Amount for such
Class for such Payment Date, together with principal payments in an aggregate amount equal to the Base Principal Payment Amount for such Class for such Payment Date, plus, until the Overcollateralization Amount for the related Group and such Payment
Date is equal to the Specified Overcollateralization Amount for such Group and such Payment Date, the Net Monthly Excess Cashflow, if any, for such Group and such Payment Date. The “Note Principal Balance” of a Note as of any date of
determination is equal to the initial Note Principal Balance thereof as of the Closing Date, reduced by the aggregate of all amounts previously paid with respect to such Note on account of principal. 
  

 EX A-2 

 The principal of and interest on this Note are payable in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and private debts. All payments made by the Issuing Entity with respect to this Note shall be applied first to interest due and payable on this Note as provided above and then
to the unpaid principal of this Note. 
 This Note is one of a duly authorized issue of Notes of the Issuing Entity, designated as the
“NovaStar Mortgage Funding Trust 200[    ]-[    ], Asset-Backed Notes, Series 200[    ]-[    ], Class A-[1][2],” issued under
the Indenture, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights and obligations thereunder of the Issuing Entity, the Indenture Trustee and the Holders of the Notes. Also
issued under the Indenture are the “NovaStar Mortgage Funding Trust 200[    ]-[    ], Asset-Backed Notes, Series 200[    ]-[    ], Class
A[l][2].” To the extent that any provision of this Note contradicts or is inconsistent with the provisions of the Indenture, the provisions of the Indenture shall control and supersede such contradictory or inconsistent provision herein. The
Notes are subject to all terms of the Indenture. 
 The Class A-[1][2] Notes are and will be equally and ratably secured by the Mortgage
Loans in Loan Group [1][2], the other collateral related thereto pledged as security therefor as provided in the Indenture, and, to the extent provided in the Indenture, by the Mortgage Loans in Loan Group [1][2]. 
 As described above, the entire unpaid Note Principal Balance of this Note shall be due and payable on the earlier of the Final Stated Maturity Date and
any Redemption Date applicable to such Class, pursuant to Article X of the Indenture. Notwithstanding the foregoing, the entire unpaid Note Principal Balance of the Notes shall be due and payable on the date on which an Event of Default shall have
occurred and be continuing if the Indenture Trustee, at the direction or upon the prior written consent of Financial Guaranty Insurance Company (the “Note Insurer”) in the absence of a Note Insurer Default, or the Holders of the
Notes representing not less than 50% of the Note Principal Balance of the Outstanding Notes (with the prior written consent of the Note Insurer in the absence of a Note Insurer Default) of both Classes, shall have declared the Notes to be
immediately due and payable in the manner provided in Section 5.02 of the Indenture. All principal payments on the Notes shall be made pro rata to the Noteholders entitled thereto. 
 The Note Insurer, in consideration of the payment of the premium and subject to the terms of the Note Guaranty Insurance Policy (the “Note
Insurance Policy”) thereby has unconditionally and irrevocably guaranteed the payment of the Insured Amounts. 
 Pursuant to the
Indenture, unless a Note Insurer Default exists (i) the Note Insurer shall be deemed to be the holder of the Notes for certain purposes specified in the Indenture and will be entitled to exercise all rights of the Noteholders thereunder,
including the rights of Noteholders relating to the occurrence of, and the remedies with respect to, an Event of Default, without the consent of such Noteholders, and (ii) the Indenture Trustee may take actions which would otherwise be at its
option or within its discretion, including actions relating to the occurrence of, and the remedies with respect to, an Event of Default, only at the direction of the Note Insurer. In addition, on each Payment Date, after the Noteholders have been
paid all 
  

 EX A-3 

 amounts to which they are entitled, the Note Insurer will be entitled to be reimbursed for any unreimbursed Insured
Payments (with interest thereon at the “Late Payment Rate” specified in the Insurance Agreement), Reimbursement Amounts and any other amounts owed under the Note Insurance Policy. 
 The Issuing Entity shall not be liable upon the indebtedness evidenced by the Notes except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Notes. The assets included in the Trust Estate and payments under the Note Insurance Policy will be sole source of payments on the Notes, and each Holder hereof, by its acceptance of this Note, agrees that
(i) such Note will be limited in right of payment to amounts available from the Trust Estate and the Note Insurance Policy as provided in the Indenture and (ii) such Holder shall have no recourse to the Issuing Entity, the Owner Trustee,
the Indenture Trustee, the Sponsor, the Servicer or any of their respective affiliates, or to the assets of any of the foregoing entities, except the assets of the Issuing Entity pledged to secure the Notes pursuant to the Indenture. 
 Payments of interest on this Note due and payable on each Payment Date, together with the installment of principal, if any, to the extent not in full
payment of this Note, shall be made by wire transfer in immediately available funds to the account designated by such nominee, or if no instructions for wire transfers have been provided to the Indenture Trustee as provided in the Indenture, then by
check mailed to the Person whose name appears as the Holder of this Note (or one or more Predecessor Notes) on the Note Register as of the close of business on each Record Date. Such checks shall be mailed to the Person entitled thereto at the
address of such Person as it appears on the Note Register as of the applicable Record Date without requiring that this Note be submitted for notation of payment. Any reduction in the principal amount of this Note (or any one or more Predecessor
Notes) effected by any payments made on any Payment Date shall be binding upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not noted hereon. If
funds are expected to be available, as provided in the Indenture, for payment in full of the then remaining unpaid principal amount of this Note on a Payment Date, then the Indenture Trustee, in the name of and on behalf of the Issuing Entity, will
notify the Person who was the Holder hereof as of the Record Date preceding such Payment Date by notice mailed or transmitted by facsimile prior to such Payment Date, and the amount then due and payable shall be payable only upon presentation and
surrender of this Note at the Indenture Trustee’s designated office or at the office of the Indenture Trustee’s agent designated for such purposes. 
 As provided in the Indenture, both Classes of Notes may be redeemed in whole, but not in part, at the option of the Depositor on any Payment Date on and after the date on which the sum of the Class A-1 Note
Principal Balance and the Class A-2 Note Principal Balance is less than or equal to 10% of the sum of the original Class A-1 Note Principal Balance and Class A-2 Note Principal Balance. 
 As provided in the Indenture and subject to certain limitations set forth therein, the transfer of this Note may be registered on the Note Register upon
surrender of this Note for registration of transfer at the office or agency designated by the Issuing Entity pursuant to the Indenture, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Indenture
Trustee duly executed by, the Holder hereof or such Holder’s 
  

 EX A-4 

 attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution”
meeting the requirements of the Note Registrar, which requirements include membership or participation in the Securities Transfer Agent’s Medallion Program (“STAMP”) or such other “signature guarantee program” as may be
determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended, and thereupon one or more new Notes of authorized denominations and in the same aggregate
principal amount will be issued to the designated transferee or transferees. No service charge will be charged for any registration of transfer or exchange of this Note, but the transferor may be required to pay a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any such registration of transfer or exchange. 
 In the case of a transfer
of a Class A-[1][2] Note, the Note Registrar shall not register the transfer of this Note unless the Note Registrar has received a representation letter from the transferee to the effect that either (i) the transferee is not a Plan and is
not, directly or indirectly, acquiring this Note or any interest herein on behalf of, as investment manager of, as named fiduciary of, as trustee of, or with the assets of a Plan or (ii) the acquisition and holding of this Note by the
transferee qualifies for exemptive relief under a United States Department of Labor prohibited transaction class exemption (or, if the transferee is a Governmental Plan, will not result in a violation of applicable law). Each Beneficial Owner, by
acceptance of a beneficial interest herein, shall be deemed to make one of the foregoing representations. 
 Each Noteholder or Beneficial
Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees that no recourse may be taken, directly or indirectly, with respect to the obligations of the Issuing Entity, the Owner
Trustee or the Indenture Trustee on the Notes or under the Indenture or any certificate or other writing delivered in connection therewith, against (i) the Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any owner
of a beneficial interest in the Issuing Entity or (iii) any partner, owner, beneficiary, agent, officer, director or employee of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the
Issuing Entity, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed and except that any such partner,
owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. 
 Each Noteholder or Beneficial Owner, by acceptance of a Note or, in the case of a Beneficial Owner, a beneficial interest in a Note, covenants and agrees
by accepting the benefits of the Indenture that such Noteholder or Beneficial Owner will not at any time institute against the Issuing Entity, or join in any institution against the Issuing Entity of, any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any United States federal or state bankruptcy or similar law in connection with any obligations relating to the Notes; the Indenture, the Trust Agreement and the Sale and Servicing Agreement and the
Insurance Agreement (the “Basic Documents”). 
 The Issuing Entity has entered into the Indenture and this Note is issued
with the intention that, for federal, state and local income, single business and franchise tax purposes, the Notes will qualify as indebtedness of the Issuing Entity secured by the Trust Estate. Each 
  

 EX A-5 

 Noteholder, by acceptance of a Note (and each Beneficial Owner by acceptance of a beneficial interest in a Note), agrees
to treat the Notes for federal, state and local income, single business and franchise tax purposes as indebtedness of the Issuing Entity. 
 Prior to the due presentment for registration of transfer of this Note, the Issuing Entity, the Indenture Trustee and any agent of the Issuing Entity or the Indenture Trustee may treat the Person in whose name this Note (as of the day of
determination or as of such other date as may be specified in the Indenture) is registered as the owner hereof for all purposes, whether or not this Note be overdue, and none of the Issuing Entity, the Indenture Trustee or any such agent shall be
affected by notice to the contrary. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Issuing Entity and the rights of the Holders of the Notes under the Indenture at any time by the Issuing Entity with the consent of the Note Insurer and the Holders of Notes representing a majority
of the Note Principal Balance of the Outstanding Notes affected thereby. The Indenture also contains provisions permitting the (i) Note Insurer or (ii) if a Note Insurer Default exists, the Holders of Notes representing specified
percentages of the Note Principal Balance of Outstanding Notes, on behalf of the Holders of all the Notes, to waive compliance by the Issuing Entity with certain provisions of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Note Insurer or by the Holder of this Note (or any one or more Predecessor Notes) shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon
the registration of transfer hereof or in exchange hereof or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. The Indenture also permits the amendment thereof, in certain limited circumstances, or the waiver
of certain terms and conditions set forth in the Indenture, without the consent of Holders of the Notes issued thereunder. 
 The term
“Issuing Entity” as used in this Note includes any successor to the Issuing Entity under the Indenture. 
 Initially, each Class of
Notes will be represented by one Note registered in the name of Cede & Co. as nominees of the Clearing Agency. The Notes will be delivered in denominations as provided in the Indenture and subject to certain limitations therein set forth.
The Notes are exchangeable for a like aggregate initial Note Principal Balance of Notes of different authorized denominations, as requested by the Holder surrendering the same. 
 THIS NOTE AND THE INDENTURE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
 No
reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Issuing Entity, which is absolute and unconditional, to pay the principal of and interest on this Note at the times,
place and rate, and in the coin or currency herein prescribed. 
  

 EX A-6 

 Unless the certificate of authentication hereon has been executed by the Authenticating Agent whose name
appears below by manual signature, this Note shall not be entitled to any benefit under the Indenture referred to herein, or be valid or obligatory for any purpose. 
  

 EX A-7 

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

			
	NOVASTAR MORTGAGE FUNDING TRUST 200[    ]-[    ]
		
	By:	 	[                                      
                          ],
		 	not in its individual capacity but solely as Owner Trustee under the Trust Agreement
		
	By:	 	  

		 	Authorized Signatory

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

			
	[                                      
                          ],
		 	        as Authenticating Agent
		
	 By:
	 	  

		 	        Authorized Signatory

  

 EX A-8 

 ASSIGNMENT 
 Social Security or taxpayer I.D. or other identifying number of assignee: 
 FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto: 
 __________________________________________________________________________________________________________________________________________

 (name and address of assignee) 
 the within Note and all rights thereunder, and hereby irrevocably constitutes and appoints
                                , attorney, to transfer said Note on the books
kept for registration thereof, with full power of substitution in the premises. 
 Dated:
                    */ 
 Signature Guaranteed: 
                                       
          */ 
  

	*/	NOTICE: The signature to this assignment must correspond with the name of the registered owner as it appears on the face of the within Note in every particular, without alteration,
enlargement or any change whatever. Such signature must be guaranteed by an “eligible guarantor institution” meeting the requirements of the Note Registrar, which requirements include membership or participation in STAMP or such other
“signature guarantee program” as may be determined by the Note Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended. 

  

 EX A-9Form of Sale and Servicing Agreement (Insured)

 Exhibit 4.7 
 SALE AND SERVICING AGREEMENT 
 dated as of [DATE] 
 by and among 
 [NOVASTAR MORTGAGE FUNDING CORPORATION] 
 [NOVASTAR CERTIFICATES FINANCING LLC] 
 as
Depositor, 
 NOVASTAR MORTGAGE INC., 
 as Sponsor and Servicer, 
 NOVASTAR MORTGAGE FUNDING TRUST 200[_]-[_], 
 as Issuing Entity, 
 and 
 [                            ], 
 as Indenture Trustee 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I
	DEFINITIONS
			
	 Section 1.01.
	  	Certain Defined Terms	  	1
	 Section 1.02.
	  	Provisions of General Application	  	1
	
	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	  	2
	 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	  	10
	
	ARTICLE III
	REPRESENTATIONS, WARRANTIES AND COVENANTS
			
	 Section 3.01.
	  	Representations, Warranties and Covenants of the Servicer	  	10
	 Section 3.02.
	  	Representations, Warranties and Covenants of the Sponsor	  	11
	 Section 3.03.
	  	[Reserved]	  	13
	 Section 3.04.
	  	Representations, Warranties and Covenants of the Indenture Trustee	  	13
	 Section 3.05.
	  	Depositor Representation and Warranties	  	14
	
	ARTICLE IV
	THE MORTGAGE LOANS
			
	 Section 4.01.
	  	Representations and Warranties Concerning the Mortgage Loans	  	15
	
	ARTICLE V
	ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
			
	 Section 5.01.
	  	Servicer to Assure Servicing	  	31
	 Section 5.02.
	  	Subservicing Agreements Between Servicer and Subservicers	  	32
	 Section 5.03.
	  	Successor Subservicers	  	33
	 Section 5.04.
	  	Liability of the Servicer	  	33
	 Section 5.05.
	  	Assumption or Termination of Subservicing Agreements by the Indenture Trustee	  	34
	 Section 5.06.
	  	Collection of Mortgage Loan Payments	  	34

  

 i 

					
	 Section 5.07.
	  	Withdrawals from the Collection Account	  	37
	 Section 5.08.
	  	Collection of Taxes, Assessments and Similar Items; Servicing Accounts	  	38
	 Section 5.09.
	  	Access to Certain Documentation and Information Regarding the Mortgage Loans	  	39
	 Section 5.10.
	  	[Reserved]	  	39
	 Section 5.11.
	  	Maintenance of Hazard Insurance and Fidelity Coverage	  	39
	 Section 5.12.
	  	Due-on-Sale Clauses; Assumption Agreements	  	41
	 Section 5.13.
	  	Realization Upon Defaulted Mortgage Loans	  	42
	 Section 5.14.
	  	Custodian to Cooperate; Release of Mortgage Files	  	43
	 Section 5.15.
	  	Servicing Compensation	  	45
	 Section 5.16.
	  	Annual Statements of Compliance	  	45
	 Section 5.17.
	  	Annual Independent Public Accountants’ Servicing Report	  	47
	 Section 5.18.
	  	Optional Purchase of Defaulted Mortgage Loans	  	48
	 Section 5.19.
	  	Information Required by the Internal Revenue Service Generally and Reports of Foreclosures and Abandonments of Mortgaged Property	  	48
	 Section 5.20.
	  	[Reserved]	  	48
	 Section 5.21.
	  	[Reserved]	  	49
	 Section 5.22.
	  	Servicing and Administration of the MI Policies	  	49
	 Section 5.23.
	  	Determination Date Reports	  	50
	 Section 5.24.
	  	Advances	  	50
	 Section 5.25.
	  	Compensating Interest Payments	  	51
	 Section 5.26.
	  	Advance Facility	  	51
	
	ARTICLE VI
	APPLICATION OF FUNDS
			
	 Section 6.01.
	  	Deposits to the Payment Account	  	54
	 Section 6.02.
	  	Collection of Money	  	54
	 Section 6.03.
	  	Application of Principal and Interest	  	54
	 Section 6.04.
	  	[Reserved]	  	54
	 Section 6.05.
	  	Compensating Interest	  	54
	 Section 6.06.
	  	Effect of Payments by the Note Insurer; Subrogation	  	54
	
	ARTICLE VII
	THE SERVICER AND THE COMPANY
			
	 Section 7.01.
	  	Liability of the Servicer and the Company	  	55
	 Section 7.02.
	  	Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Company	  	55
	 Section 7.03.
	  	Limitation on Liability of the Servicer and Others	  	55
	 Section 7.04.
	  	Servicer Not to Resign	  	56
	 Section 7.05.
	  	Delegation of Duties	  	56
	 Section 7.06.
	  	Servicer to Pay Trustee’s Fees and Expenses; Indemnification	  	57

  

 ii 

					
	ARTICLE VIII
	DEFAULT
			
	 Section 8.01.
	  	Servicing Default	  	58
	 Section 8.02.
	  	Indenture Trustee to Act: Appointment of Successor	  	60
	 Section 8.03.
	  	Waiver of Defaults	  	63
	
	ARTICLE IX
	TERMINATION
			
	 Section 9.01.
	  	Termination	  	63
	 Section 9.02.
	  	Additional Termination Requirements	  	64
	 Section 9.03.
	  	Accounting Upon Termination of Servicer	  	64
	
	ARTICLE X
	[RESERVED]
	
	ARTICLE XI
	[MISCELLANEOUS PROVISIONS]
			
	 Section 11.01.
	  	Limitation on Liability	  	65
	 Section 11.02.
	  	Acts of Noteholders	  	66
	 Section 11.03.
	  	Amendment	  	66
	 Section 11.04.
	  	Recordation of Agreement	  	67
	 Section 11.05.
	  	Duration of Agreement	  	67
	 Section 11.06.
	  	Notices	  	67
	 Section 11.07.
	  	Severability of Provisions	  	68
	 Section 11.08.
	  	No Partnership	  	68
	 Section 11.09.
	  	Counterparts	  	68
	 Section 11.10.
	  	Successors and Assigns	  	68
	 Section 11.11.
	  	Headings	  	68
	 Section 11.12.
	  	No Petition	  	68
	 Section 11.13.
	  	Third Party Beneficiary	  	68
	 Section 11.14.
	  	Intent of the Parties	  	69
	 Section 11.15.
	  	GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL	  	69
			
	 Schedule I
	  	Mortgage Loan Schedule	  	
	 Appendix I
	  	Defined Terms	  	

  

 iii 

 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 G
	    	NovaStar Mortgage Officer’s Certificate

  

 iv 

 SALE AND SERVICING AGREEMENT, dated as of [DATE] (this “Agreement”), by and among
[NOVASTAR MORTGAGE FUNDING CORPORATION, a Delaware corporation] [NOVASTAR CERTIFICATES FINANCING LLC, a Delaware limited liability company], as depositor (the “Depositor”), NOVASTAR MORTGAGE INC., a Virginia corporation, as sponsor
(the “Sponsor”), NOVASTAR MORTGAGE FUNDING TRUST 200[_]-[_], a Delaware statutory trust, as issuing entity (the “Issuing Entity”), NOVASTAR MORTGAGE INC., a Virginia corporation, as servicer (the
“Servicer”), and [                                ], a [national
banking association], as indenture trustee (the “Indenture Trustee”). 
 W I T N E S S E T H 
 WHEREAS, the Sponsor has contributed the mortgage loans (the “Mortgage Loans”) listed on Schedule I to this Agreement to the Depositor,
pursuant to the Contribution Agreement and Assignment, dated [DATE], between the Sponsor and the Depositor, (the “Contribution Agreement”); 
 WHEREAS, the Depositor desires to sell to the Issuing Entity, and the Issuing Entity desires to purchase from the Depositor, the Mortgage Loans; 
 WHEREAS, immediately after such purchase, the Issuing Entity will pledge such Mortgage Loans to the Indenture Trustee pursuant to the terms of an
Indenture, dated as of [DATE] (the “Indenture”), between the Issuing Entity and the Indenture Trustee, and issue the NOVASTAR MORTGAGE FUNDING TRUST 200[_]-[_], Asset-Backed Notes (the “Notes”); 
 WHEREAS, the Servicer has agreed to service the Mortgage Loans, which constitute the principal assets of the Issuing Entity; 
 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 Depositor, the Sponsor, the Issuing
Entity, the 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. 
 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. 
  

 1 

 (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 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
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 Depositor to sell, transfer, assign, set over and convey, and the Depositor does hereby sell, transfer,
assign, set over and convey to the Issuing Entity, in each case without recourse, but subject to the terms and provisions of this Agreement, all of the right, title and interest of the Depositor 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. 
 (b) The Depositor may cause the deposit of derivatives at any time into
the NovaStar Mortgage Funding Trust 200[_]-[_] and any such deposited derivatives shall become part of the Trust Estate. 
 (c) The parties hereto understand and agree that it is not intended that any Mortgage Loan be included in the Issuing Entity that is a “High-Cost Home Loan” as defined by HOEPA or any other applicable predatory or abusive lending
laws. 
 Section 2.02. Reserved. 
  

 2 

 Section 2.03. Purchase Price. On the Closing Date, as full consideration for the Depositor’s
sale of the Mortgage Loans to the Issuing Entity, the Underwriters, on behalf of the Issuing Entity, will deliver to, or at the direction of, the Depositor an amount in cash equal to
$[                                ]. Additionally, the Depositor will receive the
Certificates issued by the Issuing Entity pursuant to the Trust Agreement. 
 Section 2.04. Possession of Mortgage Files; Access to Mortgage
Files. 
 (a) Upon the receipt by the Depositor, 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 Issuing Entity, 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 Depositor 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 Depositor, the Sponsor, the Issuing Entity, the
Note Insurer and the 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. 
 (e) No later than the fifth Business Day of each fourth month,
commencing in [MO/YR], the Indenture Trustee shall deliver to the Servicer and the Note Insurer a report dated as of the first day of such month, identifying those Mortgage Loans for which it has not yet received (i) an original recorded
Mortgage or a copy thereof certified to be true and correct by the public recording office in possession of such Mortgage or (ii) in the event that Assignments of Mortgage are required to be recorded in accordance with the provisions of
Section 2.05, an original recorded Assignment of Mortgage to the Indenture Trustee and any required intervening Assignments of Mortgage or a copy thereof certified to be a true and correct copy by the public recording office in possession of
such Assignment of Mortgage. 
 Section 2.05. Delivery of Mortgage Loan Documents. (a) In connection with the transfer and
assignment of the Mortgage Loans, the Depositor shall, on or before the Closing Date, deliver, or cause to be delivered, to the Indenture Trustee (as pledgee of the Issuing Entity 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
“[                                ], as Indenture Trustee under the Indenture
dated as of [DATE], NovaStar Mortgage Funding Trust 200[_]-[_]” by the Sponsor, including all intervening endorsements showing a complete chain of endorsement; 
  

 3 

 (ii) the related original Mortgage with evidence of recording indicated thereon or a copy
thereof certified by the applicable recording office and if the Mortgage Loan is registered on the MERS System, such Mortgage or an assignment of the mortgage shall reflect MERS as the mortgagee of record and shall include the MIN for such Mortgage
Loan; 
 (iii) 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 originator of the related Mortgage Loan to the Sponsor (or to MERS, if the Mortgage Loan is registered on the MERS
System), and noting the presence of a MIN (if the Mortgage Loan is registered on the MERS System), 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) unless the Mortgage Loan is registered on the MERS
System, 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 (iv) 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. 
  

 4 

 The Indenture Trustee is hereby authorized and directed, upon an Event of Default and subject to subsection
(b) below, with respect to each assignment described in Section 2.05(a)(iv) hereof, to endorse such assignment as follows:
“[                                ], as Indenture Trustee under the Indenture
dated as of [DATE], NovaStar Mortgage Funding Trust 200[    ]-[    ].” 
 (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, that the Sponsor need not cause to be recorded any assignment which (i) is registered on the MERS System, or (ii) 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 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. With respect to Mortgage Loans (i) not registered on the MERS
System, or (ii) not covered by an Opinion of Counsel described in this section 2.05(b) to the extent that assignments of mortgage have not been recorded within one year after the Closing Date, the Depositor shall, and if the Depositor fails to,
then the Sponsor shall be obligated to repurchase such Mortgage Loans in accordance with the provisions of Section 4.01. 
 In
connection with the assignment of any Mortgage Loan registered on the MERS System, promptly after the Closing Date, the Sponsor will cause, at its own expense, the MERS System to indicate that such Mortgage Loan has been assigned to the Indenture
Trustee for the benefit of the Noteholders by entering (a) the Indenture Trustee’s Org ID in the “Investor” field which identifies the Indenture Trustee and (b) in the “Pool” field a code which identifies the
securitization serial number of the Notes issued in connection with such Mortgage Loans. The Sponsor and the Servicer will not alter the entries referenced in this paragraph with respect to any such Mortgage Loan during the term of this Agreement
unless and until such Mortgage Loan is repurchased or otherwise in accordance with the terms of this Agreement. 
 (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). 
  

 5 

 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 Servicer, the Sponsor or the Depositor, 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 Issuing Entity 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 Issuing Entity, such
title shall be retained in trust for the Issuing Entity as the owner of the Mortgage Loans, and the Indenture Trustee, as the pledgee of the Issuing Entity under the Indenture. In acting as custodian of any original document which is part of the
Indenture Trustee’s Mortgage Files, the 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 Servicer’s receipt of any
such original document, the Servicer, on behalf of the Issuing Entity, shall mark conspicuously each such original document, and its master data processing records with a legend evidencing that the Issuing Entity has purchased the related 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. 
 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 Depositor, the Sponsor, the Note Insurer and the 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 Depositor, the Sponsor, the Note Insurer and the 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 

  

 6 

 
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 Servicer, the Depositor, 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 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 with respect to 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; 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 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 

  

 7 

 
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 Servicer, the Sponsor and the Note Insurer. Upon receipt of such notice respecting such defect, the Depositor and the Sponsor shall have a sixty (60) day period after such notice within which to
correct or cure any such defect, or if the 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 Servicer for release to the Depositor or the Sponsor, as applicable, the related Indenture Trustee’s Mortgage File and the Indenture Trustee shall execute,
without recourse, and deliver such instruments of transfer furnished by the Depositor or the Sponsor as may be necessary to transfer such Mortgage Loan to the Depositor or the Sponsor, as applicable. The Indenture Trustee shall provide notice to the
Note Insurer if the Depositor and the Sponsor fail 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 Depositor to the Issuing Entity 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 Depositor to the Issuing Entity. 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 Depositor to the Issuing Entity to secure a debt or other obligation of the Depositor. However, in the event that the Mortgage Loans or any of such other property are
held to be property of the Depositor, 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 Depositor to the Issuing Entity of a security interest in all of the
Depositor’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 

  

 8 

 
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 Depositor, the Sponsor, the Servicer, on behalf of the Issuing
Entity 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. 
 (b) The Depositor, the Sponsor and the Servicer shall take no action inconsistent with the Issuing Entity’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 Issuing Entity, 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 Depositor, the Sponsor and the 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 Issuing Entity 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 Servicer agrees that, from time to time, at its
expense, it shall cause the Sponsor or Depositor, as the case may be, to, and each of the Sponsor and Depositor 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 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 Servicer, the Sponsor and the Depositor shall, upon the request of the 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. 
  

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 (b) Each of the Sponsor and the Depositor hereby grants to the 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 Depositor and the Servicer hereby acknowledge and agree that the Issuing Entity 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 Servicer, and the Indenture Trustee shall succeed to such of the rights of
the Issuing Entity hereunder as shall be so assigned. The Issuing Entity 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 Issuing Entity, the repurchase obligations of the Sponsor set forth herein with respect to breaches of such representations, warranties, agreements and covenants. 
 ARTICLE III 
 REPRESENTATIONS,
WARRANTIES AND COVENANTS 
 Section 3.01. Representations, Warranties and Covenants of the Servicer. The Servicer hereby
represents, warrants and covenants to the Indenture Trustee, the Depositor, the Sponsor, the Issuing Entity and the Noteholders that as of the Closing Date or as such date specifically provided herein: 
 (i) The Servicer is a corporation duly organized, validly existing and in good standing under the laws of the State of Virginia and has
the corporate power to own its assets and to transact the business in which it is currently engaged. The Servicer is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction in which the character of the
business transacted by it or properties owned or leased by it requires such qualification and in which the failure to so qualify would have a material adverse effect on the business, properties, assets, or condition (financial or other) of the
Servicer or the validity or enforceability of the Mortgage Loans; 
 (ii) The Servicer has the corporate power and authority
to make, execute, deliver and perform this Agreement and all of the transactions contemplated under this Agreement, and has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement. When executed
and delivered, this Agreement will constitute the legal, valid and binding obligation of the Servicer enforceable in accordance with its terms, except as enforcement of such terms may be limited by bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally and by the availability of equitable remedies; 
  

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 (iii) The Servicer is not required to obtain the consent of any other Person or any
consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement, except for
such consent, license, approval or authorization, or registration or declaration, as shall have been obtained or filed, as the case may be; 
 (iv) The execution and delivery of this Agreement and the performance of the transactions contemplated hereby by the Servicer will not violate any provision of any existing law or regulation or any order or decree of
any court applicable to the Servicer or any provision of the certificate of incorporation or bylaws of the Servicer, or constitute a material breach of any mortgage, indenture, contract or other agreement to which the Servicer is a party or by which
the Servicer may be bound; 
 (v) No litigation or administrative proceeding of or before any court, tribunal or governmental
body is currently pending, or to the knowledge of the Servicer threatened, against the Servicer or any of its properties or with respect to this Agreement or the Notes which, to the knowledge of the Servicer, has a reasonable likelihood of resulting
in a material adverse effect on the transactions contemplated by this Agreement; 
 (vi) The Servicer is a member of MERS in
good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS; and 
 (vii) With respect to the Group I Mortgage Loans, the Servicer will accurately and fully report its borrower credit files to the three
largest credit repositories in a timely manner. 
 The foregoing representations and warranties shall survive any termination of the Servicer hereunder.

 Section 3.02. Representations, Warranties and Covenants of the Sponsor. The Sponsor hereby represents and warrants to the Company
and the Trustee as of the date hereof, as of the Closing Date (or if otherwise specified below, as of the date so specified) and as of each Subsequent Transfer Date: 
 (a) As to the Sponsor: 
 (i) The Sponsor (i) is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Virginia and (ii) is qualified and in good standing as a foreign corporation
to do business in each jurisdiction where such qualification is necessary, except where the failure to so qualify would not have a material adverse effect on the Sponsor’s ability to enter into this Purchase Agreement and each Sponsor’s
Subsequent Transfer Instrument and to consummate the transactions contemplated hereby and thereby; 
 (ii) The Sponsor has the
power and authority to make, execute, deliver and perform its obligations under this Purchase Agreement and each Sponsor’s 

  

 11 

 
Subsequent Transfer Instrument and all of the transactions contemplated under this Purchase Agreement and each Sponsor’s Subsequent Transfer Instrument,
and has taken all necessary corporate action to authorize the execution, delivery and performance of this Purchase Agreement each Sponsor’s Subsequent Transfer Instrument; 
 (iii) The Sponsor is not required to obtain the consent of any other Person or any consent, approval or authorization from, or
registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Purchase Agreement or any Sponsor’s Subsequent Transfer Instrument,
except for such consents, approvals or authorization, or registration or declaration, as shall have been obtained or filed, as the case may be; 
 (iv) The execution and delivery of this Purchase Agreement and each Sponsor’s Subsequent Transfer Instrument and the performance of the transactions contemplated hereby by the Sponsor will not violate any
provision of any existing law or regulation or any order or decree of any court applicable to the Sponsor or any provision of the certificate of incorporation or bylaws of the Sponsor, or constitute a material breach of any mortgage, indenture,
contract or other agreement to which the Sponsor is a party or by which the Sponsor may be bound; 
 (v) No litigation or
administrative proceeding of or before any court, tribunal or governmental body is currently pending, or to the knowledge of the Sponsor threatened, against the Sponsor or any of its properties or with respect to this Purchase Agreement or any
Sponsor’s Subsequent Transfer Instrument, the Notes which in the opinion of the Sponsor has a reasonable likelihood of resulting in a material adverse effect on the transactions contemplated by this Purchase Agreement or any Sponsor’s
Subsequent Transfer Instrument; 
 (vi) This Purchase Agreement and each Sponsor’s Subsequent Transfer Instrument
constitute the legal, valid and binding obligations of the Sponsor, enforceable against the Sponsor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general and except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);

 (vii) This Purchase Agreement constitutes a valid transfer and assignment to the Company of all right, title and interest
of the Sponsor in and to the Cut-off Date Principal Balance of the Initial Mortgage Loans, all monies due or to become due with respect thereto, and all proceeds of such Cut-off Date Principal Balance of the Initial Mortgage Loans, and this Purchase
Agreement and the related Sponsor’s Subsequent Transfer Instrument constitutes a valid transfer and assignment to the Trustee of all right, title and interest of the Sponsor in and to the Subsequent Cut-off Date Principal Balance of the
Subsequent Mortgage Loans, all monies due or to become due with respect thereto, and all proceeds of such Subsequent Cut-off Date Principal Balance of the Subsequent Mortgage Loans; 
  

 12 

 (viii) The Sponsor is not in default with respect to any order or decree of any court or
any order or regulation of any federal, state or governmental agency, which default might have consequences that would materially and adversely affect the condition (financial or other) or operations of the Sponsor or its properties or might have
consequences that would materially adversely affect its performance hereunder; and 
 The Servicer or any Subservicer who will be servicing
any Mortgage Loan pursuant to the Pooling and Servicing Agreement or a Subservicing Agreement is qualified to do business in all jurisdictions in which its activities as Servicer or Subservicer of the Mortgage Loans serviced by it require such
qualifications except where failure to be so qualified will not have a material adverse effect on such servicing activities. 
 Section 3.03.
[Reserved] 
 Section 3.04. Representations, Warranties and Covenants of the Indenture Trustee. The Indenture Trustee hereby
represents, warrants and covenants to the Issuing Entity, the Servicer, the Depositor, 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 

  

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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. 
 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. Depositor Representation and Warranties. 
 (a) The Depositor is duly organized and validly existing as a [corporation][limited liability company] in good standing under the laws of the State of Delaware, with power and authority to own its properties and to
conduct its business as such properties are currently owned and such business is presently conducted. 
 (b) The Depositor is
duly qualified to do business as a foreign corporation in good standing and has obtained all necessary licenses and approvals in all jurisdictions in which the ownership or lease of its property or the conduct of its business shall require such
qualifications and in which the failure to so qualify would have a material adverse effect on the business, properties, assets or condition (financial or other) of the Depositor and the ability of the Depositor to perform under this Purchase
Agreement. 
 (c) The Depositor has the power and authority to execute and deliver this Purchase Agreement and to carry out
its terms; the Depositor has full power and authority to purchase the property to be purchased from the Seller and the Depositor has duly authorized such purchase by all necessary corporate action; and the execution, delivery and performance of this
Purchase Agreement have been duly authorized by the Depositor by all necessary corporate action. 
 (d) The consummation of
the transactions contemplated by this Purchase Agreement and the fulfillment of the terms hereof do not conflict with, result in any breach of any of the terms and provisions of, or constitute (with or without notice or lapse of time) a default
under, the articles of incorporation or bylaws of the Depositor, or any indenture, agreement or other instrument to which the Depositor is a party or by which it is bound; nor result in the creation or imposition of any Lien upon any of its
properties pursuant to the terms of any such indenture, agreement or other instrument (other than pursuant to the Basic Documents); nor violate any law or, to the best of the Depositor’s knowledge, any order, rule or regulation applicable to
the Depositor of any court or of any federal or state regulatory body, administrative 

  

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agency or other governmental instrumentality having jurisdiction over the Depositor or its properties. 
 (e) The Depositor (A) is a solvent entity and is paying its debts as they become due and (B) after giving effect to the transfer
of the Mortgage Loans, will be a solvent entity and will have sufficient resources to pay its debts as they become due. 
 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. 
 (a) As to each Initial Mortgage Loan as of the Closing Date and with respect to each Subsequent Mortgage Loan as of the Subsequent
Transfer Date, except as otherwise expressly stated: 
 (i) The information set forth on the Mortgage Loan Schedule with
respect to each Initial Mortgage Loan is true and correct in all material respects as of the Closing Date, and with respect to each Subsequent Mortgage Loan is true and correct in all material respects as of the related Subsequent Transfer Date, and
the information regarding the Initial Mortgage Loans and the Subsequent Mortgage Loans on the computer diskette or tape delivered to the Trustee prior to the Closing Date or related Subsequent Transfer Date, as applicable, is true and accurate in
all material respects and describes the same Mortgage Loans as the Mortgage Loans on the Mortgage Loan Schedule; 
 (ii) The
Mortgage Loans are not being transferred with any intent to hinder, delay or defraud any creditors; 
 (iii) No more than
[  ]% and [  ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) were secured by condominium units; and no more than [  ]% and
[  ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) were secured by properties in planned unit developments; 
 (iv) As of the Cut-off Date, the remaining term of each Group I Initial Mortgage Loan is not more than 360 months and not less than
[  ] months and the remaining term of each Group II Initial Mortgage Loan is not more than 360 months and not less than [  ] months; 
  

 15 

 (v) No more than [  ]% and [  ]% of the Initial Mortgage Loans in
Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) have been the subject of cash-out refinances; 
 (vi) No more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance), have been the subject of rate
and term (no cash-out) refinances; 
 (vii) No fewer than [  ]% and [  ]% of the Initial Mortgage Loans in
Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) are purchase money loans; 
 (viii) No more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in the
State of California; no more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in
the State of Florida; no more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in the State of
Virginia; no more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in the State of New Jersey; no
more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in the State of Maryland; no more than
[  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II (by Cut-off Date Principal Balance) are secured by Mortgaged Properties located in the State of New York; no more than
[  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) are located in any other state; 
 (ix) The outstanding Principal Balances of the Initial Mortgage Loans in Group I (by Cut-off Date Principal Balance) ranged from
$[  ] to $[  ], the average outstanding Principal Balance of the Initial Mortgage Loans in Group I is approximately $[  ]; the outstanding Principal Balances of the Initial Mortgage Loans in Group II (by Cut-off Date
Principal Balance) ranged from $[  ] to $[  ], the average outstanding Principal Balance of the Initial Mortgage Loans in Group II is approximately $[  ]; 
 (x) Approximately [  ]% and [  ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II,
respectively, (by Cut-off Date Principal Balance) were secured by a first lien on a parcel of real property improved by a detached single family residence; no more than [  ]% and [  ]% of the Initial Mortgage Loans in Group I and
Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) were secured by a first lien on a parcel of real estate improved by a multi-unit residence; 
  

 16 

 (xi) All points and fees related to each Mortgage Loan were disclosed in writing to the
borrower in accordance with applicable state and federal law and the borrower has executed a statement to that effect. No borrower was charged “points and fees” (whether or not financed) in an amount greater than [    
]% of the principal amount of any such loan originated by the Seller, such [     ]% limitation calculated in accordance with the Lender Letter. All fees and charges (including finance charges) and whether or not financed,
assessed, collected or to be collected with the origination and servicing of each Mortgage Loan has been disclosed in writing to the borrower in accordance with applicable state and federal law and regulation; 
 (xii) The Mortgage Rates borne by the adjustable rate Initial Mortgage Loans in Group I as of the Closing Date range from
[     ]% per annum to [     ]% per annum, and the weighted average Mortgage Rate (by Cut-off Date Principal Balance) of the adjustable rate Initial Mortgage Loans in Group I was [     ]%
per annum; the Mortgage Rates borne by fixed rate Initial Mortgage Loans in Group I as of the Closing Date range from [     ]% per annum to [     ]% per annum, and the weighted average Mortgage Rate (by
Cut-off Date Principal Balance) of the fixed rate Initial Mortgage Loans in Group I was [     ]% per annum; the Mortgage Rates borne by adjustable rate Initial Mortgage Loans in Group II as of the Closing Date range from
[     ]% per annum to [     ]% per annum, and the weighted average Mortgage Rate (by Cut-off Date Principal Balance) of the adjustable rate Initial Mortgage Loans in Group II was [     ]%
per annum; the Mortgage Rates borne by fixed rate Initial Mortgage Loans in Group II as of the Closing Date range from [     ]% per annum to [     ]% per annum, and the weighted average Mortgage Rate (by
Cut-off Date Principal Balance) of the fixed rate Initial Mortgage Loans in Group II was [     ]% per annum; 
 (xiii) Approximately [     ]% and [     ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) have a Loan-to-Value
Ratio in excess of [     ]%; no Group I Initial Mortgage Loan or Group II Initial Mortgage Loan in the Mortgage Pool had a Loan-to-Value Ratio or combined Loan-to-Value Ratio at origination in excess of [    
]%; and the weighted average Loan-to-Value Ratio (by Cut-off Date Principal Balance) of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II was equal to or less than [     ]% and
[     ]%, respectively (by Cut-off Date Principal Balance); 
 (xiv) Approximately
[     ]% and [     ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II, respectively (by Cut-off Date Principal Balance), are secured by first liens on the related Mortgaged
Property; and approximately [     ]% and [     ]% (by Cut-off Date Principal Balance) of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II are secured by second liens on the
related Mortgaged Property; 
 (xv) As of the Cut-off Date, the weighted average Loan-to-Value Ratio of the Initial Mortgage
Loans secured by first liens in Group I is approximately [     ]%; the weighted average combined Loan-to-Value Ratio of the Initial Mortgage Loans secured by first and second liens in Group I is approximately
[     ]%; the weighted average Loan-to-Value Ratio of the Initial Mortgage Loans secured by first liens in Group II is 

  

 17 

 
approximately [     ]%; the weighted average combined Loan-to-Value Ratio of the Initial Mortgage Loans secured by first and second liens
in Group II is approximately [     ]%; the weighted average combined Loan-to-Value Ratio of all of the Initial Mortgage Loans in Group I and Group II is approximately [     ]%; and the gross weighted average
coupon of the Initial Mortgage Loans is approximately [     ]%; 
 (xvi) There is no valid offset, right
of rescission, defense, claim or counterclaim of any obligor under any Mortgage Note or Mortgage, including the obligation of the Mortgagor to pay the unpaid principal of or interest on such Mortgage Note, and any applicable right of rescission has
expired, nor will the operation of any of the terms of such Mortgage Note or Mortgage, or the exercise of any right thereunder, render either the Mortgage Note or the Mortgage unenforceable, in whole or in part, or subject to any right of
rescission, set-off, recoupment, counterclaim or defense, including, without limitation, the defense of usury, and no such right of rescission, set-off, recoupment, counterclaim or defense has been asserted with respect thereto, and, to the best of
Seller’s knowledge, no Mortgagor of the applicable Mortgage is or since the date of origination has been a debtor in any state or federal bankruptcy or insolvency proceeding and no Mortgaged Property has been subject to any such proceeding;

 (xvii) There are no mechanics’ liens or any similar liens or claims for work, labor or material affecting any
Mortgaged Property which are or may be a lien prior to, or equal with, the lien of such Mortgage, except those which are insured against by the title insurance policy referred to in clause (xxii) below; 
 (xviii) As of the Closing Date in the case of an Initial Mortgage Loan or as of the related Subsequent Transfer Date in the case of a
Subsequent Mortgage Loan, each Mortgaged Property is free of material damage and is in good repair and there is no proceeding pending or threatened for the total or partial condemnation of any Mortgage Property. 
 (xix) Each Mortgage is a valid and enforceable first or second lien on the Mortgaged Property including all improvements on the Mortgaged
Property securing the related Mortgage Note and each Mortgaged Property is owned by the Mortgagor in fee simple (except with respect to common areas in the case of condominiums, PUDs and de minimis PUTDs) subject only to (1) the
lien of nondelinquent current real property taxes and assessments, (2) covenants, conditions and restrictions, rights of way, easements and other matters of public record as of the date of recording of such Mortgage, such exceptions appearing
of record being acceptable to mortgage lending institutions generally or specifically reflected in the appraisal made in connection with the origination of the related Mortgage Loan or referred to in the lender’s title insurance policy
delivered to the originator of the related Mortgage Loan and (3) other matters to which like properties are commonly subject that do not materially interfere with the benefits of the security intended to be provided by such Mortgage.
Immediately prior to the sale of such Mortgage Loan to the Company in the case of an Initial Mortgage Loan and to the Trustee in the case of a Subsequent Mortgage Loan pursuant to this Purchase Agreement, the Seller had full right to sell and assign
the same to the Company or the Trustee, as the case may be. Immediately following the sale of such Mortgage Loan to 

  

 18 

 
the Company and the Company’s assignment and sale thereof of such Mortgage Loan to the Trustee in the case of an Initial Mortgage Loan, the Trustee will
have good title thereto subject to no claims or liens, including delinquent tax or assessment liens. Immediately following the sale of such Mortgage Loan to the Company and the Company’s assignment and sale thereof to the Trustee in the case of
a Subsequent Mortgage Loan, the Trustee will have good title thereto subject to no claims or liens; 
 (xx) Each Mortgage Loan
at origination complied with applicable local, state and federal laws, including, without limitation, usury, equal credit opportunity, real estate settlement procedures, the Truth In Lending Act of 1968, as amended, all applicable predatory and
abusive lending laws and disclosure laws and consummation of the transactions contemplated hereby, including without limitation, the receipt of interest by the owner of such Mortgage Loan or the Holders of Notes secured thereby, will not violate any
such laws. Any and all statements or acknowledgments required to be made by the Mortgagor relating to such requirements are and will remain in the Mortgage File. Each Mortgage Loan is being serviced in accordance with applicable state and federal
laws, including, without limitation, the Truth In Lending Act of 1968, as amended, and other consumer protection laws, real estate settlement procedures, usury, equal credit opportunity and disclosure laws and in a prudent and customary manner;

 (xxi) Neither the Seller nor any prior holder of any Mortgage has impaired, waived, altered or modified the Mortgage or
Mortgage Notes in any material respect (except that a Mortgage Loan may have been modified by a written instrument which has been recorded, if necessary to protect the interests of the owner of such Mortgage Loan or the Notes, and which has been
delivered to the Trustee); satisfied, canceled or subordinated such Mortgage in whole or in part; released the applicable Mortgaged Property in whole or in part from the lien of such Mortgage; or executed any instrument of release, cancellation or
satisfaction with respect thereto; 
 (xxii) A lender’s policy of title insurance (on an ALTA or CLTA form) or binder, or
other assurance of title customary in the relevant jurisdiction insuring the first lien priority of the Mortgage Loan in an amount at least equal to the original Principal Balance of each such Mortgage Loan or a commitment binder or commitment to
issue the same was effective on the date of the origination of each Mortgage Loan, each such policy is valid and remains in full force and effect, and each such policy was issued by a title insurer qualified to do business in the jurisdiction where
the Mortgaged Property is located, which policy insures the Seller and successor owners of indebtedness secured by the insured Mortgage as to the first priority lien of the Mortgage as applicable. The Seller is, and such successor owners will be,
the sole insured under such lender’s title insurance policy; no claims have been made under such mortgage title insurance policy; no prior holder of the applicable Mortgage, including the Seller, has done, by act or omission, anything which
would impair the coverage of such mortgage title insurance policy; and each such policy, binder or assurance contains all applicable endorsements; 
 (xxiii) All of the improvements which were included for the purpose of determining the Appraised Value of the Mortgaged Property lie wholly within the 

  

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boundaries and building restriction lines of such property and no improvements on adjoining properties encroach upon the Mortgaged Property; 
 (xxiv) No improvement located on or being part of the Mortgaged Property is in violation of any applicable zoning law or regulation,
subdivision law or ordinance, except where the failure to comply would not have a material adverse effect on the market value of the Mortgaged Property. All inspections, licenses and certificates required to be made or issued with respect to all
occupied portions of the Mortgaged Property and, with respect to the use and occupancy and fire underwriting certificates, have been made or obtained from the appropriate authorities and the Mortgaged Property is lawfully occupied under applicable
law except where the failure to comply would not have a material adverse effect on the market value of the Mortgaged Property; 
 (xxv) Each Mortgage Note and the applicable Mortgage are genuine, and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium, receivership and other similar laws relating to creditors’ rights generally or by equitable principles (regardless of whether such enforcement is considered in a proceeding in equity or at law). All parties to the
Mortgage Note and the Mortgage had legal capacity to execute the Mortgage Note and the Mortgage and each Mortgage Note and Mortgage has been duly and properly executed by such parties; 
 (xxvi) The proceeds of the Mortgage Loans have been fully disbursed, there is no requirement for future advances thereunder and any and
all requirements as to completion of any on-site or off-site improvements and as to disbursement of any escrow funds therefor have been complied with. All costs, fees and expenses incurred in making, closing or recording the Mortgage Loans were paid
and the Mortgagor is not entitled to any refund of amounts paid or due under the Mortgage Note; 
 (xxvii) Each Mortgage
contains customary and enforceable provisions that render the rights and remedies of the holder thereof adequate for the realization against the 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 or if applicable, non-judicial foreclosure. Upon default by a Mortgagor on a Mortgage Loan and foreclosure on, or trustee’s sale of, the
Mortgaged Property pursuant to the proper procedures, the holder of the Mortgage Loan will be able to deliver good and merchantable title to the property, subject to any applicable rights of redemption; 
 (xxviii) With respect to each Mortgage constituting a deed of trust, either 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 or if no duly qualified trustee has been properly designated and so serves, the Mortgage contains satisfactory provisions for the appointment of such trustee by
the holder of the Mortgage at no cost or expense to such holder, and no fees or expenses are or will become payable by the Noteholders to the trustee under the deed of trust, except in connection with a trustee’s sale after default by the
Mortgagor; 
  

 20 

 (xxix) There exist no deficiencies with respect to escrow deposits and payments, if such
are required, for which customary arrangements for repayment thereof cannot be made, and no escrow deficits or payments of other charges or payments due the Seller have been capitalized under the Mortgage or the applicable Mortgage Note; 

(xxx) The Mortgage Note is not and has not been secured by any collateral, pledged account or other security other than real estate
securing the Mortgagor’s obligations and no Mortgage Loan is secured by more than one Mortgaged Property; 
 (xxxi) As of
the Closing Date in the case of an Initial Mortgage Loan and as of the related Subsequent Transfer Date in the case of a Subsequent Mortgage Loan, the improvements upon each Mortgaged Property are covered by a valid and existing hazard insurance
policy substantially acceptable to FNMA and acceptable to the Seller which policy provides for fire extended coverage and such other hazards as are customary in the area where the Mortgaged Property is located representing coverage in an amount not
less than the lesser of (A) the maximum insurable value of the improvements securing such Mortgage Loan and (B) the outstanding Principal Balance of the related Mortgage Loan; if the improvement on the Mortgaged Property is a condominium
unit, it is included under the coverage afforded by a blanket policy for the condominium project. All individual insurance policies contain a standard mortgagee clause naming the Seller or the original holder of the Mortgage, and its successors in
interest, as mortgagee, and the Seller has received no notice that any premiums due and payable thereon have not been paid; the Mortgage obligates the Mortgagor thereunder to maintain all such insurance at the Mortgagor’s cost and expense, and
upon the Mortgagor’s failure to do so, authorizes the holder of the Mortgage to obtain and maintain such insurance at the Mortgagor’s cost and expense and to seek reimbursement therefor from the Mortgagor. There has been no act or omission
which would impair the coverage of any such policy, the benefits of the endorsement provided for herein, or the validity and binding effect of either; 
 (xxxii) If the 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 in a form meeting the
requirements of the current guidelines of the Flood 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 (A) the
outstanding Principal Balance of the Mortgage Loan, (B) the minimum amount required to compensate for damage or loss on a replacement cost basis and (C) the maximum amount of flood coverage that is available under federal law; 

(xxxiii) Except for the Mortgage Loans referred to in clause (xlii) as being delinquent, if any, there is no default, breach,
violation or event of acceleration existing under the Mortgage or the applicable 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 material default, breach,
violation or event of acceleration, and neither the Seller, any of its affiliates nor any servicer or subservicer of any related Mortgage Loan 

  

 21 

 
has waived any default, breach, violation or event of acceleration; no foreclosure action is threatened or has been commenced with respect to the Mortgage
Loan; 
 (xxxiv) Each Mortgage Loan is being serviced by the Servicer in accordance with the terms of the Mortgage Note;

 (xxxv) There is no obligation on the part of the Seller or any other party to make any payments with respect to the related
Mortgage Loan in addition to the Monthly Payments required to be made by the applicable Mortgagor; 
 (xxxvi) Any future
advances made prior to the Cut-off Date in the case of an Initial Mortgage Loan and as of the related Subsequent Transfer Date in the case of a Subsequent Mortgage Loan, with respect to any Mortgage Loan have been consolidated with the outstanding
principal amount secured by such 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 Mortgage Loan. The Mortgage Note with respect to any Mortgage Loan does not permit or obligate the Servicer to make future advances to the Mortgagor at the option of the Mortgagor; 
 (xxxvii) The Seller has caused or will cause to be performed any and all acts required to preserve the rights and remedies of the Company
and the Trustee evidencing an interest in the Mortgage Loans in any insurance policies applicable to the Mortgage Loans including, without limitation, any necessary notifications of insurers, assignments of policies or interests therein, and
establishments of coinsured, joint loss payee and mortgagee rights in favor of Trustee; 
 (xxxviii) Except as set forth in
clause (xlii), there are no defaults by the Mortgagor in complying with the terms of any Mortgage, and all taxes, governmental assessments, insurance premiums, water, sewer and municipal charges which previously became due and owing have been paid,
or, if required by the terms of the Mortgage Loan, an escrow of funds has been established in an amount sufficient to pay for every such item which remains unpaid and which has been assessed, but is not yet due and payable. Except for
(A) payments in the nature of escrow payments and (B) interest accruing from the date of the Mortgage Note or date of disbursement of the Mortgage proceeds to the day which precedes by one month the Due Date of the first installment of
principal and interest, including, without limitation, taxes and insurance payments, neither the Seller nor the Servicer has advanced funds, or induced, solicited or knowingly received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required by the Mortgage; 
 (xxxix) At the time of origination, each
Mortgaged Property was the subject of an appraisal which conforms to the underwriting requirements of the related originator; and the Mortgage File contains an appraisal of the applicable Mortgaged Property; 
  

 22 

 (xl) None of the Mortgage Loans are graduated payment Mortgage Loans or growth equity
Mortgage Loans; 
 (xli) [Reserved.] 
 (xlii) (a) Except with respect to no more than [ ]% and [ ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in
Group II, respectively, none of the payments of principal of or interest on or in respect of any Initial Mortgage Loans (by Cut-off Date Principal Balance) shall be 30 days or more but less than 60 days past due as of the Cut-off Date; and [ ]% and
none of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in Group II, respectively, was 60 days or more past due as of the Cut-off Date; (b) except as set forth in clause (a) above, all payments required to be made by
the Mortgagor under the terms of the Mortgage Note have been made and credited; and (c) to the Seller’s knowledge, there was no delinquent recording, tax or assessment lien against the property subject to any Mortgage, except where such
lien was being contested in good faith and a stay had been granted against levying on the property; 
 (xliii) Upon payment of
the Purchase Price for the Mortgage Loans by the Company or the Trustee, as applicable, pursuant to this Purchase Agreement, the Seller has transferred to the Company in the case of an Initial Mortgage Loan and to the Trustee in the case of a
Subsequent Mortgage Loan, good and marketable title to each Mortgage Note and Mortgage free and clear of any and all liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and has or had
full right and authority, subject to no participation of or agreement with any other person, to sell and assign the same, and following the sale of each Mortgage Loan, the Company or the Trustee, as applicable, will own such Mortgage Loan free and
clear of any encumbrance, equity interest, participation interest, lien, pledge, charge, claim or security interest; 
 (xliv)
The Seller acquired any right, title and interest in and to the Mortgage Loans in good faith and without notice of any adverse claim; 
 (xlv) The Mortgage Note, the Mortgage, the related Assignment of Mortgage and any other documents required to be delivered by the Seller have been delivered to the Custodian. The Custodian is in possession of a
complete, true and accurate Mortgage File in accordance with Section 2.01 hereof. Substantially all the Mortgage Loans have monthly payments due on the first day of each month and each Mortgage Loan had an original term to maturity of no
greater than 30 years; 
 (xlvi) Each Mortgage Loan contains a due-on-sale provision, although each Mortgage Loan may be
assumable if permitted by the Servicer under certain circumstances; 
 (xlvii) Each of the Mortgage and the Assignment of
Mortgage is in recordable form and is acceptable for recording under the laws of the jurisdiction in which the Mortgaged Property is located; 
  

 23 

 (xlviii) The Mortgagor has not notified the Seller, and the Seller has no knowledge of
any relief requested or allowed to the Mortgagor under the Servicemembers Civil Relief Act other than as disclosed pursuant to the Prospectus Supplement; 
 (xlix) To the best of the Seller’s knowledge, there exists no violation of any local, state, or federal environmental law, rule or regulation in respect of the Mortgaged Property which violation has or could have
a material adverse effect on the market value of such Mortgaged Property. The Seller has no knowledge of any pending action or proceeding directly involving the related Mortgaged Property in which compliance with any environmental law, rule or
regulation is in issue; and, to the best of the Seller’s knowledge, nothing further remains to be done to satisfy in full all requirements of each such law, rule or regulation constituting a prerequisite to the use and employment of such
Mortgaged Property; 
 (l) Each Mortgage Loan conforms, and all such Mortgage Loans in the aggregate conform, to the
description thereof set forth in the Prospectus and Prospectus Supplement in all material respects; 
 (li) [Reserved]

 (lii) No Group I Mortgage Loan is subject to the requirements of the Home Ownership and Equity Protection Act of 1994
(“HOEPA”); 
 (liii) Immediately prior to the transfer to the Company or the Trustee, as applicable, the Seller had
good and marketable title thereto, and the Seller is the sole legal, equitable owner of beneficial title to and holder of the Mortgage Loan. The Seller is conveying the same to the Company or the Trustee, as applicable, free and clear of any and all
liens, claims, encumbrances, participation interests, equities, pledges, charges or security interests of any nature and has full right and authority to sell and assign the same pursuant to this Purchase Agreement, except for liens which will be
released simultaneously with such conveyance; 
 (liv) For each Mortgage Loan, the related Mortgage File contains a true,
accurate and correct copy of each of the documents and instruments required to be included therein; 
 (lv) The Servicer meets
all applicable requirements under the Pooling and Servicing Agreement, is properly qualified to service each Mortgage Loan and has been servicing each Mortgage Loan prior to the Cut-off Date or the related Subsequent Cut-off Date, as the case may
be; 
 (lvi) No instrument of release or waiver has been executed in connection with the Mortgage Loans, and no Mortgagor has
been released, in whole or in part from its obligations in connection with a Mortgage Loan except in connection with an assumption agreement which has been delivered to the Trustee; 
  

 24 

 (lvii) On the basis of a representation by the Mortgagor at the time of origination of
the Mortgage Loans, at least [ ]% and [ ]% of the Initial Mortgage Loans in Group I and Initial Mortgage Loans in Group II, respectively, (by Cut-off Date Principal Balance) will be secured by Mortgages on owner-occupied primary residence
properties; 
 (lviii) Approximately [ ]%, and [ ]% of the Initial Mortgage Loans in Group I and the Initial Mortgage Loans in
Group II, respectively, (by Cut-off Date Principal Balance) provide for a balloon payment and each Mortgage Note with respect to each such Mortgage Loan requires monthly payments of principal based on either a 40 year or 30 year amortization
schedules and have scheduled maturity dates of 30 years or 15 years, respectively, from the due date of the first monthly payment; 
 (lix) No Mortgage Loan was originated based on an appraisal of the related Mortgaged Property made prior to completion of construction of the improvements thereon; 
 (lx) None of the Mortgage Loans is a “buy down” mortgage loan; 
 (lxi) [Reserved]. 
 (lxii) No Mortgage Loan is a “High Cost Home Loan” or “Covered Loan,” as applicable, (as such terms are defined in the then current Standard & Poor’s LEVELS® Glossary which is now Version 5.6(b) Revised, Appendix E) and no Mortgage Loan is a
“High Cost Home Loan” as defined in the Georgia Fair Lending Act, as amended (the “Georgia Act”). No Mortgage Loan that was originated (or modified) on or after October 1, 2002 and before March 7, 2003, is secured by
property located in the State of Georgia. There is no Mortgage Loan that was originated on or after March 7, 2003 which is a “high cost home loan” as defined under the Georgia Fair Lending Act; 
 (lxiii) None of the Mortgage Loans are covered by the requirements of the Home Ownership and Equity Protection Act of 1994, as amended, or
any comparable state or local law; none of the Mortgage Loans are “section 32” loans or “high cost” loans as defined by applicable predatory and abusive lending laws; no proceeds from any Mortgage Loan were used to finance any
single premium credit insurance policies; none of the Mortgage Loans (by Cut-off Date Principal Balance) require a mortgagor to pay a Prepayment Charge if the mortgagor prepays a Mortgage Loan more than five years after the date the Mortgage Loan
was originated; 
 (lxiv) No Mortgage Loan is a “High-Cost Home Loan” as defined in New York Banking Law 6-1;

 (lxv) No Mortgage Loan is a “High-Cost Home Loan” as defined in the Arkansas Home Loan Protection Act effective
July 16, 2003 (Act 1340 of 2003); 
 (lxvi) No Mortgage Loan is a “High-Cost Home Loan” as defined in the
Kentucky high-cost home loan statute effective June 24, 2003 (Ky. Rev. Stat. Section 360.100); 
  

 25 

 (lxvii) No Mortgage Loan in the trust is a “high-cost home,”
“covered” (excluding home loans defined as “covered home loans” in the New Jersey Home Ownership Security Act of 2002 that were originated between November 26, 2003 and July 7, 2004), “high risk home” or
“predatory” loan under any applicable state, federal or local law (or a similarly classified loan using different terminology under a law imposing heightened regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees); 
 (lxviii) No Mortgage Loan is a “High-Cost Home Loan” as defined
in the New Mexico Home Loan Protection Act effective January 1, 2004 (N.M. Stat. Ann. §§ 58-21A-1 et seq.); 
 (lxix) No Mortgage Loan is a “High-Risk Home Loan” as defined in the Illinois High-Risk Home Loan Act effective January 1, 2004 (815 Ill. Comp. Stat. 137/1 et seq.); 
 (lxx) No Mortgage Loan is a “High-Cost Home Loan” as defined in the Massachusetts Predatory Home Loan Practices Act effective
November 7, 2004 (MA House Bill 4880); 
 (lxxi) No Mortgage Loan is a “High-Cost Home Loan” as defined in the
Indiana Home Loan Practices Act effective January 1st, 2005 (Indiana Code Ann. §§ 24-9-1 et seq.); 
 (lxxii)
Approximately [ ]% of the Initial Mortgage Loans are subject to prepayment penalty charges as of the Cut-off Date; 
 (lxxiii)
[Reserved.] 
 (lxxiv) No borrower was required to purchase any credit life, disability, accident or health insurance product
as a condition of obtaining the extension of credit. No borrower obtained a prepaid single premium credit life, credit disability, credit unemployment or credit property insurance policy in connection with the origination of the Mortgage Loan; No
proceeds from any Mortgage Loan were used to purchase single premium credit insurance policies as part of the origination of, or as a condition to closing, such Mortgage Loan; 
 (lxxv) No Group I Mortgage Loan originated on or after October 1, 2002 will impose a prepayment premium for a term in excess of three
years and no Group I Mortgage Loan originated before October 1, 2002 will impose prepayment penalties in excess of five years; 
 (lxxvi) [Reserved.] 
 (lxxvii) [Reserved.] 
 (lxxviii) [Reserved.] 
  

 26 

 (lxxix) [With respect to Mortgaged Properties located in the continental United States
and Puerto Rico, no Group I Mortgage Loan secured by a single-family residence has a Principal Balance at origination in excess of $[ ]; no Group I Mortgage Loan secured by a two-family residence has a Principal Balance at origination in excess of
$[ ]; no Group I Mortgage Loan secured by a three-family residence has a Principal Balance at origination in excess of $[ ]; and no Group I Mortgage Loan secured by a four-family residence has a Principal Balance at origination in excess of $[ ];
with respect to Mortgaged Properties located in Alaska, Guam, Hawaii and the Virgin Islands, no Group I Mortgage Loan secured by a single-family residence has a Principal Balance at origination in excess of $[ ]; no Group I Mortgage Loan secured by
a two-family residence has a Principal Balance at origination in excess of $[ ]; no Group I Mortgage Loan secured by a three-family residence has a Principal Balance at origination in excess of $[ ]; and no Group I Mortgage Loan secured by a
four-family residence has a Principal Balance at origination in excess of $[ ]]; 
 (lxxx) No selection procedure reasonably
believed by the Seller to be adverse to the interests of the Noteholders was utilized in selecting the Mortgage Loans; 
 (lxxxi) The terms of the Mortgage Note related to each adjustable rate Mortgage Loan provide that, following an initial period of two or three years following the month in which such Mortgage Loan was originated and semiannually or annually
thereafter (each such date, an “Adjustment Date”), the Mortgage Rate on such Mortgage Loan will be adjusted to equal the sum of (a) the related Index and (b) a fixed percentage amount specified in the related Mortgage Note
(each, a “Gross Margin”); provided, however, that the Mortgage Rate generally will not increase or decrease by the related Periodic Rate Cap, and will not increase above a specified maximum Mortgage Rate over the life of the
Adjustable Rate Mortgage Loan (the “Maximum Mortgage Rate”) or decrease below a specified minimum Mortgage Rate over the life of the Adjustable Rate Mortgage Loan (the “Minimum Mortgage Rate”); 
 (lxxxii) None of the Initial Mortgage Loans (by Cut-off Date Principal Balance) are negative amortization loans, and none of the
Subsequent Mortgage Loans shall be negative amortization loans; 
 (lxxxiii) No error, omission, negligence,
misrepresentation, fraud or similar occurrence with respect to a Mortgage Loan has taken place on the part of the Seller, its affiliates or employees or any other person involved in the origination of the Mortgage Loan or in the application for any
insurance, including, but not limited to the MI Policy, in relation to such Mortgage Loan; 
 (lxxxiv) Each Mortgage Loan was
originated by a mortgagee approved by the Secretary of Housing and Urban Development pursuant to Sections 203 and 211 of the Act, a savings and loan association, a savings bank, a commercial bank, credit union, insurance company or similar
institution which is supervised and examined by a federal or state authority; 
  

 27 

 (lxxxv) With respect to each Mortgage Loan secured by manufactured housing, such
manufactured housing is permanently affixed to a foundation and constitutes real estate under applicable state law; 
 (lxxxvi) No Mortgage Loans are date of payment or simple interest loans; 
 (lxxxvii) The sale, transfer, assignment
and conveyance of Mortgage Loans by the Seller pursuant to this Purchase Agreement is not subject to and will not result in any tax, fee or governmental charge payable by the Company, the Custodian or the Trustee to any federal, state or local
government (“Transfer Taxes”) other than Transfer Taxes which have or will be paid by the Seller as due; 
 (lxxxviii) Each Mortgage Loan is a “qualified mortgage” within Section 860G(a)(3) of the Code; 
 (lxxxix) Approximately [ ]% of the Initial Mortgage Loans (by Cut-off Date Principal Balance) with a Loan-to-Value Ratio greater than [ ]% are covered by an MI Policy issued by an MI Insurer; 
 (xc) Approximately [ ]% of the Initial Mortgage Loans that are identified on Exhibit 1 hereto are covered by a MI Policy issued by the MI
Insurer; 
 (xci) All requirements for the valid transfer of each MI Policy, including any assignments or notices required in
each MI Policy, have been satisfied; 
 (xcii) As of the Closing Date with respect to each Initial Mortgage Loan that is
subject to a MI Policy and as of each Subsequent Transfer Date with respect to each Subsequent Mortgage Loan that is subject to a MI Policy, the Seller is unaware of any existing circumstances which would cause the MI Insurer to deny a claim with
respect to such Mortgage Loan; 
 (xciii) All appraisals of the Mortgage Loans by the Seller are full URAR/1004 appraisals;

 (xciv) All Prepayment Charges are enforceable and were originated in compliance with all applicable federal, state, and
local laws; 
 (xcv) [Reserved.] 
 (xcvi) With respect to mortgage loans that are more than 59 days delinquent as of the Cut-off Date, the Seller has made a specific review of the Servicer’s data and records that reflect mortgagor communications
and payment history, and has no actual knowledge of an event, condition or mortgagor communication which would cause the Seller to institute foreclosure proceedings; 
 (xcvii) The servicer for each Group I Mortgage Loan has fully furnished (and will fully furnish), in accordance with the Fair Credit
Reporting Act and 

  

 28 

 
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; 
 (xcviii) None of the Group I
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 (including without limitation any regulation or ordinance) (or a similarly classified loan using different terminology under a law imposing heightened regulatory
scrutiny or additional legal liability for residential mortgage loans having high interest rates, points and/or fees); and 
 (xcix) With respect to any Group I Mortgage Loan originated on or after August 1, 2004, neither the related mortgage nor the related mortgage note requires the borrower to submit to arbitration to resolve any dispute arising out of or
relating in any way to the mortgage loan transaction. 
 Upon discovery by the Seller or upon notice from the Company, the Trustee, or the
Custodian, as applicable, of a breach of any representation or warranty in subsection (a) of this Section which materially and adversely affects the interests of the Noteholders the Seller shall, within 45 days of its discovery or its receipt
of notice of such breach, either (i) cure such breach in all material respects or (ii) to the extent that such breach is with respect to a Mortgage Loan or a Related Document, either (A) repurchase such Mortgage Loan from the Trustee
at the Repurchase Price, or (B) substitute one or more Eligible Substitute Mortgage Loans for such Mortgage Loan, in each case in the manner and subject to the conditions and limitations set forth below. 
 Upon discovery by the Seller or upon notice from the Company, the Trustee, or the Custodian, as applicable, of a breach of any representation or warranty
in this subsection (b) with respect to any Mortgage Loan or upon the occurrence of a Repurchase Event, which materially and adversely affects the value of the related Mortgage Loan or the interests of any Noteholders or of the Company or the
Trustee in such Mortgage Loan (notice of which shall be given to the Company and the Trustee by the Seller, if it discovers the same) the Seller shall, within 90 days after the earlier of its discovery or receipt of notice thereof, either cure such
breach or Repurchase Event in all material respects or either (i) repurchase such Mortgage Loan from the Trustee at the Repurchase Price, or (ii) substitute one or more Eligible Substitute Mortgage Loans for such Mortgage Loan, in each
case in the manner and subject to the conditions set forth below; provided, however, that a breach of any of the representations and warranties found in subsections b(xx), (b)(lii), (b)(lxii), (b)(lxvii), (b)(lxxiv), (b)(lxxv), (b)(lxxix),
(b)(xcvii), (b)(xcviii) and (b)(xcix) shall be deemed to materially and adversely affect the interest of the Noteholders. The Repurchase Price for any such Mortgage Loan repurchased by the Seller shall be deposited or caused to be deposited by the
Servicer in the Collection Account maintained by it pursuant to Section 3.06 of the Pooling and Servicing Agreement. 
 In the event
that the Seller elects to substitute an Eligible Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section 3.01, the Seller shall deliver to the Custodian on behalf of the Trustee, with respect to such Eligible
Substitute Mortgage Loan or 

  

 29 

 
Loans, the original Mortgage Note and all other documents and agreements as are required by Section 2.01 hereof, with the Mortgage Note endorsed as
required by such Section 2.01 hereof. No substitution will be made in any calendar month after the Determination Date for such month. Monthly Payments due with respect to Eligible Substitute Mortgage Loans in the month of substitution shall not
be part of the Trust Fund and will be retained by the Servicer and remitted by the Servicer to the Seller on the next succeeding Payment Date. For the month of substitution, distributions to the Collection Account pursuant to the Pooling and
Servicing Agreement will include the Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter the Seller shall be entitled to retain all amounts received in respect of such Deleted Mortgage Loan. The Servicer shall amend or cause
to be amended the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan and the substitution of the Eligible Substitute Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan Schedule to the Custodian
and the Trustee. Upon such substitution, the Eligible Substitute Mortgage Loan or Loans shall be subject to the terms of this Purchase Agreement and the Pooling and Servicing Agreement in all respects, the Seller shall be deemed to have made the
representations and warranties with respect to the Eligible Substitute Mortgage Loan contained herein set forth in this Section 3.01(b), to the extent set forth in the definition of “Eligible Substitute Mortgage Loan”, as of the date
of substitution, and the Seller shall be obligated to repurchase or substitute for any Eligible Substitute Mortgage Loan as to which a Repurchase Event has occurred as provided herein. In connection with the substitution of one or more Eligible
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (such amount, a “Substitution Adjustment Amount”), if any, by which (i) the Repurchase Price that would otherwise apply to such
Deleted Mortgage Loan, exceeds (ii) the principal balance of the related Eligible Substitute Mortgage Loan (after application of the principal portion of the Monthly Payments due in the month of substitution that are to be distributed to the
Collection Account in the month of substitution). The Seller shall pay the amount of such shortfall to the Servicer for deposit into the Collection Account on the day of substitution, without any reimbursement therefor. 
 Upon receipt by the Trustee of written notification, signed by a Servicing Officer, of the deposit of such Repurchase Price or of such substitution of an
Eligible Substitute Mortgage Loan and deposit of any applicable Substitution Adjustment Amount as provided above, the Custodian shall, on behalf of the Trustee, cause to be released to the Seller the related Mortgage File for the Mortgage Loan being
repurchased or substituted for and the Trustee shall execute and deliver such instruments of transfer or assignment prepared by the Servicer, in each case without recourse, as shall be necessary to vest in the Seller or its designee such Mortgage
Loan released pursuant hereto and thereafter such Mortgage Loan shall not be an asset of the Trustee. 
 It is understood and agreed that the
obligation of the Seller to cure any breach with respect to or to repurchase or substitute for, any Mortgage Loan as to which such a breach has occurred and is continuing shall, except to the extent provided in Section 6.01 of this Purchase
Agreement, constitute the sole remedy respecting such breach available to the Company, the Trustee, the Noteholders or the Custodian against the Seller. 
 It is understood and agreed that the representations and warranties set forth in this Section 3.01 shall survive delivery of the respective Mortgage Files to the Custodian on behalf of the Trustee. 
  

 30 

 ARTICLE V 
 ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS 
 Section 5.01. Servicer to Assure Servicing.

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

 31 

 (b) Notwithstanding the provisions of Subsection 3.01(a), the Servicer shall not take any
action inconsistent with the interests of the Indenture Trustee, or the Noteholders or with the rights and interests of the Indenture Trustee, or the Noteholders under this Agreement. 
 (c) The Indenture Trustee shall furnish the Servicer with any powers of attorney and other documents in form as provided to it necessary
or appropriate to enable the Servicer to service and administer the related Mortgage Loans and REO Property and the Indenture Trustee shall not be liable for the actions of the Servicer or any Subservicers under such powers of attorney. 

(d) The Servicer further is authorized and empowered by the Indenture Trustee, on behalf of the Noteholders and the Indenture Trustee,
when the Servicer believes it is appropriate in its best judgment to register any Mortgage Loan on the MERS System, or cause the removal from the registration of any Mortgage Loan on the MERS System, to execute and deliver, on behalf of the
Indenture Trustee and the Noteholders or any of them, any and all instruments of assignment and other comparable instruments with respect to such assignment or re-recording of a Mortgage in the name of MERS, solely as nominee for the Indenture
Trustee and its successors and assigns. Any expenses incurred in connection with the actions described in the preceding sentence shall be borne by the Servicer with no right of reimbursement; provided, that if, as a result of MERS discontinuing or
becoming unable to continue operations in connection with the MERS System, it becomes necessary to remove any Mortgage Loan from registration on the MERS System and to arrange for the assignment of the related Mortgages to the Indenture Trustee,
then any related expenses shall be reimbursable to the Servicer by the Trust. 
 Section 5.02. Subservicing Agreements Between Servicer and
Subservicers. 
 (a) The Servicer may enter into Subservicing Agreements with Subservicers for the servicing and
administration of the Mortgage Loans and for the performance of any and all other activities of the Servicer hereunder. Each Subservicer shall be either (i) an institution the accounts of which are insured by the FDIC or (ii) another
entity that engages in the business of originating or servicing mortgage loans comparable to the Mortgage Loans, and in either case shall be authorized to transact business in the state or states in which the related Mortgaged Properties it is to
service are situated, if and to the extent required by applicable law to enable the Subservicer to perform its obligations hereunder and under the Subservicing Agreement. Any Subservicing Agreement entered into by the Servicer shall include the
provision that such Agreement may be immediately terminated (i) (x) with cause and without any termination fee by the Servicer hereunder and/or (y) without cause, in which case the Servicer shall be solely responsible for any
termination fee or penalty resulting therefrom and (ii) at the option of the Indenture Trustee upon the termination or resignation of the Servicer hereunder, in which case the Servicer shall be solely responsible for any termination fee or
penalty resulting therefrom. In addition, each Subservicing Agreement shall provide for servicing of the Mortgage Loans consistent with the terms of this Agreement. The Servicer and the Subservicers may enter into Subservicing Agreements and make
amendments to the Subservicing Agreements or enter into different forms of Subservicing Agreements providing for, among other things, the delegation by the Servicer to a Subservicer of additional duties regarding the administration of the Mortgage
Loans; provided, however, that any such amendments or different forms shall be consistent with 

  

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and not violate the provisions of this Agreement, and that no such amendment or different form shall be made or entered into which could be reasonably
expected to be materially adverse to the interests of the Noteholders, without the consent of the Noteholders holding at least 51% of the aggregate Voting Rights. 
 (b) As part of its servicing activities hereunder, the Servicer, for the benefit of the Indenture Trustee, and the Noteholders, shall
enforce the obligations of each Subservicer under the related Subservicing Agreement. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Subservicing Agreements and the pursuit of other appropriate
remedies, shall be in such form and carried out to such an extent and at such time as the Servicer, in its good faith business judgment, would require were it the owner of the related Mortgage Loans. The Servicer shall pay the costs of such
enforcement at its own expense, but shall be reimbursed therefor only (i) from a general recovery resulting from such enforcement only to the extent, if any, that such recovery exceeds all amounts due in respect of the related Mortgage Loan or
(ii) from a specific recovery of costs, expenses or attorneys’ fees against the party against whom such enforcement is directed. 
 Section 5.03. Successor Subservicers. 
 The Servicer shall be entitled to terminate any Subservicing Agreement that may exist in accordance with
the terms and conditions of such Subservicing Agreement and without any limitation by virtue of this Agreement; provided, however, that upon termination, the Servicer shall either act as servicer of the related Mortgage Loans or enter into an
appropriate contract with a successor Subservicer reasonably acceptable to the Indenture Trustee, pursuant to which such successor Subservicer will be bound by all relevant terms of the related Subservicing Agreement pertaining to the servicing of
such Mortgage Loans. 
 Section 5.04. Liability of the Servicer. 
 (a) Notwithstanding any Subservicing Agreement, any of the provisions of this Agreement relating to agreements or arrangements between the
Servicer and a Subservicer or reference to actions taken through a Subservicer or otherwise, the Servicer shall under all circumstances remain obligated and primarily liable to the Indenture Trustee and the Noteholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with this Agreement. The obligations and liability of the Servicer shall not be diminished by virtue of Subservicing Agreements or by virtue of indemnification of the Servicer by
any Subservicer, or any other Person. The obligations and liability of the Servicer shall remain of the same nature and under the same terms and conditions as if the Servicer alone were servicing and administering the related Mortgage Loans. The
Servicer shall, however, be entitled to enter into indemnification agreements with any Subservicer or other Person and nothing in this Agreement shall be deemed to limit or modify such indemnification. For the purposes of this Agreement, the
Servicer shall be deemed to have received any payment on a Mortgage Loan on the date the Subservicer received such payment. 
 (b) Any Subservicing Agreement that may be entered into and any transactions or services relating to the Mortgage Loans involving a Subservicer in its capacity as such and not as an originator shall be deemed to be between the Subservicer
and the Servicer 

  

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alone, and the Custodian, 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 the Subservicer, except as set forth in Section 3.05. 
 Section 5.05. Assumption or Termination of
Subservicing Agreements by the Indenture Trustee. 
 (a) If the Indenture Trustee or its designee as the successor Servicer,
shall assume the servicing obligations of the Servicer in accordance with Section 7.02 below, the Indenture Trustee or its designee as the successor Servicer, to the extent necessary to carry out the provisions of Section 7.02 with respect
to the Mortgage Loans, shall succeed to all of the rights and obligations of the Servicer under each of the Subservicing Agreements. In such event, the Indenture Trustee or its designee as the successor Servicer shall be deemed to have assumed all
of the Servicer’s rights and obligations therein and to have replaced the Servicer as a party to such Subservicing Agreements to the same extent as if such Subservicing Agreements had been assigned to the Indenture Trustee or its designee as a
successor Servicer, except that the Indenture Trustee or its designee as a successor Servicer shall not be deemed to have assumed any obligations or liabilities of the Servicer arising prior to such assumption or as a result of the Indenture
Trustee’s or its designee’s terminating any Subservicer upon the Indenture Trustee or its designee becoming successor Servicer and the Servicer shall not thereby be relieved of any liability or obligations under such Subservicing
Agreements arising prior to such assumption or as a result of the Indenture Trustee’s or its designee’s terminating any Subservicer upon the Indenture Trustee or its designee becoming successor Servicer. 
 (b) The Indenture Trustee or its designee as the successor Servicer may terminate any Subservicer upon becoming successor Servicer. Any
termination fees will be paid by the terminated Subservicer. 
 (c) In the event that the Indenture Trustee or its designee as
successor Servicer assumes the servicing obligations of the Servicer under Section 7.02, upon the request of the Indenture Trustee or such designee as successor Servicer, the Servicer shall at its own expense deliver to the Indenture Trustee,
or at its written request to such designee, originals or, if originals are not available, photocopies of all documents, files and records, electronic or otherwise, relating to the Subservicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by it, if any, and will otherwise cooperate and use its reasonable efforts to effect the orderly and efficient transfer of the Subservicing Agreements, or responsibilities
hereunder to the Indenture Trustee, or at its written request to such designee as successor Servicer. 
 Section 5.06. Collection of Mortgage
Loan Payments. 
 (a) The Servicer will coordinate and monitor remittances by Subservicers to it with respect to the Mortgage
Loans in accordance with this Agreement. 
 (b) The Servicer shall make its best reasonable efforts to collect or cause to be
collected all payments required under the terms and provisions of the Mortgage Loans and shall follow, and use its best reasonable efforts to cause Subservicers to follow, collection procedures 

  

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comparable to the collection procedures of prudent mortgage lenders servicing mortgage loans for their own account to the extent such procedures shall be
consistent with this Agreement. Consistent with the foregoing, the Servicer or the related Subservicer may in its discretion (i) waive or permit to be waived any late payment charge, prepayment charge, assumption fee, or any penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be suspended or reduced regular monthly payments for a period of up to six months, or arrange or permit an arrangement with a Mortgagor for a scheduled
liquidation of delinquencies; provided, however, that the Servicer or the related Subservicer may permit the foregoing only if it believes, in good faith, that recoveries of Monthly Payments will be maximized; provided further, however, with
respect to Mortgage Loans insured by an MI Policy, that the Servicer may not without the prior written consent of the MI Insurer permit any waiver, modification or variance which would (a) reduce or eliminate the coverage provided under the MI
Policy (b) change the loan rate, (c) forgive any payment of principal or interest, (d) lessen the lien priority or (e) extend the final maturity date of a Mortgage Loan past 12 months after the original maturity date on such
Mortgage Loan. In the event the Servicer or related Subservicer shall consent to the deferment of the due dates for payments due on a Mortgage Note, the Servicer shall nonetheless make an Advance or shall cause the related Subservicer to make an
advance to the same extent as if such installment were due, owing and delinquent and had not been deferred through liquidation of the Mortgaged Property; provided, however, that the obligation of the Servicer or the related Subservicer to
make an Advance shall apply only to the extent that the Servicer believes, in good faith, that such advances are not Nonrecoverable Advances. The Servicer shall pay the amount of any waived prepayment charge at the time of payoff if such prepayment
charge was waived for a reason other than that specified in this Section 3.06(b). 
 (c) Within five Business Days after
the Servicer has determined that all amounts which it expects to recover from or on account of a Liquidated Mortgage Loan have been recovered and that no further Liquidation Proceeds will be received in connection therewith, the Servicer shall
provide to the Indenture Trustee a Note of a Servicing Officer that such Mortgage Loan became a Liquidated Mortgage Loan as of the date of such determination. 
 (d) The Servicer shall establish a segregated account (the “Collection Account”), which shall be an Eligible Account,
which shall be titled “Collection Account, JPMorgan Chase Bank, National Association, as Indenture Trustee for the registered holders of NovaStar Mortgage Funding Trust 20[ ]-[ ], Home Equity Loan Asset-Backed Notes, Series 20[ ]-[ ]”, in
which the Servicer shall deposit or cause to be deposited any amounts representing payments on and any collections in respect of the Mortgage Loans received by it after the Cut-Off Date or, with respect to the Subsequent Mortgage Loans, the
Subsequent Cut-Off Date (other than in respect of the payments referred to in the following paragraph) within two Business Days following receipt thereof, including the following payments and collections received or made by it (without duplication):

 (i) all payments of principal or interest on the Mortgage Loans received by the Servicer directly from Mortgagors or from
the respective Subservicer; 
 (ii) the aggregate Repurchase Price of the Mortgage Loans purchased by the Servicer pursuant to
Section 5.18; 
  

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 (iii) Net Liquidation Proceeds; 
 (iv) all proceeds of any Mortgage Loans repurchased by the Seller pursuant to the Purchase Agreement, and all Substitution Adjustment
Amounts required to be deposited in connection with the substitution of an Eligible Substitute Mortgage Loan pursuant to the Purchase Agreement; 
 (v) Insurance Proceeds, other than Net Liquidation Proceeds, and MI Insurance Proceeds resulting from any insurance policy maintained on a Mortgaged Property; 
 (vi) any Advance and any Compensating Interest payments; and 
 (vii) any other amounts received by the Servicer, including all Foreclosure Profits, assumption fees, prepayment penalties and any other
fees that are required to be deposited in the Collection Account pursuant to this Agreement; 
 provided, however, that with respect to each Due
Period, the Servicer shall be permitted to retain from payments actually collected in respect of interest on the Mortgage Loans, the Servicing Fee for such Due Period. The foregoing requirements respecting deposits to the Collection Account are
exclusive, it being understood that, without limiting the generality of the foregoing, the Servicer need not deposit in the Collection Account late payment charges payable by Mortgagors, as further described in Section 5.15, or amounts received
by the Subservicer for the accounts of Mortgagors for application towards the payment of taxes, insurance premiums, assessments and similar items. In the event any amount not required to be deposited in the Collection Account is so deposited, the
Servicer may at any time (prior to being terminated under this Agreement) withdraw such amount from the Collection Account, any provision herein to the contrary notwithstanding. The Servicer shall keep records that accurately reflect the funds on
deposit in the Collection Account that have been identified by it as being attributable to the Mortgage Loans and shall hold all collections in the Collection Account for the benefit of the Indenture Trustee, and the Noteholders, as their interests
may appear. 
 Funds in the Collection Account may be invested in Eligible Investments with a maturity date no later than the Business Day immediately
preceding the Servicer Remittance Date, but shall not be commingled with the Servicer’s own funds or general assets or with funds respecting payments on mortgage loans or with any other funds not related to the Notes. All such investments shall
be made in the name of the Indenture Trustee for the benefit of the Noteholders, provided, however, that income earned on such Eligible Investments shall be for the account of the Servicer. Such funds shall be invested at the written
direction of the Servicer or if the Servicer does not provide such written direction such funds shall be retained by the Indenture Trustee uninvested. The Servicer shall be obligated to cover losses on such Eligible Investments. 
 (e) The Servicer will require each Subservicer to hold all funds constituting collections on the Mortgage Loans, pending remittance
thereof to the Servicer, in one or more accounts in the name of the Indenture Trustee meeting the requirements of an Eligible Account, and such funds shall not be invested. The Subservicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan separate and apart from any of its own 

  

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funds and general assets and any other funds. Each Subservicer shall make remittances to the Servicer no later than one Business Day following receipt
thereof and the Servicer shall deposit into the Collection Account any such remittances received from any Subservicer within one Business Day following receipt by the Servicer. 
 Section 5.07. Withdrawals from the Collection Account. 
 (a) The Servicer shall, from time to time as provided herein, make withdrawals from the Collection Account of amounts on deposit therein pursuant to Section 5.06 that are attributable to the Mortgage Loans for
the following purposes (without duplication): 
 (i) to deposit in the Distribution Account, by the Servicer Remittance Date
prior to each Distribution Date, all collections on the Mortgage Loans required to be distributed from the Distribution Account on a Distribution Date; 
 (ii) to the extent deposited to the Collection Account, to reimburse itself or the related Subservicer for previously unreimbursed expenses incurred in maintaining individual insurance policies pursuant to
Section 5.11, or Liquidation Expenses, paid pursuant to Section 5.13, such withdrawal right being limited to amounts received on particular Mortgage Loans (other than any Repurchase Price in respect thereof) which represent late recoveries
of the payments for which such expenses were paid, or from related Liquidation Proceeds; 
 (iii) to pay to itself out of each
payment received on account of interest on a Mortgage Loan as contemplated by Section 5.15, an amount equal to the related Servicing Fee (to the extent not retained pursuant to Section 5.06); 
 (iv) to pay to itself or the Seller, with respect to any Mortgage Loan or property acquired in respect thereof that has been purchased by
the Seller, the Servicer or other entity, all amounts received thereon and not required to be distributed to Noteholders as of the date on which the related Repurchase Price is determined; 
 (v) to reimburse the Servicer or any Subservicer for any unreimbursed Advance of its own funds or any unreimbursed advance of such
Subservicer’s own funds, the right of the Servicer or a Subservicer to reimbursement pursuant to this subclause (v) being limited to amounts received on a particular Mortgage Loan (including, for this purpose, the Repurchase Price
therefor, Insurance Proceeds and Liquidation Proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Advance or advance was made; 
 (vi) to reimburse the Servicer or any Subservicer from Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan
for amounts expended by the Servicer or such Subservicer pursuant to Section 5.13: (x) in good faith in connection with the restoration of the related Mortgaged Property which was damaged by the uninsured cause, (y) in connection with
the liquidation of such Mortgage Loan, or (z) with respect to an MI Claim Payment Advance made by the Servicer with respect to such Mortgage Loan; 
  

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 (vii) to reimburse the Servicer or any Subservicer for any unreimbursed Nonrecoverable
Advance previously made, and otherwise not reimbursed pursuant to this Section 5.07(a); 
 (viii) to withdraw any other
amount deposited in the Collection Account that was not required to be deposited therein pursuant to Section 5.06; 
 (ix) to reimburse the Servicer for costs associated with the environmental report handling the presence of any toxic or hazardous substance on a Mortgaged Property as set forth in Section 5.13(c); 
 (x) to clear and terminate the Collection Account upon a termination pursuant to Section 9.01; 
 (xi) to pay to the Servicer income earned on Eligible Investments in the Collection Account; 
 (xii) to pay to the MI Insurer the monthly MI Premiums due under each MI Policy from payments received (or Advances made) on account of
interest due on the related Mortgage Loan; and 
 (xiii) to make an Advance with respect to a Mortgage Loan that is Delinquent
from funds held in the Collection Account as contemplated by Section 5.24, provided that the amount withdrawn for such an Advance is immediately deposited into the Distribution Account. 
 Withdrawals made pursuant to clause (xii) shall be made on a first priority basis. In connection with withdrawals pursuant to clauses (ii), (iii), (iv),
(v) and (vi), the Servicer’s entitlement thereto is limited to collections or other recoveries on the related Mortgage Loan, and the Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of justifying any withdrawal from the Collection Account pursuant to such clauses. 
 (b) Notwithstanding the
provisions of this Section 5.07, the Servicer may, but is not required to, allow the Subservicers to deduct from amounts received by them or from the related account maintained by a Subservicer, prior to deposit in the Collection Account, any
portion to which such Subservicers are entitled as reimbursement of any reimbursable Advances made by such Subservicers. 
 Section 5.08.
Collection of Taxes, Assessments and Similar Items; Servicing Accounts. 
 (a) The Servicer shall establish and maintain or
cause the related Subservicer to establish and maintain, one or more Servicing Accounts. The Servicer or a Subservicer will deposit and retain therein all collections from the Mortgagors for the payment of taxes, assessments, insurance premiums, or
comparable items as agent of the Mortgagors. 
 (b) The deposits in the Servicing Accounts shall be held in trust by the
Servicer or a Subservicer (and its successors and assigns) in the name of the Indenture Trustee. 

  

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Such Servicing Accounts shall be Eligible Accounts and, if permitted by applicable law, invested in Eligible Investments held in trust by the Servicer or a
Subservicer as described above and maturing, or be subject to redemption or withdrawal, no later than the date on which such funds are required to be withdrawn, and in no event later than 45 days after the date of investment; withdrawals of amounts
from the Servicing Accounts may be made only to effect timely payment of taxes, assessments, insurance premiums, or comparable items, to reimburse the Servicer or a Subservicer for any advances made with respect to such items, to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if required, to Mortgagors on balances in the Servicing Accounts or to clear and terminate the Servicing Accounts at or any time after the termination of this Agreement.
Amounts received from Mortgagors for deposit into the Servicing Accounts shall be deposited in the Servicing Accounts by the Servicer within two days of receipt. The Servicer shall advance from its own funds amounts needed to pay items payable from
the Servicing Accounts if the Servicer reasonably believes that such amounts are recoverable from the related Mortgagor. The Servicer shall comply with all laws relating to the Servicing Accounts, including laws relating to payment of interest on
the Servicing Accounts. If interest earned by the Servicer on the Servicing Accounts is not sufficient to pay required interest on the Servicing Accounts, the Servicer shall pay the difference from its own funds. The Servicing Accounts shall not be
the property of the Trust. 
 Section 5.09. Access to Certain Documentation and Information Regarding the Mortgage Loans. 
 The Servicer shall provide, and shall cause any Subservicer to provide, to the Indenture Trustee, access to the documentation regarding the related Mortgage Loans and
REO Property and to the Noteholders, the FDIC, and the supervisory agents and examiners of the FDIC (to which the Custodian and Indenture Trustee shall also provide) access to the documentation regarding the related Mortgage Loans required by
applicable regulations, such access being afforded without charge but only upon reasonable request and during normal business hours at the offices of the Servicer or the Subservicers that are designated by these entities; provided, however,
that, unless otherwise required by law, the Servicer and any Subservicer shall not be required to provide access to such documentation if the provision thereof would violate the legal right to privacy of any Mortgagor; provided, further, however,
that the Indenture Trustee shall coordinate its request for such access so as not to impose an unreasonable burden on, or cause an unreasonable interruption of, the business of the Servicer or any Subservicer. The Servicer, the Subservicers, the
Indenture Trustee and the Custodian shall allow representatives of the above entities to photocopy any of the documentation and shall provide equipment for that purpose at a charge that covers their own actual out-of-pocket costs. 
 Section 5.10. [Reserved]. 
 Section 5.11.
Maintenance of Hazard Insurance and Fidelity Coverage. 
 (a) The Servicer shall maintain and keep, or cause each Subservicer
to maintain and keep, with respect to each Mortgage Loan and each REO Property, in full force and effect hazard insurance (fire insurance with extended coverage) equal to at least the lesser of the Principal Balance of the Mortgage Loan or the
current replacement cost of the Mortgaged Property, and containing a standard mortgagee clause, provided, however, that the amount of 

  

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hazard insurance may not be less than the amount necessary to prevent loss due to the application of any co-insurance provision of the related policy. Unless
applicable state law requires a higher deductible, the deductible on such hazard insurance policy may be no more than $1,500 or 1% of the applicable amount of coverage, whichever is less. In the case of a condominium unit or a unit in a planned unit
development, the required hazard insurance shall take the form of a multi-peril policy covering the entire condominium project or planned unit development, in an amount equal to at least 100% of the insurable value based on replacement cost. If the
Servicer shall obtain and maintain a blanket policy consistent with its general mortgage servicing activities insuring against hazard losses on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied its obligations as set forth
in this Section 5.11(a), it being understood and agreed that such policy may contain a deductible clause, in which case the Servicer shall, in the event that there shall not have been maintained on the related Mortgaged Property a policy
complying with this Section 5.11(a) and there shall have been a loss which would have been covered by such policy, deposit in the Collection Account the amount not otherwise payable under the blanket policy because of such deductible clause
without any right of reimbursement. Any such deposit by the Servicer shall be made on the last Business Day of the Due Period in the month in which payments under any such policy would have been deposited in the Collection Account. In connection
with its activities as servicer of the Mortgage Loans, the Servicer agrees to present, on behalf of itself, the Trust, and the Indenture Trustee, claims under any such blanket policy. 
 (b) Any amounts collected by the Servicer or a Subservicer under any such hazard insurance policy (other than amounts to be applied to the
restoration or repair of the Mortgaged Property or amounts released to the Mortgagor in accordance with the Servicer’s or a Subservicer’s normal servicing procedures, the Mortgage Note, the Mortgage or applicable law) shall be deposited in
the Collection Account. 
 (c) Any cost incurred by a Servicer or a Subservicer in maintaining any such individual hazard
insurance policies shall not be added to the amount owing under the Mortgage Loan for the purpose of calculating monthly distributions to Noteholders, notwithstanding that the terms of the Mortgage Loan so permit. Such costs of maintaining
individual hazard insurance policies shall be recoverable by the Servicer or a Subservicer out of related late payments by the Mortgagor or out of Insurance Proceeds or Liquidation Proceeds or by the Servicer from the Repurchase Price, to the extent
permitted by Section 5.07. 
 (d) No earthquake or other additional insurance is to be required of any Mortgagor or
maintained on property acquired with respect to a Mortgage other than pursuant to such applicable laws and regulations as shall at any time be in force and shall require such additional insurance. When, at the time of origination of the Mortgage
Loan or at any subsequent time, the Mortgaged Property is located in a federally designated special flood hazard area, the Servicer shall ensure that, with respect to such Mortgage Loan or such REO Property, flood insurance is acquired (to the
extent available and in accordance with mortgage servicing industry practice). Such flood insurance shall cover the Mortgaged Property, including all items taken into account in arriving at the Appraised Value on which the Mortgage Loan was based,
and shall be in an amount equal to the lesser of (i) the Principal Balance of the related Mortgage Loan and (ii) the minimum amount required under the terms of coverage to compensate for any damage or loss on a replacement cost basis, but
not more than the maximum amount of such insurance available for the related Mortgaged Property under either the regular or emergency 

  

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programs of the National Flood Insurance Program (assuming that the area in which such Mortgaged Property is located is participating in such program).
Unless applicable state law requires a higher deductible, the deductible on such flood insurance may not exceed $1,500 or 1% of the applicable amount of coverage, whichever is less. 
 (e) If insurance complying with Subsections 5.11 (a) and (d) has not been maintained and there shall have been a loss which
would have been covered by such insurance had it been maintained, the Servicer shall pay, or cause the related Subservicer to pay, for any necessary repairs without any right of reimbursement. 
 (f) The Servicer shall present, or cause the related Subservicer to present, claims under any related hazard insurance or flood insurance
policy. 
 (g) The Servicer shall obtain and maintain at its own expense, and shall cause each Subservicer to obtain and
maintain at its own expense, and for the duration of this Agreement, a blanket fidelity bond and an errors and omissions insurance policy covering the Servicer’s and such Subservicer’s officers, employees and other persons acting on its
behalf in connection with its activities under this Agreement. The amount of coverage shall correspond with the FNMA/FHMLC levels presently maintained by the Servicer. The Servicer shall promptly notify the Indenture Trustee of any material change
in the terms of such bond or policy. The Servicer shall provide annually by March 31st of each year, to the Indenture Trustee a certification stating that such bond and policy are in effect. If any such bond or policy ceases to be in effect,
the Servicer shall, to the extent possible, give the Indenture Trustee ten days’ notice prior to any such cessation and shall use its reasonable best efforts to obtain a comparable replacement bond or policy, as the case may be. Any amounts
relating to the Mortgage Loans collected under such bond or policy shall be deposited in the Collection Account. 
 Section 5.12. Due-on-Sale
Clauses; Assumption Agreements. 
 (a) In any case in which the Servicer is notified by any Mortgagor or Subservicer that a
Mortgaged Property relating to a Mortgage Loan has been or is about to be conveyed by the Mortgagor, the Servicer shall enforce, or shall instruct such Subservicer to enforce, any due-on-sale clause contained in the related Mortgage to the extent
permitted under the terms of the related Mortgage Note and by applicable law. The Servicer or the related Subservicer may repurchase a Mortgage Loan at the Repurchase Price when the Servicer requires acceleration of the Mortgage Loan, but only if
the Servicer is satisfied, as evidenced by an Officers’ Note delivered to the Indenture Trustee, that such Mortgage Loan is in default or default is reasonably foreseeable. If the Servicer reasonably believes that such due-on-sale clause cannot
be enforced under applicable law or if the Mortgage Loan does not contain a due-on-sale clause, the Servicer is authorized, and may authorize any Subservicer, to consent to a conveyance subject to the lien of the Mortgage, and, with the consent of
the MI Insurer, if applicable, to take or enter into an assumption agreement from or with the Person to whom such property has been or is about to be conveyed, pursuant to which such Person becomes liable under the related Mortgage Note and unless
prohibited by applicable state law, on condition, however, that the related Mortgage Loan shall continue to be covered by a hazard policy. In connection with any such assumption, no material term of the related Mortgage Note may be changed. The
Servicer shall notify the Custodian and Indenture Trustee, whenever possible, 

  

 41 

 
before the completion of such assumption agreement, and shall forward to the Custodian the original copy of such assumption agreement, which copy shall be
added by the Custodian to the related Mortgage File and which shall, for all purposes, be considered a part of such Mortgage File to the same extent as all other documents and instruments constituting a part thereof. 
 (b) Notwithstanding the foregoing paragraph or any other provision of this Agreement, the Servicer shall not be deemed to be in default,
breach or any other violation of its obligations hereunder by reason of any assumption of a Mortgage Loan by operation of law or any conveyance by the Mortgagor of the related Mortgaged Property or assumption of a Mortgage Loan which the Servicer
reasonably believes it may be restricted by law from preventing, for any reason whatsoever or if the exercise of such right would impair or threaten to impair any recovery under any applicable insurance policy. 
 Section 5.13. Realization Upon Defaulted Mortgage Loans. 
 (a) The Servicer shall, or shall direct the related Subservicer to, foreclose upon or otherwise comparably convert the ownership of properties securing any Mortgage Loans that come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent payments pursuant to Section 5.06, except that the Servicer shall not, and shall not direct the related Subservicer to, foreclose upon or otherwise comparably
convert a Mortgaged Property if there is evidence of toxic waste or other environmental hazards thereon unless the Servicer follows the procedures in Subsection (c) below. In connection with such foreclosure or other conversion, the Servicer in
conjunction with the related Subservicer, if any, shall use its best reasonable efforts to preserve REO Property and to realize upon defaulted Mortgage Loans in such manner as to maximize the receipt of principal and interest by the Noteholders,
taking into account, among other things, the timing of foreclosure and the considerations set forth in Subsection 5.13(b). The foregoing is subject to the proviso that the Servicer shall not be required to expend its own funds in connection with any
foreclosure or towards the restoration of any property unless it determines in good faith (i) that such restoration or foreclosure will increase the proceeds of liquidation of the Mortgage Loan to Noteholders after reimbursement to itself for
such expenses and (ii) that such expenses will be recoverable to it either through Liquidation Proceeds (respecting which it shall have priority for purposes of reimbursements from the Collection Account pursuant to Section 5.07) or
through Insurance Proceeds (respecting which it shall have similar priority). The Servicer shall be responsible for all costs and expenses constituting Liquidation Expenses incurred by it in any such proceedings; provided, however, that it
shall be entitled to reimbursement thereof (as well as its normal servicing compensation) as set forth in Section 5.07. Any income from or other funds (net of any income taxes) generated by REO Property shall be deemed for purposes of this
Agreement to be Liquidation Proceeds. 
 Any subsequent collections with respect to any Liquidated Mortgage Loan shall be deposited to the Collection
Account. For purposes of determining the amount of any Liquidation Proceeds or Insurance Proceeds, or other unscheduled collections, the Servicer may take into account any estimated additional Liquidation Expenses expected to be incurred in
connection with the related defaulted Mortgage Loan. 
  

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 In the event that a Mortgage Loan would be properly classified as a Liquidated Mortgage Loan but for the fact that not
all MI Insurance Proceeds claimed under the related MI Policy have been received, the Servicer may, from its own funds, make an advance (an “MI Claim Payment Advance”) to the Collection Account in an amount not to exceed the claimed
amount of such MI Insurance Proceeds not yet received. The Servicer shall not make any MI Claim Payment Advance with respect to a claim under an MI Policy if an MI Insurer Insolvency Event has occurred and is continuing with respect to the related
MI Insurer. In the event that the MI Claim Payment Advance equals the claimed amount on such MI Policy, then upon the deposit of such MI Claim Payment Advance into the Collection Account the related Mortgage Loan shall be considered a
“Liquidated Mortgage Loan.” 
 In the event that title to any Mortgaged Property is acquired in foreclosure or by deed in lieu of foreclosure, the
deed or Note of sale shall be issued to the Indenture Trustee and held by the Custodian, who shall hold the same on behalf of Indenture Trustee and the Trust in accordance with the Agreement. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such Mortgaged Property shall (except as otherwise expressly provided herein) be considered to be an outstanding Mortgage Loan held as an asset of the Trust until such time as such property shall be sold.

 (b) The Servicer shall not acquire any real property (or any personal property incident to such real property) on behalf of
the Trust Fund except in connection with a default or reasonably foreseeable default of a Mortgage Loan. In the event that the Servicer acquires any real property (or personal property incident to such real property) on behalf of the Trust Fund in
connection with a default or imminent default of a Mortgage Loan, such property shall be disposed of by the Servicer on behalf of the Trust Fund as soon as reasonably practicable, but in no event later than three years after its acquisition on
behalf of the Trust Fund. 
 (c) With respect to any Mortgage Loan as to which the Servicer or a Subservicer has received
notice of, or has actual knowledge of, the presence of any toxic or hazardous substance on the Mortgaged Property, the Servicer shall promptly notify the Indenture Trustee, and shall act in accordance with any such directions and instructions
provided by the Indenture Trustee. If the Indenture Trustee has not provided directions and instructions to the Servicer in connection with any such Mortgage Loan within 5 days of a request by the Servicer for such directions and instructions, then
the Servicer shall take such action as it deems to be in the best economic interest of the Trust Fund (other than proceeding against the Mortgaged Property) and is hereby authorized at such time as it deems appropriate to release such Mortgaged
Property from the lien of the related Mortgage. The parties hereto acknowledge that the Servicer shall not obtain on behalf of the Trust a deed as a result or in lieu of foreclosure, and shall not otherwise acquire possession of or title to, or
commence any proceedings to acquire possession of or title to, or take any other action with respect to, any Mortgaged Property, if the Trust could reasonably be considered to be a responsible party for any liability arising from the presence of any
toxic or hazardous substance on the Mortgaged Property. 
 Section 5.14. Custodian to Cooperate; Release of Mortgage Files. 
 (a) Upon payment in full of any Mortgage Loan, the Servicer will immediately notify the Custodian and the Indenture Trustee by a
certification signed by a 

  

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Servicing Officer (which certification shall include a statement to the effect that all amounts received in connection with such payment which are required
to be deposited in the Collection Account have been so deposited) and shall request delivery to the Servicer or Subservicer, as the case may be, of the Mortgage File. Upon receipt of such certification and request, the Custodian, on behalf of the
Indenture Trustee, shall promptly cause to be released the related Mortgage File to the Servicer or Subservicer and the Indenture Trustee shall execute and deliver to the Servicer, without recourse, the request for reconveyance, deed of reconveyance
or release or satisfaction of mortgage or such instrument releasing the lien of the Mortgage (furnished by the Servicer), together with the Mortgage Note with written evidence of cancellation thereon. 
 (b) From time to time as is appropriate, for the servicing or foreclosure of any Mortgage Loan or collection under an insurance policy,
the Servicer may deliver to the Indenture Trustee and the Custodian a Request for Release signed by a Servicing Officer on behalf of the Servicer in substantially the form attached as Exhibit E hereto. Upon receipt of the Request for Release, the
Custodian, on behalf of the Indenture Trustee, shall deliver the Mortgage File or any document therein to the Servicer or Subservicer, as the case may be, as bailee for the Indenture Trustee. 
 (c) The Servicer shall cause each Mortgage File or any document therein released pursuant to Subsection 5.14(b) to be returned to the
Custodian when the need therefor no longer exists, and in any event within 21 days of the Servicer’s receipt thereof, unless the Mortgage Loan has become a Liquidated Mortgage Loan and the Liquidation Proceeds relating to the Mortgage Loan have
been deposited in the Collection Account or such Mortgage File is being used to pursue foreclosure or other legal proceedings. Prior to return of a Mortgage File or any document to the Custodian, the Servicer, the related insurer or Subservicer to
whom such file or document was delivered shall retain such file or document in its respective control as bailee for the Custodian, on behalf of the Indenture Trustee, unless the Mortgage File or such document has been delivered to an attorney, or to
a public Indenture Trustee or other public official as required by law, to initiate or pursue legal action or other proceedings for the foreclosure of the Mortgaged Property either judicially or non-judicially, and the Servicer has delivered to the
Custodian and the Indenture Trustee, a Note of a Servicing Officer certifying as to the name and address of the Person to which such Mortgage File or such document was delivered and the purpose or purposes of such delivery. If a Mortgage Loan
becomes a Liquidated Mortgage Loan, the Custodian, on behalf of the Indenture Trustee, shall deliver the Request for Release with respect thereto to the Servicer upon deposit of the related Liquidation Proceeds in the Collection Account. 

(d) The Indenture Trustee shall execute and deliver or cause to be executed and delivered to the Servicer any court pleadings, requests
for Indenture Trustee’s sale or other documents necessary (i) for the foreclosure or Indenture Trustee’s sale with respect to a Mortgaged Property; (ii) for any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage; (iii) to obtain a deficiency judgment against the Mortgagor; or (iv) to enforce any other rights or remedies provided by the Mortgage Note or Mortgage or otherwise available at law or equity. Together with such
documents or pleadings the Servicer shall deliver to the Indenture Trustee a Note of a Servicing Officer in which it requests the Indenture Trustee to execute or cause to be executed the pleadings or documents. The Note shall certify and explain the
reasons for which the pleadings or documents are required. It shall 

  

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further certify that the Indenture Trustee’s execution and delivery of the pleadings or documents will not invalidate any insurance coverage under the
insurance policies or invalidate or otherwise affect the lien of the Mortgage, except for the termination of such a lien upon completion of the foreclosure or Indenture Trustee’s sale. 
 Section 5.15. Servicing Compensation. 
 (a) As compensation for its activities hereunder, the Servicer shall be entitled to receive the Servicing Fee from full payments of accrued interest on each Mortgage Loan. The Servicer shall be solely responsible for
paying any and all fees with respect to a Subservicer, and the Indenture Trustee and the Trust Fund shall not bear any fees, expenses or other costs directly associated with any Subservicer. 
 (b) The Servicer may retain additional servicing compensation in the form of late payment charges, to the extent such charges are
collected from the related Mortgagors and investment earnings on the Collection Account. The Servicer shall be required to pay all expenses it incurs in connection with servicing activities under this Agreement and shall not be entitled in
connection with servicing activities under this Agreement to reimbursement except as provided in this Agreement. Expenses to be paid by the Servicer without reimbursement under this Subsection 5.15(b) shall include payment of the expenses of the
accountants retained pursuant to Section 5.17. 
 Section 5.16. Annual Statements of Compliance. 
 (a) Within 75 days after December 31 of each year, beginning in 200[ ], the Servicer at its own expense shall deliver to the
Indenture Trustee and the Rating Agencies, an Officers’ Note stating, as to the signer thereof, that (i) a review of the activities of the Servicer during the preceding calendar year and of performance under this Agreement has been made
under such officer’s supervision, (ii) to the best of such officer’s knowledge, based on such review, the Servicer has fulfilled its obligations under this Agreement in all material respects for such year, or, if there has been a
default in the fulfillment of any such obligation, specifying each such default known to such officer and the nature and status thereof including the steps being taken by the Servicer to remedy such default; (iii) a review of the activities of
each Subservicer during the Subservicer’s most recently ended calendar year and its performance under its Subservicing Agreement has been made under such officer’s supervision; and (iv) to the best of the Servicing Officer’s
knowledge, based on his review and the certification of an officer of the Subservicer (unless the Servicing Officer has reason to believe that reliance on such certification is not justified), either each Subservicer has performed and fulfilled its
duties, responsibilities and obligations under this Agreement and its Subservicing Agreement in all material respects throughout the year, or, if there has been a default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the Servicing Officer. Copies of such statements shall be provided by the Servicer to the Noteholders upon request or by the Indenture Trustee at the expense of the Servicer
should the Servicer fail to provide such copies. 
 (b) The Servicer and the Indenture Trustee will deliver to the Issuing
Entity, the Rating Agencies and the Sponsor on or before March 1st of each year, beginning March 1st, 

  

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20[__], an Officer’s Note (an “Annual Statement of Compliance”) stating, as to each signatory thereof, that (a) a review of the
activities of each such party, during the preceding calendar year and of its performance under this Agreement has been made under such officer’s supervision and (b) to the best of such officers’ knowledge, based on such review, each
such party has fulfilled all of its material obligations under this Agreement in all material respects throughout such year, or, if there has been a default in the fulfillment of any such obligation, specifying each such default known to such
officer and the nature and status thereof. Such Annual Statement of Compliance shall contain no restrictions or limitations on its use. In the event that the Indenture Trustee or the Servicer has delegated any servicing responsibilities with respect
to the Mortgage Loans to a subservicer or subcontractor that meets the criteria in Item 1108(a)(2)(i) through (iii) of Regulation AB, the Servicer, the Indenture Trustee or the related servicer (as the case may be) shall deliver a similar
Annual Statement of Compliance by that subservicer or subcontractor to the Indenture Trustee as described above as and when required with respect to the servicer. 
 (c) The Servicer shall service and administer the Mortgage Loans in accordance with all applicable requirements of the Servicing Criteria.
Pursuant to Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB, [the Indenture Trustee] (the “Attesting Party”) shall deliver to the Servicer on or before March 10th (with a 5 calendar day cure period) of
each calendar year beginning in 2007, a report regarding such Attesting Party’s assessment of compliance (an “Assessment of Compliance”) with the Servicing Criteria during the preceding calendar year. The Assessment of Compliance, as
set forth in Regulation AB, must contain the following: 
 (i) A statement by such officer of its responsibility for assessing
compliance with the Servicing Criteria applicable to the related Attesting Party; 
 (ii) A statement by such officer that
such Attesting Party used the Servicing Criteria attached as Exhibit [__] hereto, and which will also be attached to the Assessment of Compliance, to assess compliance with the Servicing Criteria applicable to the related Attesting Party;

 (iii) An assessment by such officer of the related Attesting Party’s compliance with the applicable Servicing Criteria
for the period consisting of the preceding calendar year, including disclosure of any material instance of noncompliance with respect thereto during such period, which assessment shall be based on the activities such Attesting Party performs with
respect to asset-backed securities transactions taken as a whole involving the Servicer, that are backed by the same asset type as the Mortgage Loans; 
 (iv) A statement that a registered public accounting firm has issued an attestation report on the related Attesting Party’s Assessment of Compliance for the period consisting of the preceding calendar year; and

 (v) A statement as to which of the Servicing Criteria, if any, are not applicable to such Attesting Party, which statement
shall be based on the activities such Attesting Party performs with respect to asset-backed securities transactions taken as a whole involving such Attesting Party, that are backed by the same asset type as the Mortgage Loans. 
  

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 Such report at a minimum shall address each of the Servicing Criteria specified on Exhibit [__] hereto which are
indicated as applicable to the related Attesting Party. 
 On or before March 1st of each calendar year beginning in 20[__], each Attesting Party
specified in this Section shall furnish to the Indenture Trustee and the Depositor a report (an “Attestation Report”) by a registered public accounting firm that attests to, and reports on, the Assessment of Compliance made by the
Servicer, as required by Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122(b) of Regulation AB, which Attestation Report must be made in accordance with standards for attestation reports issued or adopted by the Public Company
Accounting Oversight Board. 
 The Servicer [or the Indenture Trustee, as the case may be] shall cause any subservicer, and each subcontractor determined by
the it to be “participating in the servicing function” within the meaning of Item 1122 of Regulation AB, to deliver to the Indenture Trustee and the Depositor an Assessment of Compliance and Attestation Report as and when provided
above along with an indication of what Servicing Criteria are addressed in such assessment. 
 Such Assessment of Compliance, as to any subservicer, shall at
a minimum address each of the Servicing Criteria specified on Exhibit [__] hereto which are indicated as applicable to any “primary servicer.” The Indenture Trustee shall confirm that the assessments, taken as a whole, address all of the
Servicing Criteria and taken individually address the Servicing Criteria for each party as set forth on Exhibit [__] and notify the Depositor of any exceptions. Notwithstanding the foregoing, as to any subcontractor (as defined in the related
servicing agreement), an Assessment of Compliance is not required to be delivered unless it is required as part of a Form 10-K with respect to the Issuing Entity. 
 [The Indenture Trustee shall also provide an Assessment of Compliance and Attestation Report, as and when provided above, which shall at a minimum address each of the Servicing Criteria specified on Exhibit [__] hereto which are indicated
as applicable to the “Indenture Trustee.” In addition, the Indenture Trustee shall deliver to the Sponsor and the Depositor an Assessment of Compliance and Attestation Report, as and when provided above, which shall at a minimum address
each of the Servicing Criteria specified on Exhibit [__] hereto which are indicated as applicable to a “custodian.”] 
 Section
5.17. Annual Independent Public Accountants’ Servicing Report. 
 (a) Within 75 days after December 31 of each year,
beginning in 200[ ], the Servicer, at its expense, shall cause a firm of independent public accountants who are members of the American Institute of Certified Public Accountants to furnish a statement to the Servicer, which will be provided to the
Indenture Trustee, and the Rating Agencies, to the effect that, in connection with the firm’s examination of the Servicer’s financial statements as of the end of such calendar year, nothing came to their attention that indicated that the
Servicer was not in compliance with Sections 5.06, 5.07 and 5.08 except for (i) such exceptions as such firm believes to be immaterial and (ii) such other exceptions as are set forth in such statement. 
  

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 (b) Within 75 days after December 31 of each year, beginning in 200[ ], the
Servicer, at its expense, shall, and shall cause each Subservicer to cause, a nationally recognized firm of independent certified public accountants to furnish to the Servicer or such Subservicer, as the case may be, a report stating that
(i) it has obtained a letter of representation regarding certain matters from the management of the Servicer or such Subservicer, as the case may be, which includes an assertion that the Servicer or such Subservicer, as the case may be, has
complied with certain minimum mortgage loan servicing standards identified in the Uniform Single Attestation Program for Mortgage Bankers established by the Mortgage Bankers Association of America with respect to the servicing of residential
mortgage loans during the most recently completed calendar year and (ii) on the basis of an examination conducted by such firm in accordance with standards established by the American Institute of Certified Public Accountants, such
representation is fairly stated in all material respects, subject to such exceptions and other qualifications that may be appropriate. Immediately upon receipt of such report, the Servicer shall or shall cause each Subservicer to furnish a copy of
such report to the Indenture Trustee and the Rating Agencies. 
 Section 5.18. Optional Purchase of Defaulted Mortgage Loans. 
 The Servicer shall have the right, but not the obligation, to purchase any Mortgage Loan which becomes 90 days or more delinquent at a purchase price equal to the
Repurchase Price (a) within 29 days after the date the Mortgage Loan becomes 90 days delinquent or (b) on the date the Servicer liquidates the related Mortgaged Property. The procedure for such purchase shall be the same as for a
repurchase made by the Seller under the Purchase Agreement. With respect to any Mortgage Loans being purchased pursuant to this Section 5.18, the Servicer shall purchase the most delinquent Mortgage Loans before purchasing other less delinquent
Mortgage Loans. The Servicer or the related Subservicer may purchase a Mortgage Loan at the Repurchase Price when the Servicer requires acceleration of the Mortgage Loan, but only if the Servicer is satisfied, as evidenced by an Officers’ Note
delivered to the Indenture Trustee, that such Mortgage Loan is in default or default is reasonably foreseeable. 
 Section 5.19. Information
Required by the Internal Revenue Service Generally and Reports of Foreclosures and Abandonments of Mortgaged Property. 
 The Servicer shall prepare and
deliver all federal and state information reports when and as required by all applicable state and federal income tax laws. In particular, with respect to the requirement under Section 6050J of the Code to the effect that the Servicer or
Subservicer shall make reports of foreclosures and abandonments of any mortgaged property, the Servicer or Subservicer shall file reports relating to each instance occurring during the previous calendar year in which the Servicer (i) acquires
an interest in any Mortgaged Property through foreclosure or other comparable conversion in full or partial satisfaction of a Mortgage Loan, or (ii) knows or has reason to know that any Mortgaged Property has been abandoned. The reports from
the Servicer or Subservicer shall be in form and substance sufficient to meet the reporting requirements imposed by Section 6050J, Section 6050H (reports relating to mortgage interest received) and Section 6050P of the Code (reports
relating to cancellation of indebtedness). 
 Section 5.20. [Reserved]. 
  

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 Section 5.21. [Reserved]. 
 Section 5.22. Servicing and Administration of the MI Policies. 
 (a) The Servicer shall take
all such actions on behalf of the Indenture Trustee as are necessary to service, maintain and administer the MI Policies and to perform the Indenture Trustee’s obligations and enforce the Indenture Trustee’s rights under the MI Policies,
which actions shall conform to the standards of an institution prudently administering MI Policies for its own account. Except as expressly set forth herein, the Servicer shall have full authority on behalf of the Trust to do anything it reasonably
deems appropriate or desirable in connection with the servicing, maintenance and administration of the MI Policies. The Servicer shall make its best reasonable efforts to file all insured claims under the MI Policies and collect from the MI Insurer
all Insurance Proceeds due to the Indenture Trustee under the MI Policies. The Servicer shall not take, or permit any subservicer to take, any action which would result in non-coverage under any applicable MI Policy of any loss which, but for the
actions of the Servicer or Subservicer, would have been covered thereunder. To the extent coverage is available, the Servicer shall keep or cause to be kept in full force and effect each such MI Policy for the life of the Mortgage Loan; provided,
however, that if a MI Insurer Insolvency Event has occurred and is continuing, the Servicer may terminate the MI Policy on any Mortgage Loan that is not then past due. The Servicer shall cooperate with the MI Insurer and shall use its best
efforts to furnish all reasonable aid, evidence and information in the possession of the Servicer or to which the Servicer has access with respect to any Mortgage Loan. 
 (b) The Servicer shall deposit into the Collection Account pursuant to Section 5.06(d)(v) hereof all MI Insurance Proceeds received
from the MI Insurer under the terms of the MI Policies. The Servicer shall withdraw from the Collection Account and pay to the MI Insurer pursuant to Section 5.07(a)(xii) hereof, the monthly MI Premiums due to the MI Insurer in accordance with
the terms of the MI Insurance Agreements. In the event that the Indenture Trustee has actual knowledge that any MI Premiums have in fact not been paid, the Indenture Trustee shall distribute such amounts (in such amounts as specified by the MI
Insurer in writing) to the MI Insurer from the Interest Remittance Amount for the related Mortgage Loans, at the same level of priority as the Indenture Trustee Fee. 
 (c) Notwithstanding the provisions of Subsection 5.22(a) and (b), the Servicer shall not take any action in regard to the MI Policies
inconsistent with the interests of the Indenture Trustee or the Noteholders or with the rights and interests of the Indenture Trustee or the Noteholders under this Agreement; provided, however, that payments of the monthly MI Premiums to the
MI Insurer pursuant to Subsection 5.22(b) above and Section 5.07(a)(xii) hereof shall be deemed not to be inconsistent with such interests. 
 (d) The Indenture Trustee shall furnish the Servicer with any powers of attorney and other documents in form as provided to it necessary or appropriate to enable the Servicer to service and administer the MI Policies;
provided, however, that the Indenture Trustee shall not be liable for the actions of the Servicer under such powers of attorney. 
 (e) If at any time during the term of this Agreement, a MI Insurer Insolvency Event has occurred and is continuing, the Servicer agrees to review, not less often than monthly, 

  

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the financial condition of the related MI Insurer with a view towards determining whether recoveries under the MI Policy are jeopardized for reasons related
to the financial condition of the related MI Insurer. In such event, the Servicer may obtain an additional MI Policy or a replacement MI Policy, the MI Premiums on which would be paid by the Servicer from the Collection Account pursuant to
Section 5.07(a)(xii) hereof. 
 (f) The Servicer shall comply with all other terms, conditions and obligations set forth
in the MI Policies. 
 Section 5.23. Determination Date Reports. 
 On the second Business Day following each Determination Date, the Servicer shall deliver to the Indenture Trustee a report, prepared as of the close of business on the Determination Date (the “Determination
Date Report”), and shall forward to the Indenture Trustee in the form of computer readable electromagnetic tape or disk a copy of such report in a format acceptable to the Indenture Trustee. The Determination Date Report and any written
information supplemental thereto shall include such information with respect to the Mortgage Loans that is reasonably available to the Servicer and that is required by the Indenture Trustee for purposes of making the calculations and providing the
reports referred to in this Agreement, as set forth in written specifications or guidelines issued by the Indenture Trustee from time to time. Such information shall include the aggregate amounts required to be withdrawn from the Collection Account
and deposited into the Distribution Account pursuant to Section 5.07. Such information shall also include (a) the number of Mortgage Loans that prepaid in the previous month; (b) the loan balance of each such Mortgage Loan;
(c) whether a prepayment penalty was applied to such Mortgage Loan; and (d) the amount of prepayment penalty with respect to each such Mortgage Loan. The Servicer agrees to cooperate with the Indenture Trustee in providing all information
as is reasonably requested by the Indenture Trustee to prepare the reports required under the Agreement. 
 The determination by the Servicer of such amounts
shall, in the absence of obvious error, be presumptively deemed to be correct for all purposes hereunder and the Indenture Trustee shall be fully protected in relying upon the same without any independent check or verification. 
 Section 5.24. Advances. 
 If any Monthly Payment (together
with any advances from the Subservicers) on a Mortgage Loan that was due on the immediately preceding Due Date and delinquent on the Determination Date is delinquent other than as a result of application of the Relief Act, the Servicer will deposit
in the Collection Account not later than the Servicer Remittance Date immediately preceding the related Distribution Date an amount equal to such deficiency net of the related Servicing Fee for such Mortgage Loan, except to the extent the Servicer
determines any such advance to be nonrecoverable from Liquidation Proceeds, Insurance Proceeds or future payments on such Mortgage Loan. Subject to the foregoing and in the absence of such a determination, the Servicer shall continue to make such
advances through the date that the related Mortgaged Property has, in the judgment of the Servicer, been completely liquidated. 
  

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 The Servicer may fund an Advance from its own corporate funds, advances made by any subservicer or funds held in the
Collection Account for future payment or withdrawal. 
 Advances made from funds held in the Collection Account may be made by the Servicer from subsequent
collections of principal and interest received on other Mortgage Loans and deposited into the Collection Account. Advances made from the Collection Account are not limited to subsequent collections of principal and interest received on the
delinquent Mortgage Loan with respect to which an Advance is made. If on the Servicer Remittance Date prior to any Distribution Date funds in the Collection Account are less than the amount required to be paid to the Noteholders on such Distribution
Date, then the Servicer shall deposit its own funds into the Distribution Account in the amount of the lesser of (i) any unreimbursed Advances previously made by the Servicer with funds held in the Collection Account or (ii) the shortfall
in the Collection Account, provided, however, that in no event shall the Servicer deposit into the Collection Account an amount that is less than any shortfall in the Collection Account attributable to delinquent payments on Mortgage Loans
which the Servicer deems to be recoverable and which has not been covered by an Advance from the Servicer’s own corporate funds or any subservicer’s funds. If applicable, on the Servicer Remittance Date preceding each Distribution Date,
the Servicer shall present an Officers’ Note to the Indenture Trustee (i) stating that the Servicer elects not to make an Advance in a stated amount and (ii) detailing the reason it deems the advance to be nonrecoverable. 

Section 5.25. Compensating Interest Payments. 
 The
Servicer shall deposit in the Collection Account not later than the Servicer Remittance Date preceding the Distribution Date an amount equal to the Compensating Interest related to the related Determination Date. The Servicer shall not be entitled
to any reimbursement of any Compensating Interest payment. 
 Section 5.26. Advance Facility. 
 (a) The Servicer on behalf of the Trust Fund, is hereby authorized to enter into a facility (such an arrangement, an “Advance
Facility”) with any Person which provides that such Person (an “Advancing Person”) may fund Advances and/or Servicing Advances under this Agreement, although no such facility shall reduce or otherwise affect the
Servicer’s obligation to fund such Advances and/or Servicing Advances. No consent of the Indenture Trustee, Noteholders or any other party shall be required before the Servicer may enter into an Advance Facility nor shall the Indenture Trustee
or the Noteholders be a third party beneficiary of any obligation of an Advancing Person to the Servicer. If the Servicer enters into an Advance Facility, the Servicer and the related Advancing Person shall deliver to the Indenture Trustee at the
address set forth in Section 11.06 hereof a written notice (an “Advance Facility Notice”) (in the form attached hereto as Exhibit K), stating (a) the identity of the Advancing Person and (b) the identity of the Person
(the “Servicer’s Assignee”) that will, subject to Section 5.26(b) hereof, have the right to make withdrawals from the Collection Account pursuant to Section 5.07 hereof to reimburse previously unreimbursed Advances
and/or Servicing Advances (“Advance Reimbursement Amounts”). If the Servicer enters into such an Advance Facility pursuant to this Section 5.26, the Indenture Trustee shall execute the acknowledgment of the Advance Facility
Notice, as prepared by the Servicer confirming its receipt of written notice of the existence of 

  

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such Advance Facility. To the extent that an Advancing Person purchases or funds any Advance or any Servicing Advance and provides the Indenture Trustee with
written notice (in the form attached hereto as Exhibit K) acknowledged by the Servicer that such Advancing Person is entitled to reimbursement directly from the Indenture Trustee pursuant to the terms of the Advance Facility, such Advancing Person
shall be entitled to receive reimbursement pursuant to this Agreement for such amount to the extent provided in Section 5.26(b). Such notice from the Advancing Person must specify the amount of the reimbursement, the Section of this Agreement
that permits the applicable Advance or Servicing Advance to be reimbursed, the section(s) of the Advance Facility that entitle the Advancing Person to request reimbursement from the Indenture Trustee, on behalf of the Trust Fund, rather than the
Servicer, the Advancing Person’s wire transfer instructions, and include the Servicer’s acknowledgment thereto or proof of an Event of Default under the Advance Facility. The Indenture Trustee shall have no duty or liability with respect
to any calculation of any reimbursement to be paid to an Advancing Person and shall be entitled to rely without independent investigation on the Advancing Person’s notice provided pursuant to this Section 5.26. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing Advances shall not be required to meet the qualifications of a Sub-Servicer pursuant to Section 7.06 hereof. 
 (b) Notwithstanding the foregoing, and for the avoidance of doubt, (i) the Servicer and/or the Servicer’s Assignee shall only be
entitled to reimbursement of Advance reimbursement amounts hereunder from withdrawals from the Collection Account pursuant to Section 5.07 of this Agreement and shall not otherwise be entitled to make withdrawals or receive amounts that shall
be deposited in the Distribution Account, and (ii) none of the Indenture Trustee or the Noteholders shall have any right to, or otherwise be entitled to, receive any Advance reimbursement amounts to which the Servicer or Servicer’s
Assignee, as applicable, shall be entitled pursuant to Section 5.07 hereof. An Advance Facility may be terminated by the joint written direction of the Servicer and the related Advancing Person. Written notice of such termination shall be
delivered to the Indenture Trustee in the manner set forth in Section 11.06 hereof. None of the Company or the Indenture Trustee shall, as a result of the existence of any Advance Facility, have any additional duty or liability with respect to
the calculation or payment of any Advance reimbursement amount, nor, as a result of the existence of any Advance Facility, shall the Company or the Indenture Trustee have any additional responsibility to track or monitor the administration of the
Advance Facility or the payment of Advance reimbursement amounts to the Servicer’s Assignee. The Servicer shall indemnify the Company, the Indenture Trustee, any successor Servicer and the Trust Fund for any claim, loss, liability or damage
resulting from any claim by the related Advancing Person, except to the extent that such claim, loss, liability or damage resulted from or arose out of negligence, recklessness or willful misconduct on the part of the Company, the Indenture Trustee
or any successor Servicer, as the case may be, or failure by the successor Servicer or the Indenture Trustee, as the case may be, to remit funds as required by this Agreement or the commission of an act or omission to act by the successor Servicer
or the Indenture Trustee, as the case may be, and the passage of any applicable cure or grace period, such that an Event of Default under this Agreement occurs or such entity is subject to termination for cause under this Agreement. The Servicer
shall maintain and provide to any successor Servicer and, upon request, the Indenture Trustee a detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged or assigned to, and reimbursed to any Advancing Person. The successor
Servicer shall be entitled to 

  

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rely on any such information provided by the predecessor Servicer, and the successor Servicer shall not be liable for any errors in such information.

 (c) If an Advancing Person is entitled to reimbursement for any particular Advance or Servicing Advance as set forth in
Section 5.26(a), then the Servicer shall not be permitted to reimburse itself therefor under Section 5.07, but instead the Servicer shall include such amounts in the applicable remittance to the Indenture Trustee made pursuant to
Section 5.06(d) to the extent of amounts on deposit in the Collection Account on the related Servicer Remittance Date. The Indenture Trustee is hereby authorized to pay to an Advancing Person reimbursements for Advances and Servicing Advances
from the Distribution Account to the same extent the Servicer would have been permitted to reimburse itself for such Advances and/or Servicing Advances in accordance with Section 5.07, had the Servicer made such Advance or Servicing Advance.

 (d) All Advances and Servicing Advances made pursuant to the terms of this Agreement shall be deemed made and shall be
reimbursed on a “first in first out” (FIFO) basis. In the event the Servicer’s Assignee shall have received some or all of an Advance reimbursement amount related to Advances and/or Servicing Advances that were made by a Person other
than such predecessor Servicer or its related Advancing Person in error, then such Servicer’s Assignee shall be required to remit any portion of such Advance reimbursement amount to each Person entitled to such portion of such Advance
reimbursement amount. Without limiting the generality of the foregoing, the Servicer shall remain entitled to be reimbursed pursuant to Section 5.07 for all Advances and/or Servicing Advances funded by the Servicer to the extent the related
Advance reimbursement amounts have not been assigned, sold or pledged to such Advancing Person or Servicer’s Assignee. 
 (e) In the event the Servicer is terminated pursuant to Section 8.01, the Advancing Person shall succeed to the terminated Servicer’s right of reimbursement set forth in Section 8.02 to the extent of such Advancing
Person’s financing of Advances or Servicing Advances hereunder then remaining unreimbursed. 
 Any amendment to this Section 5.26 or to any other
provision of this Agreement that may be necessary or appropriate to effect the terms of an Advance Facility as described generally in this Section 5.26, including amendments to add provisions relating to a successor Servicer, may be entered
into by the Indenture Trustee, the Company and the Servicer without the consent of any Noteholder, provided such amendment complies with Section 11.03 hereof. All reasonable costs and expenses (including attorneys’ fees) of each party
hereto of any such amendment shall be borne solely by the Servicer. The parties hereto hereby acknowledge and agree that: (a) the Advances and/or Servicing Advances financed by, sold and/or pledged to an Advancing Person under any Advance
Facility are obligations owed to the Servicer payable only from the cash flows and proceeds received under this Agreement for reimbursement of Advances and/or Servicing Advances only to the extent provided herein, and the Indenture Trustee and the
Trust Fund are not, as a result of the existence of any Advance Facility, obligated or liable to repay any Advances and/or Servicing Advances financed by the Advancing Person; (b) the Servicer will be responsible for remitting to the Advancing
Person the applicable amounts collected by it as reimbursement for Advances and/or Servicing Advances purchased or funded by the Advancing Person, subject to the provisions of this Agreement; and (c) the Indenture Trustee shall not have 

  

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any responsibility to track or monitor the administration of the financing arrangement between the Servicer and any Advancing Person. 
 ARTICLE VI 
 APPLICATION OF FUNDS

 Section 6.01. Deposits to the Payment Account. By 12:00 noon (Eastern Time) on each Servicer Remittance Date, the Servicer
shall remit to the Indenture Trustee for deposit 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 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 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 Remittance Date, the 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”). 
 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 Depositor, the Sponsor, the Servicer, the Issuing Entity and the Indenture Trustee acknowledge and agree, that without the need for any further action on the
part of the Note Insurer, the Depositor, the Sponsor, the Servicer, the Issuing Entity, 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, 

  

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the Servicer, the Depositor, the Sponsor, the Issuing Entity 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 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 
 THE SERVICER AND THE COMPANY 
 Section 7.01. Liability of the Servicer and the Company. 
 The Servicer shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by Servicer herein.
The Company shall be liable in accordance herewith only to the extent of the obligations specifically imposed upon and undertaken by the Company. 
 Section 7.02. Merger or Consolidation of, or Assumption of the Obligations of, the Servicer or the Company. 
 Any entity into which
the Servicer or Company may be merged or consolidated, or any entity resulting from any merger, conversion or consolidation to which the Servicer or the Company shall be a party, or any corporation succeeding to the business of the Servicer or the
Company, shall be the successor of the Servicer or the Company, as the case may be, hereunder, without the execution or filing of any paper or any further act on the part of any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor Servicer shall satisfy all the requirements of Section 8.02 with respect to the qualifications of a successor Servicer. 
 Section 7.03. Limitation on Liability of the Servicer and Others. 
 Neither the Servicer nor any of the directors or
officers or employees or agents of the Servicer shall be under any liability to the Trust or the Noteholders for any action taken or for refraining from the taking of any action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the Servicer or any such Person against any liability which would otherwise be imposed by reason of its willful misfeasance, bad faith or negligence in the performance of
duties of the Servicer or by reason of its reckless disregard of its obligations and duties of the Servicer hereunder. 
 The Servicer and any director or
officer or employee or agent of the Servicer may rely in good faith on any document of any kind prima facie properly executed and submitted by any Person respecting any matters arising hereunder. The Servicer and any director or officer or employee
or agent of the Servicer shall be indemnified by the Trust and held harmless against any loss, 

  

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liability or expense incurred in connection with any legal action relating to this Agreement or the Notes, including any amount paid to the Trustee pursuant
to Section 7.06(b), other than any loss, liability or expense related to any specific Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of its willful misfeasance, bad faith or negligence in the performance of its duties hereunder or by reason of its reckless disregard of its obligations and duties hereunder. The Servicer shall not be under
any obligation to appear in, prosecute or defend any legal action which is not incidental to its duties to service the Mortgage Loans in accordance with this Agreement, and which in its opinion may involve it in any expense or liability;
provided, however, that the Servicer may in its sole discretion undertake any such action which it may deem necessary or desirable in respect of this Agreement, and the rights and duties of the parties hereto and the interests of the
Noteholders hereunder. In such event, the reasonable legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust, and the Servicer shall be entitled to be reimbursed therefor.
The Servicer’s right to indemnity or reimbursement pursuant to this Section 7.03 shall survive any resignation or termination of the Servicer pursuant to Section 7.04 or 8.01 with respect to any losses, expenses, costs or liabilities
arising prior to such resignation or termination (or arising from events that occurred prior to such resignation or termination). Any reimbursements or indemnification to the Servicer from the Trust pursuant to this Section 7.03 shall be
payable in the priority set forth in Section 8.02 of the Indenture. 
 Section 7.04. Servicer Not to Resign. 
 Subject to the provisions of Section 7.02, the Servicer shall not resign from the obligations and duties hereby imposed on it except (i) upon determination
that the performance of its obligations or duties hereunder are no longer permissible under applicable law or (ii) upon satisfaction of the following conditions: (a) the Servicer has proposed a successor servicer to the Trustee in writing
and such proposed successor servicer is reasonably acceptable to the Trustee; and (b) each Rating Agency shall have delivered a letter to the Trustee prior to the appointment of the successor servicer stating that the proposed appointment of
such successor servicer as Servicer hereunder will not result in the reduction or withdrawal of then current rating of the Notes; provided, however, that no such resignation by the Servicer shall become effective until such successor servicer
or, in the case of (i) above, the Trustee or its designee as successor Servicer shall have assumed the Servicer’s responsibilities and obligations hereunder or shall have designated a successor servicer in accordance with
Section 7.02. Any such resignation shall not relieve the Servicer of responsibility for any of the obligations specified in Sections 7.01 and 7.02 as obligations that survive the resignation or termination of the Servicer. The Servicer shall
have no claim (whether by subrogation or otherwise) or other action against any Noteholder for any amounts paid by the Servicer pursuant to any provision of this Pooling and Agreement. Any such determination permitting the resignation of the
Servicer under clause (i) above shall be evidenced by an Opinion of Counsel to such effect delivered to the Trustee. 
 Section 7.05.
Delegation of Duties. 
 In the ordinary course of business, the Servicer at any time may delegate any of its duties hereunder to any Person, including any
of its Affiliates, who agrees to conduct such duties in accordance with the same standards with which the Servicer complies pursuant to Section 3.01. 

  

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Such delegation shall not relieve the Servicer of its liabilities and responsibilities with respect to such duties and shall not constitute a resignation
within the meaning of Section 7.04. 
 Section 7.06. Servicer to Pay Trustee’s Fees and Expenses; Indemnification. 
 (a) The Servicer covenants and agrees to pay to the Trustee and any co-trustee of the Trustee from time to time, and the Trustee and any
such co-trustee shall be entitled to, reasonable compensation, including all indemnification payments (which shall not be limited by any provision of law in regard to the compensation of a trustee of an express trust) for all services rendered by
each of them in the execution of the trusts created hereunder and in the exercise and performance of any of the powers and duties and the Servicer will pay or reimburse the Trustee and any co-trustee upon request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee or any co-trustee of the Trustee in accordance with any of the provisions of this Agreement except any such expense, disbursement or advance as may arise from its negligence or bad faith.

 (b) The Servicer agrees to indemnify the Trustee for, and to defend and hold, the Trustee harmless against, any claim, tax,
penalty, loss, liability or expense of any kind whatsoever, incurred without gross negligence or willful misconduct on the part of the Trustee as such and/or in its individual capacity, arising out of, or in connection with, the performance of the
Trustee’s duties under this Agreement or the other Basic Documents, including the reasonable costs and expenses (including reasonable legal fees and expenses) of defending itself against any claim in connection with the exercise or performance
of any of its powers or duties hereunder, provided that: 
 (i) with respect to any such claim, the Trustee shall have given
the Servicer written notice thereof promptly after the Trustee shall have actual knowledge thereof; 
 (ii) while maintaining
control over its own defense, the Trustee shall cooperate and consult fully with the Servicer in preparing such defense; and 
 (iii) notwithstanding anything in this Agreement to the contrary, the Servicer shall not be liable for settlement of any claim by the Trustee entered into without the prior consent of the Servicer, which consent shall not be unreasonably
withheld. 
 No termination of this Agreement and resignation and removal of the Trustee shall affect the obligations created by this Section 7.06 of
the Servicer to indemnify the Trustee under the conditions and to the extent set forth herein. This section shall survive the termination of this Agreement and resignation and removal of the Trustee. Any amounts to be paid by the Servicer pursuant
to this Subsection may not be paid from the Trust Fund except as provided in Section 6.03. 
 Notwithstanding the foregoing, the indemnification
provided by the Servicer in this Section 7.06 shall not pertain to any loss, liability or expense of the Trustee including the costs and expenses of defending itself against any claim, incurred in connection with any actions taken by the
Trustee at the direction of the Noteholders, as the case may be, pursuant to the terms of this Agreement. 
  

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 (c) The Servicer agrees to indemnify the Trust Fund in an amount equal to the amount of
any claim made under a MI Policy for which coverage is denied by the MI Insurer because (and if the MI Insurer’s denial of coverage is contested by the Servicer, a court or arbitrator finally determines that coverage is not available under the
MI Policy because) of the Servicer’s failure to abide by the terms of the MI Policy or the MI Insurance Agreement or the Servicer’s failure to abide by the NFI Underwriting Guidelines or the NFI Servicing Guidelines, as attached to the MI
Insurance Agreement. 
 In the event the Trustee becomes the Servicer pursuant to Section 8.02 hereof, the Trustee shall not be
obligated, in its individual capacity, to pay any obligation of the Servicer under clause (a), (b) or (c) above. 
 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 11.03 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. 
 ARTICLE VIII 
 DEFAULT 
 Section 8.01. Servicing Default. 
 (a) If any one of the following events (a “Servicing Default”) shall occur and be continuing: 
 (i) Any failure by the Servicer to deposit in the Collection Account or Distribution Account (A) any Advances and Compensating
Interest or (B) any other Deposit required to be made under the terms of this Agreement, which, in the case of this clause (B), continues unremedied for a period of three Business Days after the date upon which written notice of such failure
shall have been given to the Servicer by the Trustee or to the Servicer and the Trustee by the Holders of Notes evidencing at least 25% of the Voting Rights; or 
  

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 (ii) Failure on the part of the Servicer duly to observe or perform in any material
respect any other covenants or agreements of the Servicer set forth in this Agreement, which failure, in each case, materially and adversely affects the interests of Noteholders or the breach of any representation or warranty of the Servicer in this
Agreement which materially and adversely affects the interests of the Noteholders, and which in either case continues unremedied for a period of 30 days after the date on which written notice of such failure or breach, requiring the same to be
remedied, and stating that such notice is a “Notice of Default” hereunder, shall have been given to the Servicer by the Trustee or to the Servicer and the Trustee by the Holders of Notes evidencing at least 25% of the Voting Rights; or

 (iii) The entry against the Servicer of a decree or order by a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a trustee, conservator, receiver or liquidator in any insolvency, conservatorship, receivership, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding up or
liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 consecutive days; or 
 (iv) The Servicer shall voluntarily go into liquidation, consent to the appointment of a conservator, receiver, liquidator or similar person in any insolvency, readjustment of debt, marshaling of assets and
liabilities or similar proceedings of or relating to the Servicer or of or relating to all or substantially all of its property, or a decree or order of a court, agency or supervisory authority having jurisdiction in the premises for the appointment
of a conservator, receiver, liquidator or similar person in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings, or for the winding-up or liquidation of its affairs, shall have been entered against the
Servicer and such decree or order shall have remained in force undischarged, unbonded or unstayed for a period of 60 days; or the Servicer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take
advantage of any applicable insolvency or reorganization statute, make an assignment for the benefit of its creditors or voluntarily suspend payment of its obligations; or 
 (v) The Cumulative Loss Percentage exceeds (a) with respect to the first 12 Distribution Dates, [    ]%,
(b) with respect to the next 12 Distribution Dates, [    ]% (c) with respect to the next 12 Distribution Dates, [    ]%, (d) with respect to the next 12 Distribution Dates,
[    ]%, (e) with respect to the next 12 Distribution Dates, [    ]%, (f) and with respect to all Distribution Dates thereafter, [    ]%; or 
 (vi) Realized Losses on the Mortgage Loans over any twelve-month period exceeds [    ]% of the sum of the aggregate
Principal Balance of the Initial Mortgage Loans as of the Cut-off Date and the Original Pre-Funded Amount; or 
 (vii) The
Rolling 90 Day Delinquency Percentage exceeds [    ]%. 
  

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 (b) then, and in each and every such case, so long as a Servicing Default shall not have
been remedied within the applicable grace period, (x) with respect solely to clause (i)(A) above, if such Advance is not made by 5:00 P.M., New York time, on the Business Day immediately following the Servicer Remittance Date (provided the
Trustee shall give the Servicer notice of such failure to advance by 5:00 P.M. New York time on the Servicer Remittance Date), the Trustee shall terminate all of the rights and obligations of the Servicer under this Agreement and the Trustee, or a
successor servicer appointed in accordance with Section 8.02, shall assume, pursuant to Section 8.02, the duties of a successor Servicer and (y) in the case of (i)(B), (ii), (iii), (iv), (v) and (vi) and (vii) above,
the Trustee shall, at the direction of the Holders of Notes evidencing at least 51% of the Voters Rights, by notice then given in writing to the Servicer (and to the Trustee if given by Holders of Notes), terminate all of the rights and obligations
of the Servicer as servicer under this Agreement. Any such notice to the Servicer shall also be given to the Trustee, each Rating Agency, the Company and the Seller. On or after the receipt by the Servicer (and by the Trustee if such notice is given
by the Holders) of such written notice, all authority and power of the Servicer under this Agreement, whether with respect to the Notes or the Mortgage Loans or otherwise, shall pass to and be vested in the Trustee or other Successor Servicer
appointed in accordance with Section 8.02. 
 Section 8.02. Indenture Trustee to Act: Appointment of Successor. (a) (i) On and
after the time the Servicer receives a notice of termination pursuant to Section 8.01, or the Indenture Trustee receives the resignation of the Servicer evidenced by an Opinion of Counsel pursuant to Section 7.04, or the Servicer is
removed as 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 8.02, the Indenture Trustee (provided the Indenture Trustee
receives 20 days’ prior written notice) or another successor servicer shall be the successor in all respects to the Servicer in its capacity as servicer under this Agreement and the transactions set forth or provided for in this Agreement, and
shall be subject to all the responsibilities, restrictions, duties, liabilities and termination provisions relating thereto placed on the Servicer by the terms and provisions of this Agreement. The Indenture Trustee or another successor servicer and
the Indenture Trustee shall take such action, consistent with this Agreement, as shall be necessary to effect any such succession. If the Indenture Trustee or any other successor servicer is acting as Servicer hereunder, it shall be subject to
termination under Section 8.01 upon the occurrence or continuation of a Servicer Event of Default applicable to it as Servicer. The Indenture Trustee hereby agrees to act as successor servicer pursuant to the terms of this Agreement upon the
termination or resignation of the Servicer as provided in this Section 8.02, provided that the Indenture Trustee 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 Indenture Trustee and any successor 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 Indenture Trustee, as successor servicer, or any other successor servicer, as applicable, or to compel the performance of any obligations by any party
to this Agreement. Any successor servicer and the Indenture Trustee prior to its becoming the successor servicer shall not be liable for any actions, omissions or defaults of any servicer prior to it or breaches of representations and warranties of
the servicer prior to it. The Indenture Trustee or any other successor servicer, as successor servicer, shall be obligated to pay Compensating Interest pursuant to Section 5.25 in any event and to make Delinquency Advances pursuant to Section

  

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5.24 unless, and only to the extent the successor 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 5.24, such determination to be evidenced by a certification of a Responsible Officer of the successor servicer delivered to the Indenture Trustee. Furthermore, neither the Indenture
Trustee nor any successor servicer shall 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 successor servicer with
an officer’s certificate that contains: (i) a complete description of all Events of Default by the Servicer under the Agreement of which a Responsible Officer of the Indenture Trustee has actual knowledge, which have not been fully cured
and (ii) confirmation that the Servicer Remittance Report and the reports described in Sections 5.09 and 5.10 have been timely filed by the Servicer with the Indenture Trustee. 
 (ii) In the event that any successor servicer is terminated or resigns pursuant to this Agreement or otherwise becomes unable to perform
its obligations under this Agreement, the Indenture Trustee will appoint a successor servicer in accordance with the provisions of this Section 8.02; provided, that any successor servicer, shall satisfy the requirements set forth in
Section 8.02(b) and shall be approved by the Rating Agencies. 
 (b) Any successor 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 Servicer hereunder in the assumption of all or any part of the responsibilities, duties or liabilities of the Servicer hereunder. 
 (c) In the event the Indenture Trustee is the successor 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 Servicer if the Servicer had continued to act as servicer hereunder. 
 (d) The Indenture Trustee and any successor servicer shall take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Servicer agrees to cooperate with the Indenture Trustee and any successor servicer in effecting the termination of the Servicer’s servicing responsibilities and rights hereunder and shall promptly provide the
Indenture Trustee, or such successor servicer, as applicable, at the Servicer’s cost and expense, all documents and records reasonably requested by it to enable it to assume the Servicer’s functions hereunder and shall promptly also
transfer to the Indenture Trustee, or such successor servicer, as applicable, all amounts that then have been or should have been deposited in the Collection Account by the 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 Servicer pursuant to Section 5.04(b) with respect to all insurance claims arising during the Servicer’s
tenure. Any collections received by the Servicer after such removal or resignation shall be endorsed by it to the Indenture Trustee or a successor servicer, as applicable, and remitted directly to the Indenture Trustee (or, at the direction of the
Indenture Trustee, to any other successor servicer). Neither 

  

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the Indenture Trustee nor any other successor 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 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 Servicer
hereunder. The Servicer shall not resign as Servicer until a successor servicer has been appointed. 
 (e) In the event that
the Servicer is terminated hereunder and no successor servicer has been appointed hereunder, the Indenture Trustee may appoint a successor servicer (which may be an affiliate of the Indenture Trustee) or petition a court of competent jurisdiction to
appoint a successor servicer. Pending appointment of such a successor servicer hereunder, the Indenture Trustee shall be the successor servicer and act in such capacity; provided, however, that the Indenture Trustee, in its capacity as
successor servicer pending appointment of another successor servicer, (i) shall be obligated to make Delinquency Advances or Servicing Advances only to the extent that the Indenture Trustee deems 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 Servicer hereunder until the Indenture Trustee has received all servicing records and files from the predecessor servicer and in no event later than 90 days following the termination of the Servicer; provided,
however, the Indenture Trustee shall use its reasonable efforts to perform the duties and obligations of the 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. In connection with any appointment and assumption of duties of a successor servicer, the Indenture Trustee may make such arrangements for the
compensation of such successor servicer out of payments on Mortgage Loans; provided, however, that such compensation may not be in excess of that permitted the Servicer pursuant to Section 5.08, together with other Servicing
Compensation. The Servicer, the Indenture Trustee and such successor Servicer shall take such action, consistent with this Agreement, as shall be necessary to effectuate any such succession. 
 (f) In the event the Indenture Trustee, or any successor servicer incurs out-of-pocket expenses other than Servicing Advances or
Delinquency Advances in connection with the transfer of servicing hereunder, which expenses are required to be borne by the Servicer hereunder, and such expenses are not promptly reimbursed by the Servicer or recoverable out of amounts reimbursable
to the Servicer out of the Collection Account, the Indenture Trustee shall make such reimbursement to the applicable party out of funds in the Payment Account on any Payment Date after all Payments to Noteholders on such Payment Date have been made
but before any distribution to the Noteholders. The right of the Indenture Trustee to reimbursement from the Payment Account for any of the Indenture Trustee’s costs and expenses in connection with the transfer of any 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 Servicer is terminated or resigns hereunder, and at such time the Servicer has made unreimbursed Delinquency Advances or Servicing Advances out of its own funds, 
  

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 (i) any such Delinquency Advances or Servicing Advances shall be allocated by the
successor servicer in whole or in part to specific Mortgage Loans which are delinquent at the time of the transfer of servicing, which allocation shall be based on loan-level accounts of the portion of each Delinquency Advance or Servicing Advance
which has been funded by the Servicer from its own funds consistently maintained by the former Servicer, or, if no such accounts exist, then in the successor servicer’s discretion; 
 (ii) following the transfer of servicing, the successor servicer shall reimburse the former Servicer for such Delinquency Advances and
Servicing Advances in accordance with the allocations determined in accordance with 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
servicer determines any such Delinquency Advance or Servicing Advance to be a Nonrecoverable Advance, out of any funds in the Collection Account. 
 (h) In connection with the termination or resignation of the Servicer hereunder, the successor Servicer shall represent and warrant that it is a member of MERS in good standing and shall agree to comply in all
material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS, in which case the predecessor Servicer shall cooperate with the successor Servicer in causing the MERS
System to be revised to reflect the transfer of servicing to the successor Servicer as necessary under MERS’ rules and regulations. 
 Section 8.03. Waiver of Defaults. The Majority Noteholders may, on behalf of all Noteholders, waive any events permitting removal of the Servicer as 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. 
 ARTICLE IX 
 TERMINATION 
 Section 9.01. 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 Indenture Trustee or (ii) mutual consent of the Owner Trustee, on behalf of the Issuing Entity, at the direction of all the Noteholders, the Indenture Trustee, the Servicer, the Swap Provider (if the Swap Agreement is still outstanding) and
all Noteholders in writing. 
  

 63 

 (a) In addition, subject to Section 8.02, the Sponsor may, at its sole option, cost
and expense, terminate the Issuing Entity in accordance with the terms of Section 10.01 of the Indenture. 
 (b) If on
any date, the 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 Account, the 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). 
 (c) Notice of any
termination, specifying the Payment Date upon which the Issuing Entity will terminate and the Noteholders shall surrender their Notes to the Indenture Trustee for final payment and cancellation, shall be given promptly by the 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 Remittance 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. 
 (d) 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 Noteholders 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 Noteholders for payment. Such funds shall remain uninvested. 
 Section 9.02. Additional Termination Requirements. By their acceptance of the Notes, the Holders thereof hereby agree to appoint the 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 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 9.03.
Accounting Upon Termination of Servicer. Upon termination of the Servicer, the Servicer shall, at its expense: 
 (a) deliver
to the successor servicer or, if none shall yet have been appointed, to the Indenture Trustee, the funds in any Account administered by the Servicer; 
  

 64 

 (b) deliver to the successor 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; 
 (c) deliver to the successor 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 servicer and to more fully and definitively vest in such successor all
rights, powers, duties, responsibilities, obligations and liabilities of the Servicer under this Agreement. 
 ARTICLE X 
 [RESERVED] 
 ARTICLE XI

 [MISCELLANEOUS PROVISIONS] 
 Section 11.01. Limitation on Liability. (a) None of the Issuing Entity, the Owner Trustee, the Depositor, the Sponsor, the Servicer, the Indenture Trustee or any of the directors, officers, employees or agents of such Persons
shall be under any liability to the Issuing Entity, 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 Issuing Entity, the Owner Trustee, the Depositor, the Sponsor, the 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 Issuing Entity, the Owner Trustee, the Depositor, the Sponsor, the 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
[                            ], 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 Issuing Entity is made and intended

  

 65 

 
not as personal representations, undertakings and agreements by
[                            ]but is made and intended for the purpose for binding only the Issuing
Entity, (iii) nothing herein contained shall be construed as creating any liability on
[                            ], 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
[                            ]be personally liable for the payment of any indebtedness or expenses of
the Issuing Entity or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuing Entity under this Agreement or any other related documents. 
 Section 11.02. 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 Issuing Entity, 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 Issuing
Entity, 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 Issuing Entity, 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. 
 Section 11.03. Amendment. (a) This Agreement may be amended
from time to time by the Owner Trustee, on behalf of the Issuing Entity, the Servicer, the Depositor, Sponsor 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 and will not prevent the Notes from being characterized as debt
for United States federal income tax purposes or cause the Issuing Entity to be subject to federal income tax, 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. 
  

 66 

 (b) This Agreement may be amended from time to time by the Owner Trustee, on behalf of
the Issuing Entity, the Servicer, the Depositor, the Sponsor and the Indenture Trustee, with the consent of the Note Insurer, the Noteholders representing more than 50% 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 Servicer, on behalf of the Issuing Entity, shall cause executed copies of any
supplemental indentures to be delivered to the Note Insurer and the Rating Agencies. 
 Section 11.04. 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 situated, and in any other appropriate public recording office or elsewhere, such recordation to be effected by the 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 11.05. Duration of Agreement. This Agreement shall
continue in existence and effect until terminated as herein provided. 
 Section 11.06. 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 Servicer, NovaStar Mortgage Inc., 8140 Ward Parkway, Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder;
(ii) in the case of the Issuing Entity, NovaStar Mortgage Funding Trust 200[_]-[_], c/o the Owner Trustee at its Corporate Trust Office, Attention: Corporate Trust Administration; (iii) in the case of the Indenture Trustee,
[                            ], Attn:
[                ] ; (iv) in the case of the Sponsor, NovaStar Mortgage Inc., 8140 Ward Parkway, Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder;
(v) in the case of the Underwriter, [                            ], Attn:
[                ]; (vi) in the case of the Note Insurer,
[                            ], 

  

 67 

 
Attn: [                ]; (vii) in the case of [the Rating
Agencies], [                            ], Attn:
[                ]; (viii) in the case of the Depositor, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], 8140 Ward Parkway,
Kansas City, Missouri, 64114, Attention: Matt Kaltenrieder and (ix) 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 11.07.
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 11.08. 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 Servicer shall be rendered as an independent contractor and not as agent for the Noteholders. 
 Section 11.09. 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 11.10. Successors and Assigns. This Agreement shall
inure to the benefit of and be binding upon the Issuing Entity, the Servicer, the Depositor, the Sponsor, the Indenture Trustee and the Noteholders and their respective successors and permitted assigns. 
 Section 11.11. 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 11.12. No Petition. The Servicer, by entering into this Agreement hereby covenants
and agrees, 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 Issuing Entity, or join in any institution against the Issuing Entity of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States Federal or state bankruptcy law in connection with any obligations relating to the Certificates, the Notes, this Agreement or any of the
other Basic Documents. 
 This Section 10.12 will survive for one year and one day following the termination of this Agreement.

 Section 11.13. 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

  

 68 

 
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 11.14. 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 11.15. 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. 
 (b) THE ISSUING ENTITY, THE SERVICER, THE DEPOSITOR, THE SPONSOR 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 ISSUING ENTITY, THE DEPOSITOR, THE SPONSOR, THE 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 CONSENT 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 ISSUING ENTITY, THE DEPOSITOR, THE SPONSOR, THE 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 ISSUING ENTITY, THE DEPOSITOR, THE SPONSOR, THE 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] 
  

 69 

 IN WITNESS WHEREOF, the Servicer, the Issuing Entity, the Indenture Trustee, the Depositor 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. 
  

			
	 NOVASTAR MORTGAGE, INC.,
as Sponsor and Servicer

		
	 By:
	 	  
		 	 Name:

		 	 Title:

  

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

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

		 	 Title:

  

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

		
	 By:
	 	  
		 	 Name:

		 	 Title:

  

			
	 [                                      
                          ],
 as Indenture Trustee

		
	 By:
	 	  
		 	 Name:

		 	 Title:

 [Signature Page to Sale and Servicing Agreement] 
  

 70 

 SCHEDULE I 
 MORTGAGE LOAN SCHEDULE 
 [Delivered to the Sponsor, the Servicer, the Depositor and the Trustee at the
Closing] 
  

 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 and if the Mortgage Loan is registered on the MERS System, such Mortgage or an assignment of the Mortgage shall
reflect MERS as the mortgagee of record and shall include the MIN for such Mortgage Loan; 
 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 Sponsor (or to MERS, if the Mortgage Loan is registered on the MERS System), and noting the presence of a MIN (if the Mortgage Loan is registered on the MERS System) (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. Unless the Mortgage Loan is recorded on the MERS System, 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). 

 

 A-1 

 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-2 

 EXHIBIT B 
 INDENTURE TRUSTEE’S ACKNOWLEDGMENT OF RECEIPT 
  

			
		 	[DATE]
		
	[Lead Underwriter]	 	 NovaStar Mortgage Inc.
 8140 Ward Parkway, Suite
300
 Kansas City, Missouri 64114

		
	 NovaStar Mortgage Funding Corporation
 8140 Ward Parkway,
Suite 300
 Kansas City, Missouri 64114
	 	[Note Insurer]

  

	 	Re:	Sale and Servicing Agreement, dated as of                     ,
20    ] among NovaStar Mortgage Inc., as Sponsor and Servicer, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], as depositor, NovaStar Mortgage Funding Trust 200_-_ and
                                , 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 [DATE], by and between NovaStar Mortgage
Funding Trust 200[_]-[_] and the Indenture Trustee. 
 Capitalized words and phrases used herein shall have the respective meanings assigned
to them in Appendix I to the Indenture. 
  

			
	 [                                    ],
 as Indenture Trustee

		
	 By:
	 	  
		 	 Name:

		 	 Title:

  

 B-1 

 EXHIBIT C 
 INDENTURE TRUSTEE’S ACKNOWLEDGEMENT OF RECEIPT 
  

			
		 	[DATE]
		
	[Lead Underwriter]	 	 NovaStar Mortgage Inc.
 8140 Ward Parkway, Suite
300
 Kansas City, Missouri 64114

		
	 NovaStar Mortgage Funding Corporation
 8140 Ward Parkway,
Suite 300
 Kansas City, Missouri 64114
	 	[Note Insurer]

  

	 	Re:	Sale and Servicing Agreement, dated as of                     ,
20    ] among NovaStar Mortgage Inc., as Sponsor and Servicer, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], as depositor, NovaStar Mortgage Funding Trust 200_-_ and
                                , 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, recordability, 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 [DATE], by and between NovaStar Mortgage Funding Trust 200[_]-[_] and the
Indenture Trustee. 
  

			
	 [                                    ],
 as Indenture Trustee

		
	 By:
	 	  
		 	 Name:

		 	 Title:

 EXHIBIT D 
 INITIAL CERTIFICATION OF INDENTURE TRUSTEE 
  

			
		 	                    , 200[_]
		
	[Lead Underwriter]	 	 NovaStar Mortgage Inc.
 8140 Ward Parkway, Suite
300
 Kansas City, Missouri 64114

		
	 NovaStar Mortgage Funding Corporation
 8140 Ward Parkway,
Suite 300
 Kansas City, Missouri 64114
	 	[Note Insurer]

  

	 	Re:	Sale and Servicing Agreement, dated as of                     ,
20    ] among NovaStar Mortgage Inc., as Sponsor and Servicer, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], as depositor, NovaStar Mortgage Funding Trust 200_-_ and
                                    , 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 with respect to
items (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 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 

  

 D-1 

 
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. 
  

			
	 [                                    ],
 as Indenture Trustee

		
	 By:
	 	  
		 	 Name:

		 	 Title:

  

 D-2 

 EXHIBIT E 
 FINAL CERTIFICATION OF INDENTURE TRUSTEE 
  

			
		 	                    , 200[_]
		
	[Lead Underwriter]	 	 NovaStar Mortgage Inc.
 8140 Ward Parkway, Suite
300
 Kansas City, Missouri 64114

		
	 NovaStar Mortgage Funding Corporation
 8140 Ward Parkway,
Suite 300
 Kansas City, Missouri 64114
	 	[Note Insurer]

  

	 	Re:	Sale and Servicing Agreement, dated as of                     ,
20    ] among NovaStar Mortgage Inc., as Sponsor and Servicer, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], as depositor, NovaStar Mortgage Funding Trust 200_-_ and
                            , 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 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 

  

 E-1 

 
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.

  

			
	 [                                    ],
 as Indenture Trustee

		
	 By:
	 	  
		 	 Name:

		 	 Title:

  

 E-2 

 EXHIBIT F 
 REQUEST FOR RELEASE OF DOCUMENTS 
  

	To:	[Indenture Trustee] 

  

	 	Re:	Sale and Servicing Agreement, dated as of                     ,
20    ] among NovaStar Mortgage Inc., as Sponsor and Servicer, [NovaStar Mortgage Funding Corporation] [NovaStar Certificates Financing LLC], as depositor, NovaStar Mortgage Funding Trust 200_-_ and
                                , as Indenture Trustee 

In connection with the administration of the Mortgage Loans held by you as Indenture Trustee for the Issuing Entity 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)
		 	 Issuing Entity: __________________________________

		 	 Address: _______________________________________

		 	 _______________________________________

		 	 Date: __________________________________________

 EXHIBIT G 
 NOVASTAR MORTGAGE 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 NovaStar Mortgage Funding Trust 200[_]-[_]; 

  

	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:

 EXHIBIT [  ] 
 FORM 10-D, FORM 8-K AND FORM 10-K REPORTING RESPONSIBILITY 
 As to each item described below, the entity indicated as the
Responsible Party shall be primarily responsible for reporting the information to the party identified as responsible for preparing the Securities Exchange Act Reports pursuant to Section 5.11 of the Sale and Servicing Agreement. 
 Under Item 1 of Form 10-D: a) items marked “8.06 statement” are required to be included in the periodic reports prepared by the Indenture Trustee under
Section 8.06 of the Indenture, provided by the Indenture Trustee based on information received from the Servicer; and b) items marked “Form 10-D report” are required to be in the Form 10-D report but not the 8.06 statement, provided
by the party indicated. Information under all other Items of Form 10-D is to be included in the Form 10-D report. All such information and any other Items of Form 8-K and Form 10-K set forth in this exhibit shall be sent to the Indenture Trustee and
the Depositor. 
  

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

				
	10-D	  	 Must be filed within 15 days of the distribution date for the asset-backed securities.
	  		  	
								
		  	 1
	  	Distribution and Pool Performance Information	  		  		  		  		  	
								
		  		  	Item 1121(a) – Distribution and Pool Performance Information	  		  		  		  		  	
								
		  		  	(1) Any applicable record dates, accrual dates, determination dates for calculating distributions and actual distribution dates for the distribution period.	  		  	 X
  
 (8.06
 Statement)
	  		  		  	
								
		  		  	(2) Cash flows received and the sources thereof for distributions, fees and expenses.	  		  	 X
  
 (8.06
 Statement)
	  		  		  	
								
		  		  	(3) Calculated amounts and distribution of the flow of funds for the period itemized by type and priority of payment, including:	  		  	 X
  
 (8.06
 Statement)
	  		  		  	
								
		  		  	 (i) Fees or expenses accrued and paid, with an identification of the general purpose of such fees and the party receiving such fees or expenses.
	  		  	 X
  
 (8.06
 Statement)
	  		  		  	

  

 I-1 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

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

  

 I-2 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  		  	(7) Any amounts drawn on any credit enhancement or other support identified in Item 1114 of Regulation AB, as applicable, and the amount of coverage remaining under any such enhancement, if
known and applicable.	  		  	 X
  
 (8.06
 Statement)
	  		  		  	
								
		  		  	(8) Number and amount of pool assets at the beginning and ending of each period, and updated pool composition information, such as weighted average coupon, weighted average remaining term, pool
factors and prepayment amounts.	  		  	 X
  
 (8.06
 Statement)
	  		  	Updated pool composition information fields to be as specified by Depositor from time to time	  	
								
		  		  	(9) Delinquency and loss information for the period.	  		  	 X
  
 (8.06
 Statement)
	  		  		  	
								
		  		  	In addition, describe any material changes to the information specified in Item 1100(b)(5) of Regulation AB regarding the pool assets. (methodology)	  	X	  		  		  		  	
								
		  		  	(10) Information on the amount, terms and general purpose of any advances made or reimbursed during the period, including the general use of funds advanced and the general source of funds for
reimbursements.	  		  	 X
  
 (8.06 Statement)
	  		  		  	
								
		  		  	(11) Any material modifications, extensions or waivers to pool asset terms, fees, penalties or payments during the distribution period or that have cumulatively become material over
time.	  	X	  		  		  	X	  	X

  

 I-3 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

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

  

 I-4 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

								
		  		  	 Item 1121(b) – Pre-Funding or Revolving Period Information
  
 Updated pool information as required under Item 1121(b).
	  		  		  		  	X	  	
								
		  	 2
	  	Legal Proceedings	  		  		  		  		  	
								
		  		  	Item 1117 – Legal proceedings pending against the following entities, or their respective property, that is material to Noteholders, including proceedings known to be contemplated by
governmental authorities:	  		  		  		  		  	
								
		  		  	Sponsor	  		  		  		  		  	X
								
		  		  	Depositor	  		  		  		  	X	  	
								
		  		  	Owner Trustee	  		  		  	X	  		  	
								
		  		  	Issuing entity	  		  		  		  	X	  	
								
		  		  	Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  		  	
								
		  		  	Indenture Trustee	  		  	X	  		  		  	
								
		  		  	Custodian	  		  	X	  		  		  	

  

 I-5 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

								
		  	 3
	  	Sales of Securities and Use of Proceeds	  		  		  		  		  	
								
		  		  	 Information from Item 2(a) of Part II of Form 10-Q:
  
 With respect to any sale of securities by the sponsor, depositor or issuing entity, that are backed by the same asset pool or are otherwise issued by the issuing entity,
whether or not registered, provide the sales and use of proceeds information in Item 701 of Regulation S-K. Pricing information can be omitted if securities were not registered.
	  		  		  		  	X	  	
								
		  	 4
	  	 Defaults Upon
  
 Senior Securities
	  		  		  		  		  	
								
		  		  	 Information from Item 3 of Part II of Form 10-Q:
  
 Report the occurrence of any Event of Default (after expiration of any grace period and provision of any required notice)
	  		  	X	  		  	X	  	X
								
		  	 5
	  	Submission of Matters to a Vote of Noteholders	  		  		  		  		  	
								
		  		  	Information from Item 4 of Part II of Form 10-Q	  		  	X	  		  		  	
								
		  	 6
	  	Significant Obligors of Pool Assets	  		  		  		  		  	
								
		  		  	Item 1112(b) – Significant Obligor Financial Information*	  		  		  		  	X	  	
								
		  		  	*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Item.	  		  		  		  		  	

  

 I-6 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  	 7
	  	Significant Enhancement Provider Information	  		  		  		  		  	
								
	 	  	 	  	Item 1114(b)(2) – Credit Enhancement
Provider Financial Information*	  	 	  	 	  	 	  	 	  	 
								
		  		  	 Determining applicable disclosure threshold
	  		  		  		  		  	X
								
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  		  	X
								
		  		  	Item 1115(b) – Derivative Counterparty Financial Information*	  		  		  		  		  	
								
		  		  	 Determining current maximum probable exposure
	  		  		  		  		  	X
								
		  		  	 Determining current significance percentage
	  		  		  		  		  	X
								
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  		  	X
								
		  		  	*This information need only be reported on the Form 10-D for the distribution period in which updated information is required pursuant to the Items.	  		  		  		  		  	
								
		  	8	  	Other Information	  		  		  		  		  	
				
		  		  	Disclose any information required to be reported on Form 8-K during the period covered by the Form 10-D but not reported	  	The Responsible Party for the applicable Form 8-K item as indicated below.
								
		  	9	  	Exhibits	  		  		  		  		  	
								
		  		  	Distribution Report	  		  	X	  		  		  	
								
		  		  	Exhibits required by Item 601 of Regulation S-K, such as material agreements	  		  		  	X	  		  	

  

 I-7 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

	8-K	  	Must be filed within four business days of an event reportable on Form 8-K.	  		  	
								
		  	1.01	  	Entry into a Material Definitive Agreement	  		  		  		  		  	
								
	 	  	 	  	 Disclosure is required regarding entry
into or amendment of any definitive
agreement that is material to the
securitization, even if
depositor is not a
party.
  
 Examples: servicing agreement,
custodial
agreement.
  
 Note: disclosure not required as to
definitive agreements that are
fully
disclosed in the prospectus
	  	X	  	X	  	X	  	X	  	X
								
		  	1.02	  	Termination of a Material Definitive Agreement	  		  		  		  		  	
								
		  		  	 Disclosure is required regarding termination of any definitive agreement that is material to the securitization (other than expiration in accordance
with its terms), even if depositor is not a party.
  
 Examples: servicing agreement,
custodial agreement.
	  	X	  	X	  	X	  	X	  	X

  

 I-8 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  	1.03	  	Bankruptcy or Receivership	  		  		  		  		  	
								
		  		  	 Disclosure is required regarding the bankruptcy or receivership, if known to the Depositor, Indenture Trustee, Sponsor or Servicer, with respect to
any of the following:
  
 Sponsor, Depositor, Servicer, affiliated Servicer, other Servicer
servicing 20% or more of pool assets at time of report, other material servicers, Indenture Trustee, Trustee, significant obligor, credit enhancer (10% or more), derivatives counterparty, custodian
	  	X	  	X	  		  	X	  	X
								
		  	2.04	  	Triggering Events that Accelerate or Increase a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement	  		  		  		  		  	
								
		  		  	 Includes an early amortization, performance trigger or other event, including event of default, that would materially alter the payment
priority/distribution of cash flows/amortization schedule.
  
 Disclosure will be made of
events other than waterfall triggers which are disclosed in the 8.06 statement
	  		  	X	  		  		  	
								
		  	3.03	  	Material Modification to Rights of Noteholders	  		  		  		  		  	
								
		  		  	Disclosure is required of any material modification to documents defining the rights of Noteholders, including the Sale and Servicing Agreement	  		  	X	  		  	X	  	X

  

 I-9 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  	5.03	  	Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year	  		  		  		  		  	
								
		  		  	Disclosure is required of any amendment “to the governing documents of the issuing entity”	  		  		  	X	  	X	  	
								
		  	5.06	  	Change in Shell Company Status	  		  		  		  		  	
								
		  		  	[Not applicable to ABS issuers]	  		  		  		  	X	  	
								
		  	6.01	  	ABS Informational and Computational Material	  		  		  		  		  	
								
		  		  	[Not included in reports to be filed under Section 3.19]	  		  		  		  	X	  	
								
		  	6.02	  	Change of Servicer or Trustee	  		  		  		  		  	
								
		  		  	Requires disclosure of any removal, replacement, substitution or addition of any servicer, affiliated servicer, other servicer servicing 10% or more of pool assets at time of report, other
material servicers, or trustee.	  	X	  	X	  		  	X	  	
								
		  		  	Reg AB disclosure about any new servicer is also required.	  	X	  		  		  		  	
								
		  		  	Reg AB disclosure about any new trustee is also required.	  		  	X	  	X	  		  	
								
		  	6.03	  	Change in Credit Enhancement or Other External Support	  		  		  		  		  	
								
		  		  	Covers termination of any enhancement in manner other than by its terms, the addition of an enhancement, or a material change in the enhancement provided. Applies to external credit enhancements
as well as derivatives.	  		  	X	  		  	X	  	X

  

 I-10 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  		  	Reg AB disclosure about any new enhancement provider is also required.	  		  	X	  		  	X	  	
								
		  	6.04	  	Failure to Make a Required Distribution	  		  	X	  		  		  	
								
		  	6.05	  	Securities Act Updating Disclosure	  		  		  		  		  	
								
		  		  	If any material pool characteristic differs by 5% or more at the time of issuance of the securities from the description in the final prospectus, provide updated Reg AB disclosure about the
actual asset pool.	  		  		  		  	X	  	
								
		  		  	If there are any new servicers or originators required to be disclosed under Regulation AB as a result of the foregoing, provide the information called for in Items 1108 and 1110
respectively.	  		  		  		  	X	  	
								
		  	7.01	  	7.01 Regulation FD Disclosure	  	X	  	X	  	X	  	X	  	X
								
		  	8.01	  	Other Events	  		  		  		  		  	
								
		  		  	Any event, with respect to which information is not otherwise called for in Form 8-K, that the registrant deems of importance to Noteholders.	  		  		  		  	X	  	X
				
		  	9.01	  	Financial Statements and Exhibits	  	The Responsible Party applicable to reportable event.
					
	10-K	  	Must be filed within 90 days of the fiscal year end for the registrant.	  		  		  	
								
		  	9B	  	Other Information	  		  		  		  		  	
				
		  		  	Disclose any information required to be reported on Form 8-K during the fourth quarter covered by the Form 10-K but not reported	  	The Responsible Party for the applicable Form 8-K Item as indicated above.
								
		  	15	  	Exhibits and Financial Statement Schedules	  		  		  		  		  	
								
		  		  	Item 1112(b) – Significant Obligor Financial Information	  		  		  		  	X	  	

  

 I-11 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  		  	Item 1114(b)(2) – Credit Enhancement Provider Financial Information	  		  		  		  		  	
								
		  		  	 Determining applicable disclosure threshold
	  		  		  		  		  	X
								
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  		  	X
								
		  		  	Item 1115(b) – Derivative Counterparty Financial Information	  		  		  		  		  	
								
		  		  	 Determining current maximum probable exposure
	  		  		  		  		  	X
								
		  		  	 Determining current significance percentage
	  		  		  		  		  	X
								
		  		  	 Requesting required financial information or effecting incorporation by reference
	  		  		  		  		  	X
								
		  		  	Item 1117 – Legal proceedings pending against the following entities, or their respective property, that is material to Noteholders, including proceedings known to be contemplated by
governmental authorities:	  		  		  		  		  	
								
		  		  	Sponsor	  		  		  		  		  	X
								
		  		  	Depositor	  		  		  		  	X	  	
								
		  		  	Owner Trustee	  		  		  	X	  		  	
								
		  		  	Issuing entity	  		  		  		  	X	  	
								
		  		  	Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  		  	
								
		  		  	Indenture Trustee	  		  	X	  		  		  	
								
		  		  	Custodian	  		  	X	  		  		  	

  

 I-12 

															
	 Form
	  	 Item
	  	 Description
	  	 Servicer
	  	 Indenture
Trustee
	  	 Owner
Trustee
	  	 Depositor
	  	 Sponsor

		  		  	Item 1119 – Affiliations and relationships between the following entities, or their respective affiliates, that are material to Noteholders:	  		  		  		  		  	
								
		  		  	Sponsor	  		  		  		  		  	X
								
		  		  	Depositor	  		  		  		  	X	  	
								
		  		  	Owner Trustee	  		  		  	X	  		  	
								
		  		  	Servicer, affiliated Servicer, other Servicer servicing 20% or more of pool assets at time of report, other material servicers	  	X	  		  		  		  	
								
		  		  	Indenture Trustee	  		  	X	  		  		  	
								
		  		  	Custodian	  		  	X	  		  		  	
								
		  		  	Credit Enhancer/Support Provider	  		  		  		  	X	  	
								
		  		  	Significant Obligor	  		  		  		  	X	  	
								
		  		  	Item 1122 – Assessment of Compliance with Servicing Criteria	  	X	  	X	  		  		  	
								
		  		  	Item 1123 – Servicer Compliance Statement	  	X	  		  		  		  	

  

 I-13

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