Document:

EX-10.27

 Exhibit 10.27 

LEASE 
 by and between 

BMR-PACIFIC RESEARCH CENTER LP, 
 a
Delaware limited partnership 
 and 

CYMABAY THERAPEUTICS, INC., 
 a
Delaware corporation 
 BioMed Realty form dated 10/2/13 

 LEASE 

THIS LEASE (this “Lease”) is entered into as of this 8th day of
November, 2013 (the “Execution Date”), by and between BMR-PACIFIC RESEARCH CENTER LP, a Delaware limited partnership (“Landlord”), and CYMABAY THERAPEUTICS, INC., a Delaware corporation
(“Tenant”). 
 RECITALS 

A. WHEREAS, Landlord owns certain real property (the “Property”) and the improvements on the Property located at 7333-7999
Gateway Boulevard, Newark, California, including the buildings located thereon; and 
 B. WHEREAS, Landlord wishes to lease to Tenant, and
Tenant desires to lease from Landlord, certain premises (the “Premises”) located on the first (1st) floor of the building (commonly known as Building 7) located at 7999
Gateway Boulevard, Newark, California (the “Building”), pursuant to the terms and conditions of this Lease, as detailed below. 

AGREEMENT 
 NOW,
THEREFORE, Landlord and Tenant, in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, agree as
follows: 
 1. Lease of Premises. 

1.1. Effective on the Term Commencement Date (as defined below), Landlord hereby leases to Tenant, and Tenant hereby leases from Landlord, the
Premises, as shown on Exhibit A attached hereto, for use by Tenant in accordance with the Permitted Use (as defined below) and no other uses. The Property and all landscaping, parking facilities, private drives and other improvements and
appurtenances related thereto, including the Building, the Amenities Building (as defined below), the nine (9) other buildings currently located on the Property and each additional building that is constructed on the Property (following
substantial completion of such building), are hereinafter collectively referred to as the “Project.” All portions of the Building that are for the non-exclusive use of the tenants of the Building only, and not the tenants of the
Project generally, such as service corridors, stairways, elevators, public restrooms and public lobbies (all to the extent located in the Building), are hereinafter referred to as “Building Common Area.” All portions of the Project
that are for the non-exclusive use of tenants of the Project generally, including driveways, sidewalks, parking areas, landscaped areas, and (to the extent not located in a building other than the Amenities Building) service corridors, stairways,
elevators, public restrooms, public lobbies and the amenities building (the “Amenities Building”) in which Landlord currently provides certain amenities, including food services, a fitness center and a conference center
(“Amenities Building Services”) (but excluding Building Common Area), are hereinafter referred to as “Project Common Area.” The Building Common Area and Project Common Area are collectively referred to herein as
“Common Area.” The Building is located on a portion of the Project commonly referred to as the “North Campus,” which is that part of the Project to the north of Gateway Boulevard comprised of the Building and five
(5) other buildings commonly referred to as Buildings 1, 2, 3, 5 and 6, together with all appurtenances thereto (collectively, the “North Campus”). 

 2. Basic Lease Provisions. For convenience of the parties, certain basic provisions of this Lease are set
forth herein. The provisions set forth herein are subject to the remaining terms and conditions of this Lease and are to be interpreted in light of such remaining terms and conditions. 

2.1. This Lease shall take effect upon the Execution Date and, except as specifically otherwise provided within this Lease, each of the
provisions hereof shall be binding upon and inure to the benefit of Landlord and Tenant from the date of execution and delivery hereof by all parties hereto. 

2.2. In the definitions below, each current Rentable Area (as defined below) is expressed in square feet. Rentable Area and
“Tenant’s Pro Rata Shares” are all subject to adjustment as provided in this Lease. 
  

			
	 Definition or Provision
	  	Means the Following (As of the Term
Commencement Date)
	 Approximate Rentable Area of Premises*
	  	8,894 square feet
	 Approximate Rentable Area of Building
	  	178,047 square feet
	 Approximate Rentable Area of North Campus
	  	966,271 square feet
	 Approximate Rentable Area of Project
	  	1,389,517 square feet
	 Tenant’s Pro Rata Share of Building*
	  	5.0%
	 Tenant’s Pro Rata Share of North Campus*
	  	0.92%
	 Tenant’s Pro Rata Share of Project*
	  	0.64%

  

	* Note:	Subject to adjustment based upon the Rentable Area of the Premises as of the Term Commencement Date. 

  
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 2.3. Initial monthly and annual installments of Base Rent for the Premises (“Base
Rent”) as of the Term Commencement Date, subject to adjustment under this Lease: 
  

																	
	 Dates
	  	Square Feet
of Rentable
Area*	 	  	Base Rent per Square
Foot of Rentable Area	 	  	Monthly
Base Rent*	 	  	Annual Base
Rent*	 
	 Months 1 - 12
	  	 	8,894	  	  	$	1.90 monthly	  	  	$	16,898.60	  	  	$	202,783.20	  
	 Months 13 - 24
	  	 	8,894	  	  	$	1.96 monthly	  	  	$	17,432.24	  	  	$	209,186.88	  
	 Months 25 - 36
	  	 	8,894	  	  	$	2.02 monthly	  	  	$	17,965.88	  	  	$	215,590.56	  
	 Months 37 - 48
	  	 	8,894	  	  	$	2.08 monthly	  	  	$	18,499.52	  	  	$	221,994.24	  
	 Months 49 - 60
	  	 	8,894	  	  	$	2.14 monthly	  	  	$	19,033.16	  	  	$	228,397.92	  

  

	* Note:	Subject to adjustment based upon the Rentable Area of the Premises as of the Term Commencement Date. 

2.4. Estimated Term Commencement Date: January 1, 2014 

2.5. Estimated Term Expiration Date: December 31, 2018 

2.6. Security Deposit: $50,695.80 

2.7. Permitted Use: Office use in conformity with all federal, state, municipal and local laws, codes, ordinances, rules and regulations of
Governmental Authorities (as defined below), committees, associations, or other regulatory committees, agencies or governing bodies having jurisdiction over the Premises, the Building, the Property, the Project, Landlord or Tenant, including both
statutory and common law and hazardous waste rules and regulations (“Applicable Laws”) 
  

			
	2.8. Address for Rent Payment:	  	BMR-Pacific Research Center LP
		  	Attention Entity 285
		  	P.O. Box 511415
		  	Los Angeles, California 90051-7970
		
	2.9. Address for Notices to Landlord:	  	BMR-Pacific Research Center LP
		  	17190 Bernardo Center Drive
		  	San Diego, California 92128
		  	Attn: Vice President, Real Estate Legal
		
	2.10. Address for Notices to Tenant:	  	CymaBay Therapeutics, Inc.
		  	7999 Gateway Boulevard
		  	Newark, California 94560
		
	2.11. Address for Invoices to Tenant:	  	CymaBay Therapeutics, Inc.
		  	7999 Gateway Boulevard
		  	Newark, California 94560

 2.12. The following Exhibits are attached hereto and incorporated herein by reference: 

 

			
	Exhibit A	  	Premises
	Exhibit B	  	Tenant Improvements
	Exhibit C	  	Acknowledgement of Term Commencement Date and Term Expiration Date
	Exhibit D	  	[Intentionally omitted]
	Exhibit E	  	Form of Letter of Credit

  
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	Exhibit F	  	Rules and Regulations
	Exhibit G	  	[Intentionally omitted]
	Exhibit H	  	Tenant’s Personal Property
	Exhibit I	  	Form of Estoppel Certificate

 3. Term. The actual term of this Lease (as the same may be extended pursuant to Article 42 hereof, and as the
same may be earlier terminated in accordance with this Lease, the “Term”) shall commence on the actual Term Commencement Date (as defined in Article 4) and end on the date that is sixty (60) months after the actual
Term Commencement Date (such date, the “Term Expiration Date”), subject to earlier termination of this Lease as provided herein. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1933 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE
AMENDED FROM TIME TO TIME. 
 4. Possession and Commencement Date. 

4.1. Landlord shall use commercially reasonable efforts to tender possession of the Premises to Tenant on the Estimated Term Commencement
Date, with the work (the “Tenant Improvements”) required of Landlord described on Exhibit B Substantially Complete (as defined below). Tenant agrees that in the event such work is not Substantially Complete on or before the
Estimated Term Commencement Date for any reason, then (a) this Lease shall not be void or voidable, (b) Landlord shall not be liable to Tenant for any loss or damage resulting therefrom, (c) the Term Expiration Date shall be extended
accordingly and (d) Tenant shall not be responsible for the payment of any Base Rent or Tenant’s Share of Operating Expenses (as defined below) until the actual Term Commencement Date as described in Section 4.2 occurs. The
term “Substantially Complete” or “Substantial Completion” means that the Tenant Improvements are substantially complete in accordance with Exhibit B, except for minor punch list items. Notwithstanding
anything in this Lease to the contrary, Landlord’s obligation to timely achieve Substantial Completion shall be subject to extension on a day-for-day basis as a result of Force Majeure (as defined below). 

4.2. The “Term Commencement Date” shall be the later of (a) the Estimated Term Commencement Date and (b) the day
Landlord tenders possession of the Premises to Tenant with the Tenant Improvements Substantially Complete. If possession is delayed by action of Tenant, then the Term Commencement Date shall be the date that the Term Commencement Date would have
occurred but for such delay. Tenant shall execute and deliver to Landlord written acknowledgment of the actual Term Commencement Date and the Term Expiration Date within ten (10) days after Tenant takes occupancy of the Premises, in the form
attached as Exhibit C hereto. Failure to execute and deliver such acknowledgment, however, shall not affect the Term Commencement Date or Landlord’s or Tenant’s liability hereunder. Failure by Tenant to obtain validation by any
medical review board or other similar governmental licensing of the Premises required for the Permitted Use by Tenant shall not serve to extend the Term Commencement Date. 

4.3. In the event that Landlord permits (in Landlord’s sole and absolute discretion) Tenant to enter upon the Premises prior to the Term
Commencement Date for the purpose of installing improvements or the placement of personal property, Tenant shall furnish to Landlord evidence satisfactory to Landlord that insurance coverages required of Tenant under the

  
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provisions of Article 23 are in effect, and such entry shall be subject to all the terms and conditions of this Lease other than the payment of Base Rent or Tenant’s Share of
Operating Expenses (as defined below); and provided, further, that if the Term Commencement Date is delayed due to such early access, then the Term Commencement Date shall be the date that the Term Commencement Date would have occurred but
for such delay. If Landlord has not provided Tenant with access to the “Server Room” depicted on Exhibit B attached hereto (the “Server Room”) for the purpose of installing the personal property and equipment
that Tenant intends to install in the Server Room (the “Server Room Equipment”) on or before December 26, 2013 (the “Server Room Outside Date”), then Landlord shall be obligated to reimburse Tenant (within
sixty (60) days of receiving an invoice from Tenant) for Tenant’s reasonable, actual, out-of-pocket costs incurred in connection with moving the Server Room Equipment from Tenant’s current location (i.e., Tenant’s leased premises
as of the Execution Date) to a temporary location (such costs, the “Server Room Equipment Moving Costs”); provided, however, that in no event shall Landlord be obligated to reimburse Tenant for Server Room Equipment Moving
Costs exceeding the amount of Ten Thousand Dollars ($10,000.00); provided, further, that the Server Room Outside Date shall be subject to extension on a day-for-day basis as a result of (a) Force Majeure and (b) any delay caused by
any action or inaction of Tenant. 
 4.4. Notwithstanding anything to the contrary in this Lease, if Substantial Completion has not occurred
by January 10, 2014 (the “Substantial Completion Outside Date”), then Tenant shall be entitled to receive one (1) day of Base Rent abatement for each day thereafter that Substantial Completion has not occurred;
provided, however, that the Substantial Completion Outside Date shall be subject to extension on a day-for-day basis as a result of (a) Force Majeure and (b) any delay caused by any action or inaction of Tenant. 

5. Condition of Premises. Tenant acknowledges that neither Landlord nor any agent of Landlord has made any representation or warranty with respect to
the condition of the Premises, the Building or the Project, or with respect to the suitability of the Premises, the Building or the Project for the conduct of Tenant’s business. Tenant acknowledges that, except with respect to the Tenant
Improvements (a) it is fully familiar with the condition of the Premises and agrees to take the same in its condition “as is” as of the Term Commencement Date and (b) Landlord shall have no obligation to alter, repair or
otherwise prepare the Premises for Tenant’s occupancy or to pay for or construct any improvements to the Premises. Tenant’s taking of possession of the Premises shall, except as otherwise agreed to in writing by Landlord and Tenant,
conclusively establish that the Premises, the Building and the Project were at such time in good, sanitary and satisfactory condition and repair. 
 6.
Rentable Area. 
 6.1. The term “Rentable Area” shall reflect such areas as reasonably calculated by Landlord’s
architect, as the same may be reasonably adjusted from time to time by Landlord in consultation with Landlord’s architect to reflect changes to the Premises, the Building or the Project, as applicable. 

6.2. The Rentable Area of each Building is generally determined by making separate calculations of Rentable Area applicable to each floor
within the Building and totaling the 

  
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Rentable Area of all floors within the Building. The Rentable Area of a floor is computed by measuring to the outside finished surface of the permanent outer Building walls. The full area
calculated as previously set forth is included as Rentable Area, without deduction for columns and projections or vertical penetrations, including stairs, elevator shafts, flues, pipe shafts, vertical ducts and the like, as well as such items’
enclosing walls. 
 6.3. The term “Rentable Area,” when applied to the Premises, is that area equal to the usable area of
the Premises, plus an equitable allocation of Rentable Area within the Building that is not then utilized or expected to be utilized as usable area, including that portion of the Building devoted to corridors, equipment rooms, restrooms, elevator
lobby, atrium and mailroom. 
 6.4. The Rentable Area of the Project is the total Rentable Area of all buildings within the Project. 

6.5. Review of allocations of Rentable Areas as between tenants of the Building and the Project shall be made as frequently as Landlord deems
appropriate, including in order to facilitate an equitable apportionment of Operating Expenses (as defined below). If such review is by a licensed architect and allocations are certified by such licensed architect as being correct, then Tenant shall
be bound by such certifications. 
 7. Rent. 

7.1. Tenant shall pay to Landlord as Base Rent for the Premises, commencing on the Term Commencement Date, the sums set forth in
Section 2.3. Base Rent shall be paid in equal monthly installments as set forth in Section 2.3, each in advance on the first day of each and every calendar month during the Term. 

7.2. In addition to Base Rent, Tenant shall pay to Landlord as additional rent (“Additional Rent”) at times hereinafter
specified in this Lease (a) Tenant’s Share (as defined below) of Operating Expenses (as defined below), (b) the Property Management Fee (as defined below) and (c) any other amounts that Tenant assumes or agrees to pay under the
provisions of this Lease that are owed to Landlord, including any and all other sums that may become due by reason of any default of Tenant or failure on Tenant’s part to comply with the agreements, terms, covenants and conditions of this Lease
to be performed by Tenant, after notice and the lapse of any applicable cure periods. 
 7.3. Base Rent and Additional Rent shall together
be denominated “Rent.” Rent shall be paid to Landlord, without abatement, deduction or offset, in lawful money of the United States of America at the office of Landlord as set forth in Section 2.8 or to such other person
or at such other place as Landlord may from time designate in writing. In the event the Term commences or ends on a day other than the first day of a calendar month, then the Rent for such fraction of a month shall be prorated for such period on the
basis of the number of days in the month and shall be paid at the then-current rate for such fractional month. 
 7.4. Tenant’s
obligation to pay Rent shall not be discharged or otherwise affected by (a) any Applicable Laws now or hereafter applicable to the Premises, (b) any other restriction on Tenant’s use, (c) except as expressly provided herein, any
casualty or taking or (d) any other 

  
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occurrence; and Tenant waives all rights now or hereafter existing to terminate or cancel this Lease or quit or surrender the Premises or any part thereof, or to assert any defense in the nature
of constructive eviction to any action seeking to recover rent. Tenant’s obligation to pay Rent with respect to any period or obligations arising, existing or pertaining to the period prior to the date of the expiration or earlier termination
of the Term or this Lease shall survive any such expiration or earlier termination; provided, however, that nothing in this sentence shall in any way affect Tenant’s obligations with respect to any other period. 

8. [Intentionally omitted] 
 9. Operating Expenses. 

9.1. As used herein, the term “Operating Expenses” shall include: 

(a) Government impositions, including property tax costs consisting of real and personal property taxes and assessments (including amounts due
under any improvement bond upon the Building or the Project (including the parcel or parcels of real property upon which the Building, the other buildings in the Project and areas serving the Building and the Project are located)) or assessments in
lieu thereof imposed by any federal, state, regional, local or municipal governmental authority, agency or subdivision (each, a “Governmental Authority”); taxes on or measured by gross rentals received from the rental of space in
the Project; taxes based on the square footage of the Premises, the Building or the Project, as well as any parking charges, utilities surcharges or any other costs levied, assessed or imposed by, or at the direction of, or resulting from Applicable
Laws or interpretations thereof, promulgated by any Governmental Authority in connection with the use or occupancy of the Project or the parking facilities serving the Project; taxes on this transaction or any document to which Tenant is a party
creating or transferring an interest in the Premises; any fee for a business license to operate an office building; and any expenses, including the reasonable cost of attorneys or experts, reasonably incurred by Landlord in seeking reduction by the
taxing authority of the applicable taxes, less tax refunds obtained as a result of an application for review thereof. Operating Expenses shall not include any net income, franchise, capital stock, estate or inheritance taxes, or taxes that are the
personal obligation of Tenant or of another tenant of the Project; and 
 (b) All other costs of any kind paid or incurred by Landlord in
connection with the operation or maintenance of the Building and the Project (including the Amenities Building, which shall include (i) Project office rent at fair market rental for a commercially reasonable amount of space for Project
management personnel located in the Amenities Building, to the extent an office used for Project operations is maintained at the Project, plus customary expenses for such office, and (ii) fair market rent for the portion of the Amenities
Building used in providing the Amenities Building Services), and costs of repairs and replacements to improvements within the Project as appropriate to maintain the Project as required hereunder, including costs of funding such reasonable reserves
as Landlord, consistent with good business practice, may establish to provide for future repairs and replacements; costs of utilities furnished to the Common Areas; sewer fees; cable television; trash collection; cleaning, including windows
(including those of the Amenities Building); heating; ventilation; air-conditioning; maintenance of landscaping and grounds; maintenance of drives and parking areas; maintenance of the roof (including that of the Amenities Building); security
services and 

  
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devices; building supplies; maintenance or replacement of equipment utilized for operation and maintenance of the Project; license, permit and inspection fees; sales, use and excise taxes on
goods and services purchased by Landlord in connection with the operation, maintenance or repair of the Building or Project systems and equipment; telephone, postage, stationery supplies and other expenses incurred in connection with the operation,
maintenance or repair of the Project; accounting, legal and other professional fees and expenses incurred in connection with the Project; costs of furniture, draperies, carpeting, landscaping, snow removal and other customary and ordinary items of
personal property provided by Landlord for use in Common Areas or in the Project office; capital expenditures; costs of complying with Applicable Laws (except to the extent such costs are incurred to remedy non-compliance as of the Execution Date
with Applicable Laws); costs to keep the Project in compliance with, or fees otherwise required under, any CC&Rs (as defined below); insurance premiums, including premiums for commercial general liability, property casualty, earthquake,
terrorism and environmental coverages; portions of insured losses paid by Landlord as part of the deductible portion of a loss pursuant to the terms of insurance policies; service contracts; costs of services of independent contractors retained to
do work of a nature referenced above; and costs of compensation (including employment taxes and fringe benefits) of all persons who perform regular and recurring duties connected with the day-to-day operation and maintenance of the Project, its
equipment, the adjacent walks, landscaped areas, drives and parking areas, including janitors, floor waxers, window washers, watchmen, gardeners, sweepers, plow trucks and handymen. 

(c) Notwithstanding the foregoing, Operating Expenses shall not include any leasing commissions; expenses that relate to preparation of rental
space for a tenant; expenses of initial development and construction, including grading, paving, landscaping and decorating (as distinguished from maintenance, repair and replacement of the foregoing); legal expenses relating to other tenants; costs
of repairs to the extent reimbursed by payment of insurance proceeds received by Landlord; interest upon loans to Landlord or secured by a mortgage or deed of trust covering the Project or a portion thereof (provided that interest upon a
government assessment or improvement bond payable in installments shall constitute an Operating Expense under Subsection 9.1(a)); salaries of executive officers of Landlord; depreciation claimed by Landlord for tax purposes (provided
that this exclusion of depreciation is not intended to delete from Operating Expenses actual costs of repairs and replacements and reasonable reserves in regard thereto that are provided for in Subsection 9.1(b)); and taxes that are excluded
from Operating Expenses by the last sentence of Subsection 9.1(a). To the extent that Tenant uses more than Tenant’s Pro Rata Share of any item of Operating Expenses, Tenant shall pay Landlord for such excess in addition to Tenant’s
obligation to pay Tenant’s Pro Rata Share of Operating Expenses (such excess, together with Tenant’s Pro Rata Share, “Tenant’s Share”). 

9.2. Tenant shall pay to Landlord on the first day of each calendar month of the Term, as Additional Rent, (a) the Property Management
Fee (as defined below) and (b) Landlord’s estimate of Tenant’s Share of Operating Expenses with respect to the Building and the Project, as applicable, for such month. 

(x) The “Property Management Fee” shall equal three percent (3%) of Base Rent due from Tenant. Tenant shall pay the
Property Management Fee in accordance with Section 9.2 with respect to the entire Term, including any extensions thereof or any holdover periods, regardless of whether Tenant is obligated to pay Base Rent, Operating Expenses or any other
Rent with respect to any such period or portion thereof. 

  
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 (y) Within ninety (90) days after the conclusion of each calendar year (or such longer
period as may be reasonably required by Landlord), Landlord shall furnish to Tenant a statement showing in reasonable detail the actual Operating Expenses and Tenant’s Share of Operating Expenses for the previous calendar year. Any additional
sum due from Tenant to Landlord shall be immediately due and payable. If the amounts paid by Tenant pursuant to this Section exceed Tenant’s Share of Operating Expenses for the previous calendar year, then Landlord shall credit the difference
against the Rent next due and owing from Tenant; provided that, if the Lease term has expired, Landlord shall accompany such statement with payment for the amount of such difference. 

(z) Any amount due under this Section for any period that is less than a full month shall be prorated for such fractional month on the basis
of the number of days in the month. 
 9.3. Landlord may, from time to time, modify Landlord’s calculation and allocation procedures
for Operating Expenses, so long as such modifications produce Dollar results substantially consistent with Landlord’s then-current practice at the Project. Landlord or an affiliate(s) of Landlord currently own other property(ies) adjacent to
the Project or its neighboring properties (collectively, “Neighboring Properties”). In connection with Landlord performing services for the Project pursuant to this Lease, similar services may be performed by the same vendor(s) for
Neighboring Properties. In such a case, Landlord shall reasonably allocate to each Building and the Project the costs for such services based upon the ratio that the square footage of the Building or the Project (as applicable) bears to the total
square footage of all of the Neighboring Properties or buildings within the Neighboring Properties for which the services are performed, unless the scope of the services performed for any building or property (including the Building and the Project)
is disproportionately more or less than for others, in which case Landlord shall equitably allocate the costs based on the scope of the services being performed for each building or property (including the Building and the Project). Since the
Project consists of multiple buildings, certain Operating Expenses may pertain to a particular building(s), certain Operating Expenses may pertain to the North Campus, and other Operating Expenses to the Project as a whole. Landlord reserves the
right in its sole discretion to allocate any such costs applicable to any particular building within the Project to such building, any costs applicable to the North Campus to the buildings comprising the North Campus (including the Building), and
other such costs applicable to the Project to each building in the Project (including the Building), with the tenants in each building being responsible for paying their respective proportionate shares of their buildings to the extent required under
their leases. Landlord shall allocate such costs to the buildings (including the Building) in a reasonable, non-discriminatory manner, and such allocation shall be binding on Tenant. 

9.4. Tenant shall not be responsible for Operating Expenses attributable to the time period prior to the Term Commencement Date;
provided, however, that if Landlord shall permit Tenant possession of the Premises prior to the Term Commencement Date, Tenant shall be responsible for Operating Expenses from such earlier date of possession. Tenant’s responsibility for
Tenant’s Share of Operating Expenses shall continue to the latest of (a) the date of 

  
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termination of the Lease, (b) the date Tenant has fully vacated the Premises and (c) if termination of the Lease is due to a default by Tenant, the earlier of (i) the date of
rental commencement of a replacement tenant or (ii) the scheduled expiration of this Lease. 
 9.5. Operating Expenses for the calendar
year in which Tenant’s obligation to share therein commences and for the calendar year in which such obligation ceases shall be prorated on a basis reasonably determined by Landlord. Expenses such as taxes, assessments and insurance premiums
that are incurred for an extended time period shall be prorated based upon the time periods to which they apply so that the amounts attributed to the Premises relate in a reasonable manner to the time period wherein Tenant has an obligation to share
in Operating Expenses. 
 9.6. Within three (3) business days after the end of each calendar month, Tenant shall submit to Landlord an
invoice, or, in the event an invoice is not available, an itemized list, of all costs and expenses that (a) Tenant has incurred (either internally or by employing third parties) during the prior month and (b) for which Tenant reasonably
believes it is entitled to reimbursements from Landlord pursuant to the terms of this Lease or that Tenant reasonably believes is the responsibility of Landlord pursuant to this Lease or Exhibit B. 

9.7. In the event that the Building, North Campus or Project is less than fully occupied during a calendar year, Tenant acknowledges that
Landlord may extrapolate Operating Expenses that vary depending on the occupancy of the Building , North Campus or Project, as applicable, to equal Landlord’s reasonable estimate of what such Operating Expenses would have been had the Building,
North Campus or Project, as applicable, been fully occupied during such calendar year; provided, however, that Landlord shall not recover more than one hundred percent (100%) of Operating Expenses. 

10. Taxes on Tenant’s Property. 

10.1. Tenant shall pay prior to delinquency any and all taxes levied against any personal property or trade fixtures placed by Tenant in or
about the Premises. 
 10.2. If any such taxes on Tenant’s personal property or trade fixtures are levied against Landlord or
Landlord’s property or, if the assessed valuation of the Building, the Property or the Project is increased by inclusion therein of a value attributable to Tenant’s personal property or trade fixtures, and if Landlord, after written notice
to Tenant, pays the taxes based upon any such increase in the assessed value of the Building, the Property or the Project, then Tenant shall, upon demand, repay to Landlord the taxes so paid by Landlord. 

10.3. If any improvements in or alterations to the Premises, whether owned by Landlord or Tenant and whether or not affixed to the real
property so as to become a part thereof, are assessed for real property tax purposes at a valuation higher than the valuation at which improvements conforming to Landlord’s building standards (the “Building Standard”) in other
spaces in the Building are assessed, then the real property taxes and assessments levied against Landlord or the Building, the Property or the Project by reason of such excess assessed valuation shall be deemed to be taxes levied against personal
property of Tenant and shall be governed by the provisions of Section 10.2. Any such excess assessed valuation due to improvements in or 

  
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alterations to space in the Project leased by other tenants at the Project shall not be included in Operating Expenses. If the records of the applicable governmental assessor’s office are
available and sufficiently detailed to serve as a basis for determining whether such Tenant improvements or alterations are assessed at a higher valuation than the Building Standard, then such records shall be binding on both Landlord and Tenant.

 11. Security Deposit. 
 11.1. Tenant
shall deposit with Landlord on or before the Execution Date the sum set forth in Section 2.6 (the “Security Deposit”), which sum shall be held by Landlord as security for the faithful performance by Tenant of all of the
terms, covenants and conditions of this Lease to be kept and performed by Tenant during the period commencing on the Execution Date and ending upon the expiration or termination of Tenant’s obligations under this Lease. If Tenant Defaults (as
defined below) with respect to any provision of this Lease, including any provision relating to the payment of Rent, then Landlord may (but shall not be required to) use, apply or retain all or any part of the Security Deposit for the payment of any
Rent or any other sum in default, or to compensate Landlord for any other loss or damage that Landlord may suffer by reason of Tenant’s default. If any portion of the Security Deposit is so used or applied, then Tenant shall, within ten
(10) days following demand therefor, deposit cash with Landlord in an amount sufficient to restore the Security Deposit to its original amount, and Tenant’s failure to do so shall be a material breach of this Lease. The provisions of this
Article shall survive the expiration or earlier termination of this Lease. TENANT HEREBY WAIVES THE REQUIREMENTS OF SECTION 1950.7 OF THE CALIFORNIA CIVIL CODE, AS THE SAME MAY BE AMENDED FROM TIME TO TIME. 

11.2. In the event of bankruptcy or other debtor-creditor proceedings against Tenant, the Security Deposit shall be deemed to be applied first
to the payment of Rent and other charges due Landlord for all periods prior to the filing of such proceedings. 
 11.3. Landlord may deliver
to any purchaser of Landlord’s interest in the Premises the funds deposited hereunder by Tenant, and thereupon Landlord shall be discharged from any further liability with respect to such deposit. This provision shall also apply to any
subsequent transfers. 
 11.4. If Tenant shall fully and faithfully perform every provision of this Lease to be performed by it, then the
Security Deposit, or any balance thereof, shall be returned to Tenant (or, at Landlord’s option, to the last assignee of Tenant’s interest hereunder) within thirty (30) days after the expiration or earlier termination of this Lease.

 11.5. [Intentionally omitted] 

11.6. If the Security Deposit shall be in cash, Landlord shall hold the Security Deposit in an account at a banking organization selected by
Landlord; provided, however, that Landlord shall not be required to maintain a separate account for the Security Deposit, but may intermingle it with other funds of Landlord. Landlord shall be entitled to all interest and/or dividends, if
any, accruing on the Security Deposit. Landlord shall not be required to credit Tenant with any interest for any period during which Landlord does not receive interest on the Security Deposit. 

  
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 11.7. The Security Deposit may be in the form of cash, a letter of credit or any other security
instrument acceptable to Landlord in its sole discretion. Tenant may at any time, except when Tenant is in Default (as defined below), deliver a letter of credit (the “L/C Security”) as the entire Security Deposit, as follows: 

(a) If Tenant elects to deliver L/C Security, then Tenant shall provide Landlord, and maintain in full force and effect throughout the Term
and until the date that is six (6) months after the then-current Term Expiration Date, a letter of credit in the form of Exhibit E issued by an issuer reasonably satisfactory to Landlord, in the amount of the Security Deposit, with an
initial term of at least one year. Landlord may require the L/C Security to be re-issued by a different issuer at any time during the Term if Landlord reasonably believes that the issuing bank of the L/C Security is or may soon become insolvent;
provided, however, Landlord shall return the existing L/C Security to the existing issuer immediately upon receipt of the substitute L/C Security. If any issuer of the L/C Security shall become insolvent or placed into FDIC receivership, then Tenant
shall immediately deliver to Landlord (without the requirement of notice from Landlord) substitute L/C Security issued by an issuer reasonably satisfactory to Landlord, and otherwise conforming to the requirements set forth in this Article. As used
herein with respect to the issuer of the L/C Security, “insolvent” shall mean the determination of insolvency as made by such issuer’s primary bank regulator (i.e., the state bank supervisor for state chartered banks; the OCC
or OTS, respectively, for federally chartered banks or thrifts; or the Federal Reserve for its member banks). If, at the Term Expiration Date, any Rent remains uncalculated or unpaid, then (i) Landlord shall with reasonable diligence complete
any necessary calculations, (ii) Tenant shall extend the expiry date of such L/C Security from time to time as Landlord reasonably requires and (iii) in such extended period, Landlord shall not unreasonably refuse to consent to an
appropriate reduction of the L/C Security. Tenant shall reimburse Landlord’s legal costs (as estimated by Landlord’s counsel) in handling Landlord’s acceptance of L/C Security or its replacement or extension. 

(b) If Tenant delivers to Landlord satisfactory L/C Security in place of the entire Security Deposit, Landlord shall remit to Tenant any cash
Security Deposit Landlord previously held. 
 (c) Landlord may draw upon the L/C Security, and hold and apply the proceeds in the same
manner and for the same purposes as the Security Deposit, if (i) an uncured Default (as defined below) exists, (ii) as of the date forty-five (45) days before any L/C Security expires (even if such scheduled expiry date is after the
Term Expiration Date) Tenant has not delivered to Landlord an amendment or replacement for such L/C Security, reasonably satisfactory to Landlord, extending the expiry date to the earlier of (1) six (6) months after the then-current Term
Expiration Date or (2) the date one year after the then-current expiry date of the L/C Security, (iii) the L/C Security provides for automatic renewals, Landlord asks the issuer to confirm the current L/C Security expiry date, and the
issuer fails to do so within ten (10) business days, (iv) Tenant fails to pay (when and as Landlord reasonably requires) any bank charges for Landlord’s transfer of the L/C Security or (v) the issuer of the L/C Security ceases,
or announces that it will cease, to maintain an office in the city where Landlord may present drafts under the L/C Security (and fails to permit drawing upon the L/C Security by overnight courier or facsimile). This Section does not limit any other
provisions of this Lease allowing Landlord to draw the L/C Security under specified circumstances. 

  
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 (d) Tenant shall not seek to enjoin, prevent, or otherwise interfere with Landlord’s draw
under L/C Security, even if it violates this Lease. Tenant acknowledges that the only effect of a wrongful draw would be to substitute a cash Security Deposit for L/C Security, causing Tenant no legally recognizable damage. Landlord shall hold the
proceeds of any draw in the same manner and for the same purposes as a cash Security Deposit. In the event of a wrongful draw, the parties shall cooperate to allow Tenant to post replacement L/C Security simultaneously with the return to Tenant of
the wrongfully drawn sums, and Landlord shall upon request confirm in writing to the issuer of the L/C Security that Landlord’s draw was erroneous. 

(e) If Landlord transfers its interest in the Premises, then Tenant shall at Tenant’s expense, within five (5) business days after
receiving a request from Landlord, deliver (and, if the issuer requires, Landlord shall consent to) an amendment to the L/C Security naming Landlord’s grantee as substitute beneficiary. If the required Security Deposit changes while L/C
Security is in force, then Tenant shall deliver (and, if the issuer requires, Landlord shall consent to) a corresponding amendment to the L/C Security. 

12. Use. 
 12.1. Tenant shall use the
Premises for the Permitted Use, and shall not use the Premises, or permit or suffer the Premises to be used, for any other purpose without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute
discretion. 
 12.2. Tenant shall not use or occupy the Premises in violation of Applicable Laws; zoning ordinances; or the certificate of
occupancy issued for the Building or the Project, and shall, upon five (5) days’ written notice from Landlord, discontinue any use of the Premises that is declared or claimed by any Governmental Authority having jurisdiction to be a
violation of any of the above, or that in Landlord’s reasonable opinion violates any of the above. Tenant shall comply with any direction of any Governmental Authority having jurisdiction that shall, by reason of the nature of Tenant’s use
or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or with respect to the use or occupation thereof. 

12.3. Tenant shall not do or permit to be done anything that will invalidate or increase the cost of any fire, environmental, extended
coverage or any other insurance policy covering the Building or the Project, and shall comply with all rules, orders, regulations and requirements of the insurers of the Building and the Project, and Tenant shall promptly, upon demand, reimburse
Landlord for any additional premium charged for such policy by reason of Tenant’s failure to comply with the provisions of this Article. 

12.4. Tenant shall keep all doors opening onto public corridors closed, except when in use for ingress and egress. 

12.5. No additional locks or bolts of any kind shall be placed upon any of the doors or windows by Tenant, nor shall any changes be made to
existing locks or the mechanisms thereof without Landlord’s prior written consent. Tenant shall, upon termination of this Lease, return to Landlord all keys to offices and restrooms either furnished to or otherwise procured by Tenant. In the
event any key so furnished to Tenant is lost, Tenant shall pay to Landlord the cost of replacing the same or of changing the lock or locks opened by such lost key if Landlord shall deem it necessary to make such change. 

  
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 12.6. No awnings or other projections shall be attached to any outside wall of the Building. No
curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any window or door of the Premises other than Landlord’s standard window coverings. Neither the interior nor exterior of any windows shall be
coated or otherwise sunscreened without Landlord’s prior written consent, nor shall any bottles, parcels or other articles be placed on the windowsills. No equipment, furniture or other items of personal property shall be placed on any exterior
balcony without Landlord’s prior written consent. 
 12.7. No sign, advertisement or notice (“Signage”) shall be
exhibited, painted or affixed by Tenant on any part of the Premises or the Building without Landlord’s prior written consent. Signage shall conform to Landlord’s design criteria. For any Signage, Tenant shall, at Tenant’s own cost and
expense, (a) acquire all permits for such Signage in compliance with Applicable Laws and (b) design, fabricate, install and maintain such Signage in a first-class condition. Tenant shall be responsible for reimbursing Landlord for costs
incurred by Landlord in removing any of Tenant’s Signage upon the expiration or earlier termination of the Lease. Interior signs on entry doors to the Premises and the directory tablet shall be inscribed, painted or affixed for Tenant by
Landlord at Tenant’s sole cost and expense, and shall be of a size, color and type and be located in a place acceptable to Landlord. The directory tablet shall be provided exclusively for the display of the name and location of tenants only.
Tenant shall not place anything on the exterior of the corridor walls or corridor doors other than Landlord’s standard lettering. At Landlord’s option, Landlord may install any Tenant Signage, and Tenant shall pay all costs associated with
such installation within thirty (30) days after demand therefor. 
 12.8. Tenant may only place equipment within the Premises with
floor loading consistent with the Building’s structural design unless Tenant obtains Landlord’s prior written approval. Tenant may place such equipment only in a location designed to carry the weight of such equipment. 

12.9. Tenant shall cause any equipment or machinery to be installed in the Premises so as to reasonably prevent sounds or vibrations therefrom
from extending into the Common Areas or other offices in the Project. 
 12.10. Tenant shall not (a) do or permit anything to be done
in or about the Premises that shall in any way obstruct or interfere with the rights of other tenants or occupants of the Project, or injure or annoy them, (b) use or allow the Premises to be used for immoral, unlawful or objectionable
purposes, (c) cause, maintain or permit any nuisance or waste in, on or about the Project or (d) take any other action that would in Landlord’s reasonable determination in any manner adversely affect other tenants’ quiet use and
enjoyment of their space or adversely impact their ability to conduct business in a professional and suitable work environment. 
 12.11.
Notwithstanding any other provision herein to the contrary, Tenant shall be responsible for all liabilities, costs and expenses arising out of or in connection with the compliance of the Premises with the Americans with Disabilities Act, 42 U.S.C.
§ 12101, et seq., and any state and local accessibility laws, codes, ordinances and rules (collectively, and together 

  
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with regulations promulgated pursuant thereto, the “ADA”), and Tenant shall indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord)
and hold Landlord and its affiliates, employees, agents and contractors; and any lender, mortgagee or beneficiary (each, a “Lender” and, collectively with Landlord and its affiliates, employees, agents and contractors, the
“Landlord Indemnitees”) harmless from and against any demands, claims, liabilities, losses, costs, expenses, actions, causes of action, damages, suits or judgments, and all reasonable expenses (including reasonable attorneys’
fees, charges and disbursements, regardless of whether the applicable demand, claim, action, cause of action or suit is voluntarily withdrawn or dismissed) incurred in investigating or resisting the same (collectively, “Claims”)
arising out of any such failure of the Premises to comply with the ADA. The Premises have not undergone inspection by a Certified Access Specialist. The provisions of this Section shall survive the expiration or earlier termination of this Lease.

 13. Rules and Regulations, CC&Rs, Parking Facilities and Common Areas. 

13.1. Tenant shall have the non-exclusive right, in common with others, to use the Common Areas in conjunction with Tenant’s use of the
Premises for the Permitted Use, and such use of the Common Areas and Tenant’s use of the Premises shall be subject to the rules and regulations adopted by Landlord and attached hereto as Exhibit F, together with such other reasonable and
nondiscriminatory rules and regulations as are hereafter promulgated by Landlord in its sole and absolute discretion (the “Rules and Regulations”). Tenant shall faithfully observe and comply with the Rules and Regulations. Landlord
shall not be responsible to Tenant for the violation or non-performance by any other tenant or any agent, employee or invitee thereof of any of the Rules and Regulations. 

13.2. This Lease is subject to any recorded covenants, conditions or restrictions on the Project or Property (the
“CC&Rs”), as the same may be amended, amended and restated, supplemented or otherwise modified from time to time. Tenant shall comply with the CC&Rs. 

13.3. Tenant shall have a non-exclusive, irrevocable license to use Tenant’s Pro Rata Share of parking facilities serving the Building in
common on an unreserved basis with other tenants of the Building during the Term at no additional cost. 
 13.4. Tenant agrees not to
unreasonably overburden the parking facilities and agrees to cooperate with Landlord and other tenants in the use of the parking facilities. Landlord reserves the right to determine that parking facilities are becoming overcrowded and to limit
Tenant’s use thereof. Upon such determination, Landlord may reasonably allocate parking spaces among Tenant and other tenants of the Building or the Project. Nothing in this Section, however, is intended to create an affirmative duty on
Landlord’s part to monitor parking. 
 13.5. Landlord reserves the right to modify the Common Areas, including the right to add or
remove exterior and interior landscaping and to subdivide real property. Tenant acknowledges that Landlord specifically reserves the right to allow the exclusive use of corridors and restroom facilities located on specific floors to one or more
tenants occupying such floors; provided, however, that Tenant shall not be deprived of the use of the corridors reasonably required to serve the Premises or of restroom facilities serving the floor upon which the Premises are located. 

  
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 14. Project Control by Landlord. 

14.1. Landlord reserves full control over the Building and the Project to the extent not inconsistent with Tenant’s enjoyment of the
Premises as provided by this Lease. This reservation includes Landlord’s right to subdivide the Project; convert the Building and other buildings within the Project to condominium units; change the size of the Project by selling all or a
portion of the Project or adding real property and any improvements thereon to the Project; grant easements and licenses to third parties; maintain or establish ownership of the Building separate from fee title to the Property; make additions to or
reconstruct portions of the Building and the Project; install, use, maintain, repair, replace and relocate for service to the Premises and other parts of the Building or the Project pipes, ducts, conduits, wires and appurtenant fixtures, wherever
located in the Premises, the Building or elsewhere at the Project; and alter or relocate any other Common Area or facility, including private drives, lobbies and entrances; provided, however, that such rights shall be exercised in a way that
does not materially adversely affect Tenant’s beneficial use and occupancy of the Premises, including the Permitted Use and Tenant’s access to the Premises. 

14.2. Possession of areas of the Premises necessary for utilities, services, safety and operation of the Building is reserved to Landlord.

 14.3. Tenant shall, at Landlord’s request, promptly execute such further documents as may be reasonably appropriate to assist
Landlord in the performance of its obligations hereunder; provided that Tenant need not execute any document that creates additional liability for Tenant or that deprives Tenant of the quiet enjoyment and use of the Premises as provided for
in this Lease. 
 14.4. Landlord may, at any and all reasonable times during non-business hours (or during business hours, if (a) with
respect to Subsections 14.4(u) through 14.4(y), Tenant so requests, and (b) with respect to Subsection 14.4(z), if Landlord so requests), and upon twenty-four (24) hours’ prior notice (provided that no time
restrictions shall apply or advance notice be required if an emergency necessitates immediate entry), enter the Premises to (u) inspect the same and to determine whether Tenant is in compliance with its obligations hereunder, (v) supply
any service Landlord is required to provide hereunder, (w) alter, improve or repair any portion of the Building other than the Premises for which access to the Premises is reasonably necessary, (x) post notices of nonresponsibility,
(y) access the telephone equipment, electrical substation and fire risers and (z) show the Premises to prospective purchasers or tenants during the final year of the Term. In connection with any such alteration, improvement or repair as
described in Subsection 14.4(w), Landlord may erect in the Premises or elsewhere in the Project scaffolding and other structures reasonably required for the alteration, improvement or repair work to be performed. In no event shall
Tenant’s Rent abate as a result of Landlord’s activities pursuant to this Section; provided, however, that all such activities shall be conducted in such a manner so as to cause as little interference to Tenant as is reasonably
possible. Landlord shall at all times retain a key with which to unlock all of the doors in the Premises. If an emergency necessitates immediate access to the Premises, Landlord may use whatever force is necessary to enter the Premises, and any such
entry to the Premises shall not constitute a forcible or unlawful entry to the Premises, a detainer of the Premises, or an eviction of Tenant from the Premises or any portion thereof. 

  
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 15. Quiet Enjoyment. Landlord covenants that Tenant, upon paying the Rent and performing its obligations
contained in this Lease, may peacefully and quietly have, hold and enjoy the Premises, free from any claim by Landlord or persons claiming under Landlord, but subject to all of the terms and provisions hereof, provisions of Applicable Laws and
rights of record to which this Lease is or may become subordinate. This covenant is in lieu of any other quiet enjoyment covenant, either express or implied. 

16. Utilities and Services. 
 16.1.
Tenant shall pay for all water (including the cost to service, repair and replace reverse osmosis, de-ionized and other treated water), gas, heat, light, power, telephone, internet service, cable television, other telecommunications and other
utilities supplied to the Premises, together with any fees, surcharges and taxes thereon. If any such utility is not separately metered to Tenant, Tenant shall pay Tenant’s Share of all charges of such utility jointly metered with other
premises as Additional Rent or, in the alternative, Landlord may, at its option, monitor the usage of such utilities by Tenant and charge Tenant with the cost of purchasing, installing and monitoring such metering equipment, which cost shall be paid
by Tenant as Additional Rent. To the extent that Tenant uses more than Tenant’s Pro Rata Share of any utilities, then Tenant shall pay Landlord for Tenant’s Share of such utilities to reflect such excess. In the event that the Building,
North Campus or Project is less than fully occupied during a calendar year, Tenant acknowledges that Landlord may extrapolate utility usage that varies depending on the occupancy of the Building, North Campus or Project (as applicable) to equal
Landlord’s reasonable estimate of what such utility usage would have been had the Building, North Campus or Project, as applicable, been fully occupied during such calendar year; provided, however, that Landlord shall not recover more
than one hundred percent (100%) of the cost of such utilities. Tenant shall not be liable for the cost of utilities supplied to the Premises attributable to the time period prior to the Term Commencement Date; provided, however, that, if
Landlord shall permit Tenant possession of the Premises prior to the Term Commencement Date and Tenant uses the Premises for any purpose other than placement of personal property as set forth in Section 4.3, then Tenant shall be
responsible for the cost of utilities supplied to the Premises from such earlier date of possession. 
 16.2. Landlord shall not be liable
for, nor shall any eviction of Tenant result from, the failure to furnish any utility or service, whether or not such failure is caused by accident; breakage; repair; strike, lockout or other labor disturbance or labor dispute of any character; act
of terrorism; shortage of materials, which shortage is not unique to Landlord or Tenant, as the case may be; governmental regulation, moratorium or other governmental action, inaction or delay; or other causes beyond Landlord’s control
(collectively, “Force Majeure”) or, to the extent permitted by Applicable Laws, Landlord’s negligence. In the event of such failure, Tenant shall not be entitled to termination of this Lease or any abatement or reduction of
Rent, nor shall Tenant be relieved from the operation of any covenant or agreement of this Lease. 
 16.3. Tenant shall pay for, prior to
delinquency of payment therefor, any utilities and services that may be furnished to the Premises during or, if Tenant occupies the Premises after the expiration or earlier termination of the Term, after the Term, beyond those utilities provided by
Landlord, including telephone, internet service, cable television and other telecommunications, together with any fees, surcharges and taxes thereon. Upon Landlord’s demand, utilities and services provided to the Premises that are separately
metered shall be paid by Tenant directly to the supplier of such utilities or services. 

  
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 16.4. Tenant shall not, without Landlord’s prior written consent, use any device in the
Premises (including data processing machines) that will in any way (a) increase the amount of ventilation, air exchange, gas, steam, electricity or water required or consumed in the Premises based upon Tenant’s Pro Rata Share of the
Building or Project (as applicable) beyond the existing capacity of the Building or the Project usually furnished or supplied for the Permitted Use or (b) exceed Tenant’s Pro Rata Share of the Building’s or Project’s (as
applicable) capacity to provide such utilities or services. 
 16.5. If Tenant shall require utilities or services in excess of those
usually furnished or supplied for tenants in similar spaces in the Building or the Project by reason of Tenant’s equipment or extended hours of business operations, then Tenant shall first procure Landlord’s consent for the use thereof,
which consent Landlord may condition upon the availability of such excess utilities or services, and Tenant shall pay as Additional Rent an amount equal to the cost of providing such excess utilities and services. 

16.6. Landlord shall provide water in Common Areas for lavatory and landscaping purposes only, which water shall be from the local municipal
or similar source; provided, however, that if Landlord determines that Tenant requires, uses or consumes water provided to the Common Areas for any purpose other than ordinary lavatory purposes, Landlord may install a water meter
(“Tenant Water Meter”) and thereby measure Tenant’s water consumption for all purposes. Tenant shall pay Landlord for the costs of any Tenant Water Meter and the installation and maintenance thereof during the Term. If Landlord
installs a Tenant Water Meter, Tenant shall pay for water consumed, as shown on such meter, as and when bills are rendered. If Tenant fails to timely make such payments, Landlord may pay such charges and collect the same from Tenant. Any such costs
or expenses incurred or payments made by Landlord for any of the reasons or purposes stated in this Section shall be deemed to be Additional Rent payable by Tenant and collectible by Landlord as such. 

16.7. Landlord reserves the right to stop service of the elevator, plumbing, ventilation, air conditioning and utility systems, when Landlord
deems necessary or desirable, due to accident, emergency or the need to make repairs, alterations or improvements, until such repairs, alterations or improvements shall have been completed, and Landlord shall further have no responsibility or
liability for failure to supply elevator facilities, plumbing, ventilation, air conditioning or utility service when prevented from doing so by Force Majeure or, to the extent permitted by Applicable Laws, Landlord’s negligence; a failure by a
third party to deliver gas, oil or another suitable fuel supply; or Landlord’s inability by exercise of reasonable diligence to obtain gas, oil or another suitable fuel. Without limiting the foregoing, it is expressly understood and agreed that
any covenants on Landlord’s part to furnish any service pursuant to any of the terms, covenants, conditions, provisions or agreements of this Lease, or to perform any act or thing for the benefit of Tenant, shall not be deemed breached if
Landlord is unable to furnish or perform the same by virtue of Force Majeure or, to the extent permitted by Applicable Laws, Landlord’s negligence. 

  
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 16.8. For the Premises, Landlord shall (a) maintain and operate the heating, ventilating and
air conditioning systems used for typical office use only (“HVAC”) (and not for uses other than office use, including HVAC related to laboratory fixtures and equipment) and (b) subject to Subsection 16.8(a), furnish HVAC
as reasonably required (except as this Lease otherwise provides) for reasonably comfortable occupancy of the Premises twenty-four (24) hours a day, every day during the Term, subject to casualty, eminent domain or as otherwise specified in this
Article. Notwithstanding anything to the contrary in this Section, Landlord shall have no liability, and Tenant shall have no right or remedy, on account of any interruption or impairment in HVAC services; provided that Landlord diligently
endeavors to cure any such interruption or impairment. 
 16.9. For any utilities serving the Premises for which Tenant is billed directly
by such utility provider, Tenant agrees to furnish to Landlord (a) any invoices or statements for such utilities within thirty (30) days after Tenant’s receipt thereof, (b) within thirty (30) days after Landlord’s
request, any other utility usage information reasonably requested by Landlord, and (c) within thirty (30) days after each calendar year during the Term, an ENERGY STAR® Statement of Performance (or similar comprehensive utility usage
report (e.g., related to Labs 21), if requested by Landlord) and any other information reasonably requested by Landlord for the immediately preceding year. Tenant shall retain records of utility usage at the Premises, including invoices and
statements from the utility provider, for at least sixty (60) months, or such other period of time as may be requested by Landlord. Tenant acknowledges that any utility information for the Premises, the Building and the Project may be shared
with third parties, including Landlord’s consultants and Governmental Authorities. In the event that Tenant fails to comply with this Section, Tenant hereby authorizes Landlord to collect utility usage information directly from the applicable
utility providers, and Tenant shall pay Landlord a fee of One Thousand Dollars ($1,000) per month to collect such utility usage information. The provisions of this Section shall survive the expiration or earlier termination of this Lease. 

17. Alterations. 
 17.1. Tenant shall
make no alterations, additions or improvements in or to the Premises or engage in any construction, demolition, reconstruction, renovation, or other work (whether major or minor) of any kind in, at, or serving the Premises
(“Alterations”) without Landlord’s prior written approval, which approval Landlord shall not unreasonably withhold; provided, however, that in the event any proposed Alteration affects (a) any structural portions of
the Building, including exterior walls, roof, foundation, foundation systems (including barriers and subslab systems), or core of the Building, (b) the exterior of the Building or (c) any Building systems, including elevator, plumbing, air
conditioning, heating, electrical, security, life safety and power, then Landlord may withhold its approval in its sole and absolute discretion. Tenant shall, in making any such Alterations, use only those architects, contractors, suppliers and
mechanics of which Landlord has given prior written approval, which approval shall be in Landlord’s sole and absolute discretion. In seeking Landlord’s approval, Tenant shall provide Landlord, at least fourteen (14) days in advance of
any proposed construction, with plans, specifications, bid proposals, certified stamped engineering drawings and calculations by Tenant’s engineer of record or architect of record, (including connections to the Building’s structural
system, modifications to the Building’s envelope, non-structural penetrations in slabs or walls, and modifications or tie-ins to life safety systems), work contracts, requests for 

  
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laydown areas and such other information concerning the nature and cost of the Alterations as Landlord may reasonably request. In no event shall Tenant use or Landlord be required to approve any
architects, consultants, contractors, subcontractors or material suppliers that Landlord reasonably believes could cause labor disharmony. 

17.2. Tenant shall not construct or permit to be constructed partitions or other obstructions that might interfere with free access to
mechanical installation or service facilities of the Building or with other tenants’ components located within the Building, or interfere with the moving of Landlord’s equipment to or from the enclosures containing such installations or
facilities. 
 17.3. Tenant shall accomplish any work performed on the Premises or the Building in such a manner as to permit any life
safety systems to remain fully operable at all times. 
 17.4. Any work performed on the Premises, the Building or the Project by Tenant or
Tenant’s contractors shall be done at such times and in such manner as Landlord may from time to time designate. Tenant covenants and agrees that all work done by Tenant or Tenant’s contractors shall be performed in full compliance with
Applicable Laws. Within thirty (30) days after completion of any Alterations, Tenant shall provide Landlord with complete “as built” drawing print sets and electronic CADD files on disc (or files in such other current format in common
use as Landlord reasonably approves or requires) showing any changes in the Premises. Any such “as built” plans shall show the applicable Alterations as an overlay on the Building as-built plans; provided that Landlord provides the
Building “as built” plans to Tenant. 
 17.5. Before commencing any Alterations, Tenant shall give Landlord at least fourteen
(14) days’ prior written notice of the proposed commencement of such work and shall, if required by Landlord, secure, at Tenant’s own cost and expense, a completion and lien indemnity bond satisfactory to Landlord for such work. 

17.6. Tenant shall repair any damage to the Premises caused by Tenant’s removal of any property from the Premises. During any such
restoration period, Tenant shall pay Rent to Landlord as provided herein as if such space were otherwise occupied by Tenant. The provisions of this Section shall survive the expiration or earlier termination of this Lease. 

17.7. The Premises plus any Alterations, Signage, Tenant Improvements, attached equipment, decorations, fixtures, movable laboratory casework
and related appliances, trade fixtures, additions and improvements attached to or built into the Premises, made by either of the Parties (including all floor and wall coverings; paneling; sinks and related plumbing fixtures; laboratory benches;
exterior venting fume hoods; walk-in freezers and refrigerators; ductwork; conduits; electrical panels and circuits; business and trade fixtures; attached machinery and equipment; and built-in furniture and cabinets, in each case, together with all
additions and accessories thereto), shall (unless, prior to such construction or installation, Landlord elects otherwise) at all times remain the property of Landlord, shall remain in the Premises and shall (unless, prior to construction or
installation thereof, Landlord elects otherwise) be surrendered to Landlord upon the expiration or earlier termination of this Lease. For the avoidance of doubt, the items listed on Exhibit H attached hereto (which Exhibit H may be
updated by Tenant from and after the Term Commencement Date, subject to Landlord’s written consent) constitute Tenant’s property and shall be removed by Tenant upon the expiration or earlier termination of the Lease. 

  
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 17.8. Notwithstanding any other provision of this Article to the contrary, in no event shall
Tenant remove any improvement from the Premises as to which Landlord contributed payment, including the Tenant Improvements, without Landlord’s prior written consent, which consent Landlord may withhold in its sole and absolute discretion. 

17.9. If Tenant shall fail to remove any of its property from the Premises prior to the expiration or earlier termination of this Lease, then
Landlord may, at its option, remove the same in any manner that Landlord shall choose and store such effects without liability to Tenant for loss thereof or damage thereto, and Tenant shall pay Landlord, upon demand, any costs and expenses incurred
due to such removal and storage or Landlord may, at its sole option and without notice to Tenant, sell such property or any portion thereof at private sale and without legal process for such price as Landlord may obtain and apply the proceeds of
such sale against any (a) amounts due by Tenant to Landlord under this Lease and (b) any expenses incident to the removal, storage and sale of such personal property. 

17.10. Tenant shall pay to Landlord an amount equal to three percent (3%) of the cost to Tenant of all Alterations to cover
Landlord’s overhead and expenses for plan review, coordination, scheduling and supervision thereof. For purposes of payment of such sum, Tenant shall submit to Landlord copies of all bills, invoices and statements covering the costs of such
charges, accompanied by payment to Landlord of the fee set forth in this Section. Tenant shall reimburse Landlord for any extra expenses incurred by Landlord by reason of faulty work done by Tenant or its contractors, or by reason of delays caused
by such work, or by reason of inadequate clean-up. 
 17.11. Within sixty (60) days after final completion of any Alterations performed
by Tenant with respect to the Premises, Tenant shall submit to Landlord documentation showing the amounts expended by Tenant with respect to such Alterations, together with supporting documentation reasonably acceptable to Landlord. 

17.12. Tenant shall take, and shall cause its contractors to take, commercially reasonable steps to protect the Premises during the
performance of any Alterations, including covering or temporarily removing any window coverings so as to guard against dust, debris or damage. 

17.13. Tenant shall require its contractors and subcontractors performing work on the Premises to name Landlord and its affiliates and Lenders
as additional insureds on their respective insurance policies. 
 18. Repairs and Maintenance. 

18.1. Landlord shall repair and maintain the structural and exterior portions and Common Areas of the Building and the Project, including
roofing and covering materials; foundations; exterior walls; plumbing; fire sprinkler systems (if any); heating, ventilating, air conditioning systems; elevators; and electrical systems installed or furnished by Landlord. 

  
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 18.2. Except for services of Landlord, if any, required by Section 18.1, Tenant shall
at Tenant’s sole cost and expense maintain and keep the Premises and every part thereof in good condition and repair, damage thereto from ordinary wear and tear excepted. Tenant shall, upon the expiration or sooner termination of the Term,
surrender the Premises to Landlord in as good a condition as when received, ordinary wear and tear excepted; and shall, at Landlord’s request and Tenant’s sole cost and expense, remove all telephone and data systems, wiring and equipment
from the Premises, and repair any damage to the Premises caused thereby. Landlord shall have no obligation to alter, remodel, improve, repair, decorate or paint the Premises or any part thereof, other than as described in Exhibit B. 

18.3. Landlord shall not be liable for any failure to make any repairs or to perform any maintenance that is Landlord’s obligation
pursuant to this Lease unless such failure shall persist for an unreasonable time after Tenant provides Landlord with written notice of the need of such repairs or maintenance. Tenant waives its rights under Applicable Laws now or hereafter in
effect to make repairs at Landlord’s expense. 
 18.4. If any excavation shall be made upon land adjacent to or under the Building, or
shall be authorized to be made, Tenant shall afford to the person causing or authorized to cause such excavation, license to enter the Premises for the purpose of performing such work as such person shall deem necessary or desirable to preserve and
protect the Building from injury or damage and to support the same by proper foundations, without any claim for damages or liability against Landlord and without reducing or otherwise affecting Tenant’s obligations under this Lease. 

18.5. This Article relates to repairs and maintenance arising in the ordinary course of operation of the Building and the Project. In the
event of a casualty described in Article 24, Article 24 shall apply in lieu of this Article. In the event of eminent domain, Article 25 shall apply in lieu of this Article. 

18.6. Costs incurred by Landlord pursuant to this Article shall constitute Operating Expenses. 

19. Liens. 
 19.1. Subject to the
immediately succeeding sentence, Tenant shall keep the Premises, the Building and the Project free from any liens arising out of work or services performed, materials furnished or obligations incurred by Tenant. Tenant further covenants and agrees
that any mechanic’s or materialman’s lien filed against the Premises, the Building or the Project for work or services claimed to have been done for, or materials claimed to have been furnished to, or obligations incurred by Tenant shall
be discharged or bonded by Tenant within ten (10) days after the filing thereof, at Tenant’s sole cost and expense. 
 19.2.
Should Tenant fail to discharge or bond against any lien of the nature described in Section 19.1, Landlord may, at Landlord’s election, pay such claim or post a statutory lien bond or otherwise provide security to eliminate the lien
as a claim against title, and Tenant shall immediately reimburse Landlord for the costs thereof as Additional Rent. Tenant shall indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to

  
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Landlord) and hold the Landlord Indemnitees harmless from and against any Claims arising from any such liens, including any administrative, court or other legal proceedings related to such liens.

 19.3. In the event that Tenant leases or finances the acquisition of office equipment, furnishings or other personal property of a
removable nature utilized by Tenant in the operation of Tenant’s business, Tenant warrants that any Uniform Commercial Code financing statement shall, upon its face or by exhibit thereto, indicate that such financing statement is applicable
only to removable personal property of Tenant located within the Premises. In no event shall the address of the Premises, the Building or the Project be furnished on a financing statement without qualifying language as to applicability of the lien
only to removable personal property located in an identified suite leased by Tenant. Should any holder of a financing statement record or place of record a financing statement that appears to constitute a lien against any interest of Landlord or
against equipment that may be located other than within an identified suite leased by Tenant, Tenant shall, within ten (10) days after filing such financing statement, cause (a) a copy of the Lender security agreement or other documents to
which the financing statement pertains to be furnished to Landlord to facilitate Landlord’s ability to demonstrate that the lien of such financing statement is not applicable to Landlord’s interest and (b) Tenant’s Lender to
amend such financing statement and any other documents of record to clarify that any liens imposed thereby are not applicable to any interest of Landlord in the Premises, the Building or the Project. 

20. Estoppel Certificate. Tenant shall, within ten (10) days of receipt of written notice from Landlord, execute, acknowledge and deliver a
statement in writing substantially in the form attached to this Lease as Exhibit I, or on any other form reasonably requested by a proposed Lender or purchaser, (a) certifying that this Lease is unmodified and in full force and effect
(or, if modified, stating the nature of such modification and certifying that this Lease as so modified is in full force and effect) and the dates to which rental and other charges are paid in advance, if any, (b) acknowledging that there are
not, to Tenant’s knowledge, any uncured defaults on the part of Landlord hereunder, or specifying such defaults if any are claimed, and (c) setting forth such further information with respect to this Lease or the Premises as may be
requested thereon. Any such statement may be relied upon by any prospective purchaser or encumbrancer of all or any portion of the Property. Tenant’s failure to deliver such statement within such the prescribed time shall, at Landlord’s
option, constitute a Default (as defined below) under this Lease, and, in any event, shall be binding upon Tenant that the Lease is in full force and effect and without modification except as may be represented by Landlord in any certificate
prepared by Landlord and delivered to Tenant for execution. 
 21. Hazardous Materials. 

21.1. Tenant shall not cause or permit any Hazardous Materials (as defined below) to be brought upon, kept or used in or about the Premises,
the Building or the Project by Tenant or any of its employees, agents, contractors or invitees (collectively with Tenant, each a “Tenant Party”). If (a) Tenant breaches such obligation, (b) the presence of Hazardous
Materials as a result of such a breach results in contamination of the Project, any portion thereof, or any adjacent property, (c) contamination of the Premises otherwise occurs during the Term or any extension or renewal hereof or holding over
hereunder or (d) contamination of the Project occurs 

  
 23 

 
as a result of Hazardous Materials that are placed on or under or are released into the Project by a Tenant Party, then Tenant shall indemnify, save, defend (at Landlord’s option and with
counsel reasonably acceptable to Landlord) and hold the Landlord Indemnitees harmless from and against any and all Claims, including (w) diminution in value of the Project or any portion thereof, (x) damages for the loss or restriction on
use of rentable or usable space or of any amenity of the Project, (y) damages arising from any adverse impact on marketing of space in the Project or any portion thereof and (z) sums paid in settlement of Claims that arise during or after
the Term as a result of such breach or contamination. This indemnification by Tenant includes costs incurred in connection with any investigation of site conditions or any clean-up, remedial, removal or restoration work required by any Governmental
Authority because of Hazardous Materials present in the air, soil or groundwater above, on or under or about the Project. Without limiting the foregoing, if the presence of any Hazardous Materials in, on, under or about the Project, any portion
thereof or any adjacent property caused or permitted by any Tenant Party results in any contamination of the Project, any portion thereof or any adjacent property, then Tenant shall promptly take all actions at its sole cost and expense as are
necessary to return the Project, any portion thereof or any adjacent property to its respective condition existing prior to the time of such contamination; provided that Landlord’s written approval of such action shall first be obtained,
which approval Landlord shall not unreasonably withhold; and provided, further, that it shall be reasonable for Landlord to withhold its consent if such actions could have a material adverse long-term or short-term effect on the Project, any
portion thereof or any adjacent property. 
 21.2. [Intentionally omitted] 

21.3. Notwithstanding the provisions of Sections 21.1 21.2 or 21.9, if (a) Tenant or any proposed transferee,
assignee or sublessee of Tenant has been required by any prior landlord, Lender or Governmental Authority to take material remedial action in connection with Hazardous Materials contaminating a property if the contamination resulted from such
party’s action or omission or use of the property in question or (b) Tenant or any proposed transferee, assignee or sublessee is subject to a material enforcement order issued by any Governmental Authority in connection with the use,
disposal or storage of Hazardous Materials, then Landlord shall have the right to terminate this Lease in Landlord’s sole and absolute discretion (with respect to any such matter involving Tenant), and it shall not be unreasonable for Landlord
to withhold its consent to any proposed transfer, assignment or subletting (with respect to any such matter involving a proposed transferee, assignee or sublessee). 

21.4. At any time, and from time to time, prior to the expiration of the Term, Landlord shall have the right to conduct appropriate tests of
the Project or any portion thereof to demonstrate that Hazardous Materials are present or that contamination has occurred due to the acts or omissions of a Tenant Party. Tenant shall pay all reasonable costs of such tests if such tests reveal that
Hazardous Materials exist at the Project in violation of this Lease. 
 21.5. [Intentionally omitted] 

21.6. Tenant shall promptly report to Landlord any actual or suspected presence of mold or water intrusion at the Premises. 

  
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 21.7. Tenant’s obligations under this Article shall survive the expiration or earlier
termination of the Lease. During any period of time needed by Tenant or Landlord after the termination of this Lease to complete the removal from the Premises of any such Hazardous Materials, Tenant shall be deemed a holdover tenant and subject to
the provisions of Article 27. 
 21.8. As used herein, the term “Hazardous Material” means any hazardous or toxic
substance, material or waste that is or becomes regulated by any Governmental Authority. 
 22. Odors and Exhaust. Tenant acknowledges that Landlord
would not enter into this Lease with Tenant unless Tenant assured Landlord that under no circumstances will any other occupants of the Building or the Project (including persons legally present in any outdoor areas of the Project) be subjected to
odors or fumes (whether or not noxious), and that the Building and the Project will not be damaged by any exhaust, in each case from Tenant’s operations. Landlord and Tenant therefore agree as follows: 

22.1. Tenant shall not cause or permit (or conduct any activities that would cause) any release of any odors or fumes of any kind from the
Premises. 
 22.2. If the Building has a ventilation system that, in Landlord’s judgment, is adequate, suitable, and appropriate to
vent the Premises in a manner that does not release odors affecting any indoor or outdoor part of the Project, Tenant shall vent the Premises through such system. If Landlord at any time determines that any existing ventilation system is inadequate,
or if no ventilation system exists, Tenant shall in compliance with Applicable Laws vent all fumes and odors from the Premises (and remove odors from Tenant’s exhaust stream) as Landlord requires. The placement and configuration of all
ventilation exhaust pipes, louvers and other equipment shall be subject to Landlord’s approval. Tenant acknowledges Landlord’s legitimate desire to maintain the Project (indoor and outdoor areas) in an odor-free manner, and Landlord may
require Tenant to abate and remove all odors in a manner that goes beyond the requirements of Applicable Laws. 
 22.3. Tenant shall, at
Tenant’s sole cost and expense, provide odor eliminators and other devices (such as filters, air cleaners, scrubbers and whatever other equipment may in Landlord’s judgment be necessary or appropriate from time to time) to completely
remove, eliminate and abate any odors, fumes or other substances in Tenant’s exhaust stream that, in Landlord’s judgment, emanate from Tenant’s Premises. Any work Tenant performs under this Section shall constitute Alterations. 

22.4. Tenant’s responsibility to remove, eliminate and abate odors, fumes and exhaust shall continue throughout the Term. Landlord’s
construction of the Tenant Improvements shall not preclude Landlord from requiring additional measures to eliminate odors, fumes and other adverse impacts of Tenant’s exhaust stream (as Landlord may designate in Landlord’s discretion).
Tenant shall install additional equipment as Landlord requires from time to time under the preceding sentence. Such installations shall constitute Alterations. 

22.5. If Tenant fails to install satisfactory odor control equipment within ten (10) business days after Landlord’s demand made at
any time, then Landlord may, without limiting Landlord’s other rights and remedies, require Tenant to cease and suspend any operations in the 

  
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Premises that, in Landlord’s determination, cause odors, fumes or exhaust. For example, if Landlord determines that Tenant’s production of a certain type of product causes odors, fumes
or exhaust, and Tenant does not install satisfactory odor control equipment within ten (10) business days after Landlord’s request, then Landlord may require Tenant to stop producing such type of product in the Premises unless and until
Tenant has installed odor control equipment satisfactory to Landlord. 
 23. Insurance; Waiver of Subrogation. 

23.1. Landlord shall maintain insurance for the Building and the Project in amounts equal to full replacement cost (exclusive of the costs of
excavation, foundations and footings, engineering costs or such other costs that would not be incurred in the event of a rebuild and without reference to depreciation taken by Landlord upon its books or tax returns) or such lesser coverage as
Landlord may elect, provided that such coverage shall not be less than the amount of such insurance Landlord’s Lender, if any, requires Landlord to maintain, providing protection against any peril generally included within the
classification “Fire and Extended Coverage,” together with insurance against sprinkler damage (if applicable), vandalism and malicious mischief. Landlord, subject to availability thereof, shall further insure, if Landlord deems it
appropriate, coverage against flood, environmental hazard, earthquake, loss or failure of building equipment, rental loss during the period of repairs or rebuilding, Workers’ Compensation insurance and fidelity bonds for employees employed to
perform services. Notwithstanding the foregoing, Landlord may, but shall not be deemed required to, provide insurance for any improvements installed by Tenant or that are in addition to the standard improvements customarily furnished by Landlord,
without regard to whether or not such are made a part of or are affixed to the Building. 
 23.2. In addition, Landlord shall carry
Commercial General Liability insurance with limits of not less than One Million Dollars ($1,000,000) per occurrence/general aggregate for bodily injury (including death), or property damage with respect to the Project. 

23.3. Tenant shall, at its own cost and expense, procure and maintain in effect, beginning on the Term Commencement Date or the date of
occupancy, whichever occurs first, and continuing throughout the Term (and occupancy by Tenant, if any, after termination of this Lease) with insurers financially acceptable and lawfully authorized to do business in the state where the Project is
located Commercial General Liability insurance on a broad-based occurrence coverage form, with limits of not less than Two Million Dollars ($2,000,000) per occurrence and in the aggregate for bodily injury (including death) and for property damage
with respect to the Premises (including $100,000 fire legal liability (each loss)), and Two Million Dollars ($2,000,000) products and completed operations insurance on a claims made basis. 

23.4. The insurance required to be purchased and maintained by Tenant pursuant to this Lease shall name Landlord, BioMed Realty, L.P., BioMed
Realty Trust, Inc., and their respective officers, directors, employees, agents, general partners, members, subsidiaries, affiliates and Lenders (“Landlord Parties”) as additional insureds as respects liability arising from work or
operations performed by or on behalf of Tenant and Tenant’s use or occupancy of the Premises. Said insurance shall be with companies authorized to do business in the state in which the Project is located and at all times having a current rating
of not less than A- and financial category rating 

  
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of at least Class VII in “A.M. Best’s Insurance Guide” current edition. Tenant shall obtain for Landlord from the insurance companies or cause the insurance companies to furnish
certificates of insurance evidencing all coverages required herein to Landlord. Landlord reserves the right to require complete, certified copies of all required insurance policies including any endorsements. No such policy shall be cancelable or
subject to reduction of coverage or other modification or cancellation except after twenty (20) days’ prior written notice to Landlord from the insurer (except in the event of non-payment of premium, in which case ten (10) days
written notice shall be given). Should carrier be unwilling or unable to provide such notice, Tenant shall provide notice to Landlord in accordance with this Section. All such policies shall be written as primary policies, not contributing with and
not in excess of the coverage that Landlord may carry. Tenant’s required policies shall contain severability of interests clauses stating that, except with respect to limits of insurance, coverage shall apply separately to each insured or
additional insured. Tenant’s policies shall contain dedicated or per location limits endorsements so that the amounts of insurance required herein shall not be prejudiced by losses at other locations. Tenant shall, at least twenty
(20) days prior to the expiration of such policies, furnish Landlord with renewal certificates of insurance or binders. Tenant agrees that if Tenant does not take out and maintain such insurance, Landlord may (but shall not be required to)
procure said insurance on Tenant’s behalf and at its cost to be paid by Tenant as Additional Rent. 
 23.5. Tenant assumes the risk of
damage to any fixtures, goods, inventory, merchandise, equipment and leasehold improvements, and Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom, relative to such damage, all as more particularly set
forth within this Lease. Tenant shall, at Tenant’s sole cost and expense, carry such insurance as Tenant desires for Tenant’s protection with respect to personal property of Tenant or business interruption. 

23.6. In each instance where insurance is to name Landlord Parties as additional insureds, Tenant shall, upon Landlord’s written request,
also designate and furnish certificates evidencing such Landlord Parties as additional insureds to (a) any Lender of Landlord holding a security interest in the Building, the Property or the Project, (b) the landlord under any lease
whereunder Landlord is a tenant of the Property if the interest of Landlord is or shall become that of a tenant under a ground lease rather than that of a fee owner and (c) any management company retained by Landlord to manage the Project. 

23.7. Landlord, Tenant and each of their respective insurers hereby waive any and all rights of recovery or subrogation against one another or
against the officers, directors, employees, agents, general partners, members, subsidiaries, affiliates and Lenders of the other as respects any loss, damage, claims, suits or demands, howsoever caused, that are covered, or should have been covered,
by valid and collectible insurance, including any deductibles or self-insurance maintained thereunder. If necessary, each party agrees to endorse the required insurance policies to permit waivers of subrogation as required hereunder and hold
harmless and indemnify the other party for any loss or expense incurred as a result of a failure to obtain such waivers of subrogation from insurers. Such waivers shall continue so long as their respective insurers so permit. Any termination of such
a waiver shall be by written notice to the other party, containing a description of the circumstances hereinafter set forth in this Section. Landlord and Tenant, upon obtaining the policies of insurance required or permitted under this Lease, shall
give notice to the insurance carrier or carriers that the foregoing mutual waiver of 

  
 27 

 
subrogation is contained in this Lease. If such policies shall not be obtainable with such waiver or shall be so obtainable only at a premium over that chargeable without such waiver, then the
party seeking such policy shall notify the other of such conditions, and the party so notified shall have ten (10) days thereafter to either (a) procure such insurance with companies reasonably satisfactory to the other party or
(b) agree to pay such additional premium (in Tenant’s case, in the proportion that the area of the Premises bears to the insured area). If the parties do not accomplish either (a) or (b), then this Section shall have no effect during
such time as such policies shall not be obtainable or the party in whose favor a waiver of subrogation is desired refuses to pay the additional premium. If such policies shall at any time be unobtainable, but shall be subsequently obtainable, then
neither party shall be subsequently liable for a failure to obtain such insurance until a reasonable time after notification thereof by the other party. If the release of either Landlord or Tenant, as set forth in the first sentence of this Section,
shall contravene Applicable Laws, then the liability of the party in question shall be deemed not released but shall be secondary to the other party’s insurer. 

23.8. Landlord may require insurance policy limits required under this Lease to be raised to conform with requirements of Landlord’s
Lender or to bring coverage limits to levels then being required of new tenants within the Project. 
 23.9. Any costs incurred by Landlord
pursuant to this Article shall constitute a portion of Operating Expenses. 
 24. Damage or Destruction. 

24.1. In the event of a partial destruction of (a) the Premises or (b) Common Areas of the Building or the Project ((a) and
(b) together, the “Affected Areas”) by fire or other perils covered by extended coverage insurance not exceeding twenty-five percent (25%) of the full insurable value thereof, and provided that (x) the damage
thereto is such that the Affected Areas may be repaired, reconstructed or restored within a period of six (6) months from the date of the happening of such casualty, (y) Landlord shall receive insurance proceeds sufficient to cover the
cost of such repairs, reconstruction and restoration (except for any deductible amount provided by Landlord’s policy, which deductible amount, if paid by Landlord, shall constitute an Operating Expense) and (z) such casualty was not
intentionally caused by a Tenant Party, then Landlord shall commence and proceed diligently with the work of repair, reconstruction and restoration of the Affected Areas and this Lease shall continue in full force and effect. 

24.2. In the event of any damage to or destruction of the Building or the Project other than as described in Section 24.1,
Landlord may elect to repair, reconstruct and restore the Building or the Project, as applicable, in which case this Lease shall continue in full force and effect. If Landlord elects not to repair, reconstruct and restore the Building or the
Project, as applicable, then this Lease shall terminate as of the date of such damage or destruction. 
 24.3. Landlord shall give written
notice to Tenant within sixty (60) days following the date of damage or destruction of its election not to repair, reconstruct or restore the Building or the Project, as applicable. 

  
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 24.4. Upon any termination of this Lease under any of the provisions of this Article, the parties
shall be released thereby without further obligation to the other from the date possession of the Premises is surrendered to Landlord, except with regard to (a) items occurring prior to the damage or destruction and (b) provisions of this
Lease that, by their express terms, survive the expiration or earlier termination hereof. 
 24.5. In the event of repair, reconstruction
and restoration as provided in this Article, all Rent to be paid by Tenant under this Lease shall be abated proportionately based on the extent to which Tenant’s use of the Premises is impaired during the period of such repair, reconstruction
or restoration, unless Landlord provides Tenant with other space during the period of repair, reconstruction and restoration that, in Tenant’s reasonable opinion, is suitable for the temporary conduct of Tenant’s business; provided,
however, that the amount of such abatement shall be reduced by the proceeds of business interruption or loss of rental income insurance actually received by Tenant with respect to the Premises. 

24.6. Notwithstanding anything to the contrary contained in this Article, should Landlord be delayed or prevented from completing the repair,
reconstruction or restoration of the damage or destruction to the Premises after the occurrence of such damage or destruction by Force Majeure or delays caused by a Tenant Party, then the time for Landlord to commence or complete repairs,
reconstruction and restoration shall be extended on a day-for-day basis; provided, however, that, at Landlord’s election, Landlord shall be relieved of its obligation to make such repairs, reconstruction and restoration. 

24.7. If Landlord is obligated to or elects to repair, reconstruct or restore as herein provided, then Landlord shall be obligated to make
such repairs, reconstruction or restoration only with regard to (a) those portions of the Premises that were originally provided at Landlord’s expense and (b) the Common Area portion of the Affected Areas. The repairs, reconstruction
or restoration of improvements not originally provided by Landlord or at Landlord’s expense shall be the obligation of Tenant. In the event Tenant has elected to upgrade certain improvements from the Building Standard, Landlord shall, upon the
need for replacement due to an insured loss, provide only the Building Standard, unless Tenant again elects to upgrade such improvements and pay any incremental costs related thereto, except to the extent that excess insurance proceeds, if received,
are adequate to provide such upgrades, in addition to providing for basic repairs, reconstruction and restoration of the Premises, the Building and the Project. 

24.8. Notwithstanding anything to the contrary contained in this Article, Landlord shall not have any obligation whatsoever to repair,
reconstruct or restore the Premises if the damage resulting from any casualty covered under this Article occurs during the last twenty-four (24) months of the Term or any extension thereof, or to the extent that insurance proceeds are not
available therefor. 
 24.9. Landlord’s obligation, should it elect or be obligated to repair, reconstruct or restore, shall be limited
to the Affected Areas. Tenant shall, at its expense, replace or fully repair all of Tenant’s personal property and any Alterations installed by Tenant existing at the time of such damage or destruction. If Affected Areas are to be repaired,
reconstructed or restored in accordance with the foregoing, Landlord shall make available to Tenant any portion of insurance proceeds it receives that are allocable to the Alterations constructed by Tenant pursuant to this Lease; provided
Tenant is not then in default under this Lease, and subject to the requirements of any Lender of Landlord. 

  
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 25. Eminent Domain. 

25.1. In the event (a) the whole of all Affected Areas or (b) such part thereof as shall substantially interfere with Tenant’s
use and occupancy of the Premises for the Permitted Use shall be taken for any public or quasi-public purpose by any lawful power or authority by exercise of the right of appropriation, condemnation or eminent domain, or sold to prevent such taking,
Tenant or Landlord may terminate this Lease effective as of the date possession is required to be surrendered to such authority, except with regard to (y) items occurring prior to the taking and (z) provisions of this Lease that, by their
express terms, survive the expiration or earlier termination hereof. 
 25.2. In the event of a partial taking of (a) the Building or
the Project or (b) drives, walkways or parking areas serving the Building or the Project for any public or quasi-public purpose by any lawful power or authority by exercise of right of appropriation, condemnation, or eminent domain, or sold to
prevent such taking, then, without regard to whether any portion of the Premises occupied by Tenant was so taken, Landlord may elect to terminate this Lease (except with regard to (y) items occurring prior to the taking and (z) provisions
of this Lease that, by their express terms, survive the expiration or earlier termination hereof) as of such taking if such taking is, in Landlord’s sole opinion, of a material nature such as to make it uneconomical to continue use of the
unappropriated portion for purposes of renting office or laboratory space. 
 25.3. Tenant shall be entitled to any award that is
specifically awarded as compensation for (a) the taking of Tenant’s personal property that was installed at Tenant’s expense and (b) the costs of Tenant moving to a new location. Except as set forth in the previous sentence, any
award for such taking shall be the property of Landlord. 
 25.4. If, upon any taking of the nature described in this Article, this Lease
continues in effect, then Landlord shall promptly proceed to restore the Affected Areas to substantially their same condition prior to such partial taking. To the extent such restoration is infeasible, as determined by Landlord in its sole and
absolute discretion, the Rent shall be decreased proportionately to reflect the loss of any portion of the Premises no longer available to Tenant. 
 26.
Surrender. 
 26.1. [Intentionally omitted] 

26.2. No surrender of possession of any part of the Premises shall release Tenant from any of its obligations hereunder, unless such surrender
is accepted in writing by Landlord. 
 26.3. The voluntary or other surrender of this Lease by Tenant shall not effect a merger with
Landlord’s fee title or leasehold interest in the Premises, the Building, the Property or the Project, unless Landlord consents in writing, and shall, at Landlord’s option, operate as an assignment to Landlord of any or all subleases. 

  
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 26.4. The voluntary or other surrender of any ground or other underlying lease that now exists or
may hereafter be executed affecting the Building or the Project, or a mutual cancellation thereof or of Landlord’s interest therein by Landlord and its lessor shall not effect a merger with Landlord’s fee title or leasehold interest in the
Premises, the Building or the Property and shall, at the option of the successor to Landlord’s interest in the Building or the Project, as applicable, operate as an assignment of this Lease. 

27. Holding Over. 
 27.1. If, with
Landlord’s prior written consent, Tenant holds possession of all or any part of the Premises after the Term, Tenant shall become a tenant from month to month after the expiration or earlier termination of the Term, and in such case Tenant shall
continue to pay (a) Base Rent in accordance with Article 7 and (b) any amounts for which Tenant would otherwise be liable under this Lease if the Lease were still in effect, including payments for Tenant’s Share of Operating
Expenses. Any such month-to-month tenancy shall be subject to every other term, covenant and agreement contained herein. 
 27.2.
Notwithstanding the foregoing, if Tenant remains in possession of the Premises after the expiration or earlier termination of the Term without Landlord’s prior written consent, (a) Tenant shall become a tenant at sufferance subject to the
terms and conditions of this Lease, except that the monthly rent shall be equal to one hundred fifty percent (150%) of the Rent in effect during the last thirty (30) days of the Term, and (b) Tenant shall be liable to Landlord for any
and all damages suffered by Landlord as a result of such holdover, including any lost rent or consequential, special and indirect damages. 

27.3. Acceptance by Landlord of Rent after the expiration or earlier termination of the Term shall not result in an extension, renewal or
reinstatement of this Lease. 
 27.4. The foregoing provisions of this Article are in addition to and do not affect Landlord’s right of
reentry or any other rights of Landlord hereunder or as otherwise provided by Applicable Laws. 
 27.5. The provisions of this Article shall
survive the expiration or earlier termination of this Lease. 
 28. Indemnification and Exculpation. 

28.1. Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the
Landlord Indemnitees harmless from and against any and all Claims arising from injury or death to any person or damage to any property occurring within or about the Premises, the Building, the Property or the Project arising directly or indirectly
out of a Tenant Party’s use or occupancy of the Premises or a breach or default by Tenant in the performance of any of its obligations hereunder, except to the extent caused by Landlord’s negligence or willful misconduct. 

28.2. Notwithstanding anything in this Lease to the contrary, Landlord shall not be liable to Tenant for and Tenant assumes all risk of
(a) damage or losses caused by fire, electrical malfunction, gas explosion or water damage of any type (including broken water lines, 

  
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malfunctioning fire sprinkler systems, roof leaks or stoppages of lines), unless any such loss is due to Landlord’s willful disregard of written notice by Tenant of need for a repair that
Landlord is responsible to make for an unreasonable period of time, and (b) damage to personal property or scientific research, including loss of records kept by Tenant within the Premises. Tenant further waives any claim for injury to
Tenant’s business or loss of income relating to any such damage or destruction of personal property as described in this Section. Notwithstanding anything in the foregoing or this Lease to the contrary, except (x) as otherwise provided
herein, (y) as may be provided by Applicable Laws or (z) in the event of Tenant’s breach of Article 21 or Section 26.1, in no event shall Landlord or Tenant be liable to the other for any consequential, special or
indirect damages arising out of this Lease. 
 28.3. Landlord shall not be liable for any damages arising from any act, omission or neglect
of any other tenant in the Building or the Project, or of any other third party. 
 28.4. Tenant acknowledges that security devices and
services, if any, while intended to deter crime, may not in given instances prevent theft or other criminal acts. Landlord shall not be liable for injuries or losses caused by criminal acts of third parties, and Tenant assumes the risk that any
security device or service may malfunction or otherwise be circumvented by a criminal. If Tenant desires protection against such criminal acts, then Tenant shall, at Tenant’s sole cost and expense, obtain appropriate insurance coverage. 

28.5. The provisions of this Article shall survive the expiration or earlier termination of this Lease. 

29. Assignment or Subletting. 
 29.1.
Except as hereinafter expressly permitted, Tenant shall not, either voluntarily or by operation of Applicable Laws, directly or indirectly sell, hypothecate, assign, pledge, encumber or otherwise transfer this Lease or sublet the Premises (each, a
“Transfer”), without Landlord’s prior written consent. In no event shall Tenant perform a Transfer to or with an entity that is a tenant at the Project or that is in discussions or negotiations with Landlord or an affiliate of
Landlord to lease premises at the Project or a property owned by Landlord or an affiliate of Landlord. 
 29.2. In the event Tenant desires
to effect a Transfer, then, at least thirty (30) but not more than ninety (90) days prior to the date when Tenant desires the Transfer to be effective (the “Transfer Date”), Tenant shall provide written notice to Landlord
(the “Transfer Notice”) containing information (including references) concerning the character of the proposed transferee, assignee or sublessee; the Transfer Date; the most recent unconsolidated financial statements of Tenant and
of the proposed transferee, assignee or sublessee satisfying the requirements of Section 41.2 (“Required Financials”); any ownership or commercial relationship between Tenant and the proposed transferee, assignee or
sublessee; and the consideration and all other material terms and conditions of the proposed Transfer, all in such detail as Landlord shall reasonably require. 

29.3. Landlord, in determining whether consent should be given to a proposed Transfer, may give consideration to (a) the financial
strength of Tenant and of such transferee, assignee or 

  
 32 

 
sublessee (notwithstanding Tenant remaining liable for Tenant’s performance), (b) any change in use that such transferee, assignee or sublessee proposes to make in the use of the
Premises and (c) Landlord’s desire to exercise its rights under Section 29.8 to cancel this Lease. In no event shall Landlord be deemed to be unreasonable for declining to consent to a Transfer to a transferee, assignee or
sublessee of poor reputation, lacking financial qualifications or seeking a change in the Permitted Use, or jeopardizing directly or indirectly the status of Landlord or any of Landlord’s affiliates as a Real Estate Investment Trust under the
Internal Revenue Code of 1986 (as the same may be amended from time to time, the “Revenue Code”). Notwithstanding anything contained in this Lease to the contrary, (w) no Transfer shall be consummated on any basis such that the
rental or other amounts to be paid by the occupant, assignee, manager or other transferee thereunder would be based, in whole or in part, on the income or profits derived by the business activities of such occupant, assignee, manager or other
transferee; (x) Tenant shall not furnish or render any services to an occupant, assignee, manager or other transferee with respect to whom transfer consideration is required to be paid, or manage or operate the Premises or any capital additions
so transferred, with respect to which transfer consideration is being paid; (y) Tenant shall not consummate a Transfer with any person in which Landlord owns an interest, directly or indirectly (by applying constructive ownership rules set
forth in Section 856(d)(5) of the Revenue Code); and (z) Tenant shall not consummate a Transfer with any person or in any manner that could cause any portion of the amounts received by Landlord pursuant to this Lease or any sublease,
license or other arrangement for the right to use, occupy or possess any portion of the Premises to fail to qualify as “rents from real property” within the meaning of Section 856(d) of the Revenue Code, or any similar or successor
provision thereto or which could cause any other income of Landlord to fail to qualify as income described in Section 856(c)(2) of the Revenue Code. 

29.4. The following are conditions precedent to a Transfer or to Landlord considering a request by Tenant to a Transfer: 

(a) Tenant shall remain fully liable under this Lease during the unexpired Term. Tenant agrees that it shall not be (and shall not be deemed
to be) a guarantor or surety of this Lease, however, and waives its right to claim that is it is a guarantor or surety or to raise in any legal proceeding any guarantor or surety defenses permitted by this Lease or by Applicable Laws; 

(b) If Tenant or the proposed transferee, assignee or sublessee does not or cannot deliver the Required Financials, then Landlord may elect to
have either Tenant’s ultimate parent company or the proposed transferee’s, assignee’s or sublessee’s ultimate parent company provide a guaranty of the applicable entity’s obligations under this Lease, in a form acceptable to
Landlord, which guaranty shall be executed and delivered to Landlord by the applicable guarantor prior to the Transfer Date; 
 (c) In the
case of an Exempt Transfer, Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the Transfer qualifies as an Exempt Transfer; 

(d) Tenant shall provide Landlord with evidence reasonably satisfactory to Landlord that the value of Landlord’s interest under this
Lease shall not be diminished or reduced by the proposed Transfer. Such evidence shall include evidence respecting the relevant business experience and financial responsibility and status of the proposed transferee, assignee or sublessee; 

  
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 (e) Tenant shall reimburse Landlord for Landlord’s actual costs and expenses, including
reasonable attorneys’ fees, charges and disbursements incurred in connection with the review, processing and documentation of such request; 

(f) If Tenant’s transfer of rights or sharing of the Premises provides for the receipt by, on behalf of or on account of Tenant of any
consideration of any kind whatsoever (including a premium rental for a sublease or lump sum payment for an assignment, but excluding Tenant’s reasonable costs in marketing and subleasing the Premises) in excess of the rental and other charges
due to Landlord under this Lease, Tenant shall pay fifty percent (50%) of all of such excess to Landlord, after making deductions for any reasonable marketing expenses, tenant improvement funds expended by Tenant, alterations, cash concessions,
brokerage commissions, attorneys’ fees and free rent actually paid by Tenant. If such consideration consists of cash paid to Tenant, payment to Landlord shall be made upon receipt by Tenant of such cash payment; 

(g) The proposed transferee, assignee or sublessee shall agree that, in the event Landlord gives such proposed transferee, assignee or
sublessee notice that Tenant is in default under this Lease, such proposed transferee, assignee or sublessee shall thereafter make all payments otherwise due Tenant directly to Landlord, which payments shall be received by Landlord without any
liability being incurred by Landlord, except to credit such payment against those due by Tenant under this Lease, and any such proposed transferee, assignee or sublessee shall agree to attorn to Landlord or its successors and assigns should this
Lease be terminated for any reason; provided, however, that in no event shall Landlord or its Lenders, successors or assigns be obligated to accept such attornment; 

(h) Landlord’s consent to any such Transfer shall be effected on Landlord’s forms; 

(i) Tenant shall not then be in default hereunder in any respect; 

(j) Such proposed transferee, assignee or sublessee’s use of the Premises shall be the same as the Permitted Use; 

(k) Landlord shall not be bound by any provision of any agreement pertaining to the Transfer, except for Landlord’s written consent to
the same; 
 (l) Tenant shall pay all transfer and other taxes (including interest and penalties) assessed or payable for any Transfer; 

(m) Landlord’s consent (or waiver of its rights) for any Transfer shall not waive Landlord’s right to consent or refuse consent to
any later Transfer; 
 (n) Tenant shall deliver to Landlord one executed copy of any and all written instruments evidencing or relating to
the Transfer; and 

  
 34 

 (o) Tenant shall deliver to Landlord a list of Hazardous Materials (as defined below), certified
by the proposed transferee, assignee or sublessee to be true and correct, that the proposed transferee, assignee or sublessee intends to use or store in the Premises. Additionally, Tenant shall deliver to Landlord, on or before the date any proposed
transferee, assignee or sublessee takes occupancy of the Premises, all of the items relating to Hazardous Materials of such proposed transferee, assignee or sublessee as described in Section 21.2. 

29.5. Any Transfer that is not in compliance with the provisions of this Article or with respect to which Tenant does not fulfill its
obligations pursuant to this Article shall be void and shall, at the option of Landlord, terminate this Lease. 
 29.6. Notwithstanding any
Transfer, Tenant shall remain fully and primarily liable for the payment of all Rent and other sums due or to become due hereunder, and for the full performance of all other terms, conditions and covenants to be kept and performed by Tenant. The
acceptance of Rent or any other sum due hereunder, or the acceptance of performance of any other term, covenant or condition thereof, from any person or entity other than Tenant shall not be deemed a waiver of any of the provisions of this Lease or
a consent to any Transfer. 
 29.7. If Tenant delivers to Landlord a Transfer Notice indicating a desire to transfer this Lease to a
proposed transferee, assignee or sublessee other than as provided within Section 29.4, then Landlord shall have the option, exercisable by giving notice to Tenant at any time within ten (10) days after Landlord’s receipt of
such Transfer Notice, to terminate this Lease as of the date specified in the Transfer Notice as the Transfer Date, except for those provisions that, by their express terms, survive the expiration or earlier termination hereof. If Landlord exercises
such option, then Tenant shall have the right to withdraw such Transfer Notice by delivering to Landlord written notice of such election within five (5) days after Landlord’s delivery of notice electing to exercise Landlord’s option
to terminate this Lease. In the event Tenant withdraws the Transfer Notice as provided in this Section, this Lease shall continue in full force and effect. No failure of Landlord to exercise its option to terminate this Lease shall be deemed to be
Landlord’s consent to a proposed Transfer. 
 29.8. If Tenant sublets the Premises or any portion thereof, Tenant hereby immediately
and irrevocably assigns to Landlord, as security for Tenant’s obligations under this Lease, all rent from any such subletting, and appoints Landlord as assignee and attorney-in-fact for Tenant, and Landlord (or a receiver for Tenant appointed
on Landlord’s application) may collect such rent and apply it toward Tenant’s obligations under this Lease; provided that, until the occurrence of a Default (as defined below) by Tenant, Tenant shall have the right to collect such
rent. 
 30. Subordination and Attornment. 

30.1. This Lease shall be subject and subordinate to the lien of any mortgage, deed of trust, or lease in which Landlord is tenant now or
hereafter in force against the Building or the Project and to all advances made or hereafter to be made upon the security thereof without the necessity of the execution and delivery of any further instruments on the part of Tenant to effectuate such
subordination. 

  
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 30.2. Notwithstanding the foregoing, Tenant shall execute and deliver upon demand such further
instrument or instruments evidencing such subordination of this Lease to the lien of any such mortgage or mortgages or deeds of trust or lease in which Landlord is tenant as may be required by Landlord. If any such mortgagee, beneficiary or landlord
under a lease wherein Landlord is tenant (each, a “Mortgagee”) so elects, however, this Lease shall be deemed prior in lien to any such lease, mortgage, or deed of trust upon or including the Premises regardless of date and Tenant
shall execute a statement in writing to such effect at Landlord’s request. If Tenant fails to execute any document required from Tenant under this Section within ten (10) days after written request therefor, Tenant hereby constitutes and
appoints Landlord or its special attorney-in-fact to execute and deliver any such document or documents in the name of Tenant. Such power is coupled with an interest and is irrevocable. 

30.3. Upon written request of Landlord and opportunity for Tenant to review, Tenant agrees to execute any Lease amendments not materially
altering the terms of this Lease, if required by a mortgagee or beneficiary of a deed of trust encumbering real property of which the Premises constitute a part incident to the financing of the real property of which the Premises constitute a part.

 30.4. In the event any proceedings are brought for foreclosure, or in the event of the exercise of the power of sale under any mortgage
or deed of trust made by Landlord covering the Premises, Tenant shall at the election of the purchaser at such foreclosure or sale attorn to the purchaser upon any such foreclosure or sale and recognize such purchaser as Landlord under this Lease.

 31. Defaults and Remedies. 
 31.1.
Late payment by Tenant to Landlord of Rent and other sums due shall cause Landlord to incur costs not contemplated by this Lease, the exact amount of which shall be extremely difficult and impracticable to ascertain. Such costs include processing
and accounting charges and late charges that may be imposed on Landlord by the terms of any mortgage or trust deed covering the Premises. Therefore, if any installment of Rent due from Tenant is not received by Landlord within three (3) days
after the date such payment is due, Tenant shall pay to Landlord (a) an additional sum of six percent (6%) of the overdue Rent as a late charge plus (b) interest at an annual rate (the “Default Rate”) equal to the
lesser of (a) twelve percent (12%) and (b) the highest rate permitted by Applicable Laws. The parties agree that this late charge represents a fair and reasonable estimate of the costs that Landlord shall incur by reason of late
payment by Tenant and shall be payable as Additional Rent to Landlord due with the next installment of Rent or within five (5) business days after Landlord’s demand, whichever is earlier. Landlord’s acceptance of any Additional Rent
(including a late charge or any other amount hereunder) shall not be deemed an extension of the date that Rent is due or prevent Landlord from pursuing any other rights or remedies under this Lease, at law or in equity. 

31.2. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent payment herein stipulated shall be deemed to be other than
on account of the Rent, nor shall any endorsement or statement on any check or any letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to recover the balance of such Rent or pursue any other 

  
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remedy provided in this Lease or in equity or at law. If a dispute shall arise as to any amount or sum of money to be paid by Tenant to Landlord hereunder, Tenant shall have the right to make
payment “under protest,” such payment shall not be regarded as a voluntary payment, and there shall survive the right on the part of Tenant to institute suit for recovery of the payment paid under protest. 

31.3. If Tenant fails to pay any sum of money required to be paid by it hereunder or perform any other act on its part to be performed
hereunder, in each case within the applicable cure period (if any) described in Section 31.4, then Landlord may (but shall not be obligated to), without waiving or releasing Tenant from any obligations of Tenant, make such payment or
perform such act; provided that such failure by Tenant unreasonably interfered with the use of the Building or the Project by any other tenant or with the efficient operation of the Building or the Project, or resulted or could have resulted
in a violation of Applicable Laws or the cancellation of an insurance policy maintained by Landlord. Notwithstanding the foregoing, in the event of an emergency, Landlord shall have the right to enter the Premises and act in accordance with its
rights as provided elsewhere in this Lease. In addition to the late charge described in Section 31.1, Tenant shall pay to Landlord as Additional Rent all sums so paid or incurred by Landlord, together with interest at the Default Rate,
computed from the date such sums were paid or incurred. 
 31.4. The occurrence of any one or more of the following events shall constitute
a “Default” hereunder by Tenant: 
 (a) Tenant abandons or vacates the Premises; 

(b) Tenant fails to make any payment of Rent, as and when due, or to satisfy its obligations under Article 19, where such failure shall
continue for a period of three (3) business days after written notice thereof from Landlord to Tenant; 
 (c) Tenant fails to observe
or perform any obligation or covenant contained herein (other than described in Sections 31.4(a) and 31.4(b)) to be performed by Tenant, where such failure continues for a period of ten (10) days after written notice thereof from
Landlord to Tenant; provided that, if the nature of Tenant’s default is such that it reasonably requires more than ten (10) days to cure, Tenant shall not be deemed to be in Default if Tenant commences such cure within such ten
(10) day period and thereafter diligently prosecute the same to completion; and provided, further, that such cure is completed no later than thirty (30) days after Tenant’s receipt of written notice from Landlord; 

(d) Tenant makes an assignment for the benefit of creditors; 

(e) A receiver, trustee or custodian is appointed to or does take title, possession or control of all or substantially all of Tenant’s
assets; 
 (f) Tenant files a voluntary petition under the United States Bankruptcy Code or any successor statute (as the same may be
amended from time to time, the “Bankruptcy Code”) or an order for relief is entered against Tenant pursuant to a voluntary or involuntary proceeding commenced under any chapter of the Bankruptcy Code; 

  
 37 

 (g) Any involuntary petition is filed against Tenant under any chapter of the Bankruptcy Code and
is not dismissed within one hundred twenty (120) days; 
 (h) Tenant fails to deliver an estoppel certificate in accordance with
Article 20; or 
 (i) Tenant’s interest in this Lease is attached, executed upon or otherwise judicially seized and such action
is not released within one hundred twenty (120) days of the action. 
 Notices given under this Section shall specify the alleged
default and shall demand that Tenant perform the provisions of this Lease or pay the Rent that is in arrears, as the case may be, within the applicable period of time, or quit the Premises. No such notice shall be deemed a forfeiture or a
termination of this Lease unless Landlord elects otherwise in such notice. 
 31.5. In the event of a Default by Tenant, and at any time
thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or remedy that Landlord may have, Landlord has the right to do any or all of the following: 

(a) Halt any Tenant Improvements and Alterations and order Tenant’s contractors, subcontractors, consultants, designers and material
suppliers to stop work; 
 (b) Terminate Tenant’s right to possession of the Premises by written notice to Tenant or by any lawful
means, in which case Tenant shall immediately surrender possession of the Premises to Landlord. In such event, Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a
public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby;
and 
 (c) Terminate this Lease, in which event Tenant shall immediately surrender possession of the Premises to Landlord. In such event,
Landlord shall have the immediate right to re-enter and remove all persons and property, and such property may be removed and stored in a public warehouse or elsewhere at the cost and for the account of Tenant, all without service of notice or
resort to legal process and without being deemed guilty of trespass or becoming liable for any loss or damage that may be occasioned thereby. In the event that Landlord shall elect to so terminate this Lease, then Landlord shall be entitled to
recover from Tenant all damages incurred by Landlord by reason of Tenant’s default, including: 
 (i) The sum of: 

A. The worth at the time of award of any unpaid Rent that had accrued at the time of such termination; plus 

B. The worth at the time of award of the amount by which the unpaid Rent that would have accrued during the period commencing with
termination of the Lease and ending at the time of award exceeds that portion of the loss of Landlord’s rental income from the Premises that Tenant proves to Landlord’s reasonable satisfaction could have been reasonably avoided; plus 

  
 38 

 C. The worth at the time of award of the amount by which the unpaid Rent for the balance of the
Term after the time of award exceeds that portion of the loss of Landlord’s rental income from the Premises that Tenant proves to Landlord’s reasonable satisfaction could have been reasonably avoided; plus 

D. Any other amount necessary to compensate Landlord for all the detriment caused by Tenant’s failure to perform its obligations under
this Lease or that in the ordinary course of things would be likely to result therefrom, including the cost of restoring the Premises to the condition required under the terms of this Lease, including any rent payments not otherwise chargeable to
Tenant (e.g., during any “free” rent period or rent holiday); plus 
 E. At Landlord’s election, such other amounts in
addition to or in lieu of the foregoing as may be permitted from time to time by Applicable Laws; or 
 (ii) At Landlord’s election,
as minimum liquidated damages in addition to any (A) amounts paid or payable to Landlord pursuant to Section 31.5(c)(i)(A) prior to such election and (B) costs of restoring the Premises to the condition required under the terms
of this Lease, an amount (the “Election Amount”) equal to either (Y) the positive difference (if any, and measured at the time of such termination) between (1) the then-present value of the total Rent and other benefits
that would have accrued to Landlord under this Lease for the remainder of the Term if Tenant had fully complied with the Lease minus (2) the then-present cash rental value of the Premises as determined by Landlord for what would be the
then-unexpired Term if the Lease remained in effect, computed using the discount rate of the Federal Reserve Bank of San Francisco at the time of the award plus one (1) percentage point (the “Discount Rate”) or (Z) twelve
(12) months (or such lesser number of months as may then be remaining in the Term) of Base Rent and Additional Rent at the rate last payable by Tenant pursuant to this Lease, in either case as Landlord specifies in such election. Landlord and
Tenant agree that the Election Amount represents a reasonable forecast of the minimum damages expected to occur in the event of a breach, taking into account the uncertainty, time and cost of determining elements relevant to actual damages, such as
fair market rent, time and costs that may be required to re-lease the Premises, and other factors; and that the Election Amount is not a penalty. 
 As used
in Sections 31.5(c)(i)(A) and (B), “worth at the time of award” shall be computed by allowing interest at the Default Rate. As used in Section 31.5(c)(i)(C), the “worth at the time of the award” shall be
computed by taking the present value of such amount, using the Discount Rate. 

  
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 31.6. In addition to any other remedies available to Landlord at law or in equity and under this
Lease, Landlord shall have the remedy described in California Civil Code Section 1951.4 and may continue this Lease in effect after Tenant’s Default and abandonment and recover Rent as it becomes due, provided Tenant has the right
to sublet or assign, subject only to reasonable limitations. In addition, Landlord shall not be liable in any way whatsoever for its failure or refusal to relet the Premises. For purposes of this Section, the following acts by Landlord will not
constitute the termination of Tenant’s right to possession of the Premises: 
 (a) Acts of maintenance or preservation or efforts to
relet the Premises, including alterations, remodeling, redecorating, repairs, replacements or painting as Landlord shall consider advisable for the purpose of reletting the Premises or any part thereof; or 

(b) The appointment of a receiver upon the initiative of Landlord to protect Landlord’s interest under this Lease or in the Premises.

 Notwithstanding the foregoing, in the event of a Default by Tenant, Landlord may elect at any time to terminate this Lease and to recover damages to
which Landlord is entitled. 
 31.7. If Landlord does not elect to terminate this Lease as provided in Section 31.5, then
Landlord may, from time to time, recover all Rent as it becomes due under this Lease. At any time thereafter, Landlord may elect to terminate this Lease and to recover damages to which Landlord is entitled. 

31.8. In the event Landlord elects to terminate this Lease and relet the Premises, Landlord may execute any new lease in its own name. Tenant
hereunder shall have no right or authority whatsoever to collect any Rent from such tenant. The proceeds of any such reletting shall be applied as follows: 

(a) First, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord, including storage charges or brokerage
commissions owing from Tenant to Landlord as the result of such reletting; 
 (b) Second, to the payment of the costs and expenses of
reletting the Premises, including (i) alterations and repairs that Landlord deems reasonably necessary and advisable and (ii) reasonable attorneys’ fees, charges and disbursements incurred by Landlord in connection with the retaking
of the Premises and such reletting; 
 (c) Third, to the payment of Rent and other charges due and unpaid hereunder; and 

(d) Fourth, to the payment of future Rent and other damages payable by Tenant under this Lease. 

31.9. All of Landlord’s rights, options and remedies hereunder shall be construed and held to be nonexclusive and cumulative. Landlord
shall have the right to pursue any one or all of such remedies, or any other remedy or relief that may be provided by Applicable Laws, whether or not stated in this Lease. No waiver of any default of Tenant hereunder shall be implied from any
acceptance by Landlord of any Rent or other payments due hereunder or any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect defaults other than as specified
in such waiver. Notwithstanding any provision of this Lease to the contrary, in no event shall Landlord be required to mitigate its damages with respect to any default by Tenant. Any obligation imposed by Applicable Law upon Landlord to relet the
Premises after any termination of this Lease shall be subject to the reasonable requirements of Landlord to (a) lease to high quality tenants on such terms as Landlord may from time to time deem appropriate in its discretion and
(b) develop the Project in a harmonious manner with a mix of uses, tenants, floor areas, terms of tenancies, etc., as 

  
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determined by Landlord. Landlord shall not be obligated to relet the Premises to any party to whom Landlord or an affiliate of Landlord may desire to lease other available space in the Project or
at another property owned by Landlord or an affiliate of Landlord. 
 31.10. Landlord’s termination of (a) this Lease or
(b) Tenant’s right to possession of the Premises shall not relieve Tenant of any liability to Landlord that has previously accrued or that shall arise based upon events that occurred prior to the later to occur of (y) the date of
Lease termination and (z) the date Tenant surrenders possession of the Premises. 
 31.11. To the extent permitted by Applicable Laws,
Tenant waives any and all rights of redemption granted by or under any present or future Applicable Laws if Tenant is evicted or dispossessed for any cause, or if Landlord obtains possession of the Premises due to Tenant’s default hereunder or
otherwise. 
 31.12. Landlord shall not be in default or liable for damages under this Lease unless Landlord fails to perform obligations
required of Landlord within a reasonable time, but in no event shall such failure continue for more than thirty (30) days after written notice from Tenant specifying the nature of Landlord’s failure; provided, however, that if the
nature of Landlord’s obligation is such that more than thirty (30) days are required for its performance, then Landlord shall not be in default if Landlord commences performance within such thirty (30) day period and thereafter
diligently prosecutes the same to completion. In no event shall Tenant have the right to terminate or cancel this Lease or to withhold or abate rent or to set off any Claims against Rent as a result of any default or breach by Landlord of any of its
covenants, obligations, representations, warranties or promises hereunder, except as may otherwise be expressly set forth in this Lease. 

31.13. In the event of any default by Landlord, Tenant shall give notice by registered or certified mail to any (a) beneficiary of a deed
of trust or (b) mortgagee under a mortgage covering the Premises, the Building or the Project and to any landlord of any lease of land upon or within which the Premises, the Building or the Project is located, and shall offer such beneficiary,
mortgagee or landlord a reasonable opportunity to cure the default, including time to obtain possession of the Building or the Project by power of sale or a judicial action if such should prove necessary to effect a cure; provided that
Landlord shall furnish to Tenant in writing, upon written request by Tenant, the names and addresses of all such persons who are to receive such notices. 

32. Bankruptcy. In the event a debtor, trustee or debtor in possession under the Bankruptcy Code, or another person with similar rights, duties and
powers under any other Applicable Laws, proposes to cure any default under this Lease or to assume or assign this Lease and is obliged to provide adequate assurance to Landlord that (a) a default shall be cured, (b) Landlord shall be
compensated for its damages arising from any breach of this Lease and (c) future performance of Tenant’s obligations under this Lease shall occur, then such adequate assurances shall include any or all of the following, as designated by
Landlord in its sole and absolute discretion: 
 32.1. Those acts specified in the Bankruptcy Code or other Applicable Laws as included
within the meaning of “adequate assurance,” even if this Lease does not concern a shopping center or other facility described in such Applicable Laws; 

  
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 32.2. A prompt cash payment to compensate Landlord for any monetary defaults or actual damages
arising directly from a breach of this Lease; 
 32.3. A cash deposit in an amount at least equal to the then-current amount of the Security
Deposit; or 
 32.4. The assumption or assignment of all of Tenant’s interest and obligations under this Lease. 

33. Brokers. 
 33.1. Tenant represents
and warrants that it has had no dealings with any real estate broker or agent in connection with the negotiation of this Lease other than CBRE (“Broker”), and that it knows of no other real estate broker or agent that is or might be
entitled to a commission in connection with this Lease. Landlord shall compensate Broker in full in relation to this Lease pursuant to a separate agreement between Landlord and Broker. 

33.2. Tenant represents and warrants that no broker or agent has made any representation or warranty relied upon by Tenant in Tenant’s
decision to enter into this Lease, other than as contained in this Lease. 
 33.3. Tenant acknowledges and agrees that the employment of
brokers by Landlord is for the purpose of solicitation of offers of leases from prospective tenants and that no authority is granted to any broker to furnish any representation (written or oral) or warranty from Landlord unless expressly contained
within this Lease. Landlord is executing this Lease in reliance upon Tenant’s representations, warranties and agreements contained within Sections 33.1 and 33.2. 

33.4. Tenant agrees to indemnify, save, defend (at Landlord’s option and with counsel reasonably acceptable to Landlord) and hold the
Landlord Indemnitees harmless from any and all cost or liability for compensation claimed by any broker or agent, other than Broker, employed or engaged by Tenant or claiming to have been employed or engaged by Tenant. 

34. Definition of Landlord. With regard to obligations imposed upon Landlord pursuant to this Lease, the term “Landlord,” as used in
this Lease, shall refer only to Landlord or Landlord’s then-current successor-in-interest. In the event of any transfer, assignment or conveyance of Landlord’s interest in this Lease or in Landlord’s fee title to or leasehold interest
in the Property, as applicable, Landlord herein named (and in case of any subsequent transfers or conveyances, the subsequent Landlord) shall be automatically freed and relieved, from and after the date of such transfer, assignment or conveyance,
from all liability for the performance of any covenants or obligations contained in this Lease thereafter to be performed by Landlord and, without further agreement, the transferee, assignee or conveyee of Landlord’s in this Lease or in
Landlord’s fee title to or leasehold interest in the Property, as applicable, shall be deemed to have assumed and agreed to observe and perform any and all covenants and obligations of Landlord hereunder during the tenure of its interest in the
Lease or the Property. Landlord or any subsequent Landlord may transfer its interest in the Premises or this Lease without Tenant’s consent. 

  
 42 

 35. Limitation of Landlord’s Liability. 

35.1. If Landlord is in default under this Lease and, as a consequence, Tenant recovers a monetary judgment against Landlord, the judgment
shall be satisfied only out of (a) the proceeds of sale received on execution of the judgment and levy against the right, title and interest of Landlord in the Building and the Project, (b) rent or other income from such real property
receivable by Landlord or (c) the consideration received by Landlord from the sale, financing, refinancing or other disposition of all or any part of Landlord’s right, title or interest in the Building or the Project. 

35.2. Landlord shall not be personally liable for any deficiency under this Lease. If Landlord is a partnership or joint venture, then the
partners of such partnership shall not be personally liable for Landlord’s obligations under this Lease, and no partner of Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any
partner of Landlord except as may be necessary to secure jurisdiction of the partnership or joint venture. If Landlord is a corporation, then the shareholders, directors, officers, employees and agents of such corporation shall not be personally
liable for Landlord’s obligations under this Lease, and no shareholder, director, officer, employee or agent of Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any shareholder,
director, officer, employee or agent of Landlord. If Landlord is a limited liability company, then the members of such limited liability company shall not be personally liable for Landlord’s obligations under this Lease, and no member of
Landlord shall be sued or named as a party in any suit or action, and service of process shall not be made against any member of Landlord except as may be necessary to secure jurisdiction of the limited liability company. No partner, shareholder,
director, employee, member or agent of Landlord shall be required to answer or otherwise plead to any service of process, and no judgment shall be taken or writ of execution levied against any partner, shareholder, director, employee, member or
agent of Landlord. 
 35.3. Each of the covenants and agreements of this Article shall be applicable to any covenant or agreement either
expressly contained in this Lease or imposed by Applicable Laws and shall survive the expiration or earlier termination of this Lease. 
 36. Joint and
Several Obligations. If more than one person or entity executes this Lease as Tenant, then: 
 36.1. Each of them is jointly and
severally liable for the keeping, observing and performing of all of the terms, covenants, conditions, provisions and agreements of this Lease to be kept, observed or performed by Tenant; and 

36.2. The term “Tenant,” as used in this Lease shall mean and include each of them, jointly and severally. The act of, notice
from, notice to, refund to, or signature of any one or more of them with respect to the tenancy under this Lease, including any renewal, extension, expiration, termination or modification of this Lease, shall be binding upon each and all of the
persons executing this Lease as Tenant with the same force and effect as if each and all of them had so acted, so given or received such notice or refund, or so signed. 

  
 43 

 37. Representations. Tenant guarantees, warrants and represents that (a) Tenant is duly incorporated
or otherwise established or formed and validly existing under the laws of its state of incorporation, establishment or formation, (b) Tenant has and is duly qualified to do business in the state in which the Property is located, (c) Tenant
has full corporate, partnership, trust, association or other appropriate power and authority to enter into this Lease and to perform all Tenant’s obligations hereunder, (d) each person (and all of the persons if more than one signs)
signing this Lease on behalf of Tenant is duly and validly authorized to do so and (e) neither (i) the execution, delivery or performance of this Lease nor (ii) the consummation of the transactions contemplated hereby will violate or
conflict with any provision of documents or instruments under which Tenant is constituted or to which Tenant is a party. In addition, Tenant guarantees, warrants and represents that none of (x) it, (y) its affiliates or partners nor
(z) to the best of its knowledge, its members, shareholders or other equity owners or any of their respective employees, officers, directors, representatives or agents is a person or entity with whom U.S. persons or entities are restricted from
doing business under regulations of the Office of Foreign Asset Control (“OFAC”) of the Department of the Treasury (including those named on OFAC’s Specially Designated and Blocked Persons List) or under any statute, executive
order (including the September 24, 2001, Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism) or other similar governmental action. 

38. Confidentiality. Tenant shall keep the terms and conditions of this Lease and any information provided to Tenant or its employees, agents or
contractors pursuant to Article 9 confidential and shall not (a) disclose to any third party any terms or conditions of this Lease or any other Lease-related document (including subleases, assignments, work letters, construction
contracts, letters of credit, subordination agreements, non-disturbance agreements, brokerage agreements or estoppels) or (b) provide to any third party an original or copy of this Lease (or any Lease-related document). Landlord shall not
release to any third party any non-public financial information or non-public information about Tenant’s ownership structure that Tenant gives Landlord. Notwithstanding the foregoing, confidential information under this Section may be released
by Landlord or Tenant under the following circumstances: (x) if required by Applicable Laws or in any judicial proceeding; provided that the releasing party has given the other party reasonable notice of such requirement, if feasible,
(y) to a party’s attorneys, accountants, brokers and other bona fide consultants or advisers (with respect to this Lease only); provided such third parties agree to be bound by this Section or (z) to bona fide prospective
assignees or subtenants of this Lease; provided they agree in writing to be bound by this Section. Notwithstanding anything to the contrary in this section, Landlord agrees that the terms and conditions of this Lease may be disclosed by
Tenant pursuant to any filing obligations of Tenant with the Securities and Exchange Commission, as set forth in the Securities Exchange Act of 1934, as amended. 

39. Notices. Any notice, consent, demand, invoice, statement or other communication required or permitted to be given hereunder shall be in writing and
shall be given by personal delivery or by overnight delivery with a reputable nationwide overnight delivery service. If given by personal delivery, any such notice, consent, demand, invoice, statement or other communication shall be deemed delivered
upon receipt; if given by overnight delivery, shall be deemed delivered one business (1) day after deposit with a reputable nationwide overnight delivery service. Any notices given pursuant to this Lease shall be addressed to Tenant at the

  
 44 

 
Premises, or to Landlord or Tenant at the addresses shown in Sections 2.9 and 2.10 or 2.11, respectively. Either party may, by notice to the other given pursuant to this
Section, specify additional or different addresses for notice purposes. 
 40. [Intentionally omitted]. 

41. Miscellaneous. 
 41.1. Landlord
reserves the right to change the name of the Building or the Project in its sole discretion. 
 41.2. To induce Landlord to enter into this
Lease, Tenant agrees that it shall promptly furnish to Landlord, from time to time, upon Landlord’s written request, the most recent year-end unconsolidated financial statements reflecting Tenant’s current financial condition audited by a
nationally recognized accounting firm. Tenant shall, within ninety (90) days after the end of Tenant’s financial year, furnish Landlord with a certified copy of Tenant’s year-end unconsolidated financial statements for the previous
year audited by a nationally recognized accounting firm. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in all
respects. If audited financials are not otherwise prepared, unaudited financials complying with generally accepted accounting principles and certified by the chief financial officer of Tenant as true, correct and complete in all respects shall
suffice for purposes of this Section. 
 41.3. Where applicable in this Lease, the singular includes the plural and the masculine or neuter
includes the masculine, feminine and neuter. The words “include,” “includes,” “included” and “including” shall mean “‘include,’ etc., without limitation.” The section headings of this Lease
are not a part of this Lease and shall have no effect upon the construction or interpretation of any part hereof. 
 41.4. If either party
commences a demand, claim, action, cause of action or suit against the other party arising out of or in connection with this Lease, then the substantially prevailing party shall be reimbursed by the other party for all reasonable costs and expenses,
including reasonable attorneys’ fees and expenses, incurred by the substantially prevailing party in such action or proceeding and in any appeal in connection therewith (regardless of whether the applicable demand, claim, action, cause of
action or suit is voluntarily withdrawn or dismissed). 
 41.5. Submission of this instrument for examination or signature by Tenant does
not constitute a reservation of or option for a lease, and shall not be effective as a lease or otherwise until execution by and delivery to both Landlord and Tenant. 

41.6. Time is of the essence with respect to the performance of every provision of this Lease in which time of performance is a factor. 

41.7. Notwithstanding anything to the contrary contained in this Lease, Tenant’s obligations under this Lease are independent and shall
not be conditioned upon performance by Landlord. 

  
 45 

 41.8. Whenever consent or approval of either party is required, that party shall not unreasonably
withhold such consent or approval, except as may be expressly set forth to the contrary. 
 41.9. The terms of this Lease are intended by
the parties as a final expression of their agreement with respect to the terms as are included herein, and may not be contradicted by evidence of any prior or contemporaneous agreement. 

41.10. Any provision of this Lease that shall prove to be invalid, void or illegal shall in no way affect, impair or invalidate any other
provision hereof, and all other provisions of this Lease shall remain in full force and effect and shall be interpreted as if the invalid, void or illegal provision did not exist. 

41.11. Landlord may, but shall not be obligated to, record a short form or memorandum hereof without Tenant’s consent. Within ten
(10) days after receipt of written request from Landlord, Tenant shall execute a termination of any short form or memorandum of lease recorded with respect hereto. Tenant shall be responsible for the cost of recording any short form or
memorandum of this Lease, including any transfer or other taxes incurred in connection with such recordation. Neither party shall record this Lease. 

41.12. The language in all parts of this Lease shall be in all cases construed as a whole according to its fair meaning and not strictly for
or against either Landlord or Tenant. 
 41.13. Each of the covenants, conditions and agreements herein contained shall inure to the benefit
of and shall apply to and be binding upon the parties hereto and their respective heirs; legatees; devisees; executors; administrators; and permitted successors, assigns, sublessees. Nothing in this Section shall in any way alter the provisions of
this Lease restricting assignment or subletting. 
 41.14. This Lease shall be governed by, construed and enforced in accordance with the
laws of the state in which the Premises are located, without regard to such state’s conflict of law principles. 
 41.15. Tenant
guarantees, warrants and represents that the individual or individuals signing this Lease have the power, authority and legal capacity to sign this Lease on behalf of and to bind all entities, corporations, partnerships, limited liability companies,
joint venturers or other organizations and entities on whose behalf such individual or individuals have signed. 
 41.16. This Lease may be
executed in one or more counterparts, each of which, when taken together, shall constitute one and the same document. 
 41.17. No provision
of this Lease may be modified, amended or supplemented except by an agreement in writing signed by Landlord and Tenant. The waiver by Landlord of any breach by Tenant of any term, covenant or condition herein contained shall not be deemed to be a
waiver of any subsequent breach of the same or any other term, covenant or condition herein contained. 

  
 46 

 41.18. To the extent permitted by Applicable Laws, the parties waive trial by jury in any action,
proceeding or counterclaim brought by the other party hereto related to matters arising out of or in any way connected with this Lease; the relationship between Landlord and Tenant; Tenant’s use or occupancy of the Premises; or any claim of
injury or damage related to this Lease or the Premises. 
 42. Option to Extend Term. Tenant shall have the option (“Option”) to
extend the Term by three (3) years as to the entire Premises (and no less than the entire Premises) upon the following terms and conditions. Any extension of the Term pursuant to the Option shall be on all the same terms and conditions as this
Lease, except as follows: 
 42.1. Base Rent at the commencement of the Option term shall equal the greater of (a) one hundred three
percent (103%) of the then-current Base Rent and (b) the then-current fair market value for comparable office space in the Alameda County submarket of comparable age, quality, level of finish and proximity to amenities and public transit
(“FMV”), and shall be further increased on each annual anniversary of the Option term commencement date by three percent (3%). Tenant may, no more than eighteen (18) months prior to the date the Term is then scheduled to
expire, request Landlord’s estimate of the FMV for the Option term. Landlord shall, within fifteen (15) days after receipt of such request, give Tenant a written proposal of such FMV. If Tenant gives written notice to exercise the Option,
such notice shall specify whether Tenant accepts Landlord’s proposed estimate of FMV. If Tenant does not accept the FMV, then the parties shall endeavor to agree upon the FMV, taking into account all relevant factors, including (v) the
size of the Premises, (w) the length of the Option term, (x) rent in comparable buildings in the relevant submarket, including concessions offered to new tenants, such as free rent, tenant improvement allowances and moving allowances,
(y) Tenant’s creditworthiness and (z) the quality and location of the Building and the Project. In the event that the parties are unable to agree upon the FMV within thirty (30) days after Tenant notifies Landlord that Tenant is
exercising the Option, then either party may request that the same be determined as follows: a senior officer of a nationally recognized leasing brokerage firm with local knowledge of the Alameda County office leasing submarket (the
“Baseball Arbitrator”) shall be selected and paid for jointly by Landlord and Tenant. If Landlord and Tenant are unable to agree upon the Baseball Arbitrator, then the same shall be designated by the local chapter of the American
Arbitration Association or any successor organization thereto (the “AAA”). The Baseball Arbitrator selected by the parties or designated by the AAA shall (y) have at least ten (10) years’ experience in the leasing of
office space in the Alameda County submarket and (z) not have been employed or retained by either Landlord or Tenant or any affiliate of either for a period of at least ten (10) years prior to appointment pursuant hereto. Each of Landlord
and Tenant shall submit to the Baseball Arbitrator and to the other party its determination of the FMV. The Baseball Arbitrator shall grant to Landlord and Tenant a hearing and the right to submit evidence. The Baseball Arbitrator shall determine
which of the two (2) FMV determinations more closely represents the actual FMV. The arbitrator may not select any other FMV for the Premises other than one submitted by Landlord or Tenant. The FMV selected by the Baseball Arbitrator shall be
binding upon Landlord and Tenant and shall serve as the basis for determination of Base Rent payable for the Option term. If, as of the commencement date of the Option term, the amount of Base Rent payable during the Option term shall not have been
determined, then, pending such determination, Tenant shall pay Base Rent equal to the Base Rent payable with respect to the last year of the then-current Term. After the final determination 

  
 47 

 
of Base Rent payable for the Option term, the parties shall promptly execute a written amendment to this Lease specifying the amount of Base Rent to be paid during the Option term. Any failure of
the parties to execute such amendment shall not affect the validity of the FMV determined pursuant to this Section. 
 42.2. The Option is
not assignable separate and apart from this Lease. 
 42.3. The Option is conditional upon Tenant giving Landlord written notice of its
election to exercise the Option at least twelve (12) months prior to the end of the expiration of the then-current Term. Time shall be of the essence as to Tenant’s exercise of the Option. Tenant assumes full responsibility for maintaining
a record of the deadlines to exercise the Option. Tenant acknowledges that it would be inequitable to require Landlord to accept any exercise of the Option after the date provided for in this Section. 

42.4. Notwithstanding anything contained in this Article to the contrary, Tenant shall not have the right to exercise the Option: 

(a) During the time commencing from the date Landlord delivers to Tenant a written notice that Tenant is in default under any provisions of
this Lease and continuing until Tenant has cured the specified default to Landlord’s reasonable satisfaction; or 
 (b) At any time
after any Default as described in Article 31 of the Lease (provided, however, that, for purposes of this Section 42.4(b), Landlord shall not be required to provide Tenant with notice of such Default) and continuing until
Tenant cures any such Default, if such Default is susceptible to being cured; or 
 (c) In the event that Tenant has defaulted in the
performance of its obligations under this Lease two (2) or more times and a service or late charge has become payable under Section 31.1 for each of such defaults during the twelve (12)-month period immediately prior to the date
that Tenant intends to exercise the Option, whether or not Tenant has cured such defaults. 
 42.5. The period of time within which Tenant
may exercise the Option shall not be extended or enlarged by reason of Tenant’s inability to exercise such Option because of the provisions of Section 42.4. 

42.6. All of Tenant’s rights under the provisions of the Option shall terminate and be of no further force or effect even after
Tenant’s due and timely exercise of the Option if, after such exercise, but prior to the commencement date of the new term, (a) Tenant fails to pay to Landlord a monetary obligation of Tenant for a period of twenty (20) days after
written notice from Landlord to Tenant, (b) Tenant fails to commence to cure a default (other than a monetary default) within thirty (30) days after the date Landlord gives notice to Tenant of such default or (c) Tenant has defaulted
under this Lease two (2) or more times and a service or late charge under Section 31.1 has become payable for any such default, whether or not Tenant has cured such defaults. 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

  
 48 

 IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the date first above
written. 
  

			
	LANDLORD:
	
	 BMR-PACIFIC RESEARCH CENTER LP,
 a
Delaware limited partnership

		
	By:	 	 /s/ Kevin M. Simonsen

	Name:	 	 Kevin M. Simonsen

	Title:	 	 V.P., Real Estate Legal

	
	TENANT:
	
	 CYMABAY THERAPEUTICS, INC.,
 a
Delaware corporation

		
	By:	 	 /s/ Harold Van Wart

	Name:	 	 Harold Van Wart

	Title:	 	 President and C.E.O.

 EXHIBIT A 

PREMISES 

  
 A-1 

 

 
  

 EXHIBIT B 

TENANT IMPROVEMENTS 

  
 B-1 

 CymaBay Exhibit 
  

	 	•	 	Storefront glass on full front entry wall, wood double door with full glass vision lite 

  

	 	•	 	Storefront glass on all offices, full width, no vertical mullions, wood doors 

  

	 	•	 	Gypsum ceiling in lobby; drop ceiling in rest of suite 

  

	 	•	 	Meeting Room 

  

	 	•	 	Glass wall with glass seams(no vertical aluminum frame), full width glass, no mullions, wood door 

  

	 	•	 	Provide at the wall power and rough-in, ring and string for tel/data/AV, actual tel/data/av cabling and AV equipment by Tenant. 

  

	 	•	 	Provide at the floor below the table, power and rough-in, ring and string for tel/data/AV, actual tel/data/av cabling and integration with furniture by Tenant. 

 

	 	•	 	Board Room 

  

	 	•	 	Will remove jog in wall and align to column 

  

	 	•	 	Provide at the wall power and rough-in, ring and string for tel/data/AV, actual tel/data/av cabling and AV equipment by Tenant. 

  

	 	•	 	Provide at the floor below the table, power and rough-in, ring and string for tel/data/AV, actual tel/data/av cabling and integration with furniture by Tenant. 

 

	 	•	 	Secure File Room 

  

	 	•	 	BMR will provide (1) 2-hour rated room in a location to be determined in lieu of (1) office, the glazing shown on the plan at that location will be eliminated. 

 

	 	•	 	Lobby 

  

	 	•	 	Floor hardwood – BMR will provide (3) options for Tenant to select from. Tenant shall make selection within 1 business day. 

 

	 	•	 	Decorative rock or wood accent wall behind receptionist – BMR will provide (3) options for Tenant to select from. Tenant shall make selection within 1 business day. 

 

	 	•	 	Spot lighting to logo 

  

	 	•	 	All office 

  

	 	•	 	Double drop electrical, phone and computer on opposite walls 

 

 
  

 EXHIBIT C 

ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE 

AND TERM EXPIRATION DATE 

THIS ACKNOWLEDGEMENT OF TERM COMMENCEMENT DATE AND TERM EXPIRATION DATE is entered into as of
[                ], 20[    ], with reference to that certain Lease (the “Lease”) dated as of
[                ], 20[    ], by CYMABAY THERAPEUTICS, INC., a Delaware corporation (“Tenant”), in favor of BMR-PACIFIC RESEARCH
CENTER LP, a Delaware limited partnership (“Landlord”). All capitalized terms used herein without definition shall have the meanings ascribed to them in the Lease. 

Tenant hereby confirms the following: 

1. Tenant accepted possession of the Premises for use in accordance with the Permitted Use on
[            ], 20[    ]. Tenant first occupied the Premises for the Permitted Use on
[                ], 20[    ]. 
 2. The
Premises are in good order, condition and repair. 
 3. The Tenant Improvements are Substantially Complete. 

4. All conditions of the Lease to be performed by Landlord as a condition to the full effectiveness of the Lease have been satisfied, and
Landlord has fulfilled all of its duties in the nature of inducements offered to Tenant to lease the Premises. 
 5. In accordance with the
provisions of Article 4 of the Lease, the Term Commencement Date is [                ], 20[    ], and, unless the Lease is terminated prior to
the Term Expiration Date pursuant to its terms, the Term Expiration Date shall be [                ], 20[    ]. 

6. The Lease is in full force and effect, and the same represents the entire agreement between Landlord and Tenant concerning the Premises[,
except [                        ]]. 

7. Tenant has no existing defenses against the enforcement of the Lease by Landlord, and there exist no offsets or credits against Rent owed
or to be owed by Tenant. 

  
 C-1 

 8. The obligation to pay Rent is presently in effect and all Rent obligations on the part of
Tenant under the Lease commenced to accrue on [                ], 20[    ], with Base Rent payable on the dates and amounts set forth in the chart
below: 
  

																	
	 Dates
	  	Square Feet
of Rentable
Area*	 	  	Base Rent per Square
Foot of Rentable Area	 	  	Monthly
Base Rent*	 	  	Annual Base
Rent*	 
	 Months 1 - 12
	  	 	8,894	  	  	$	1.90 monthly	  	  	$	16,898.60	  	  	$	202,783.20	  
	 Months 13 - 24
	  	 	8,894	  	  	$	1.96 monthly	  	  	$	17,432.24	  	  	$	209,186.88	  
	 Months 25 - 36
	  	 	8,894	  	  	$	2.02 monthly	  	  	$	17,965.88	  	  	$	215,590.56	  
	 Months 37 - 48
	  	 	8,894	  	  	$	2.08 monthly	  	  	$	18,499.52	  	  	$	221,994.24	  
	 Months 49 - 60
	  	 	8,894	  	  	$	2.14 monthly	  	  	$	19,033.16	  	  	$	228,397.92	  

  

	* Note:	Subject to adjustment based upon the Rentable Area of the Premises as of the Term Commencement Date. 

9. The undersigned Tenant has not made any prior assignment, transfer, hypothecation or pledge of the Lease or of the rents thereunder or
sublease of the Premises or any portion thereof. 
 [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK] 

  
 C-2 

 IN WITNESS WHEREOF, Tenant has executed this Acknowledgment of Term Commencement Date and Term
Expiration Date as of the date first written above. 
 TENANT: 
  

			
	CYMABAY THERAPEUTICS, INC.,
	a Delaware corporation
		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 C-3 

 EXHIBIT D 

[Intentionally omitted] 

  
 D-1 

 EXHIBIT E 

FORM OF LETTER OF CREDIT 

[On letterhead or L/C letterhead of Issuer.] 

LETTER OF CREDIT 
 Date:
                , 20     
  

					
	  
	 	(the “Beneficiary”)
	  
	 	
	  
	 	
	Attention:	 	  
	 	
	L/C. No.:	 	  
	 	
	Loan No.:	 	  
	 	

 Ladies and Gentlemen: 

We establish in favor of Beneficiary our irrevocable and unconditional Letter of Credit numbered as identified above (the
“L/C”) for an aggregate amount of $            , expiring at     :00 p.m. on
                     or, if such day is not a Banking Day, then the next succeeding Banking Day (such date, as extended from time to time, the
“Expiry Date”). “Banking Day” means a weekday except a weekday when commercial banks in
                             are authorized or required to close. 

We authorize Beneficiary to draw on us (the “Issuer”) for the account of
                             (the “Account Party”), under the terms and conditions of this
L/C. 
 Funds under this L/C are available by presenting the following documentation (the “Drawing Documentation”):
(a) the original L/C and (b) a sight draft substantially in the form of Attachment 1, with blanks filled in and bracketed items provided as appropriate. No other evidence of authority, certificate, or documentation is required. 

Drawing Documentation must be presented at Issuer’s office at
                             on or before the Expiry Date by personal presentation, courier or messenger
service, or fax. Presentation by fax shall be effective upon electronic confirmation of transmission as evidenced by a printed report from the sender’s fax machine. After any fax presentation, but not as a condition to its effectiveness,
Beneficiary shall with reasonable promptness deliver the original Drawing Documentation by any other means. Issuer will on request issue a receipt for Drawing Documentation. 

We agree, irrevocably, and irrespective of any claim by any other person, to honor drafts drawn under and in conformity with this L/C, within
the maximum amount of this L/C, presented to us on or before the Expiry Date, provided we also receive (on or before the Expiry Date) any other Drawing Documentation this L/C requires. 

  
 E-1 

 We shall pay this L/C only from our own funds by check or wire transfer, in compliance with the
Drawing Documentation. 
 If Beneficiary presents proper Drawing Documentation to us on or before the Expiry Date, then we shall pay under
this L/C at or before the following time (the “Payment Deadline”): (a) if presentment is made at or before noon of any Banking Day, then the close of such Banking Day; and (b) otherwise, the close of the next Banking Day.
We waive any right to delay payment beyond the Payment Deadline. If we determine that Drawing Documentation is not proper, then we shall so advise Beneficiary in writing, specifying all grounds for our determination, within one Banking Day after the
Payment Deadline. 
 Partial drawings are permitted. This L/C shall, except to the extent reduced thereby, survive any partial drawings.

 We shall have no duty or right to inquire into the validity of or basis for any draw under this L/C or any Drawing Documentation. We
waive any defense based on fraud or any claim of fraud. 
 The Expiry Date shall automatically be extended by one year (but never beyond
                     (the “Outside Date”)) unless, on or before the date 90 days before any Expiry Date, we have given Beneficiary
notice that the Expiry Date shall not be so extended (a “Nonrenewal Notice”). We shall promptly upon request confirm any extension of the Expiry Date under the preceding sentence by issuing an amendment to this L/C, but such an
amendment is not required for the extension to be effective. We need not give any notice of the Outside Date. 
 Beneficiary may from time
to time without charge transfer this L/C, in whole but not in part, to any transferee (the “Transferee”). Issuer shall look solely to Account Party for payment of any fee for any transfer of this L/C. Such payment is not a condition
to any such transfer. Beneficiary or Transferee shall consummate such transfer by delivering to Issuer the original of this L/C and a Transfer Notice substantially in the form of Attachment 2, purportedly signed by Beneficiary, and
designating Transferee. Issuer shall promptly reissue or amend this L/C in favor of Transferee as Beneficiary. Upon any transfer, all references to Beneficiary shall automatically refer to Transferee, who may then exercise all rights of Beneficiary.
Issuer expressly consents to any transfers made from time to time in compliance with this paragraph. 
 Any notice to Beneficiary shall be
in writing and delivered by hand with receipt acknowledged or by overnight delivery service such as FedEx (with proof of delivery) at the above address, or such other address as Beneficiary may specify by written notice to Issuer. A copy of any such
notice shall also be delivered, as a condition to the effectiveness of such notice, to:
                             (or such replacement as Beneficiary designates from time to time by written
notice). 
 No amendment that adversely affects Beneficiary shall be effective without Beneficiary’s written consent. 

This L/C is subject to and incorporates by reference: (a) the International Standby Practices 98 (“ISP 98”); and
(b) to the extent not inconsistent with ISP 98, Article 5 of the Uniform Commercial Code of the State of New York. 

  
 E-2 

 
	
	Very truly yours,
	
	[Issuer Signature]

  
 E-3 

 ATTACHMENT 1 TO EXHIBIT E 

FORM OF SIGHT DRAFT 

[BENEFICIARY LETTERHEAD] 

TO: 
 [Name and Address of Issuer] 

SIGHT DRAFT 
 AT SIGHT, pay to the Order
of                              , the sum of
                             United States Dollars
($            ). Drawn under [Issuer] Letter of Credit No.                      dated
                    . 
 [Issuer is hereby directed to
pay the proceeds of this Sight Draft solely to the following account:                             .] 

[Name and signature block, with signature or purported signature of Beneficiary] 
  

			
	Date:	 	  

  
 E-1-1 

 ATTACHMENT 2 TO EXHIBIT E 

FORM OF TRANSFER NOTICE 

[BENEFICIARY LETTERHEAD] 

TO: 
 [Name and Address of Issuer] (the
“Issuer”) 
 TRANSFER NOTICE 

By signing below, the undersigned, Beneficiary (the “Beneficiary”) under Issuer’s Letter of Credit No.
                             dated
                     (the “L/C”), transfers the L/C to the following transferee (the “Transferee”): 

[Transferee Name and Address] 
 The original L/C is enclosed.
Beneficiary directs Issuer to reissue or amend the L/C in favor of Transferee as Beneficiary. Beneficiary represents and warrants that Beneficiary has not transferred, assigned, or encumbered the L/C or any interest in the L/C, which transfer,
assignment, or encumbrance remains in effect. 
 [Name and signature block, with signature or purported signature of Beneficiary] 

 

					
	Date:	 	  
	 	]

  
 E-2-1 

 EXHIBIT F 

RULES AND REGULATIONS 

NOTHING IN THESE RULES AND REGULATIONS (“RULES AND REGULATIONS”) SHALL SUPPLANT ANY PROVISION OF THE LEASE. IN THE EVENT OF A
CONFLICT OR INCONSISTENCY BETWEEN THESE RULES AND REGULATIONS AND THE LEASE, THE LEASE SHALL PREVAIL. 
 1. No Tenant Party shall encumber or obstruct the
common entrances, lobbies, elevators, sidewalks and stairways of the Building(s) or the Project or use them for any purposes other than ingress or egress to and from the Building(s) or the Project. 

2. Except as specifically provided in the Lease, no sign, placard, picture, advertisement, name or notice shall be installed or displayed on any part of the
outside of the Premises or the Building(s) without Landlord’s prior written consent. Landlord shall have the right to remove, at Tenant’s sole cost and expense and without notice, any sign installed or displayed in violation of this rule.

 3. If Landlord objects in writing to any curtains, blinds, shades, screens, hanging plants or other similar objects attached to or used in connection
with any window or door of the Premises or placed on any windowsill, and (a) such window, door or windowsill is visible from the exterior of the Premises and (b) such curtain, blind, shade, screen, hanging plant or other object is not
included in plans approved by Landlord, then Tenant shall promptly remove such curtains, blinds, shades, screens, hanging plants or other similar objects at its sole cost and expense. 

4. No deliveries shall be made that impede or interfere with other tenants in or the operation of the Project. Movement of furniture, office equipment or any
other large or bulky material(s) through the Common Area shall be restricted to such hours as Landlord may designate and shall be subject to reasonable restrictions that Landlord may impose. 

5. Tenant shall not place a load upon any floor of the Premises that exceeds the load per square foot that (a) such floor was designed to carry or
(b) is allowed by Applicable Laws. Fixtures and equipment that cause noises or vibrations that may be transmitted to the structure of the Building(s) to such a degree as to be objectionable to other tenants shall be placed and maintained by
Tenant, at Tenant’s sole cost and expense, on vibration eliminators or other devices sufficient to eliminate such noises and vibrations to levels reasonably acceptable to Landlord and the affected tenants of the Project. 

6. Tenant shall not use any method of heating or air conditioning other than that approved in writing by Landlord. 

7. Tenant shall not install any radio, television or other antennae; cell or other communications equipment; or other devices on the roof or exterior walls of
the Premises except in accordance with the Lease. Tenant shall not interfere with radio, television or other digital or electronic communications at the Project or elsewhere. 

  
 F-1 

 8. Canvassing, peddling, soliciting and distributing handbills or any other written material within, on or around
the Project (other than within the Premises) are prohibited. Tenant shall cooperate with Landlord to prevent such activities by any Tenant Party. 
 9.
Tenant shall store all of its trash, garbage and Hazardous Materials in receptacles within its Premises or in receptacles designated by Landlord outside of the Premises. Tenant shall not place in any such receptacle any material that cannot be
disposed of in the ordinary and customary manner of trash, garbage and Hazardous Materials disposal. Any Hazardous Materials transported through Common Areas shall be held in secondary containment devices. 

10. The Premises shall not be used for lodging or for any improper, immoral or objectionable purpose. No cooking shall be done or permitted in the Premises;
provided, however, that Tenant may use (a) equipment approved in accordance with the requirements of insurance policies that Landlord or Tenant is required to purchase and maintain pursuant to the Lease for brewing coffee, tea, hot
chocolate and similar beverages, (b) microwave ovens for employees’ use and (c) equipment shown on plans approved by Landlord; provided, further, that any such equipment and microwave ovens are used in accordance with
Applicable Laws. 
 11. Tenant shall not, without Landlord’s prior written consent, use the name of the Project, if any, in connection with or in
promoting or advertising Tenant’s business except as Tenant’s address. 
 12. Tenant shall comply with all safety, fire protection and evacuation
procedures and regulations established by Landlord or any Governmental Authority. 
 13. Tenant assumes any and all responsibility for protecting the
Premises from theft, robbery and pilferage, which responsibility includes keeping doors locked and other means of entry to the Premises closed. 
 14.
Tenant shall not modify any locks to the Premises without Landlord’s prior written consent, which consent Landlord shall not unreasonably withhold, condition or delay. Tenant shall furnish Landlord with copies of keys, pass cards or similar
devices for locks to the Premises. 
 15. Tenant shall cooperate and participate in all reasonable security programs affecting the Premises. 

16. Tenant shall not permit any animals in the Project, other than for guide animals or for use in laboratory experiments. 

17. Bicycles shall not be taken into the Building(s) except into areas designated by Landlord. 

18. The water and wash closets and other plumbing fixtures shall not be used for any purposes other than those for which they were constructed, and no
sweepings, rubbish, rags or other substances shall be deposited therein. 
 19. Discharge of industrial sewage shall only be permitted if Tenant, at its
sole expense, first obtains all necessary permits and licenses therefor from all applicable Governmental Authorities. 

  
 F-2 

 20. Smoking is prohibited at the Project. 

21. The Project’s hours of operation are currently 24 hours a day, seven days a week. 

22. Tenant shall comply with all orders, requirements and conditions now or hereafter imposed by Applicable Laws or Landlord (“Waste
Regulations”) regarding the collection, sorting, separation and recycling of waste products, garbage, refuse and trash generated by Tenant (collectively, “Waste Products”), including (without limitation) the separation of
Waste Products into receptacles reasonably approved by Landlord and the removal of such receptacles in accordance with any collection schedules prescribed by Waste Regulations. 

23. Tenant, at Tenant’s sole cost and expense, shall cause the Premises to be exterminated on a monthly basis to Landlord’s reasonable satisfaction
and shall cause all portions of the Premises used for the storage, preparation, service or consumption of food or beverages to be cleaned daily in a manner reasonably satisfactory to Landlord, and to be treated against infestation by insects,
rodents and other vermin and pests whenever there is evidence of any infestation. Tenant shall not permit any person to enter the Premises or the Project for the purpose of providing such extermination services, unless such persons have been
approved by Landlord. If requested by Landlord, Tenant shall, at Tenant’s sole cost and expense, store any refuse generated in the Premises by the consumption of food or beverages in a cold box or similar facility. 

24. If Tenant desires to use any portion of the Common Area for a Tenant-related event, Tenant must notify Landlord in writing at least thirty (30) days
prior to such event on the form attached as Attachment 1 to this Exhibit, which use shall be subject to Landlord’s prior written consent, not to be unreasonably withheld, conditioned or delayed. Notwithstanding anything in this Lease or
the completed and executed Attachment to the contrary, Tenant shall be solely responsible for setting up and taking down any equipment or other materials required for the event, and shall promptly pick up any litter and report any property damage to
Landlord related to the event. Any use of the Common Area pursuant to this Section shall be subject to the provisions of Article 28 of the Lease. 

Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other tenant, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Project, including
Tenant. These Rules and Regulations are in addition to, and shall not be construed to in any way modify or amend, in whole or in part, the terms covenants, agreements and conditions of the Lease. Landlord reserves the right to make such other and
reasonable rules and regulations as, in its judgment, may from time to time be needed for safety and security, the care and cleanliness of the Project, or the preservation of good order therein; provided, however, that Tenant shall not be
obligated to adhere to such additional rules or regulations until Landlord has provided Tenant with written notice thereof. Tenant agrees to abide by these Rules and Regulations and any additional rules and regulations issued or adopted by Landlord.
Tenant shall be responsible for the observance of these Rules and Regulations by all Tenant Parties. 

  
 F-3 

 ATTACHMENT 1 TO EXHIBIT F 

REQUEST FOR USE OF COMMON AREA 

[TENANT LETTERHEAD] 
 VIA
[                    ] 
 [Date] 

BMR-Pacific Research Center LP 
 17190 Bernardo Center Drive 

San Diego, California 92128 
 Attn: Senior Director, West Coast
Operations 
  

	 	Re:	Notice of Request to Use Common Area 

 To Whom It May Concern: 

CymaBay Therapeutics, Inc. requests that it have use of the common area as described below: 

 

			
	Event Description:	  	  

  

			
	Date:	 	  

  

			
	Location at Property:	 	  

  

			
	Number of Attendees:	 	  

 Open to the
Public?     ̈  YES     ̈  NO 

Food and/or Beverages?     ̈  YES     ̈  NO 
 If YES: 

 

					
	•      	 	will alcohol be served (Note: Proof of an insurance endorsement for serving alcohol must be
provided)     ̈  YES     ̈  NO
			
	•      	 	please describe:	 	  

  

			
	Other Amenities (tent, band, etc.):	 	  

  

			
	Other Event Details:	  	  

 Please let us know at your earliest convenience whether such use is approved. 

 

	
	Sincerely,
	
	[Name]
	[Title]

  
 F-1-1 

 To Be Completed by Landlord: 

 ̈  APPROVED    DENIED  
 ̈ 
 The following conditions apply to approval (if approved): 

 

			
	1.      	 	  

		
	2.      	 	  

		
	3.      	 	  

		
	4.      	 	  

		
	5.      	 	  

  

			
	BMR-PACIFIC RESEARCH CENTER LP
		
	By:	 	  

	Name:	 	  

	Its:	 	  

	Date:	 	  

  
 F-2 

 EXHIBIT G 

[Intentionally omitted] 

  
 G-1 

 EXHIBIT H 

TENANT’S PROPERTY 
 None. 

  
 H-1 

 EXHIBIT I 

FORM OF ESTOPPEL CERTIFICATE 
  

			
	To:	  	BMR-Pacific Research Center LP
		  	17190 Bernardo Center Drive
		  	San Diego, California 92128
		  	Attention: Vice President, Real Estate Legal
		
		  	BioMed Realty, L.P.
		  	17190 Bernardo Center Drive
		  	San Diego, California 92128
		
	Re:	  	7999 Gateway Boulevard, Newark, California (the “Premises”) at 7333-7999 Gateway Boulevard, Newark, California (the “Property”)

 The undersigned tenant (“Tenant”) hereby certifies to you as follows: 

1. Tenant is a tenant at the Property under a lease (the “Lease”) for the Premises dated as of
[                ], 20[    ]. The Lease has not been cancelled, modified, assigned, extended or amended [except as follows:
[                            ]], and there are no other agreements, written or oral, affecting or relating to
Tenant’s lease of the Premises or any other space at the Property. The lease term expires on [                ], 20[    ]. 

2. Tenant took possession of the Premises, currently consisting of
[                            ] square feet, on
[                ], 20[    ], and commenced to pay rent on
[                ], 20[    ]. Tenant has full possession of the Premises, has not assigned the Lease or sublet any part of the Premises, and does not
hold the Premises under an assignment or sublease[, except as follows: [                            ]]. 

3. All base rent, rent escalations and additional rent under the Lease have been paid through
[                ], 20[    ]. There is no prepaid rent[, except
$[                ]][, and the amount of security deposit is $[            ] [in cash][OR][in the form of a
letter of credit]]. Tenant currently has no right to any future rent abatement under the Lease. 
 4. Base rent is currently payable in the
amount of $[            ] per month. 
 5. Tenant is currently paying estimated
payments of additional rent of $[            ] per month on account of real estate taxes, insurance, management fees and common area maintenance expenses. 

6. All work to be performed for Tenant under the Lease has been performed as required under the Lease and has been accepted by Tenant[, except
[                            ]], and all allowances to be paid to Tenant, including allowances for tenant
improvements, moving expenses or other items, have been paid. 
 7. The Lease is in full force and effect, free from default and free from
any event that could become a default under the Lease, and Tenant has no claims against the landlord or offsets or defenses against rent, and there are no disputes with the landlord. Tenant has received no notice of prior sale, transfer, assignment,
hypothecation or pledge of the Lease or of the rents payable thereunder[, except
[                            ]]. 

  
 M-1 

 8. [Tenant has the following expansion rights or options for the Property:
[                            ].][OR][Tenant has no rights or options to purchase the Property.] 

9. To Tenant’s knowledge, no hazardous wastes have been generated, treated, stored or disposed of by or on behalf of Tenant in, on or
around the Premises or the Project in violation of any environmental laws. 
 10. The undersigned has executed this Estoppel Certificate
with the knowledge and understanding that [INSERT NAME OF LANDLORD, PURCHASER OR LENDER, AS APPROPRIATE] or its assignee is acquiring the Property in reliance on this certificate and that the undersigned shall be bound by this certificate. The
statements contained herein may be relied upon by [INSERT NAME OF PURCHASER OR LENDER, AS APPROPRIATE], [LANDLORD], BioMed Realty, L.P., BioMed Realty Trust, Inc., and any [other] mortgagee of the Property and their respective successors and
assigns. 
 Any capitalized terms not defined herein shall have the respective meanings given in the Lease. 

Dated this [    ] day of [                ],
20[    ]. 
  

			
	 CYMABAY THERAPEUTICS, INC.,
 a
Delaware corporation

		
	By:	 	  

	Name:	 	  

	Title:	 	  

  
 M-2EXECUTION COPY 

ZAIS FINANCIAL PARTNERS L.P., as
Issuer,

ZAIS FINANCIAL CORP., as
Guarantor,

and

U.S. BANK NATIONAL ASSOCIATION, as
Trustee 

____________________

INDENTURE 

Dated as of
November 25, 2013

____________________

8.0% Exchangeable Senior Notes due
2016 

TABLE OF CONTENTS 

Page No. 

ARTICLE 1
DEFINITIONS

	Section 1.01	     	Definitions	1
	 
	ARTICLE 2
	ISSUE, DESCRIPTION, EXECUTION,
      REGISTRATION AND EXCHANGE OF NOTES
	 
	Section 2.01		Designation Amount and
      Issue of Notes	9
	Section 2.02		Form of Notes	10
	Section 2.03		Date and Denomination of
      Notes; Payments of Interest	10
	Section 2.04		Execution of Notes	12
	Section 2.05		Exchange and Registration
      of Transfer of Notes; Restrictions on Transfer	12
	Section 2.06		Mutilated, Destroyed, Lost or Stolen
      Notes	16
	Section 2.07		Temporary Notes	16
	Section 2.08		Cancellation of Notes	17
	Section 2.09		CUSIP and ISIN
      Numbers	17
	 
	ARTICLE 3
	REDEMPTION OF NOTES
	 
	Section 3.01		No Redemption	17
	Section 3.02		Sinking Fund	17
	 
	ARTICLE 4
	PURCHASE OF NOTES UPON A FUNDAMENTAL
      CHANGE
	 
	Section 4.01		Purchase at Option of
      Holders Upon a Fundamental Change	17
	Section 4.02		Fundamental Change Company Notice	18
	Section 4.03		Effect of Fundamental
      Change Purchase Notice; Withdrawal	19
	Section 4.04		Deposit of Fundamental Change Purchase
      Price	20
	Section 4.05		Notes Purchased in
      Part	20
	Section 4.06		Repayment to the Issuer	20
	 
	ARTICLE 5
	PARTICULAR COVENANTS OF THE
      ISSUER
	 
	Section 5.01		Payment of Principal and
      Interest	20
	Section 5.02		Maintenance of Office or Agency	21
	Section 5.03		Appointments to Fill
      Vacancies in Trustee’s Office	21
	Section 5.04		Provisions as to Paying Agent	21
	Section 5.05		Existence	22
	Section 5.06		Stay, Extension and Usury Laws	22
	Section 5.07		Compliance
      Certificate	22
	Section 5.08		Liquidated Damages Notice	23

	ARTICLE 6
	NOTEHOLDERS’ LISTS AND REPORTS BY THE
      ISSUER AND THE TRUSTEE
	 
	Section 6.01	     	Noteholders’
    Lists	23
	Section 6.02		Preservation and Disclosure of
    Lists	23
	Section 6.03		Reports by
Issuer	23
	 
	ARTICLE 7
	REMEDIES OF THE TRUSTEE AND
      NOTEHOLDERS ON AN EVENT OF DEFAULT
	 
	Section 7.01		Events of
Default	24
	Section 7.02		Payments of Notes on Default; Suit
      Therefor	26
	Section 7.03		Application of Monies
      Collected by Trustee	27
	Section 7.04		Proceedings by Noteholders	27
	Section 7.05		Proceedings by
      Trustee	27
	Section 7.06		Remedies Cumulative and Continuing	27
	Section 7.07		Direction of Proceedings
      and Waiver of Defaults by Majority of Noteholders	28
	Section 7.08		Undertaking to Pay Costs	28
	 
	ARTICLE 8
	THE TRUSTEE
	 
	Section 8.01		Notice of
    Defaults	28
	Section 8.02		Certain Rights of Trustee	29
	Section 8.03		Not Responsible for
      Recitals or Issuance of Notes	30
	Section 8.04		May Hold Notes and Common Stock	30
	Section 8.05		Money Held in
    Trust	31
	Section 8.06		Compensation and Reimbursement	31
	Section 8.07		Corporate Trustee
      Required; Eligibility; Conflicting Interests	31
	Section 8.08		Resignation and Removal; Appointment of
      Successor	32
	Section 8.09		Acceptance of Appointment
      By Successor	32
	Section 8.10		Merger, Conversion, Consolidation or
      Succession to Business	33
	Section 8.11		Appointment of
      Authenticating Agent	33
	Section 8.12		Certain Duties and Responsibilities of the
      Trustee	34
	 
	ARTICLE 9
	THE NOTEHOLDERS
	 
	Section 9.01		Action by
      Noteholders	35
	Section 9.02		Proof of Execution by Noteholders	35
	Section 9.03		Absolute Owners	36
	Section 9.04		Issuer-owned Notes Disregarded	36
	Section 9.05		Revocation of Consents;
      Future Holders Bound	36
	 
	ARTICLE 10
	SUPPLEMENTAL INDENTURES
	 
	Section 10.01		Supplemental Indentures
      Without Consent of Noteholders	36
	Section 10.02		Supplemental Indenture With Consent of
      Noteholders	37
	Section 10.03		Effect of Supplemental
      Indenture	38
	Section 10.04		Notation on Notes	38
	Section 10.05		Evidence of Compliance of
      Supplemental Indenture to Be Furnished to Trustee	38
	Section 10.06		Notice of Supplemental Indentures	38

ii 

	ARTICLE 11
	CONSOLIDATION, MERGER, SALE,
      CONVEYANCE AND LEASE
	 
	Section 11.01		Issuer and Guarantor May
      Consolidate on Certain Terms	39
	Section 11.02		Issuer or Guarantor Successor to Be
      Substituted	39
	 
	ARTICLE 12
	SATISFACTION AND DISCHARGE OF
      INDENTURE
	 
	Section 12.01	     	Satisfaction and Discharge
      of Indenture	39
	Section 12.02		Application of Trust Funds	40
	Section 12.03		Paying Agent to Repay
      Monies Held	40
	Section 12.04		Return of Unclaimed Monies	40
	Section 12.05		Reinstatement	41
	 
	ARTICLE 13
	GUARANTEE
	 
	Section 13.01		Guarantee	41
	Section 13.02		Execution and Delivery of
    Guarantees	42
	Section 13.03		Release of the
      Guarantor	42
	 
	ARTICLE 14
	IMMUNITY OF INCORPORATORS,
      STOCKHOLDERS, PARTNERS, ADVISORS, OFFICERS, DIRECTORS
	AND OTHERS
	 
	Section 14.01		Indenture and Notes Solely
      Corporate Obligations	43
	 
	ARTICLE 15
	EXCHANGE OF NOTES
	 
	Section 15.01		Right to
Exchange	43
	Section 15.02		Exercise of Exchange Right; No Adjustment
      for Interest or Dividends	44
	Section 15.03		Cash Payments in Lieu of
      Fractional Shares	45
	Section 15.04		Exchange Rate	45
	Section 15.05		Adjustment of Exchange
      Rate	45
	Section 15.06		Taxes on Shares Issued	53
	Section 15.07		Reservation of Shares,
      Shares to Be Fully Paid; Compliance with Governmental	
			Requirements; Listing of
      Common Stock	53
	Section 15.08		Responsibility of Trustee	54
	Section 15.09		Notice to Holders Prior to
      Certain Actions	54
	Section 15.10		Settlement upon Exchange	55
	Section 15.11		Exchange Rate Adjustment
      After Make-Whole Fundamental Changes	56
	Section 15.12		Calculations in Respect of Notes	57
	Section 15.13		Adjustment of
    Prices	57
	 
	ARTICLE 16
	MEETINGS OF HOLDERS OF
      NOTES
	 
	Section 16.01		Purposes for Which
      Meetings May Be Called	57
	Section 16.02		Call, Notice and Place of Meetings	57
	Section 16.03		Persons Entitled to Vote
      at Meetings	58
	Section 16.04		Quorum; Action	58
	Section 16.05		Determination of Voting
      Rights; Conduct and Adjournment of Meetings	58
	Section 16.06		Counting Votes and Recording Action of
      Meetings	59

iii 

ARTICLE 17 
MISCELLANEOUS PROVISIONS

	Section 17.01		Provisions Binding on Issuer’s and ZAIS
      Financial Corp.’s Successors	59
	Section 17.02	     	Waiver of Jury Trial	59
	Section 17.03		Official Acts by Successor
    Corporation	59
	Section 17.04		Addresses for Notices, etc.	60
	Section 17.05		Governing Law	61
	Section 17.06		Evidence of Compliance with Conditions Precedent,
      Certificates to Trustee	61
	Section 17.07		Legal Holidays	61
	Section 17.08		No Security Interest Created	61
	Section 17.09		Benefits of Indenture	61
	Section 17.10		Table of Contents, Headings, etc.	61
	Section 17.11		Execution in Counterparts	61
	Section 17.12		Severability	62
	Section 17.13		No Stockholder Rights for
    Noteholders	62
	Section 17.14		Trust Indenture Act Controls	62

iv 

INDENTURE 

     INDENTURE dated
as of November 25, 2013 by and among ZAIS Financial Partners, L.P., a Delaware
limited partnership, as issuer (hereinafter called the “Issuer”), ZAIS Financial
Corp., a Maryland corporation, as guarantor (hereinafter called “ZAIS Financial Corp.”),
each having its principal office at Two Bridge Avenue, Suite 322, Red Bank, New
Jersey 07701, and U.S. Bank National Association, a national banking association
organized and existing under the laws of the United States of America, as
trustee hereunder (hereinafter called the “Trustee”). 

    
Each party agrees as follows for the benefit of the other parties and for
the equal and ratable benefit of the Holders (as defined herein) of the Issuer’s
8.0% Exchangeable Senior Notes due 2016, which are unconditionally guaranteed by
the Guarantor pursuant to the Guarantee attached thereto (hereinafter
collectively referred to as the “Notes”). 

ARTICLE 1 
DEFINITIONS

    
Section 1.01 Definitions. The terms defined in this
Section 1.01 (except as herein otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture and of any
indenture supplemental hereto shall have the respective meanings specified in
this Section 1.01. The words “herein,” “hereof,” “hereunder” and words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article include the plural as well
as the singular. 

    
“Accredited Investor” means an “accredited investor” as defined in Rule 501(a)
under the Securities Act. 

    
“Accredited Investor
Certificate” means a certificate
substantially in the form of Exhibit B hereto. 

    
“actual knowledge” means the actual fact or state of knowing without any duty
to make any investigation with regard thereto. 

    
“Additional Notes” has the meaning specified in Section 2.01. 

    
“Additional Shares” has the meaning specified in Section 15.11(a). 

    
“Affiliate” of any specified Person means any other Person directly or indirectly
controlling or 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 or cause the direction
of 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 Members” has the meaning specified in Section 2.05(c)(v).

    
“Aggregate Share Cap” means the maximum number of shares of the Common Stock that
ZAIS Financial Corp. may issue without shareholder approval pursuant to New York
Stock Exchange listing requirements. 

    
“AI Global Note” means a Global Note resold to Accredited Investors bearing
the Restricted Notes Legend. 

    
“Averaging Period” means the 40 consecutive Trading Days beginning on, and
including, the second Trading Day immediately following the relevant Exchange
Date. 

    
“Benefit Plan Investor” means any (i) employee benefit plan (within the meaning of
Section 3(3) of ERISA) that is subject to Title I of ERISA, (ii) plan (within
the meaning of Section 4975(e)(1) of the Internal Revenue Code) that is subject
to Section 4975 of the Internal Revenue Code, or (iii) entity whose underlying
assets are deemed to include “plan assets” subject to
Title I of ERISA and/or Section 4975 of the Internal Revenue Code by reason of
investment in the entity by one or more plans described in clauses (i) or
(ii).

     “Board of Directors” means
the board of directors of ZAIS Financial Corp. or a committee of that board duly
authorized to act hereunder. 

    
“Board Resolution” means a copy of a resolution certified by the Secretary or
an Assistant Secretary of ZAIS Financial Corp. to have been duly adopted by the
Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee. 

    
“Business Day” means any day other than a Saturday, a Sunday or a day on
which the Federal Reserve Bank of New York or the place of payment is authorized
or required by law or executive order to close or be closed.

    
“Capital Stock” means, for any Person, any and all shares, interests, rights
to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) the equity of such Person, but excluding any
debt securities convertible into such equity. 

    
“Clause A Distribution” has the meaning specified in Section 15.05(c). 

    
“Clause B Distribution” has the meaning specified in Section 15.05(c). 

    
“Clause C Distribution” has the meaning specified in Section 15.05(c). 

    
“Close of Business” means 5:00 p.m., New York City time. 

    
“Commission” means the Securities and Exchange Commission, created under the
Exchange Act, as from time to time constituted, or, if at any time after the
execution of this Indenture such Commission is not existing and performing the
duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time. 

    
“Common Equity” of any Person means the Capital Stock of such Person that is
generally entitled (a) to vote in the election of directors of such Person or
(b) if such Person is not a corporation, to vote or otherwise participate in the
selection of the governing body, partners, managers or others that will control
the management or policies of such Person. 

    
“Common Stock” means all shares of Capital Stock issued by ZAIS Financial
Corp. other than Preferred Stock. Shares of Common Stock issuable on exchange of
Notes shall include only shares of the class designated as common stock of ZAIS
Financial Corp. at the date of this Indenture (namely, the common stock, par
value $0.0001) or shares of any class or classes resulting from any
reclassification or reclassifications thereof and which have no preference in
respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of ZAIS Financial Corp. and
which are not subject to redemption by ZAIS Financial Corp.; provided that if at any
time there shall be more than one such resulting class, the shares of each such
class then so issuable on exchange shall be substantially in the proportion
which the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications. 

    
“Common Stock Legend” has the meaning specified in Section 2.05(d). 

2 

    
“Corporate Trust Office” means the office of the Trustee at which, at any particular
time, its corporate trust business in Boston shall be principally administered,
which office as of the date of this instrument is located at Corporate
Trust Services, One Federal Street, Third Floor, Boston, MA 02110, Attn: ZAIS
Financial Partners, L.P., Fax: (617) 603-6683, except that with respect to
presentation of Notes for payment or for registration of transfer, conversion or
exchange, such term shall mean the office or agency of the Trustee at which at
any particular time its corporate agency business shall be conducted, which
offices at the date of this instrument are located at 100 Wall Street, Suite
1600, New York, New York 10005; Attention: ZAIS Financial Partners L.P. and 60
Livingston Ave., St. Paul, MN 55107; Attention: Corporate Trust Services – ZAIS
Financial Partners L.P., or, in the case of any of such offices or agency, such
other address as the Trustee may designate from time to time by notice to the
Issuer. 

    
“CUSIP” means the Committee on Uniform Securities Identification Procedures.

    
“Custodian” means U.S. Bank National Association, as custodian for the Depositary
with respect to the Global Notes, or any successor entity thereto. 

    
“Daily Exchange Value” means, for each of the 40 consecutive Trading Days during
the Averaging Period, 2.5% of the product of (a) the number of shares of Common
Stock that would otherwise be delivered upon such exchange in excess of the
number to be delivered due to the Aggregate Share Cap and (b) the Daily VWAP of
the Common Stock on such Trading Day.

    
“Daily VWAP” means, for any Trading Day, the per share volume-weighted average price
as displayed under the heading “Bloomberg VWAP” on Bloomberg page “ZFC
<Equity> AQR” (or its equivalent successor if such page is not available)
in respect of the period from the scheduled open of trading until the scheduled
close of trading of the primary trading session on such Trading Day (or if such
volume-weighted average price is unavailable, the market value of one share of
Common Stock on such Trading Day determined, using a volume-weighted average
method, by a nationally recognized independent investment banking firm retained
for this purpose by us). The “Daily
VWAP” will be determined without regard to
after-hours trading or any other trading outside of the regular trading session
trading hours. 

    
“Default” means any event that is, or after notice or lapse of time or both would
become, an Event of Default. 

    
“Defaulted Interest” has the meaning specified in Section 2.03. 

    
“Depositary” means the clearing agency registered under the Exchange Act that is
designated to act as the depositary for the Global Notes. DTC shall be the
initial Depositary, until a successor shall have been appointed and become such
pursuant to the applicable provisions of this Indenture, and thereafter,
“Depositary” shall mean or include such successor. 

    
“DTA” has the meaning specified in Section 15.05(d). 

    
“DTC” means The Depository Trust Company. 

    
“Effective Date” has the meaning specified in Section 15.11(b). 

    
“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

    
“Event of Default” has the meaning specified in Section 7.01. 

    
“Ex-Dividend Date” means the first date on which shares of the Common Stock
trade on the applicable exchange or in the applicable market, regular way,
without the right to receive the issuance, dividend or distribution in question
from ZAIS Financial Corp. or, if applicable, from the seller of the shares of
the Common Stock on such exchange or market (in the form of due bills or
otherwise) as determined by such exchange or market. 

    
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder, as in effect from time to
time. 

3 

     “Exchange Agent” means the
exchange agent appointed by the Issuer to act as set forth in Article 15, which,
initially, shall be the Trustee. 

    
“Exchange Date” has the meaning specified in Section 15.02. 

    
“Exchange Notice” has the meaning specified in Section 15.02. 

    
“Exchange Obligation” has the meaning specified in Section 15.10(a). 

    
“Exchange Rate” has the meaning specified in Section 15.04. 

    
“Fundamental Change” shall be deemed to have occurred at the time after the Notes
are originally issued if any of the following occurs: 

    
(1) any “person” or “group” (within the meaning of Section 13(d) of the
Exchange Act, other than ZAIS Financial Corp. or its Subsidiaries) files a
Schedule TO or any schedule, form or report under the Exchange Act disclosing
that such person or group has become the direct or indirect ultimate “beneficial
owner,” as defined in Rule 13d-3 under the Exchange Act, of ZAIS Financial
Corp.’s Common Equity representing more than 50% of the voting power of ZAIS
Financial Corp.’s Common Equity; 

    
(2) the consummation of (x) any consolidation, merger, amalgamation,
scheme of arrangement or other binding share exchange or reclassification or
similar transaction between ZAIS Financial Corp. and another Person (other than
any of ZAIS Financial Corp.’s Subsidiaries), in each case pursuant to which the
Common Stock shall be converted into cash, securities or other property, other
than a transaction (i) that results in the holders of all classes of ZAIS
Financial Corp.’s Common Equity immediately prior to such transaction owning,
directly or indirectly, as a result of such transaction, more than 50% of the
surviving corporation or transferee or the parent thereof immediately after such
event, or (ii) effected solely to change ZAIS Financial Corp.’s jurisdiction of
incorporation or to form a holding company for ZAIS Financial Corp. and that
results in a share exchange or reclassification or similar exchange of the
outstanding Common Stock solely into common shares of the surviving entity or
(y) any sale or other disposition in one transaction or a series of transactions
of all or substantially all of the assets of ZAIS Financial Corp. and its
Subsidiaries, on a consolidated basis, to another Person (other than any of ZAIS
Financial Corp.’s Subsidiaries); 

    
(3) the Issuer’s or ZAIS Financial Corp.’s partners or stockholders, as
applicable, approve any plan or proposal for the liquidation or dissolution of
the Issuer or ZAIS Financial Corp., respectively (other than, in the case of
ZAIS Financial Corp., in a transaction described in clause (2) above);

    
(4) ZAIS Financial Corp. ceases to be the Issuer’s general partner or the
Issuer ceases to be directly or indirectly controlled by ZAIS Financial Corp.
(or any successor thereto permitted pursuant to the terms of this Indenture); or

    
(5) the Common Stock ceases to be listed on The New York Stock Exchange,
The NASDAQ Global Select Market or The NASDAQ Global Market (or any of their
respective successors); 

provided, however, that in the case of a transaction or event described in clause (1) or
(2) above, if at least 90% of the consideration received or to be received by
holders of the Common Stock (excluding cash payments for fractional shares) in
the transaction or transactions that would otherwise constitute a “Fundamental
Change” consists of shares of common stock or common equity interests that are
traded on The New York Stock Exchange, The NASDAQ Global Select Market or The
NASDAQ Global Market (or any of their respective successors) or that will be so
traded when issued or exchanged in connection with the transaction that would
otherwise constitute a “Fundamental Change” under clause (1) or (2) above
(“Publicly Traded Securities”), and as a result of such transaction or transactions, the
Notes become exchangeable for or by reference to such Publicly Traded
Securities, excluding cash payments for fractional shares (subject to settlement
in accordance with the provisions of Sections 15.10 and 15.11 hereof), such
event shall not be a “Fundamental Change.” 

4 

     “Fundamental Change Company Notice” has the meaning specified in Section 4.01(b). 

    
“Fundamental Change Expiration
Time” has the meaning specified in Section
4.01(a)(i). 

    
“Fundamental Change Notice
Date” has the meaning specified in Section
4.01(b). 

    
“Fundamental Change Purchase
Date” has the meaning specified in Section
4.01(a). 

    
“Fundamental Change Purchase
Notice” has the meaning specified in Section
4.01(a)(i). 

    
“Fundamental Change Purchase
Price” has the meaning specified in Section
4.01(a). 

    
“Global Note” has the meaning specified in Section 2.02. 

    
“Guarantee” means the guarantee by the Guarantor of the Issuer’s obligation under
this Indenture and the Notes, to pay principal of and interest when due and
payable, and all other amounts due or to become due under or in connection with
this Indenture, the Notes and the performance of all other obligations to the
Trustee and the Holders under this Indenture and the Notes, according to the
respective terms hereof and thereof. 

    
“Guarantor” means ZAIS Financial Corp. and any successor thereof; in each case
until such Guarantor ceases to be such in accordance with Section 13.03 hereof.

    
“Indenture” means this instrument as originally executed or, if amended or
supplemented as herein provided, as so amended or supplemented. 

    
“Initial Notes” has the meaning specified in Section 2.01. 

    
“Initial Purchaser” has the meaning specified in the Registration Rights
Agreement. 

    
“interest” means, when used with reference to the Notes, any interest payable
under the terms of the Notes, including Supplemental Interest, if any, and
Liquidated Damages, if any, payable under the terms of the Registration Rights
Agreement. 

    
“Internal Revenue Code” means the Internal Revenue Code of 1986, as
amended.

    
“ISIN” means the International Securities Identification Number as defined in
ISO 6166. 

    
“Issuer” means the Delaware limited partnership named as the “Issuer” in the
first paragraph of this Indenture, and, subject to the provisions of Article 11,
shall include its successors and assigns. 

    
“Issuer Request” and “Issuer
Order” mean, respectively, a written request
or order signed in the name of the Issuer by ZAIS Financial Corp., acting in its
capacity as the general partner of the Issuer, by its Chairman of the Board of
Directors, the President or a Vice President, and by its Treasurer, an Assistant
Treasurer, the Secretary or an Assistant Secretary, of ZAIS Financial Corp., and
delivered to the Trustee. 

    
“Last Reported Sale
Price” of the Common Stock for any Trading
Day means the closing sale price per share (or, if no closing sale price is
reported, the average of the last bid and last ask prices or, if more than one
in either case, the average of the average last bid and the average last ask
prices) on that Trading Day as reported in composite transactions for the
principal U.S. national or regional securities exchange on which the Common
Stock is traded. If the Common Stock is not listed for trading on a U.S.
national or regional securities exchange on the relevant Trading Day, the “Last
Reported Sale Price” will be the last quoted bid price for the Common Stock in
the over-the-counter market on the relevant date as reported by OTC Markets
Group Inc. or a similar organization. If the Common Stock is not so quoted, the
“Last Reported Sale Price” will be the average of the mid-point of the last bid
and last ask prices for the Common Stock on the relevant Trading Day from each
of at least three nationally recognized independent investment banking
firms selected by the Issuer for this purpose, which may include the Initial
Purchaser. Any such determination will be conclusive absent manifest error.

5 

      
“Liquidated Damages” shall have the meaning set forth in the Registration Rights Agreement.

      
“Liquidated Damages Notice” has the meaning specified in Section 5.08. 

      
“Make Whole Cap” has the meaning specified in Section 15.11(f)(ii). 

      
“Make Whole Floor” has the meaning specified in Section 15.11(f)(iii). 

      
“Make-Whole Fundamental Change” means any event that (i) is a Fundamental Change or (ii)
would be a Fundamental Change, but for the exclusion in section (i) of clause
(2) of the definition thereof. 

      
“Market Disruption Event” means (1) a failure by the primary exchange or quotation
system on which the Common Stock trades or is quoted to open for trading during
its regular trading session or (2) the occurrence or existence, prior to 1:00
p.m., New York City time, on any Trading Day for the Common Stock, of an
aggregate one half-hour period of any suspension or limitation imposed on
trading (by reason of movements in price exceeding limits permitted by the stock
exchange or otherwise) in the Common Stock or in any options, contracts or
future contracts relating to the Common Stock. 

      
“Maturity Date” means November 15, 2016. 

      
“Merger Event” has the meaning specified in Section 15.05(g). 

      
“Note” or
“Notes”
means any Note or Notes, as the case may be, authenticated and delivered under
this Indenture (including the Guarantee endorsed thereon), including the Initial
Notes, any Additional Notes and any Global Note. 

      
“Note Register” has the meaning specified in Section 2.05(a). 

      
“Note Registrar” has the meaning specified in Section 2.05(a). 

      
“Noteholder” or “Holder” as applied to any Note, or other similar terms (but excluding the term
“beneficial holder”), means any Person in whose name at the time a particular Note is
registered on the Note Register. 

      
“Notice of Default” has the meaning specified in Section 7.01(f). 

      
“Offer Expiration Date” has the meaning specified in Section 15.05(e). 

      
“Offering Memorandum” means the Issuer’s preliminary offering memorandum dated
November 18, 2013, as supplemented by the pricing term sheet dated November 19,
2013, relating to the offering and sale of the Notes. 

      
“Officer”
means the Chairman, the President, one of the Vice Presidents, the Treasurer,
the Assistant Treasurer, the Secretary or an Assistant Secretary of ZAIS
Financial Corp. 

      
“Officers’ Certificate,” when used with respect to the Issuer, means a certificate
signed by the Chairman of the Board of Directors, the President or a Vice
President and by the Treasurer, the Chief Financial Officer, an Assistant
Treasurer, the Secretary or an Assistant Secretary of ZAIS Financial Corp., and
delivered to the Trustee. 

      
“Open of Business” means 9:00 a.m., New York City time. 

6 

      
“Opinion of Counsel” means a written opinion of counsel, who may be counsel for ZAIS
Financial Corp. or the Issuer or who may be an employee of or other counsel for
ZAIS Financial Corp. or the Issuer, and delivered to the Trustee. 

      
“Outstanding,” when used with respect to Notes, means, as of the date of
determination, all Notes theretofore authenticated and delivered under this
Indenture, except: 

       (a)
Notes theretofore canceled by the Trustee or delivered to the Trustee for
cancellation; 

       (b)
Notes, or portions thereof, for the payment of which (including purchase
pursuant to Article 4) money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the Issuer) in trust
or set aside and segregated in trust by the Issuer (if the Issuer shall act as
its own Paying Agent) for the Holders of such Notes; 

       (c)
Notes that have been discharged in accordance with Article 12; and 

       (d)
Notes that have been paid pursuant to Section 2.06 or in exchange for or in lieu
of which other Notes have been authenticated and delivered pursuant to this
Indenture, other than any such Notes in respect of which there shall have been
presented to the Trustee proof satisfactory to it that such Notes are held by a
protected purchaser in whose hands such Notes are valid obligations of the
Issuer; 

provided, however, that in determining whether the Holders of the requisite principal
amount of the outstanding Notes have given any request, demand, authorization,
direction, notice, consent or waiver hereunder or are present at a meeting of
Holders for quorum purposes, Notes owned by the Issuer or any other obligor on
the Notes or any Affiliate of the Issuer or of such other obligor shall be
disregarded and deemed not to be outstanding, except that, in determining whether
the Trustee shall be protected in making such calculation or in relying upon any
such request, demand, authorization, direction, notice, consent or waiver, only
Notes that a Responsible Officer of the Trustee actually knows to be so owned
shall be so disregarded. Notes that have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee’s right so to act with respect to such Notes and that the
pledgee is not the Issuer or any other obligor on the Notes or any Affiliate of
the Issuer or of such other obligor. In case of a dispute as to such right, the
advice of counsel shall be full protection in respect of any decision made by
the Trustee in accordance with such advice. 

      
“Paying Agent” has the meaning specified in Section 2.08. 

      
“Person”
means any corporation, association, partnership, limited partnership, limited
liability company, individual, joint venture, joint stock company, trust,
unincorporated organization or government or agency or political subdivision
thereof. 

      
“Physical Note” means any non-Global Note issued pursuant to this Indenture in
definitive, fully registered form, without interest coupons. 

      
“Plan Asset Regulation” means U.S. Department of Labor Regulation Section 2510.3-101, as modified by Section 3(42) of ERISA.

      
“Preferred Stock” means, with respect to any Person, all Capital Stock issued by such
Person that is entitled to a preference or priority over any other Capital Stock
issued by such Person with respect to any distribution of such Person’s assets,
whether by dividend or upon any voluntary or involuntary liquidation,
dissolution or winding up. 

      
“Purchase Agreement” means the Purchase Agreement, dated November 19, 2013, by and among the
Issuer, ZAIS Financial Corp., ZAIS REIT Management, LLC and Credit Suisse
Securities (USA) LLC. 

      
“QIB” means
a “qualified institutional buyer” as defined in Rule 144A. 

7 

      
“Record Date” has the meaning specified in Section 2.03. 

      
“Reference Property” has the meaning specified in Section 15.05(g). 

      
“Registration Default” has the meaning specified in the Registration Rights
Agreement. 

      
“Registration Rights Agreement” means the Registration Rights Agreement, dated November 25,
2013, by and among the Issuer, ZAIS Financial Corp. and Credit Suisse Securities
(USA) LLC, as amended from time to time in accordance with its terms.

      
“Reporting Event of Default” has the meaning specified in Section 7.01. 

      
“Responsible Officer” when used with respect to the Trustee, means any officer
assigned to the Corporate Trust Division (or any successor division or unit) of
the Trustee located at the Corporate Trust Office of the Trustee who shall have
direct responsibility for the administration of this Indenture, and for the
purposes of the proviso in Section 8.01 and Section 8.12(c)(ii) shall also
include any other officer of the Trustee to whom any corporate trust matter is
referred because of such officer’s knowledge of and familiarity with the
particular subject.

      
“Restricted Notes” has the meaning specified in Section 2.05(d). 

      
“Restricted Notes Legend” has the meaning specified in Section 2.05(d). 

      
“Rule 144A”
means Rule 144A as promulgated under the Securities Act as it may be amended
from time to time hereafter. 

      
“Scheduled Trading Day” means a day that is scheduled to be a Trading Day.

      
“Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder, as in effect from time to time. 

      
“Significant Subsidiary” means any Subsidiary which is a “significant subsidiary” (as
defined in Article I, Rule 1-02 of Regulation S-X, promulgated under the
Securities Act) of the Issuer. 

      
“Similar Law” means any non-U.S. or U.S. federal, state or local laws or regulations
that are substantially similar to the fiduciary responsibility provisions of
Title I of ERISA and/or Section 4975 of the Internal Revenue Code. 

      
“Spin-Off”
has the meaning specified in Section 15.05(c). 

      
“Stated Maturity,” when used with respect to any Note or any installment of principal
thereof or interest thereon, means the date specified in such Note as the fixed
date on which the principal of such Note or such installment of principal or
interest is due and payable. 

      
“Stock Price” has the meaning specified in Section 15.11(b). 

      
“Subsidiary” means a Person (other than an individual), a majority of the
outstanding voting stock, partnership interests, membership interests or other
equity interest, as the case may be, of which is owned or controlled, directly
or indirectly, by another Person or by one or more other Subsidiaries of such
other Person. For the purposes of this definition, “voting stock” means stock having
voting power for the election of directors, trustees or
managers, as the case may be, whether at all times or only so long as no senior
class of stock has such voting power by reason of any contingency.

8 

      
“Supplemental Interest” has the meaning specified in Section 7.01. 

      
“Trading Day” means a day on which (i) there is no Market Disruption Event and (ii)
trading in securities generally occurs on the New York Stock Exchange or, if the
Common Stock is not then listed on the New York Stock Exchange, on the principal
other United States national or regional securities exchange on which the Common
Stock is then listed or, if the Common Stock is not then listed on a United
States national or regional securities exchange, on the principal other market
on which the Common Stock is then traded; provided, however, that if the Common Stock (or
other security for which a Last Reported Sale Price must be determined) is not
so listed or quoted, “Trading Day” means a Business Day, and provided, further, that for purposes
of determining amounts due upon exchange only, “Trading Day” means a day during which
trading in the Common Stock generally occurs on the primary exchange or
quotation system on which the Common Stock then trades or is quoted and there is
no market disruption event. If the Common Stock is not so traded or quoted,
“Trading
Day” means
a Business day. 

      
“transfer”
has the meaning specified in Section 2.05(d). 

      
“Trigger Event” has the meaning specified in Section 15.05(c). 

      
“Trust Indenture Act” or “TIA” means the Trust Indenture Act of 1939, as amended, as it was
in force at the date of this Indenture; provided that, in the case of a
supplemental indenture executed pursuant to this Indenture, “Trust Indenture
Act” or “TIA” means the Trust Indenture Act of 1939, as amended, as it was in
force at the date of such supplemental indenture. 

      
“Trustee”
means U.S. Bank National Association, solely in its capacity as Trustee under
this Indenture and not in its individual capacity, and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder. 

      
“Unit of Reference Property” has the meaning specified in Section 15.05(g). 

      
“Valuation Period” has the meaning specified in Section 15.05(c). 

      
“ZAIS Financial Corp.” means ZAIS Financial Corp. and, subject to the provisions of
Article 11, shall include its successors and assigns. 

ARTICLE 2 
ISSUE, DESCRIPTION, EXECUTION, REGISTRATION AND EXCHANGE OF
NOTES 

      
Section 2.01 Designation Amount and Issue of Notes.
The Notes shall be designated as “8.0%
Exchangeable Senior Notes due 2016.” Upon the
execution of this Indenture, and from time to time thereafter, Notes may be,
subject to this Section 2.01, executed by the Issuer and delivered to the
Trustee (with or without the Guarantee endorsed thereon) for authentication, and
the Trustee shall thereupon authenticate and deliver Notes upon a written order
of the Issuer, such order signed by one Officer of the Issuer, without any
further action by the Issuer or ZAIS Financial Corp. hereunder. 

       The
aggregate principal amount of Notes which may be authenticated and delivered
under this Indenture is unlimited; provided that upon initial issuance
the aggregate principal amount of Notes outstanding shall not exceed
$57,500,000, except as provided in Section 2.06. The Issuer may, without the consent of the
Holders of Notes, issue additional Notes (the “Additional Notes”) from time to time
in the future with the same terms and conditions, except for any difference in
the issue price and interest accrued prior to the issue date of the Additional
Notes, and the same CUSIP number as the Notes originally issued under this
Indenture (the “Initial Notes”) in an unlimited principal amount, provided that such
Additional Notes must be part of the same issue as and fungible with the Initial
Notes for United States federal income tax purposes. The Initial Notes and any
such Additional Notes will constitute a single series of debt securities, and in
circumstances in which this Indenture provides for the Holders of Notes to vote
or take any action, the Holders of Initial Notes and the Holders of any such
Additional Notes will vote or take that action as a single class.

9 

      
Section 2.02 Form of Notes. The Notes and the
Trustee’s certificate of authentication to be borne by such Notes shall be
substantially in the form set forth in Exhibit A hereto. The terms and
provisions contained in the form of Note attached as Exhibit A hereto shall
constitute, and are hereby expressly made, a part of this Indenture and, to the
extent applicable, the Issuer and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby. 

       Any
of the Notes may have such letters, numbers or other marks of identification and
such notations, legends, endorsements or changes as the officers executing the
same may approve (execution thereof to be conclusive evidence of such approval)
and as are not inconsistent with the provisions of this Indenture, or as may be
required by the Custodian or the Depositary or as may be required for the Notes
to be tradable on any other market developed for trading of securities pursuant
to Rule 144A or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage, or to indicate any special limitations or
restrictions to which any particular Notes are subject. 

       So
long as the Notes are eligible for book-entry settlement with the Depositary, or
unless otherwise required by law, or otherwise contemplated by Section 2.05(c),
all of the Notes will be represented by one or more Notes in global form
registered in the name of the Depositary or the nominee of the Depositary (a
“Global Note”). The transfer, repurchase, exchange, and all dispositions of
beneficial interests in any such Global Note shall be effected through the
Depositary in accordance with this Indenture and the applicable procedures of
the Depositary. Except as provided in Section 2.05(c), beneficial owners of a
Global Note shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered Holders of such
Global Note. 

       Any
Global Note shall represent such of the outstanding Notes as shall be specified
therein and shall provide that it shall represent the aggregate amount of
outstanding Notes from time to time endorsed thereon and that the aggregate
amount of outstanding Notes represented thereby may from time to time be
increased or reduced to reflect repurchases, exchanges, or transfers permitted
hereby. Any endorsement of a Global Note to reflect the amount of any increase
or decrease in the amount of outstanding Notes represented thereby shall be made
by the Trustee or the Custodian, at the direction of the Trustee, in such manner
and upon instructions given by the Holder of such Notes in accordance with this
Indenture. Payment of principal of and interest on any Global Note shall be made
to the Holder of such Note. 

       So
long as any Notes are represented by one or more Global Notes, the parties
hereto will be bound at all times by the applicable procedures of the Depositary
with respect to such Notes. 

       Notes
transferred to Accredited Investors pursuant to Section 2.05(b) of this
Indenture shall be issued in the form of an AI Global Note or, upon the written
request of the Issuer to the Trustee, in the form of a certificated Note.

      
Section 2.03 Date and Denomination of Notes; Payments of Interest. The Notes shall be issuable in registered book entry form
without coupons in minimum denominations of $1,000 principal amount and in
integral multiples of $1,000 in excess thereof. Each Note shall be dated the
date of its authentication and shall bear interest from the date specified on
the face of the Note. Interest on the Notes shall be computed on the basis of a
360-day year consisting of twelve 30-day months. 

10 

       The
Person in whose name any Note is registered on the Note Register at the Close of
Business on any Record Date with respect to any interest payment date shall be
entitled to receive the interest payable on such interest payment date.
Notwithstanding the foregoing, any Note or portion thereof surrendered for
exchange during the period from the Close of Business on the Record Date for any
interest payment to the Open of Business on the applicable interest payment date
must be accompanied by payment, in immediately available funds or other funds
acceptable to the Issuer, of an amount equal to the interest otherwise payable
on such interest payment date on the principal amount being exchanged;
provided,
however,
that no such payment need be made (1) if a Holder exchanges its Notes in
connection with a Fundamental Change and the Issuer has specified a Fundamental
Change Purchase Date that is after a Record Date and on or prior to the Business
Day immediately succeeding the corresponding interest payment date, (2) with
respect to any exchange on or following the Record Date immediately preceding
the Maturity Date, or (3) to the extent of any Defaulted Interest, if any
Defaulted Interest exists at the time of exchange with respect to such Note.
Interest on any Global Note shall be paid by wire transfer of immediately
available funds to the account of the Depositary or its nominee. For Notes not
represented by a Global Note, payment of the principal will be made at the
Corporate Trust Office, or the office maintained for that purpose by the Issuer
in the Borough of Manhattan, The City of New York, New York, and the payment of
interest will be made by check mailed to the address of the registered Holder of
such Notes, each 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;
provided, however, that interest will be paid to any Holder of more than $2,000,000
aggregate principal amount of certificated Notes by wire transfer in immediately
available funds to an account within the United States designated by such Holder
in a written application delivered by such Holder to the Trustee and the Paying
Agent not later than the Record Date for the relevant interest payment, which
application will remain in effect until such Holder notifies the Trustee and
Paying Agent, in writing, to the contrary.

       If a
payment date is not a Business Day, payment shall be made on the next succeeding
Business Day, and no additional interest shall accrue thereon. The term
“Record Date” with respect to any interest payment date shall mean the May 1 or
November 1 preceding the applicable May 15 or November 15 interest payment date,
respectively. 

       Any
interest on any Note that is payable, but is not punctually paid or duly
provided for, on any May 15 or November 15 (herein called “Defaulted Interest”) shall
forthwith cease to be payable to the Noteholder registered as such on the
relevant Record Date, and such Defaulted Interest shall be paid by the Issuer,
at its election in each case, as provided in clause (a) or (b) below:

             
(a) The Issuer may
elect to make payment of any Defaulted Interest to the Persons in whose names
the Notes are registered at the Close of Business on a special record date for
the payment of such Defaulted Interest, which shall be fixed in the following
manner. The Issuer shall notify the Trustee in writing of the amount of
Defaulted Interest proposed to be paid on each Note and the date of the proposed
payment (which shall be not less than twenty (20) calendar days after the
receipt by the Trustee of such notice, unless the Trustee shall consent to an
earlier date), and at the same time the Issuer shall deposit with the Trustee an
amount of money equal to the aggregate amount to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee for
such deposit on or prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the Trustee shall fix a
special record date for the payment of such Defaulted Interest which shall be
not more than fifteen (15) calendar days and not less than ten (10) calendar
days prior to the date of the proposed payment, and not less than ten (10)
calendar days after the receipt by the Trustee of the notice of the proposed
payment (unless, the Trustee shall consent to an earlier date). The Trustee
shall promptly notify the Issuer of such special record date and, in the name
and at the expense of the Issuer, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to be mailed,
first-class postage prepaid, to each Holder at its address as it appears in the
Note Register, not less than ten (10) calendar days prior to such special record
date (unless, the Trustee shall consent to an earlier date). Notice of the
proposed payment of such Defaulted Interest and the special record date therefor
having been so mailed, such Defaulted Interest shall be paid to the Persons in
whose names the Notes are registered at the Close of Business on such special
record date and shall no longer be payable pursuant to the following clause (b)
of this Section 2.03. 

             
(b) The Issuer may
make payment of any Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any securities exchange or automated
quotation system on which the Notes may be listed or designated for issuance,
and upon such notice as may be required by such exchange or automated quotation
system, if, after notice given by the Issuer to the Trustee of the proposed
payment pursuant to this clause, such manner of payment shall be deemed
practicable by the Trustee.

11 

      
Section 2.04 Execution of Notes. The Notes shall be
signed in the name and on behalf of the Issuer by the manual or facsimile
signature of an Officer of the Issuer. Only such Notes as shall bear thereon a
certificate of authentication substantially in the form set forth on the form of
Note attached as Exhibit A hereto, executed manually or by facsimile by the
Trustee (or an authenticating agent appointed by the Trustee as provided by
Section 8.11), shall be entitled to the benefits of this Indenture or be valid
or obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Issuer shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the Holder is entitled to the benefits of this
Indenture. 

       In
case any Officer who shall have signed any of the Notes shall cease to be such
Officer before the Notes so signed shall have been authenticated and delivered
by the Trustee, or disposed of by the Issuer, such Notes nevertheless may be
authenticated and delivered or disposed of as though the person who signed such
Notes had not ceased to be such Officer, and any Note may be signed on behalf of
the Issuer by such persons as, at the actual date of the execution of such Note,
shall be the proper Officers, although at the date of the execution of this
Indenture any such person was not such an Officer. 

      
Section 2.05 Exchange and Registration of Transfer of Notes; Restrictions on
Transfer. (a) The Trustee shall cause to be
kept at the Corporate Trust Office a register (the register maintained in such
office and in any office or agency of the Issuer designated pursuant to Section
5.02 being herein sometimes collectively referred to as the “Note Register”) in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Notes and of transfers and exchanges of Notes.
The Note Register shall be in written form or in any form capable of being
exchanged into written form within a reasonably prompt period of time. The
Trustee is hereby appointed “Note
Registrar” for the purpose of registering
Notes and transfers and exchanges of Notes as herein provided. The Issuer may
appoint one or more co-registrars in accordance with Section 5.02. 

       Upon
surrender for registration of transfer of any Note to the Note Registrar or any
office or agency maintained by the Issuer pursuant to Section 5.02, and
satisfaction of the requirements for such transfer set forth in this Section
2.05, the Issuer shall execute, and upon receipt thereof the Trustee 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 principal amount and bearing such restrictive legends as may be
required by this Indenture. 

       Notes
may be exchanged for other Notes of any authorized denominations and of a like
aggregate principal amount, upon surrender of the Notes to be exchanged at the
Corporate Trust Office or any such office or agency maintained by the Issuer
pursuant to Section 5.02. Whenever any Notes are so surrendered for exchange,
the Issuer shall execute, and upon receipt thereof the Trustee shall
authenticate and deliver, the Notes which the Noteholder making the exchange is
entitled to receive bearing registration numbers not contemporaneously
outstanding. 

       All
Notes issued upon any registration of transfer or exchange of Notes shall be the
valid obligations of the Issuer, evidencing the same debt, and entitled to the
same benefits under this Indenture, as the Notes surrendered upon such
registration of transfer or exchange. 

       All
Notes presented or surrendered for registration of transfer or for exchange, or
repurchase shall (if so required by the Issuer or the Note Registrar) be duly
endorsed, or be accompanied by a written instrument or instruments of transfer
in form satisfactory to the Issuer and the Note Registrar, duly executed by the
Noteholder thereof or its attorney duly authorized in writing. 

       No
service charge shall be made to any Holder for any registration of transfer or
exchange of Notes, but the Issuer may require payment by the Holder of a sum
sufficient to cover any transfer or similar tax that may be imposed in
connection with any registration of transfer or exchange of Notes. 

12 

             
(b) The following
provisions shall apply with respect to the registration of any proposed transfer
of a Note to any Accredited Investor which is not a QIB: 

             
(i) The Note
Registrar shall register the transfer of any Note if the proposed transferee has
delivered to the Note Registrar (x) an Accredited Investor Certificate and (y)
an opinion of counsel acceptable to the Issuer and such other certifications and
evidence as the Issuer may reasonably require in order to determine that such
transfer is being made in compliance with the Securities Act. 

             
(ii) If the
proposed transferor is an Agent Member holding a beneficial interest in a Global
Note, upon receipt by the Note Registrar of (x) the documents required by clause
(i) above and (y) instructions given in accordance with the Depositary’s and the
Note Registrar’s procedures, the Note Registrar shall reflect on its books and
records the date and a decrease in the principal amount of such Global Note in
an amount equal to the principal amount of the beneficial interest in the Global
Note to be transferred, and the Issuer shall execute, and the Trustee shall
authenticate and deliver, one or more AI Global Note or, upon the written
request of the Issuer to the Trustee, one or more certificated Notes, of like
tenor and amount. 

             
(c) The following
provisions shall apply only to Global Notes: 

             
(i) Each Global
Note authenticated under this Indenture shall be registered in the name of the
Depositary or a nominee thereof and delivered to such Depositary or a nominee
thereof or Custodian therefor, and each such Global Note shall constitute a
single Note for all purposes of this Indenture. 

             
(ii) Notwithstanding any other provision in this Indenture, no Global Note may
be exchanged in whole or in part for Notes registered, and no transfer of a
Global Note in whole or in part may be registered, in the name of any Person
other than the Depositary or a nominee thereof unless (1) the Depositary (x) has
notified the Issuer that it is unwilling or unable to continue as Depositary for
such Global Note or (y) has ceased to be a clearing agency registered under the
Exchange Act, and a successor Depositary has not been appointed by the Issuer
within ninety (90) calendar days, (2) an Event of Default has occurred and is
continuing or (3) the Issuer, in its sole discretion, determines at any time
that the Notes shall no longer be represented by a Global Note and any Global
Note exchange pursuant to clause (iii) below may be exchanged in whole or from
time to time in part as directed by the Issuer. Any Global Note exchanged
pursuant to clause (1) or (2) above shall be so exchanged in whole and not in
part. Any Note issued in exchange for a Global Note or any portion thereof shall
be a Global Note; provided that any such Note so issued that is registered in the name
of a Person other than the Depositary or a nominee thereof shall not be a Global
Note. 

             
(iii) Notes issued
in exchange for a Global Note or any portion thereof pursuant to clause (ii)
above shall be issued in definitive, fully registered form, without interest
coupons, shall have an aggregate principal amount equal to that of such Global
Note or portion thereof to be so exchanged, shall be registered in such names
and be in such authorized denominations as the Depositary shall designate and
shall bear any legends required hereunder. Any Global Note to be exchanged in
whole shall be surrendered by the Depositary to the Trustee, as Note Registrar.
With regard to any Global Note to be exchanged in part, either such Global Note
shall be so surrendered for exchange or, if the Trustee is acting as Custodian
for the Depositary or its nominee with respect to such Global Note, the
principal amount thereof shall be reduced, by an amount equal to the portion
thereof to be so exchanged, by means of an appropriate adjustment made on the
records of the Trustee. Upon any such surrender or adjustment, the Trustee shall
authenticate and make available for delivery the Note issuable on such exchange
to or upon the written order of the Depositary or an authorized representative
thereof. 

             
(iv) In the event
of the occurrence of any of the events specified in clause (ii) above, the
Issuer shall promptly make available to the Trustee a reasonable supply of
certificated Notes in definitive, fully registered form, without interest
coupons. 

             
(v) Neither any
members of, or participants in, the Depositary (“Agent Members”) nor any other Persons
on whose behalf Agent Members may act shall have any rights under this Indenture
with respect to any Global Note registered in the name of the Depositary or any
nominee thereof, and the Depositary or such nominee, as the case may be, may be
treated by the Issuer, the Trustee and any agent of the Issuer or the Trustee as
the absolute owner and Holder of such Global Note for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Issuer, the
Trustee or any agent of the Issuer or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depositary
or such nominee, as the case may be, or impair, as between the Depositary, its
Agent Members and any other Person on whose behalf an Agent Member may act, the
operation of customary practices of such Persons governing the exercise of the
rights of a Holder of any Note.

13 

             
(vi) At such time
as all interests in a Global Note have been repurchased, exchanged, or canceled
for Notes in certificated form, such Global Note shall, upon receipt thereof, be
canceled by the Trustee in accordance with standing procedures and instructions
existing between the Depositary and the Custodian. At any time prior to such
cancellation, if any interest in a Global Note is repurchased, exchanged, or
canceled for Notes in certificated form, the principal amount of such Global
Note shall, in accordance with the standing procedures and instructions existing
between the Depositary and the Custodian, be appropriately reduced, and an
endorsement shall be made on such Global Note, by the Trustee or the Custodian,
at the direction of the Trustee, to reflect such reduction. 

             
(d) Every Note
(and all securities issued in exchange therefor or in substitution thereof) that
bears or is required under this Section 2.05(d) to bear the legend set forth in
this Section 2.05(d) (the “Restricted Notes
Legend”), and any Common Stock that bears or
is required under this Section 2.05(d) to bear the Common Stock legend set forth
in this Section 2.05(d) (the “Common Stock
Legend”) (collectively, the “Restricted Notes”) shall be
subject to the restrictions on transfer set forth in this Section 2.05(d)
(including those set forth in the legends below) unless such restrictions on
transfer shall be waived by written consent of the Issuer, and the Holder of
each such Restricted Note, by such Holder’s acceptance thereof, agrees to be
bound by all such restrictions on transfer. As used in this Section 2.05(d), the
term “transfer” means any sale, pledge, loan, transfer or other disposition whatsoever
of any Restricted Note or any interest therein. 

       Any certificate evidencing a
Note shall bear a legend in substantially the following form, or unless
otherwise agreed by the Issuer in writing, with written notice thereof to the
Trustee: 

THIS NOTE
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE
HOLDER AGREES THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER,
ZAIS FINANCIAL CORP. OR A SUBSIDIARY OF THE ISSUER OR OF ZAIS FINANCIAL CORP.;
(B) TO A PERSON THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT) THAT IS
PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS BEING MADE
IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE 144A (IF AVAILABLE) OR (C)
PURSUANT TO ANY OTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (INCLUDING,
WITHOUT LIMITATION, TO ACCREDITED INVESTORS).

       Any stock certificate
representing shares of Common Stock issued upon exchange of any Note shall bear
a legend in substantially the following form, which may be removed upon the
expiration of the holding period applicable to sales thereof under Rule 144
under the Securities Act (or any successor provision) or once such Common Stock
has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and that continues to be effective at the
time of such transfer) or pursuant to Rule 144 under the Securities Act or any
similar provision then in force, or unless otherwise agreed by the Issuer in
writing, with written notice thereof to the Trustee: 

THESE
SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE “SECURITIES ACT”), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY
EVIDENCED HEREBY, EXCEPT (A) TO THE ISSUER, ZAIS FINANCIAL CORP. OR A SUBSIDIARY
OF THE ISSUER OR OF ZAIS FINANCIAL CORP.; (B) UNDER A REGISTRATION STATEMENT
THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT; OR (C) UNDER ANY
AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT; AND (2) THAT IT WILL,
PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH TO THE TRANSFER AGENT AND THE
ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS
OR OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING
MADE PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. 

14 

       Any
such shares of Common Stock as to which such restrictions on transfer shall have
expired in accordance with their terms or as to which the conditions for removal
of the Common Stock Legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the Common Stock Legend required by
this Section 2.05(d). 

             
(e) By its
acceptance of any Note bearing the Restricted Notes Legend, each Holder of such
Note acknowledges the restrictions on transfer of such Note set forth in this
Indenture and in the Restricted Notes Legend and agrees that it will transfer
such Note only as provided in this Indenture and as permitted by applicable law.

             
(f) By its
purchase of any Notes, the purchaser thereof will be deemed to have represented
and agreed as follows: (1) either (A) no portion of the assets used by the
purchaser to acquire and hold the Notes and any Common Stock received in
exchange for the Notes constitutes assets of any Benefit Plan Investor or plan
subject to Similar Law, or (B) if the purchaser is a Benefit Plan Investor or
plan subject to Similar Law, (i) the purchaser believes the Notes are properly
treated as indebtedness without substantial equity features for purposes of the
Plan Asset Regulation and agrees to so treat the Notes, (ii) the purchase and
holding of the Notes and any Common Stock received in exchange for the Notes by
the purchaser will not constitute a nonexempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code or a violation
under any applicable Similar Laws; and (iii) the purchaser has made its own
discretionary decision to acquire and hold the Notes and/or exchange the Notes
for Common Stock and is not relying upon the Issuer to make any decision
regarding the investment of plan assets; and (2) the purchaser will not transfer
the Notes to any person or entity, unless such person or entity could itself
truthfully make the foregoing representations and covenants. 

             
(g) Any Restricted
Notes purchased or owned by the Issuer or any Affiliate thereof may not be
resold by the Issuer or such Affiliate unless registered under the Securities
Act in a transaction which results in such Notes or Common Stock, as the case
may be, no longer being “restricted securities” (as defined under Rule 144) or
resold pursuant to an exemption from the registration requirements of the
Securities Act. 

             
(h) The Trustee,
the Issuer, and ZAIS Financial Corp. shall have no responsibility or obligation
to any Agent Members or any other Person with respect to the accuracy of the
books or records, or the acts or omissions, of the Depositary or its nominee or
of any participant or member thereof, with respect to any ownership interest in
the Notes or with respect to the delivery to any Agent Member or other Person
(other than the Depositary) of any notice or the payment of any amount, under or
with respect to such Notes. All notices and communications to be given to the
Noteholders and all payments to be made to Noteholders under the Notes shall be
given or made only to or upon the order of the registered Noteholders (which
shall be the Depositary or its nominee in the case of a Global Note). The rights
of beneficial owners in any Global Note shall be exercised only through the
Depositary subject to the customary procedures of the Depositary. The Trustee
may rely and shall be fully protected in relying upon information furnished by
the Depositary with respect to its Agent Members. 

             
(i) The Trustee
shall have no obligation or duty to monitor, determine or inquire as to
compliance with any restrictions on transfer imposed under this Indenture or
under applicable law with respect to any transfer of any interest in any Note
(including any transfers between or among Agent Members in any Global Note) other than to require delivery of
such certificates and other documentation or evidence as are expressly required
by, and to do so if and when expressly required by, the terms of this Indenture,
and to examine the same to determine substantial compliance as to form with the
express requirements hereof. 

15 

     Section
2.06 Mutilated,
Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Issuer in its
discretion may execute, and upon its written request and receipt of such new
Note the Trustee or an authenticating agent appointed by the Trustee shall
authenticate and make available for delivery, a new Note, bearing a number not
contemporaneously outstanding, in exchange and substitution for the mutilated
Note, or in lieu of and in substitution for the Note so destroyed, lost or
stolen. In every case, the applicant for a substituted Note shall furnish to the
Issuer, to the Trustee and, if applicable, to such authenticating agent such
security or indemnity as may be required by them to save each of them harmless
for any loss, liability, cost or expense caused by or connected with such
substitution, and, in every case of destruction, loss or theft, the applicant
shall also furnish to the Issuer, to the Trustee and, if applicable, to such
authenticating agent evidence to their satisfaction of the destruction, loss or
theft of such Note and of the ownership thereof. 

    
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Issuer may require the
payment by the Holder of a sum sufficient to cover any tax, assessment or other
governmental charge that may be imposed in relation thereto and any other
expenses connected therewith. In case any Note which has matured or is about to
mature or has been properly tendered for purchase on a Fundamental Change
Purchase Date (and not withdrawn) or is to be exchanged pursuant to this
Indenture, shall become mutilated or be destroyed, lost or stolen, the Issuer
may, instead of issuing a substitute Note, pay or authorize the payment of or
exchange or authorize the exchange of the same (without surrender thereof except
in the case of a mutilated Note), as the case may be, if the applicant for such
payment or exchange shall furnish to the Issuer, to the Trustee and, if
applicable, to such authenticating agent such security or indemnity as may be
required by them to save each of them harmless for any loss, liability, cost or
expense caused by or in connection with such substitution, and, in every case of
destruction, loss or theft, the applicant shall also furnish to the Issuer, the
Trustee and, if applicable, any Paying Agent or Exchange Agent evidence to their
satisfaction of the destruction, loss or theft of such Note and of the ownership
thereof. 

    
Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is mutilated, destroyed, lost or stolen
shall constitute an additional contractual obligation of the Issuer and the
Guarantor, whether or not the mutilated, destroyed, lost or stolen Note shall be
found at any time, and shall be entitled to all the benefits of (but shall be
subject to all the limitations set forth in) this Indenture equally and
proportionately with any and all other Notes duly issued hereunder. To the
extent permitted by law, all Notes shall be held and owned upon the express
condition that the foregoing provisions are exclusive with respect to the
replacement or payment or exchange or repurchase of mutilated, destroyed, lost
or stolen Notes and shall preclude any and all other rights or remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement or payment or exchange or repurchase of
negotiable instruments or other securities without their surrender. 

    
Section 2.07 Temporary Notes. Pending the
preparation of Notes in certificated form, the Issuer may execute and the
Trustee or an authenticating agent appointed by the Trustee shall, upon the
written request of the Issuer, authenticate and deliver temporary Notes (printed
or lithographed). Temporary Notes shall be issuable in any authorized
denomination, and substantially in the form of the Notes in certificated form,
including the Guarantee endorsed thereon, but with such omissions, insertions
and variations as may be appropriate for temporary Notes, all as may be
determined by the Issuer. Every such temporary Note shall be executed by the
Issuer and upon the written request of the Issuer authenticated by the Trustee
or such authenticating agent upon the same conditions and in substantially the
same manner, and with the same effect, as the Notes in certificated form.
Without unreasonable delay, the Issuer shall execute and deliver to the Trustee
or such authenticating agent Notes in certificated form and thereupon any or all
temporary Notes may be surrendered in exchange therefor, at each office or
agency maintained by the Issuer pursuant to Section 5.02 and, upon receipt of
the certificated Notes, the Trustee or such authenticating agent shall
authenticate and make available for delivery in exchange for such temporary
Notes an equal aggregate principal amount of Notes in certificated form. Such
exchange shall be made by the Issuer at its own expense and without any charge
therefor. Until so exchanged, the temporary Notes shall in all respects be
entitled to the same benefits and subject to the same limitations under this
Indenture as Notes in certificated form authenticated and delivered
hereunder. 

16

     Section
2.08 Cancellation of Notes. All Notes
surrendered for the purpose of payment, repurchase, exchange or registration of
transfer shall, if surrendered to the Issuer or any paying agent to whom Notes
may be presented for payment (the “Paying
Agent”) or Exchange Agent, which shall
initially be the Trustee, be surrendered to the Trustee and promptly canceled by
it or, if surrendered to the Trustee, shall be promptly canceled by it and no
Notes shall be issued in lieu thereof except as expressly permitted by any of
the provisions of this Indenture. The Trustee shall dispose of such canceled
Notes in accordance with its customary procedures. If the Issuer shall acquire
any of the Notes, such acquisition shall not operate as a repurchase, exchange
or satisfaction of the indebtedness represented by such Notes unless and until
the same are delivered to the Trustee for cancellation. 

    
Section 2.09 CUSIP and ISIN Numbers. The Issuer in
issuing the Notes may use CUSIP or ISIN numbers (if then generally in use), and,
if so, shall promptly notify the Trustee of any change in the CUSIP or ISIN
numbers. 

ARTICLE 3 
REDEMPTION OF NOTES

    
Section 3.01 No Redemption. The Issuer shall not
have the right to redeem the Notes prior to the Maturity Date. 

    
Section 3.02 Sinking Fund. There shall be no
sinking fund provided for the Notes. 

ARTICLE 4
PURCHASE OF NOTES UPON A FUNDAMENTAL
CHANGE 

    
Section 4.01 Purchase at Option of Holders Upon a Fundamental Change. (a) If a Fundamental Change occurs, then each Holder shall
have the right, at such Holder’s option, to require the Issuer to purchase for
cash all of such Holder’s Notes, or any portion thereof such that the remaining
principal amount of each Note that is not purchased in full equals $1,000 or an
integral multiple of $1,000 in excess thereof, on a date (the “Fundamental Change Purchase Date”) specified by the Issuer that is not less than 20 calendar days or more
than 35 calendar days following the date on which the Issuer delivers the
Fundamental Change Company Notice, at a purchase price equal to 100% of the
principal amount thereof, plus
accrued and unpaid interest thereon
(including Liquidated Damages), if any, to, but excluding, the Fundamental
Change Purchase Date (the “Fundamental Change
Purchase Price”); provided, however, that if the Issuer purchases
a Note on a Fundamental Change Purchase Date that is after a Record Date and on
or prior to the interest payment date corresponding to such Record Date, the
Issuer shall instead pay such accrued and unpaid interest on such Note on the
interest payment date to the Holder of record of such Note as of such Record
Date. 

    
Purchases of Notes under this Section 4.01 shall be made, at the option
of the Holder thereof, upon: 

         
(i) if the
Notes to be purchased are certificated Notes, delivery to the Paying Agent by
the Holder of a duly completed notice (the “Fundamental Change Purchase Notice”)
in the form set forth on the reverse of the Note and of the Notes, duly endorsed
for transfer, on or before the Close of Business on the Business Day immediately
preceding the Fundamental Change Purchase Date, subject to extensions to comply
with applicable law (the “Fundamental Change
Expiration Time”); and 

         
(ii) if the
Notes to be purchased are Global Notes, delivery of the Notes, by book-entry
transfer, in compliance with the applicable procedures of the Depositary and the
satisfaction of any other requirements of the Depositary in connection with
tendering beneficial interests in a Global Note for purchase, by the Fundamental
Change Expiration Time. 

17

    
The Fundamental Change Purchase Notice in respect of any Notes to be
purchased shall state: 

          (i) if certificated, the certificate numbers of such Notes; 

         
(ii) the
portion of the principal amount of such Notes, which must be such that the
principal amount that is not to be purchased of each Note that is not to be
purchased in full equals $1,000 or an integral multiple of $1,000 in excess
thereof; and 

         
(iii) that
such Notes are to be purchased by the Issuer pursuant to the applicable
provisions of the Notes and this Indenture. 

    
Notwithstanding anything herein to the contrary, any Holder delivering to
the Paying Agent the Fundamental Change Purchase
Notice contemplated by this Section 4.01 shall have the right to withdraw, in
whole or in part, such Fundamental Change Purchase Notice at any time prior to
the Fundamental Change Expiration Time by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 4.03. 

    
The Paying Agent shall promptly notify the Issuer of the receipt by it of
any Fundamental Change Purchase Notice or written notice of withdrawal thereof.

         
(b) On or
before the 20th calendar day after the occurrence of a Fundamental Change (the
“Fundamental Change Notice
Date”), the Issuer shall provide to all
Holders of the Notes, the Trustee and the Paying Agent (in the case of any
Paying Agent other than the Trustee) a notice (the “Fundamental Change Company Notice”),
as set forth in Section 4.02 of the occurrence of such Fundamental Change and of
the purchase right at the option of the Holders arising as a result thereof.
Such notice shall be sent by first class mail or, in the case of any Global
Notes, in accordance with the procedures of the Depositary for providing
notices. Simultaneously with providing such
Fundamental Change Company Notice, the Issuer shall publish this information in
a newspaper of general circulation in The City of New York or publish the
information on the Issuer’s website or through such other public medium as the
Issuer may use at that time. 

    
No failure of the Issuer to give the foregoing notices and no defect
therein shall limit the Noteholders’ repurchase rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 4.01.

         
(c) Notwithstanding the foregoing, there shall be no purchase of any Notes
pursuant to this Section 4.01 if the principal amount of the Notes has been
accelerated, and such acceleration has not been rescinded, on or prior to the
Fundamental Change Purchase Date (except in the case of an acceleration
resulting from a Default by the Issuer in the payment of the Fundamental Change
Purchase Price with respect to such Notes). The Paying Agent shall promptly
return to the respective Holders thereof any certificated Notes held by it
during the acceleration of the Notes (except in the case of an acceleration
resulting from a Default by the Issuer in the payment of the Fundamental Change
Purchase Price with respect to such Notes) and shall deem to be cancelled any
instructions for book-entry transfer of the Notes in compliance with the
procedures of the Depositary, in which case, upon such return or cancellation,
as the case may be, the Fundamental Change Purchase Notice with respect thereto
shall be deemed to have been withdrawn. 

    
Section 4.02 Fundamental Change Company Notice. (a)
In connection with any purchase of Notes, the Issuer shall, on the applicable
Fundamental Change Notice Date, give written notice to Holders, as provided in
Section 4.01(b), setting forth information specified in this Section 4.02.

    
Each Fundamental Change Company Notice shall specify: 

         
(i) the
events causing the Fundamental Change; 

         
(ii) the
date of the Fundamental Change; 

         
(iii) the
last date on which a Holder may exercise its purchase right; 

         
(iv) the
Fundamental Change Purchase Price; 

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          (v) the Fundamental Change Purchase Date; 

         
(vi) the
name and address of the Paying Agent and the Exchange Agent, if applicable;

         
(vii) if
applicable, the applicable Exchange Rate and any adjustments to the applicable
Exchange Rate; 

         
(viii) if
applicable, that the Notes with respect to which a Fundamental Change Purchase
Notice has been delivered by a Holder may be exchanged only if the Holder
withdraws the Fundamental Change Purchase Notice in accordance with this
Indenture; 

         
(ix) that
the Holder shall have the right to withdraw any Notes surrendered for purchase
prior to the Fundamental Change Expiration Time; and 

         
(x) the
procedures that Holders must follow to require the Issuer to purchase their
Notes; 

         
(b) The
Issuer shall, along with providing Fundamental Change Company Notice, publish a
notice containing this information in a newspaper of general circulation in The
City of New York or publish the information on our website or through such other
public medium as we may use at that time. 

         
(c) The
Issuer shall, to the extent applicable, comply with the provisions of Rule
13e-4, Rule 14e-1 (or any successor provision) and other tender offer rules
under the Exchange Act that may be applicable at the time of the purchase of the
Notes, including filing the related Schedule TO (or any successor schedule, form
or report) under the Exchange Act and comply with all other applicable federal
and state securities laws in connection with the purchase of the Notes.

    
Section 4.03 Effect of Fundamental Change Purchase Notice; Withdrawal. Upon receipt by the Paying Agent of a Fundamental Change
Purchase Notice specified in Section 4.01(a), the Holder of the Note in respect
of which such Fundamental Change Purchase Notice was given shall (unless such
Fundamental Change Purchase Notice is withdrawn in accordance with this Section
4.03) thereafter be entitled to receive solely the Fundamental Change Purchase
Price in cash with respect to such Note (and any previously accrued and unpaid
interest on such Note). Such Fundamental Change Purchase Price shall be paid to
such Holder, subject to receipt of funds by the Paying Agent, on the later of
(x) the applicable Fundamental Change Purchase Date (provided the conditions in
Section 4.01 have been satisfied) and (y) the time of delivery or book-entry
transfer of such notice to the Paying Agent by the Holder thereof in the manner
required by Section 4.01, subject in each case to extensions to comply with
applicable law. 

    
Notes in respect of which a Fundamental Change Purchase Notice has been
given by the Holder thereof may not be exchanged pursuant to Article 15 hereof
on or after the date of the delivery of such Fundamental Change Purchase Notice
unless such Fundamental Change Purchase Notice has first been validly withdrawn.

    
A Fundamental Change Purchase Notice may be withdrawn (in whole or in
part) by the Holder of the Notes subject thereto by means of a written notice of
withdrawal delivered to the Paying Agent in accordance with the Fundamental
Change Company Notice at any time prior to the Fundamental Change Expiration
Time, specifying: 

         
(a) the
principal amount of the Notes with respect to which such notice of withdrawal is
being submitted; 

         
(b) if
certificated Notes have been issued, the certificate numbers of the withdrawn
Notes, or if not certificated, the notice must comply with appropriate DTC
procedure; and 

19

          (c) the principal amount, if any, of each Note that remains subject to the
Fundamental Change Purchase Notice, which must be such that the principal amount
not to be purchased equals $1,000 or an integral multiple of $1,000 in excess
thereof; 

provided, however, that if the Notes are Global Notes, the notice must comply with
applicable procedures of the Depositary. 

    
The Paying Agent shall promptly return to the respective Holders thereof
any certificated Notes with respect to which a Fundamental Change Purchase
Notice has been withdrawn in compliance with the provisions of this Section
4.03. 

    
If a Fundamental Change Purchase Notice is properly withdrawn, the Issuer
shall not be obligated to purchase the Notes listed in such Fundamental Change
Purchase Notice. 

    
Section 4.04 Deposit of Fundamental Change Purchase Price. (a) Prior to 11:00 a.m., New York City time, on the Fundamental Change
Purchase Date, the Issuer shall deposit with the Paying Agent (or, if the Issuer
or a Subsidiary or an Affiliate of either of them is acting as the Paying Agent,
shall segregate and hold in trust as provided in Section 5.04) an amount of
money (in immediately available funds if deposited on such Business Day)
sufficient to pay the Fundamental Change Purchase Price of all the Notes or
portions thereof that are to be purchased as of the Fundamental Change Purchase
Date. 

         
(b) If the
Paying Agent holds cash sufficient to pay the Fundamental Change Purchase Price
of the Notes for which a Fundamental Change Purchase Notice has been tendered
and not withdrawn in accordance with this Indenture on the Fundamental Change
Purchase Date, then as of such Fundamental Change Purchase Date, (a) such Notes
will cease to be Outstanding and interest will cease to accrue thereon (whether
or not book-entry transfer of such Notes is made or such Notes have been
delivered to the Paying Agent) and (b) all other rights of the Holders in
respect thereof will terminate (other than the right to receive the Fundamental
Change Purchase Price upon delivery or book-entry transfer of such Notes).

    
Section 4.05 Notes Purchased in Part. Any Note that
is to be purchased, whether in whole or in part, shall be surrendered at the
office of the Paying Agent (with, if the Issuer or the Trustee so requires in
the case of certificated Notes, due endorsement by, or a written instrument of
transfer in form satisfactory to the Issuer and the Trustee duly executed by,
the Holder thereof or such Holder’s attorney duly authorized in writing) and the
Issuer shall execute and the Trustee shall authenticate and deliver to the
Holder of such Note, without service charge, a new Note or Notes, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Notes so surrendered that is not purchased. 

    
Section 4.06 Repayment to the Issuer. To the extent
that the aggregate amount of cash deposited by the Issuer pursuant to Section
4.04 exceeds the aggregate Fundamental Change Purchase Price of the Notes or
portions thereof that the Issuer is obligated to purchase as of the Fundamental
Change Purchase Date, then, following the Fundamental Change Purchase Date, the
Paying Agent shall promptly return any such excess to the Issuer. 

ARTICLE 5
PARTICULAR COVENANTS OF THE ISSUER 

    
Section 5.01 Payment of Principal and Interest. The
Issuer covenants and agrees that it will duly and punctually pay or cause to be
paid when due the principal of (including the Fundamental Change Purchase Price
upon purchase pursuant to Article 4), and interest on each of the Notes at the
places, at the respective times and in the manner provided herein and in the
Notes. The Issuer shall pay any interest on any Physical Note to the Holder of
such Note (i) if such Holder holds $2,000,000 or less aggregate principal amount
of Notes, by check mailed to such Holder’s registered address, and (ii) if such
Holder holds more than $2,000,000 aggregate principal amount of Note, (A) by
check mailed to such Holder’s registered address or, (B) if such Holder delivers
to the Note Registrar a written request that the Issuer make such payments by
wire transfer to an account of such Holder within the United States, for each
interest payment corresponding to each regular Record Date occurring during the
period beginning on the date on which such Holder delivered such request and
ending on the date, if any, on which such Holder delivers to the Note Registrar
a written instruction to the contrary, by wire transfer of immediately available
funds to the account specified by such Holder. 

20

     Section
5.02 Maintenance of Office or Agency. The
Issuer shall maintain an office or agency in the Borough of Manhattan, where the
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment or for exchange or repurchase and where notices and
demands to or upon the Issuer in respect of the Notes and this Indenture may be
served; provided, however, that the Notes may be so surrendered or presented instead to the
Trustee at the Corporate Trust Office at the Holder’s or Issuer’s option. The
Issuer shall give prompt written notice to the Trustee of the location, and any
change in the location, of such office or agency. If at any time the Issuer
shall fail to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the Corporate Trust Office.

    
The Issuer may also from time to time designate co-registrars and one or
more offices or agencies where the Notes may be presented or surrendered for any
or all such purposes and may from time to time rescind such designations. The
Issuer shall give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency. 

    
The Issuer hereby initially designates the Trustee as Paying Agent, Note
Registrar, Custodian and Exchange Agent and the Corporate Trust Office shall be
considered as one such office or agency of the Issuer for each of the aforesaid
purposes. The provisions of Article 8 of this Indenture shall also apply to the
Trustee in each of its roles as Paying Agent, Note Registrar, Custodian, and
Exchange Agent, respectively. 

    
So long as the Trustee is the Note Registrar, the Trustee agrees to mail,
or cause to be mailed, at the expense of the Issuer, the notices set forth in
Section 8.08(f). If co-registrars have been appointed in accordance with this
Section 5.02, the Trustee shall mail such notices only to the Issuer and the
Holders of Notes it can identify from its records. 

    
Section 5.03 Appointments to Fill Vacancies in Trustee’s Office. The Issuer, whenever necessary to avoid or fill a vacancy in
the office of Trustee, will appoint, upon the terms and conditions and otherwise
as provided in Section 8.08, a Trustee, so that there shall at all times be a
Trustee hereunder. 

    
Section 5.04 Provisions as to Paying Agent. (a) If
the Issuer shall appoint a Paying Agent other than the Trustee, or if the
Trustee shall appoint such a Paying Agent, the Issuer shall cause such Paying
Agent to execute and deliver to the Trustee an instrument in which such agent
shall agree with the Trustee, subject to the provisions of this Section 5.04:

         
(i) that it
will hold all sums held by it as such agent for the payment of the principal of
or interest on the Notes (whether such sums have been paid to it by the Issuer
or by any other obligor on the Notes) in trust for the benefit of the Holders of
the Notes; 

         
(ii) that
it will give the Trustee notice of any failure by the Issuer (or by any other
obligor on the Notes) to make any payment of the principal of or interest on the
Notes when the same shall be due and payable; and 

         
(iii) that
at any time during the continuance of an Event of Default, upon request of the
Trustee, it will forthwith pay to the Trustee all sums so held in trust.

    
The Issuer shall, on or before each due date of the principal of or
interest on the Notes, deposit with the Paying Agent a sum (in funds which are
immediately available on the due date for such payment) sufficient to pay such
principal or interest and (unless such Paying Agent is the Trustee) the Issuer
will promptly notify the Trustee of any failure to take such action;
provided
that if such deposit is made on the due date, such deposit shall be received by
the Paying Agent by 11:00 a.m. New York City time, on such date. 

21

          (b) If the Issuer shall act as its own Paying Agent, it will, on or before
each due date of the principal of or interest on the Notes, set aside, segregate
and hold in trust for the benefit of the Holders of the Notes a sum sufficient
to pay such principal and interest so becoming due and will promptly notify the
Trustee of any failure to take such action and of any failure by the Issuer (or
any other obligor under the Notes) to make any payment of the principal of or
interest on the Notes when the same shall become due and payable. 

         
(c) Anything in this Section 5.04 to the contrary notwithstanding, the Issuer
may, at any time, for the purpose of obtaining a satisfaction and discharge of
this Indenture, or for any other reason, pay or cause to be paid to the Trustee
all sums held in trust by the Issuer or any Paying Agent hereunder as required
by this Section 5.04, such sums to be held by the Trustee upon the trusts herein
contained and upon such payment by the Issuer or any Paying Agent to the
Trustee, the Issuer or such Paying Agent shall be released from all further
liability with respect to such sums. 

         
(d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Section 12.02 and Section 12.03. 

    
The Trustee shall not be responsible for the actions of any other Paying
Agents (including the Issuer if acting as its own Paying Agent) and shall have
no control of any funds held by such other Paying Agents. 

    
Section 5.05 Existence. Subject to Article 11, each
of the Issuer and ZAIS Financial Corp. will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and all
material rights and material franchises; provided, however, that neither the Issuer nor
ZAIS Financial Corp. shall be required to preserve any such right or franchise
if the Issuer or the Board of Directors, as applicable, shall determine that the
preservation thereof is no longer desirable in the conduct of the business of
the Issuer or ZAIS Financial Corp., as applicable. 

    
Section 5.06 Stay, Extension and Usury Laws. The
Issuer and ZAIS Financial Corp. each 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 usury, stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Issuer and
ZAIS Financial Corp. each (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 Trustee, but will suffer and permit the execution of every such power as
though no such law had been enacted. 

    
Section 5.07 Compliance Certificate. The Issuer and
ZAIS Financial Corp. will deliver to the Trustee, within 120 days after the end
of each fiscal year, an Officers’ Certificate from at least one such Officer who
shall be the principal executive officer, principal financial officer or
principal accounting officer of ZAIS Financial Corp. as to each of his or her
knowledge of the Issuer’s and ZAIS Financial Corp.’s compliance with all
conditions and covenants under this Indenture and, in the event of any
noncompliance, specifying such noncompliance and the nature and status thereof
and stating that to each of the signing Officers’ knowledge no Default or Event
of Default has occurred and is continuing (or, if a Default or Event of Default
has occurred and is continuing, describing all such Defaults or Events of
Default of which he or she has knowledge and what action the Issuer is taking or
proposes to take with respect thereto). For purposes of this Section 5.07, such
compliance shall be determined without regard to any period of grace or
requirement of notice under this Indenture. 

    
The Issuer will deliver to the Trustee, promptly upon becoming aware of
(i) any default in the performance or observance of any covenant, agreement or
condition contained in this Indenture, or (ii) any Default or Event of Default,
an Officers’ Certificate specifying with particularity such default, Default or
Event of Default and further stating what action the Issuer has taken, is taking
or proposes to take with respect thereto. 

    
Any notice required to be given under this Section 5.07 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.

22

     Section
5.08 Liquidated
Damages Notice. In the event that the Issuer
is required to pay Liquidated Damages to Holders of Notes pursuant to the
Registration Rights Agreement, the Issuer shall provide written notice
(“Liquidated
Damages Notice”) to the Trustee of its
obligation to pay Liquidated Damages no later than fifteen (15) calendar days
prior to the proposed interest payment date for Liquidated Damages, and the
Liquidated Damages Notice shall set forth the amount of Liquidated Damages to be
paid by the Issuer on such interest payment date. The Trustee shall not at any
time be under any duty or responsibility to any Holder of Notes to determine the
Liquidated Damages, or with respect to the nature, extent or calculation of the
amount of Liquidated Damages when made, or with respect to the method employed
in such calculation of the Liquidated Damages. 

ARTICLE 6
NOTEHOLDERS’ LISTS AND REPORTS BY THE ISSUER AND THE
TRUSTEE 

    
Section 6.01 Noteholders’ Lists. The Issuer shall
furnish or cause to be furnished to the Trustee: 

         
(a) semiannually, not later than 15 days after the Record Date for interest
for the Notes, a list, in such form as the Trustee may reasonably require, of
the names and addresses of the Holders of Notes as of such Record Date, and

         
(b) at such
other times as the Trustee may request in writing, within 30 days after the
receipt by the Issuer of any such request, a list of similar form and content as
of a date not more than 15 days prior to the time such list is furnished,
provided,
however,
that, so long as the Trustee is the Note Registrar, no such list shall be
required to be furnished. 

    
Section 6.02 Preservation and Disclosure of Lists.
Every Holder of Notes, by receiving and holding the same, agrees with the Issuer
and the Trustee that neither the Issuer nor the Trustee nor any authenticating
agent nor any Paying Agent nor any Note Registrar shall be held accountable by
reason of the disclosure of any information as to the names and addresses of the
Holders of Notes in accordance with TIA Section 312, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
TIA Section 312(b). 

    
Section 6.03 Reports by Issuer. The Issuer
shall:

         
(a) deliver
to the Trustee, within 15 days after ZAIS Financial Corp. 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 from time to time by rules and regulations
prescribe) which ZAIS Financial Corp. may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Exchange Act, or if
ZAIS Financial Corp. is not required to file information, documents or reports
pursuant to either Section 13 or Section 15(d) of the Exchange Act, the Issuer
shall provide to the Trustee upon request and to the Commission such reports as
may be prescribed to be filed by ZAIS Financial Corp. by the Commission at such
time; documents that are filed with the Commission via the EDGAR system, or any
successor system thereto, shall be deemed filed with the Trustee as of the time
such documents are filed via such system; 

         
(b) file
with the Trustee and the Commission, in accordance with rules and regulations
prescribed from time to time by the Commission, such additional information,
documents and reports with respect to compliance by ZAIS Financial Corp. with
the conditions and covenants of this Indenture as may be required from time to
time by such rules and regulations; 

         
(c) transmit by mail to the Holders of Notes, within 30 days after the filing
thereof with the Trustee, in the manner and to the extent provided in TIA
Section 313(c), such summaries of any information, documents and reports
required to be filed by ZAIS Financial Corp. pursuant to clauses (a) and (b) of
this Section 6.03 as may be required by rules and regulations prescribed from
time to time by the Commission; 

         
(d) until
the Maturity Date, provide upon request the information required by Rule
144A(d)(4) to each Noteholder and to each beneficial owner and prospective
purchaser of Notes and of any shares of Common Stock delivered upon exchange of
the Notes, unless such information has been furnished to the Commission pursuant
to Section 13 or 15(d) of the Exchange Act; and 

23

          (e) be deemed, for purposes of this Section 6.03, to have furnished or
delivered reports to the Noteholders if (i) such reports are filed with the
Commission via the EDGAR filing system and (ii) such reports are currently
available.

          Delivery of
such reports, information and documents to the Trustee is for informational
purposes only and the Trustee’s receipt of such shall not constitute
constructive notice of any information contained therein or determinable from
information contained therein, including the Issuer’s or ZAIS Financial Corp.’s
compliance with any of their covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers’ Certificates). 

ARTICLE 7
REMEDIES OF THE TRUSTEE AND NOTEHOLDERS ON AN EVENT OF
DEFAULT 

    
Section 7.01 Events of Default. In case one or more
of the following (each an “Event of
Default”) shall have occurred and be
continuing: 

         
(a) default
in any payment of interest on any Note when due and payable, and the default
continues for a period of thirty (30) days; 

         
(b) default
in the payment of the principal of any Note (including the Fundamental Change
Purchase Price) when due and payable on the Maturity Date, upon required
repurchase, upon declaration of acceleration or otherwise; 

         
(c) failure
by the Issuer to comply with its obligations under Article 15 hereof to exchange
the Notes into shares of Common Stock and/or cash in accordance with Article 15
hereof upon exercise of a Holder’s exchange right and that failure continues for
five (5) Business Days; 

         
(d) failure
by the Issuer or ZAIS Financial Corp., as the case may be, to comply with its
obligations under Article 11 hereof; 

         
(e) failure
by the Issuer to issue a notice in accordance with the provisions of Section
4.01(b) hereof when due; 

         
(f) failure
by the Issuer or ZAIS Financial Corp., as the case may be, for 60 days after
written notice from the Trustee or the Holders of at least 25% in principal
amount of the Notes then Outstanding (a copy of which notice, if given by
Holders, must also be given to the Trustee) has been received by the Issuer or
ZAIS Financial Corp. to comply with any of its other agreements contained in the
Notes or this Indenture (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section 7.01 specifically
provided for or that is not applicable to the Notes), which notice shall state
that it is a “Notice of
Default” hereunder; 

         
(g) failure
by the Issuer or ZAIS Financial Corp., as the case may be, to pay beyond any
applicable grace period, or the acceleration of, indebtedness of the Issuer or
of ZAIS Financial Corp., as the case may be, or any of the Issuer’s or ZAIS
Financial Corp.’s, as the case may be, Subsidiaries in an aggregate amount
greater than $10,000,000 (or its foreign currency equivalent at the time);

         
(h) failure
by the Issuer or ZAIS Financial Corp., as the case may be, to pay final
judgments aggregating in excess of $10,000,000 (excluding any amounts covered by
insurance), which final judgments remain unpaid, undischarged or unstayed for a
period of more than 60 days; 

24

         
(i) the
Issuer or ZAIS Financial Corp., or any Significant Subsidiary of the Issuer or
ZAIS Financial Corp., shall commence a voluntary case or other proceeding
seeking the liquidation, reorganization or other relief with respect to the
Issuer or ZAIS Financial Corp. or any Significant Subsidiary of the Issuer or
ZAIS Financial Corp. or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Issuer or ZAIS
Financial Corp. or any Significant Subsidiary of the Issuer or ZAIS Financial
Corp. or any substantial part of the Issuer’s or ZAIS Financial Corp.’s or any
Significant Subsidiary of the Issuer’s or ZAIS Financial Corp.’s property, or
shall consent to any such relief or to the appointment of or taking possession
by any such official in an involuntary case or other proceeding commenced
against it, or shall make a general assignment for the benefit of creditors, or
shall fail generally to pay its debts as they become due; or 

         
(j) an
involuntary case or other proceeding shall be commenced against Issuer or ZAIS
Financial Corp. or any Significant Subsidiary of the Issuer or ZAIS Financial
Corp. seeking liquidation, reorganization or other relief with respect to the
Issuer or ZAIS Financial Corp. or any Significant Subsidiary of the Issuer or
ZAIS Financial Corp. or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Issuer or ZAIS
Financial Corp., or any Significant Subsidiary of the Issuer or ZAIS Financial
Corp., or any substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a period of thirty
consecutive days; 

then, and in each and every such case
(other than an Event of Default specified in Sections 7.01(i) and 7.01(j) with
respect to the Issuer or its Significant Subsidiaries), unless the principal of
all of the Notes shall have already become due and payable, either the Trustee
or the Holders of at least 25% in aggregate principal amount of the Notes then
outstanding, by notice in writing to the Issuer and ZAIS Financial Corp. (and to
the Trustee if given by Noteholders), may declare 100% of the principal of and
accrued and unpaid interest, if any, on all then outstanding Notes to be
immediately due and payable, and upon any such declaration the same shall be
immediately due and payable. 

     If an Event of
Default specified in Section 7.01(i) or Section 7.01(j) occurs and is continuing
with respect to the Issuer, then the principal amount of and interest accrued
and unpaid on all the Notes shall be immediately due and payable without any
declaration or other action on the part of the Trustee or any Holder of Notes.

    
If the Trustee or any Holder 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 adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Issuer, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted. 

    
If the Issuer so elects, the sole remedy for an Event of Default relating
to (i) the Issuer’s failure to file with the Trustee, pursuant to Section
314(a)(1) of the Trust Indenture Act, any documents or reports that it is
required to file with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act, or (ii) the Issuer’s failure to comply with Section 6.03 hereof (a
“Reporting Event of Default”), will, for the first 180 days after the occurrence consist
exclusively of the right to receive additional interest on the Notes (the
“Supplemental Interest”) at a rate per year equal to 0.50% per annum of the
Outstanding principal amount of the Notes for each day during the 180-day period
beginning on, and including, the day on which the Event of Default occurs during
which such Event of Default is continuing (and neither waived nor cured). If the
Issuer so elects, such Supplemental Interest will be payable in the same manner
and on the same dates as the stated interest payable on the Notes. On the 181st
day after such Event of Default (if the Reporting Event of Default is not cured
or waived prior to such 181st day), the Notes will be subject to acceleration
pursuant to this Section 7.01. The provisions of this paragraph will not affect
the rights of Holders of Notes in the event of the occurrence of any Event of
Default that is not a Reporting Event of Default. In the event the Issuer does
not elect to pay the Supplemental Interest following an Event of Default in
accordance with this paragraph or the Issuer elected to make such payment but
does not pay the Supplemental Interest when due, the Notes will be immediately
subject to acceleration as provided for in this Section 7.01. 

25

     In order to elect
to pay the Supplemental Interest as the sole remedy during the first 180 days
after the occurrence of a Reporting Event of Default, the Issuer must notify all
Holders of Notes, the Trustee and the Paying Agent of such election prior to the
beginning of such 180-day period. Upon the Issuer’s failure to timely give such
notice, the Notes will be immediately subject to acceleration as provided for in
this Section 7.01. 

    
Section 7.02 Payments of Notes on Default; Suit Therefor. The Issuer and the Guarantor covenant that in the case of an
Event of Default pursuant to Section 7.01(a) or 7.01(b), upon demand of the
Trustee, the Issuer and the Guarantor will pay to the Trustee, for the benefit
of the Holders of the Notes, (i) the whole amount that then shall be due and
payable on all such Notes for principal and interest, as the case may be, with
interest upon the overdue principal and (to the extent that payment of such
interest is enforceable under applicable law) upon the overdue installments of
accrued and unpaid interest at the rate borne by the Notes from the required
payment date and, (ii) in addition thereto, any amounts due the Trustee under
Section 8.06. Until such demand by the Trustee, the Issuer may pay the principal
of and interest on the Notes to the registered Holders, whether or not the Notes
are overdue. 

    
In case the Issuer or the Guarantor shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as trustee of an
express trust, shall be entitled and empowered to institute any actions or
proceedings at law or in equity for the collection of the sums so due and
unpaid, and may prosecute any such action or proceeding to judgment or final
decree, and may enforce any such judgment or final decree against the Issuer,
the Guarantor or any other obligor on the Notes and collect in the manner
provided by law out of the property of the Issuer, the Guarantor or any other
obligor on the Notes wherever situated the monies adjudged or decreed to be
payable. 

    
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to ZAIS Financial Corp., the Issuer or any other
obligor on the Notes or the property of ZAIS Financial Corp., the Issuer or of
such other obligor or their creditors, the Trustee (irrespective of whether the
principal amount of the Notes shall then be due and payable as therein expressed
or by declaration or otherwise and irrespective of whether the Trustee shall
have made any demand on the Issuer for the payment of overdue principal
(including the Fundamental Change Purchase Price upon purchase pursuant to
Article 4)) shall be entitled and empowered, by intervention in such proceeding
or otherwise: (i) to file and prove a claim for the whole amount of principal
(including the Fundamental Change Purchase Price upon purchase pursuant to
Article 4) and interest owing and unpaid in respect of the Notes and to file
such other papers or documents as may be necessary or advisable in order to have
the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and (ii) to collect and
receive any moneys or other property payable or deliverable on any such claims
and to distribute the same; and any custodian, receiver, assignee, trustee,
liquidator, sequestrator (or other similar official) in any such judicial
proceeding is hereby authorized by each Holder to make such payments to the
Trustee, and in the event that the Trustee shall consent to the making of such
payments directly to the Holders, to pay to the Trustee any amount due to it for
the reasonable compensation, expenses, disbursements and advances of the Trustee
and any predecessor Trustee, their agents and counsel, and any other amounts due
the Trustee or any predecessor Trustee under Section 8.06. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding; provided, however, that the Trustee may, on
behalf of the Holders, vote for the election of a trustee in bankruptcy or
similar official and may be a member of the creditors’ committee. 

    
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, and any other amounts owed to the Trustee or any predecessor
Trustee under Section 8.06, be for the ratable benefit of the Holders of the
Notes. 

26 

    
Section 7.03 Application of Monies Collected by Trustee. Any monies collected by the Trustee pursuant to this Article 7 or,
after an Event of Default, any money or other property distributable in respect
of the Issuer’s obligations under this
Indenture shall be applied, in the following order, at the date or dates fixed
by the Trustee for the distribution of such monies, upon presentation of the
several Notes, and stamping thereon the payment, if only partially paid, and
upon surrender thereof, if fully paid:

    
FIRST: to the Trustee (including any predecessor trustee), its agents and
attorneys for amounts due under Section 8.06, including payment of all
compensation, expenses and liabilities incurred, and all advances made, by the
Trustee and the costs and expenses of collection; 

    
SECOND: to the Holders, for any amounts due and unpaid on the principal
of, accrued and unpaid interest on, Fundamental Change Purchase Price for, and
any cash due upon exchange of, any Note, without preference or priority of any
kind, according to such amounts due and payable on all of the Notes; and

    
THIRD: the balance, if any, to the Issuer or to such other party as a
court of competent jurisdiction directs. 

    
The Trustee may fix a record date and payment date for any such payment
to Holders. If the Trustee so fixes a record date and a payment date, at least
15 days prior to such record date, the Issuer shall deliver to each Holder and
the Trustee a written notice, which notice shall state such record date, such
payment date and the amount of such payment. 

    
Section 7.04 Proceedings by Noteholders.
Notwithstanding anything to the contrary elsewhere in this Indenture, the right
of any Holder to receive payment of the principal of, interest on, Fundamental
Change Purchase Price for, its Notes, on or after the respective due date, and
to exchange its Notes and receive payment or delivery of the consideration due
with respect to such Notes in accordance with Article 15 hereof, or to bring
suit for the enforcement of any such payment or exchange rights, will not be
impaired or affected without the consent of such Holder and will not be subject
to the requirements below. 

    
Subject to the provisions of this Section 7.04 above, no Holder may
pursue a remedy with respect to this Indenture or the Notes unless: (a) such
Holder has previously delivered to the Trustee written notice that an Event of
Default has occurred and is continuing; (b) the Holders of at least 25% of the
aggregate principal amount of the then Outstanding Notes deliver to the Trustee
a written request that the Trustee pursue a remedy with respect to such Event of
Default; (c) such Holder or Holders have offered and, if requested, provided to
the Trustee indemnity reasonably satisfactory to the Trustee against any loss,
liability or other expense of compliance with such written request; (d) the
Trustee has not complied with such written request within 60 days after receipt
of such written request and offer of indemnity; and (e) during such 60-day
period, the Holders of a majority of the aggregate principal amount of the then
Outstanding Notes did not deliver to the Trustee a direction inconsistent with
such written request. 

    
A Holder may not use this Indenture to prejudice the rights of any other
Holder or to obtain a preference or priority over any other Holder, it being
understood that the Trustee does not have any affirmative duty to ascertain
whether any usage of this Indenture by a Holder is unduly prejudicial to such
other Holders. 

    
Section 7.05 Proceedings by Trustee. If
an Event of Default specified under Section 7.01(a), (b) or (c) occurs and is
continuing, the Trustee is authorized to recover judgment in its own name and as
trustee of an express trust against the Issuer for the whole amount of principal
of, interest on, Fundamental Change Purchase Price for, and the shares of Common
Stock due upon the exchange of, the Notes, as the case may be, and such further
amount as is sufficient to cover the costs and expenses of collection, including
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, as well as any other amounts that may be due
under Section 8.06. 

    
Section 7.06 Remedies Cumulative and Continuing. Except as otherwise provided with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Notes in Section 2.06, no right or
remedy herein conferred upon or reserved to the Trustee or to the Holders 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 any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy. 

27

    
Section 7.07 Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders. At any time, the Holders of a
majority of the aggregate principal amount of the then Outstanding Notes may
direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee or for exercising any trust or power conferred on the
Trustee. However, the Trustee may refuse to follow any direction that conflicts
with law or this Indenture or, subject to the Trustee’s duties under the Trust
Indenture Act, that the Trustee determines to be unduly prejudicial to the
rights of a Holder or to the Trustee, or that would potentially involve the
Trustee in personal liability unless the Trustee is offered indemnity or
security reasonably satisfactory to it against any loss, liability or expense
(including the reasonable fees of its attorneys and agents) to the Trustee that
may result from the Trustee’s instituting such proceeding as the Trustee. Prior
to taking any action hereunder, the Trustee will be entitled to indemnification
reasonably satisfactory to it against all losses and expenses caused by taking
or not taking such action. 

    
The Holders of a majority in principal amount of the Notes then
Outstanding, by written notice to the Issuer and to the Trustee, may waive
(including by way of consents obtained in connection with a repurchase of, or
tender or exchange offer for, the Notes) all past Defaults or Events of Default
with respect to the Notes (other than a Default or an Event of Default resulting
from nonpayment of principal or interest, a failure to deliver consideration due
upon exchange or any other provisions that requires the consent of each affected
Holder to amend) and rescind any such acceleration with respect to the Notes and
its consequences if (i) rescission would not conflict with any judgment or
decree of a court of competent jurisdiction and (ii) all existing Events of
Default, other than the nonpayment of the principal of, and interest on, the
Notes that have become due solely by such declaration of acceleration have been
cured or waived. 

    
Section 7.08 Undertaking to Pay Costs.
All parties to this Indenture agree, and each Holder of any Note by its
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 Trustee for any action taken or
omitted by it as 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;
provided, however, that the provisions of this Section 7.08 (to the extent permitted by
law) shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than ten percent in principal amount of the Notes at the time outstanding
determined in accordance with Section 9.04, or to any suit instituted by any
Holder for the enforcement of the payment of the principal of (including the
Fundamental Change Purchase Price upon purchase pursuant to Article 4), or
interest on any Note on or after the due date expressed in such Note or to any
suit for the enforcement of the right to exchange any Note in accordance with
the provisions of Article 15. 

ARTICLE 8
THE TRUSTEE

    
Section 8.01 Notice of Defaults. Within
90 days after the occurrence of any Default hereunder, the Trustee shall
transmit, in the manner and to the extent provided in TIA Section 313(c), notice
of such Default hereunder actually known to a Responsible Officer of the
Trustee, unless a Responsible Officer of the Trustee shall have actual knowledge
that such Default shall have been cured or waived; provided, however, that, except in the case of a
Default in the payment of the principal of (including the Fundamental Change
Purchase Price upon purchase pursuant to Article 4) or interest on any Note or a
Default with respect to the Issuer’s obligation to deliver, upon exchange,
shares of Common Stock and cash, if applicable, the Trustee shall be protected
in withholding such notice if and so long as the board of directors, the
executive committee or a trust committee of directors or Responsible Officers of
the Trustee in good faith determine that the withholding of such notice is in
the interests of the Holders of the Notes. 

28 

    
Section 8.02 Certain Rights of Trustee. Subject to
the provisions of Section 8.12: 

         
(a) the Trustee may conclusively rely and shall be fully protected in acting
or refraining from acting upon any resolution, Officers’ Certificate, Issuer
Request, Issuer Order, written request or order of the Issuer, certificate,
statement, calculations, instrument, Opinion of Counsel, opinion, report,
notice, request, direction, consent, order, bond, debenture, note, other
evidence of indebtedness, coupon or other paper or document believed by it to be
genuine and to have been signed or presented by the proper party or parties;

         
(b) any request or direction of the Issuer mentioned herein shall be
sufficiently evidenced by an Issuer Request, Issuer Order, or written request or
order of the Issuer (other than delivery of any Note to the Trustee for
authentication and delivery pursuant to Sections 2.01 and 2.04 which shall be
sufficiently evidenced as provided therein) and any resolution or determination
of the Board of Directors may be sufficiently evidenced by a Board Resolution;

         
(c) whenever in the administration of this Indenture the Trustee shall deem
it desirable that a matter be proved or established prior to taking, suffering
or omitting any action hereunder, the Trustee (unless other evidence be herein
specifically prescribed) may, in the absence of bad faith on its part, require
and rely upon an Officers’ Certificate; 

         
(d) before the Trustee acts or refrains from acting, the Trustee may consult
with counsel of its selection and the advice of such counsel or any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon; 

         
(e) the Trustee shall be under no obligation to exercise any of the rights or
powers vested in it by this Indenture at the request or direction of any of the
Holders of Notes pursuant to this Indenture, unless such Holders shall have
offered to the Trustee security or indemnity satisfactory to the Trustee against
the costs, expenses and liabilities, including the reasonable fees and expenses
of its agents and attorneys, which might be incurred by it in compliance with
such request or direction; 

         
(f) the Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, Officers’ Certificate, Issuer Request,
Issuer Order, written request or order of the Issuer, certificate, statement,
calculations, instrument, Opinion of Counsel, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness, coupon or other paper or document, unless requested in writing to
do so by the Holders of not less than a majority in aggregate principal amount
of the outstanding Notes; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not reasonably assured to the Trustee by the security afforded to it by
the terms of this Indenture, the Trustee may require indemnity satisfactory to
it against such expenses or liabilities as a condition to proceeding; the
reasonable expenses of every such examination shall be paid by the Holders or,
if paid by the Trustee, shall be repaid by the Holders upon demand. The Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Issuer, relevant to the facts or matters that
are the subject of its inquiry, personally or by agent or attorney at the sole
cost of the Issuer and shall incur no liability or additional liability of any
kind by reason of such inquiry or investigation; 

         
(g) the Trustee may execute any of the trusts or powers hereunder or perform
any duties hereunder either directly or by or through agents or attorneys and
the Trustee shall not be responsible for any misconduct or negligence on the
part of any agent or attorney appointed with due care by it hereunder;

         
(h) the Trustee shall not be liable for any action taken, suffered or omitted
by it in good faith and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Indenture; 

         
(i) in
no event shall the Trustee be responsible or liable for special, indirect,
punitive or consequential loss or damage of any kind whatsoever (including, but
not limited to, loss of profit) irrespective of whether the Trustee has been
advised of the likelihood of such loss or damage and regardless of the form of
action;

29 

          (j) the Trustee shall not be required to give any bond or surety
in respect of the performance of its powers and duties hereunder; 

         
(k) the permissive rights of the Trustee to do things enumerated in this
Indenture shall not be construed as a duty and the Trustee shall not be
answerable for other than its negligence or willful misconduct; 

         
(l) the Trustee shall not be deemed to have notice or be charged with
knowledge of any Default or Event of Default or other default unless written
notice of such default, Default or Event of Default from the Issuer or any
Holder is received by a Responsible Officer of the Trustee at the Corporate
Trust Office of the Trustee, and such notice references the Notes and this
Indenture;

         
(m) the Trustee shall not be obligated to perform any obligation hereunder
and shall not incur any liability for the nonperformance or breach of any
obligation hereunder to the extent that the Trustee is delayed in performing,
unable to perform or breaches such obligation arising out of or caused, directly
or indirectly, by circumstances reasonably beyond its control, including,
without limitation, acts of God, war, terrorism, fire, floods, strikes, work
stoppages, accidents, civil or military disturbances or natural catastrophes,
electrical outages, equipment or transmission failures, it being understood that
the Trustee shall use commercially reasonable efforts consistent with accepted
practices for corporate trustees to maintain performance without delay or resume
performance as soon as reasonably practicable under the circumstances; and

         
(n) the Trustee shall perform only such duties as are expressly undertaken by
it to perform under this Indenture. 

    
The Issuer shall provide any information reasonably requested by the
Trustee, the Exchange Agent, or any Paying Agent in order to comply with any
applicable tax reporting requirements relating to the Notes. 

    
All of the benefits, protections, privileges, immunities, indemnities,
and rights under this Indenture that apply to the Trustee, including, without
limitation, its right to be indemnified, also apply to U.S. Bank National
Association, in its individual capacity and in its respective other capacities
hereunder (including, without limitation, as Note Registrar, Paying Agent,
Exchange Agent, and Custodian). 

    
The Trustee may request that the Issuer and ZAIS Financial Corp. deliver
a certificate setting forth the names of individuals and/or titles of officers
authorized at such time to take specified actions pursuant to this Indenture.

    
Section 8.03 Not Responsible for Recitals or Issuance of
Notes. The recitals contained herein and in
the Notes, except the Trustee’s certificate of authentication, shall be taken as the
statements of the Issuer, and neither the Trustee nor any authenticating agent
assumes any responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes or of the Common Stock, the Offering Memorandum, or the Registration
Rights Agreement except that the Trustee represents that it is duly authorized
to execute and deliver this Indenture, authenticate the Notes and perform its
obligations hereunder. Neither the Trustee nor any authenticating agent shall be
accountable for the use or application by the Issuer of Notes or the proceeds
thereof. The Trustee shall not be responsible to make any calculation with
respect to any matter under this Indenture. The Trustee shall have no duty to
monitor or investigate the Issuers’ compliance with or the breach of, or cause
to be performed or observed, any representation, warranty, or covenant, or
agreement of any Person, other than the Trustee, made in this Indenture.

    
Section 8.04 May Hold Notes and Common Stock. The Trustee, any Paying Agent, Exchange Agent, Note Registrar, the
Custodian, authenticating agent or any other agent of the Issuer and their
Affiliates, in its individual or any other capacity, may become the owner or
pledgee of Notes or Common Stock and may otherwise deal with the Issuer and ZAIS
Financial Corp. with the same rights it would have if it were not Trustee,
Paying Agent, Exchange Agent, Note Registrar, authenticating agent or such other
agent. 

30 

     Section
8.05 Money
Held in Trust. Money held by the Trustee in
trust hereunder need not be segregated from other funds except to the extent
required by law. The Trustee shall be under no liability for interest on any
money received by it hereunder except as otherwise agreed with the Issuer in
writing. 

    
Section 8.06 Compensation and Reimbursement. The Issuer and ZAIS Financial Corp., jointly and severally, agree:

         
(a) to
pay to the Trustee from time to time, and the Trustee shall be entitled to,
compensation and as agreed to in writing for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust); 

         
(b) to
reimburse each of the Trustee and any predecessor Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or made by the
Trustee in accordance with any provision of this Indenture (including the
reasonable compensation and the reasonable expenses and disbursements of its
agents and counsel), except any such expense, disbursement or advance as shall be
determined to have been caused by its own gross negligence or willful
misconduct; and 

         
(c) to
indemnify each of the Trustee (including its officers, agents, and employees)
and any predecessor Trustee for, and to hold it harmless against, any loss,
claim, damage, liability or expense (including the reasonable fees and
disbursements of its attorneys and agents) incurred without gross negligence or
willful misconduct on its part, determined to have been caused by the acceptance
or administration of the trust or trusts hereunder, including the costs and
expenses of defending itself against or investigating any claim or liability in
connection with the exercise or performance of any of its powers or duties
hereunder. 

    
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 7.01(i) or 7.01(j), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable federal or state bankruptcy, insolvency or
other similar law. 

    
As security for the performance of the obligations of the Issuer under
this Section 8.06, the Trustee shall have a lien prior to the Notes upon all
property and funds held or collected by the Trustee as such, except funds held in trust
for the payment of principal of (including the Fundamental Change Purchase Price
upon purchase pursuant to Article 4) or interest on any Notes. The provisions of
this Section 8.06 shall survive the termination for any reason of this
Indenture, the satisfaction and discharge of this Indenture, the payment or
exchange of the Notes, and the resignation or removal of the Trustee.

    
“Trustee” for purposes of this Section shall include any predecessor
Trustee; provided, however, that the negligence, willful misconduct or bad faith of any Trustee
hereunder shall not affect the rights of any other Trustee hereunder.

    
Section 8.07 Corporate Trustee Required; Eligibility; Conflicting
Interests. There shall at all times be a
Trustee hereunder which shall be eligible to act as Trustee under TIA Section
310(a)(1) and shall have a combined capital and surplus of at least $50,000,000.
If such corporation publishes reports of condition at least annually, pursuant
to law or the requirements of federal, state, territorial or District of
Columbia supervising or examining authority, then for the purposes of this
Section 8.07, the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. Neither the Issuer nor any Person directly or
indirectly controlling, controlled by, or under common control with the Issuer
shall serve as Trustee. If at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section 8.07, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article.

31 

     Section
8.08 Resignation and Removal; Appointment of Successor. 

         
(a) No
resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of
appointment by the successor Trustee in accordance with the applicable
requirements of Section 8.09. 

         
(b) The Trustee may resign at any time by giving written notice thereof to
the Issuer. If an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee may petition at the expense of the Issuer any
court of competent jurisdiction for the appointment of a successor Trustee.

         
(c) The Trustee may be removed at any time by act of the Holders of a
majority in principal amount of the outstanding Notes delivered to the Trustee
and to the Issuer. 

         
(d) If
at any time: 

         
(i) the Trustee shall cease to be eligible under Section 8.07 and shall fail
to resign after written request therefor by the Issuer or by any Holder of a
Note who has been a bona fide Holder of a Note for at least six months, or

         
(ii) the Trustee shall become incapable of acting or shall be adjudged
bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, 

then, in any such case, (A) the Issuer by
or pursuant to a Board Resolution may remove the Trustee and appoint a successor
Trustee, or (B) subject to TIA Section 315(e), any Holder of a Note who has been
a bona fide Holder of a Note for at least six months may, on behalf of himself
and all others similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor Trustee or
Trustees. 

         
(e) If
the Trustee shall resign, be removed or become incapable of acting, or if a
vacancy shall occur in the office of Trustee for any cause, the Issuer, by or
pursuant to a Board Resolution, shall promptly appoint a successor Trustee or
Trustees. If, within one year after such resignation, removal or incapability,
or the occurrence of such vacancy, a successor Trustee shall be appointed by act
of the Holders of a majority in principal amount of the outstanding Notes
delivered to the Issuer and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such appointment, become the
successor Trustee and to that extent supersede the successor Trustee appointed
by the Issuer. If no successor Trustee shall have been so appointed by the
Issuer or the Holders of Notes and accepted appointment in the manner
hereinafter provided, any Holder of a Note who has been a bona fide Holder of a
Note for at least six months may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee. 

         
(f) The Issuer shall give notice of each resignation and each removal of the
Trustee and each appointment of a successor Trustee by mailing or causing to be
mailed such notice to the Holders of Notes as they appear on the Note Register.
Each notice shall include the name of the successor Trustee and the address of
its Corporate Trust Office. 

    
Section 8.09 Acceptance of Appointment By Successor. (a) In case of the appointment hereunder of a successor
Trustee, every such successor Trustee so appointed shall execute, acknowledge
and deliver to the Issuer and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Issuer or the
successor Trustee, such retiring Trustee shall, upon payment of its charges, and
subject to its lien provided for in Section 8.06, execute and deliver an
instrument transferring to such successor Trustee all the rights, powers and
trusts of the retiring Trustee, and shall duly assign, transfer and deliver to
such successor Trustee all property and money held by such retiring Trustee
hereunder, subject nevertheless to its claim, if any, provided for in Section
8.06. 

32 

          (b) In case of the appointment hereunder of a successor Trustee,
the Issuer, the retiring Trustee and each successor Trustee shall execute and
deliver an indenture supplemental hereto, pursuant to Article 10 hereof, wherein
each successor Trustee shall accept such appointment and which (i) shall contain
such provisions as shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers, trusts and duties
of the retiring Trustee to which the appointment of such successor Trustee
relates, (ii) if the retiring Trustee is not retiring with respect to all Notes,
shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the retiring Trustee
as to which the retiring Trustee is not retiring shall continue to be vested in
the retiring Trustee, and (iii) shall add to or change any of the provisions of
this Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, it being
understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee; and upon
the execution and delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Trustee to which the appointment of such successor Trustee
relates; but, on request of the Issuer or any successor Trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor Trustee all
property and money held by such retiring Trustee hereunder to which the
appointment of such successor Trustee relates. 

         
(c) Upon request of any such successor Trustee, the Issuer shall execute any
and all instruments for more fully and certainly vesting in and confirming to
such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section 8.09, as the case may be. 

         
(d) No
successor Trustee shall accept its appointment unless at the time of such
acceptance such successor Trustee shall be qualified and eligible under this
Article. 

    
Section 8.10 Merger, Conversion, Consolidation or Succession to
Business. Any Person into which the Trustee
may be merged or converted or with which it may be consolidated, or any Person
resulting from any merger, conversion or consolidation to which the Trustee
shall be a party, or any Person succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such Person shall be otherwise qualified and eligible under this
Article, 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 shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may adopt
such authentication and deliver the Notes so authenticated with the same effect
as if such successor Trustee had itself authenticated such Notes. In case any
Notes shall not have been authenticated by such predecessor Trustee, any such
successor Trustee may authenticate and deliver such Notes, in either its own
name or that of its predecessor Trustee, with the full force and effect which
this Indenture provides for the certificate of authentication of the Trustee.

    
Section 8.11 Appointment of Authenticating Agent. At any time when any of the Notes remain outstanding, the Trustee may
appoint an authenticating agent or agents which shall be authorized to act on
behalf of the Trustee to authenticate Notes issued upon exchange, registration
of transfer or partial repayment thereof, and Notes so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Any such appointment
shall be evidenced by an instrument in writing signed by a Responsible Officer
of the Trustee, a copy of which instrument shall be promptly furnished to the
Issuer. Wherever reference is made in this Indenture to the authentication and
delivery of Notes by the Trustee or the Trustee’s certificate of authentication,
such reference shall be deemed to include authentication and delivery on behalf
of the Trustee by an authenticating agent and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent. Each
authenticating agent shall be acceptable to the Issuer and shall at all times be
a bank or trust company or corporation organized and doing business and in good
standing under the laws of the United States of America or of any state or the
District of Columbia, authorized under such laws to act as authenticating agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or state authorities. If such
authenticating agent publishes reports of condition at least annually, pursuant
to law or the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section 8.11, the combined capital and surplus of
such authenticating agent shall be deemed to be its combined capital and surplus
as set forth in its most recent report of condition so published. In case at any
time an authenticating agent shall cease to be eligible in accordance with the
provisions of this Section 8.11, such authenticating agent shall resign
immediately in the manner and with the effect specified in this Section 8.11.

33 

    
Any Person into which an authenticating agent may be merged or converted
or with which it may be consolidated, or any Person resulting from any merger,
conversion or consolidation to which such authenticating agent shall be a party,
or any Person succeeding to the corporate agency or corporate trust business of
an authenticating agent, shall continue to be an authenticating agent,
provided
such Person shall be otherwise eligible under this Section 8.11, without the
execution or filing of any paper or further act on the part of the Trustee or
the authenticating agent. 

    
An authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Issuer. The Trustee may at any time
terminate the agency of an authenticating agent by giving written notice of
termination to such authenticating agent and to the Issuer. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time such
authenticating agent shall cease to be eligible in accordance with the
provisions of this Section 8.11, the Trustee may appoint a successor
authenticating agent which shall be acceptable to the Issuer and shall give
notice of such appointment to all Holders of Notes by mailing or causing to be
mailed such notice to the Holders of Notes as they appear on the Note Register.
Any successor authenticating agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an authenticating agent
herein. No successor authenticating agent shall be appointed unless eligible
under the provisions of this Section 8.11. 

    
The Issuer agrees to pay to each authenticating agent from time to time a
reasonable compensation including reimbursement of its reasonable expenses for
its services under this Section 8.11. 

    
If an appointment is made pursuant to this Section 8.11, the Notes may
have endorsed thereon, in addition to or in lieu of the Trustee’s certificate of
authentication, an alternate certificate of authentication substantially in the
following form: 

    
This is one of the Notes designated therein referred to in the
within-mentioned Indenture. 

			      	U.S. Bank National Association, as Trustee
	 
	Dated:      
      	 		By:       	
		 
			as Authenticating Agent
	 
	Dated:			By:	
					Authorized
Signatory

    
Section 8.12 Certain Duties and Responsibilities of the
Trustee. 

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

         
(i) the Trustee undertakes to perform such duties and only such duties as are
specifically to be performed by it as set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture against the
Trustee; and 

         
(ii) in the absence of bad faith on its part, the Trustee may conclusively
rely, as to the truth of the statements and the correctness of the opinions
expressed therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the case of any such
certificates or opinions which by any provision hereof are specifically required
to be furnished to the Trustee, the Trustee shall be under a duty to examine the
same to determine whether or not they conform to the requirements of this
Indenture, but shall not be under any duty to verify the contents or accuracy
thereof and need not confirm or investigate the accuracy of mathematical
calculations or other facts, statements, opinions or conclusions stated therein.

34 

          (b) In case an Event of Default has occurred and is continuing,
the 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. 

         
(c) No
provision of this Indenture shall be construed to relieve the Trustee from
liability for its own negligent action, its own negligent failure to act, or its
own willful misconduct, except that: 

         
(i) this subsection (c) shall not be construed to limit the effect of
subsections (a) or (d) of this Section 8.12; 

         
(ii) the Trustee shall not be liable for any error of judgment made in good
faith by a Responsible Officer of the Trustee, unless it shall be proved that
the Trustee was negligent in ascertaining the pertinent facts; and 

         
(iii) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders of a majority in principal amount of the Outstanding Notes relating to
the time, method and place of conducting any proceeding for any remedy available
to the Trustee, or exercising any trust or power conferred upon the Trustee,
under this Indenture. 

         
(d) No
provision of this Indenture shall require the 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
indemnity satisfactory to it against such risk or liability is not reasonably
assured to it. 

         
(e) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section
8.12. 

ARTICLE 9
THE NOTEHOLDERS

    
Section 9.01 Action by Noteholders.
Whenever in this Indenture it is provided that the Holders of a specified
percentage in aggregate principal amount of the Notes may take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), the fact that, at the time
of taking any such action, the Holders of such specified percentage have joined
therein may be evidenced (a) by any instrument or any number of instruments of
similar tenor executed by Noteholders in person or by agent or proxy appointed
in writing, or (b) by the record of the Holders of Notes voting in favor thereof
at any meeting of Noteholders, or (c) by a combination of such instrument or
instruments and any such record of such a meeting of Noteholders. Whenever the
Issuer or the Trustee solicits the taking of any action by the Holders of the
Notes, the Issuer or the Trustee may fix in advance of such solicitation a date
as the record date for determining Holders entitled to take such action. Such
record date shall be the record date specified in or pursuant to such Board
Resolution, which shall be a date not earlier than the date 30 days prior to the
first solicitation of Noteholders generally in connection therewith and not
later than the date such solicitation is completed. If such a record date is
fixed, such request, demand, authorization, direction, notice, consent, waiver
or other act may be given before or after such record date, but only the
Noteholders of record at the Close of Business on such record date shall be
deemed to be Noteholders for the purposes of determining whether Holders of the
requisite proportion of outstanding Notes have authorized or agreed or consented
to such request, demand, authorization, direction, notice, consent, waiver or
other act, and for that purpose the outstanding Notes shall be computed as of
such record date; provided that no such authorization, agreement or consent by the
Noteholders on such record date shall be deemed effective unless it shall become
effective pursuant to the provisions of this Indenture not later than eleven
months after the record date. 

    
Section 9.02 Proof of Execution by Noteholders. Subject to the provisions of Sections 8.02 and 8.12, proof of the
execution of any instrument by a Noteholder or its agent or proxy shall be
sufficient if made in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee or in such manner as shall be
satisfactory to the Trustee. The holding of Notes shall be proved by the
registry of such Notes or by a certificate of the Note Registrar. 

35 

     Section
9.03 Absolute Owners. The Issuer, the
Trustee, any Paying Agent, any Exchange Agent and any Note Registrar may deem
the Person in whose name such Note shall be registered upon the Note Register to
be, and may treat it as, the absolute owner of such Note (whether or not such
Note shall be overdue and notwithstanding any notation of ownership or other
writing thereon made by any Person other than the Issuer or any Note Registrar)
for the purpose of receiving payment of or on account of the principal of
(including the Fundamental Change Purchase Price upon purchase pursuant to
Article 4) and interest on such Note, for exchange of such Note and for all
other purposes; and neither the Issuer nor the Trustee nor any Paying Agent nor
any Exchange Agent nor any Note Registrar shall be affected by any notice to the
contrary. All such payments so made to any Holder for the time being, or upon
its order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note. 

    
Section 9.04 Issuer-owned Notes Disregarded. In determining whether the Holders of the requisite aggregate principal
amount of Notes have given any request, demand, authorization, direction,
notice, consent or waiver under this Indenture or whether a quorum is present
for a meeting of Noteholders, Notes that are owned by the Issuer or any other
obligor on the Notes or any Affiliate of the Issuer or any such other obligor
shall be disregarded and deemed not to be outstanding for the purpose of any
such determination; provided that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only Notes which a Responsible Officer of the Trustee actually knows are
so owned shall be so disregarded, and provided
further that, in each case, without
limitation, votes on or consents to any matter obtained in connection with a
repurchase of, or tender or exchange offer for, Notes shall be included for
purposes of determining whether such matter has been approved, and any such
Notes so acquired shall also be deemed to be outstanding for such purposes.
Notes so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 9.04 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee’s right to vote such Notes and
that the pledgee is not the Issuer, any other obligor on the Notes or any
Affiliate of the Issuer or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the Issuer
shall furnish to the Trustee promptly an Officers’ Certificate listing and
identifying all Notes, if any, known by the Issuer to be owned or held by or for
the account of any of the above described Persons, and, subject to Section 8.12,
the Trustee shall be entitled to accept such Officers’ Certificate as conclusive
evidence of the facts therein set forth and of the fact that all Notes not
listed therein are outstanding for the purpose of any such determination.

    
Section 9.05 Revocation of Consents; Future Holders Bound. At any time prior to (but not after) the evidencing to the
Trustee, as provided in Section 9.01, of the taking of any action by the Holders
of the percentage in aggregate principal amount of the Notes specified in this
Indenture in connection with such action, any Holder of a Note which is shown by
the evidence to be included in the Notes the Holders of which have consented to
such action may, by filing written notice with the Trustee at its Corporate
Trust Office and upon proof of holding as provided in Section 9.02, revoke such
action so far as concerns such Note. Except as aforesaid, any such action taken
by the Holder of any Note shall be conclusive and binding upon such Holder and
upon all future Holders and owners of such Note and of any Notes issued in
exchange or substitution therefor, irrespective of whether any notation in
regard thereto is made upon such Note or any Note issued in exchange or
substitution therefor. 

ARTICLE 10 
SUPPLEMENTAL INDENTURES 

    
Section 10.01 Supplemental Indentures Without Consent of
Noteholders. The Issuer, ZAIS Financial Corp.
and the Trustee may, from time to time, and at any time amend or supplement this
Indenture or the Notes without the consent of any Holder for any of the
following purposes: 

     (a)
to conform the terms of this Indenture or the
Notes to the description thereof in the Offering Memorandum; 

36 

     (b) to evidence the succession by a successor to the Issuer as
obligor or ZAIS Financial Corp. (as Guarantor or otherwise) and to provide for
the assumption by such successor of the Issuer’s or ZAIS Financial Corp.’s
obligations under this Indenture; 

         
(c) to
add guarantees with respect to the Notes;

         
(d) to
secure the Notes;

         
(e) to
issue Additional Notes pursuant to Section 2.01; 

     (f)
to add to the Issuer’s covenants such further
covenants, restrictions or conditions for the benefit of the Holders (or any
other holders) or surrender any right or power conferred upon the Issuer by the
Indenture; 

     (g)
to cure any ambiguity, defect or inconsistency in
this Indenture or the Notes, including to eliminate any conflict with the Trust
Indenture Act, to the extent applicable; 

     (h)
to make any other change that does not adversely
affect the rights of any Holder in any material respect; 

         
(i) to
provide for a successor Trustee; 

         
(j) to
comply with the applicable procedures of the Depositary; or 

     (k) to
comply with any requirements of the Commission in connection with the
qualification of the Indenture under the Trust Indenture Act, to the extent
applicable. 

    
Upon an Issuer Request authorizing the execution of any supplemental
indenture, the Trustee is hereby authorized to join with the Issuer and ZAIS
Financial Corp. in the execution of any such supplemental indenture, to make any
further appropriate agreements and stipulations that may be therein contained
and to accept the conveyance, transfer and assignment of any property
thereunder, but the Trustee shall not be obligated to, but may in its
discretion, enter into any supplemental indenture that affects the Trustee’s own
rights, duties or immunities under this Indenture or otherwise. 

    
Any supplemental indenture authorized by the provisions of this Section
10.01 may be executed by the Issuer, ZAIS Financial Corp. and the Trustee
without the consent of the Holders of any of the Notes at the time outstanding,
notwithstanding any of the provisions of Section 10.02. 

    
Section 10.02 Supplemental Indenture With Consent of
Noteholders. With the consent (evidenced as
provided in Article 9) of the Holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, ZAIS Financial Corp., the
Issuer and the Trustee may, from time to time and at any time, amend or
supplement this Indenture or the Notes for the purpose of adding any provisions
to or changing in any manner or eliminating any of the provisions of this
Indenture or any supplemental indenture or modifying in any manner the rights of
the Holders of the Notes; provided that no such supplemental
indenture shall, without the consent of the Holder of each Note so affected:

         
(a) reduce the percentage in aggregate principal amount of Notes Outstanding
necessary to waive any past Default or Event of Default; 

         
(b) reduce the rate of interest on any Note or change the time for payment of
interest on any Note; 

         
(c) reduce the principal of any Note or change the Maturity Date;

         
(d) change the place or currency of payment on any Note;

37 

          (e) make any change that impairs or adversely affects the exchange
rights of any Notes; 

         
(f) reduce the Fundamental Change Purchase Price of any Note or amend or
modify in any manner adverse to the rights of the Holders of the Notes the
Issuer’s obligation to pay the Fundamental Change Purchase Price, whether
through an amendment or waiver of provisions in the covenants, definitions
related thereto or otherwise; 

         
(g) impair the right of any Holder of Notes to receive payment of principal
of, and interest, if any, on, its Notes, or the right to receive shares of
Common Stock due upon exchange of its Notes on or after the due dates therefor
or to institute suit for the enforcement of any such payment or delivery, as the
case may be, with respect to such Holder’s Notes; 

         
(h) modify the ranking provisions of this Indenture in a manner that is
adverse to the rights of the Holders of the Notes; or 

         
(i) make any change in the provisions of this Section 10.02 that requires
each Holder’s consent or in the waiver provisions in Section 7.07 of this
Indenture if such change is adverse to the rights of Holders of the Notes.

    
Upon an Issuer Request authorizing the execution of any supplemental
indenture, and upon the filing with the Trustee of evidence of the consent of
Noteholders as aforesaid, the Trustee shall join with the Issuer and ZAIS
Financial Corp. in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee’s own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture. 

    
It shall not be necessary for Noteholders to approve the particular form
of any proposed supplemental indenture. It will be sufficient if such
Noteholders approve the substance of the proposed supplemental indenture. After
a supplemental indenture becomes effective, the Issuer is required to mail to
the Noteholders a notice briefly describing such supplemental indenture.
However, the failure to give such notice to all the Noteholders, or any defect
in the notice, will not impair or affect the validity of the supplemental
indenture. 

    
Section 10.03 Effect of Supplemental Indenture. Upon the execution of any supplemental indenture pursuant to the
provisions of this Article 10, this Indenture shall be and be deemed to be
modified and amended in accordance therewith and the respective rights,
limitation of rights, obligations, duties and immunities under this Indenture of
the Trustee, the Issuer and the Holders of Notes shall thereafter be determined,
exercised and enforced hereunder, subject in all respects to such modifications
and amendments and all the terms and conditions of any such supplemental
indenture shall be and be deemed to be part of the terms and conditions of this
Indenture for any and all purposes. 

    
Section 10.04 Notation on Notes. Notes
authenticated and delivered after the execution of any supplemental indenture
pursuant to the provisions of this Article 10 may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Issuer or the Trustee shall so determine, new Notes so
modified as to conform, in the opinion of the Trustee and the Board of
Directors, to any modification of this Indenture contained in any such
supplemental indenture may, at the Issuer’s expense, be prepared and executed by
the Issuer, authenticated by the Trustee (or an authenticating agent duly
appointed by the Trustee pursuant to Section 8.11) and delivered in exchange for
the Notes then outstanding, upon surrender of such Notes then outstanding.

    
Section 10.05 Evidence of Compliance of Supplemental Indenture to Be
Furnished to Trustee. Prior to entering into
any supplemental indenture pursuant to this Article 10, the Trustee shall be
provided with an Officers’ Certificate and an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant hereto complies with
the requirements of this Article 10 and is otherwise authorized or permitted by
this Indenture. 

    
Section 10.06 Notice of Supplemental Indentures. After any supplemental indenture under this Article 10 becomes
effective, the Issuer shall mail to the Holders a notice briefly describing such
supplemental indenture; provided, however, that the failure to give such
notice to all Holders, or any defect therein, shall not impair or affect the
validity of such supplemental indenture. 

38 

ARTICLE 11 
CONSOLIDATION, MERGER, SALE, CONVEYANCE AND
LEASE 

     Section
11.01 Issuer and Guarantor May Consolidate on Certain Terms. Nothing contained in this Indenture or in the Notes shall
prevent any amalgamation or consolidation or merger of the Issuer or the
Guarantor with or into any other Person or Persons (whether or not affiliated
with the Issuer or the Guarantor), or successive amalgamations, consolidations
or mergers in which either the Issuer or the Guarantor will be the continuing
entity or the Issuer or the Guarantor or its successor or successors shall be a
party or parties, or shall prevent any transfer, lease or conveyance, of the
properties and assets of the Issuer or the Guarantor substantially as an
entirety to any other Person (whether or not affiliated with the Issuer or the
Guarantor), so long as the following conditions are met: 

         
(a) the Issuer or the Guarantor, as the case may be, shall be the continuing
entity, or the resulting, surviving or transferee Person (if other than the
Issuer or the Guarantor, as the case may be), is organized and existing under
the laws of the United States of America, any State thereof or the District of
Columbia, and such Person (if other than the Issuer or the Guarantor, as the
case may be) shall expressly assume, by a supplemental indenture, executed and
delivered to the Trustee, in a form reasonably satisfactory to the Trustee, (i)
in the case of the Issuer, payment of the principal of and interest on all of
the Notes and the due and punctual performance and observance of all Issuer’s
obligations under the Notes and this Indenture or (ii) in the case of the
Guarantor, all of the obligations of the Guarantor under the Notes and this
Indenture; 

         
(b) immediately after giving effect to such transaction, no Default or Event
of Default shall have occurred and be continuing; and 

         
(c) either the Issuer or Guarantor or the successor Person, as the case may
be, shall have delivered to the Trustee an Officers’ Certificate and an Opinion
of Counsel, each stating that such amalgamation, consolidation, merger,
transfer, lease or conveyance and, if a supplemental indenture is required in
connection with such transaction, such supplemental indenture comply with this
Article 11. 

    
Section 11.02 Issuer or Guarantor Successor to Be
Substituted. Upon any amalgamation or
consolidation by the Issuer or the Guarantor with or merger of the Issuer or the
Guarantor into any other Person or any transfer, lease or conveyance of all or
substantially all of the properties and assets of the Issuer or the Guarantor to
any Person in accordance with Section 11.01, the successor Person formed by such
amalgamation or consolidation or into which the Issuer or the Guarantor is
merged or to which such transfer, lease or conveyance is made shall succeed to,
and be substituted for, and may exercise every right and power of, the Issuer or
the Guarantor, as the case may be, under this Indenture with the same effect as
if such successor Person had been named as the Issuer or the Guarantor herein,
as the case may be, and thereafter, except in the case of a lease, the
predecessor Person shall be released, in the case of the Issuer, from all
obligations and covenants under this Indenture and the Notes, and in the case of
the Guarantor, from all of the obligations of the Guarantor under its Guarantee
of the Notes. 

    
In case of any such consolidation, merger, sale, lease or conveyance,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate. 

ARTICLE 12 
SATISFACTION AND DISCHARGE OF INDENTURE 

    
Section 12.01 Satisfaction and Discharge of Indenture. This Indenture shall cease to be of further effect (except
as to any surviving rights of exchange or registration of transfer or exchange
of the Notes herein expressly provided for and except as provided below), and
the Trustee, upon Issuer Order and demand of and at the expense of the Issuer,
shall execute instruments satisfactory to the Trustee and the Issuer
acknowledging satisfaction and discharge of this Indenture when: 

          (a) either 

         
(i) all Notes theretofore authenticated and delivered (other than (A) Notes
which have been destroyed, lost or stolen and which have been replaced or paid
as provided in Section 12.04, and (B) Notes for whose payment money has
theretofore been deposited in trust or segregated and held in trust by the
Issuer and thereafter repaid to the Issuer or discharged from such trust, as
provided in Section 12.04) have been delivered to the Trustee for cancellation;
or 

39 

         
(ii) all such Notes not theretofore delivered to the Trustee for cancellation
have become due and payable, whether at Stated Maturity, or any Fundamental
Change Purchase Date, or upon exchange (following the determination of the
Common Stock and cash, if any, due upon exchange as determined pursuant to
Article 15), 

and the Issuer or, if applicable, the
Guarantor has irrevocably (except as provided in the second proviso to Section
12.05) deposited or caused to be deposited with the Trustee, a Paying Agent or
the Exchange Agent (other than the Issuer or any of its Affiliates), as
applicable, as trust funds in trust cash and/or shares of Common Stock (as
applicable under the terms of this Indenture) in an amount sufficient without
reinvestment, as confirmed by a letter from a nationally recognized firm of
independent public accountants (which shall not be subject to the requirements
of Section 17.06), to pay and discharge the entire indebtedness on such Notes
not theretofore delivered to the Trustee for cancellation, for principal and
interest to the date of such deposit (in the case of Notes which have become due
and payable) or to the Stated Maturity, as the case may be; 

         
(b) the Issuer or the Guarantor has paid or caused to be paid all other sums
payable hereunder by the Issuer and the Guarantor; and 

         
(c) the Issuer has delivered to the Trustee an Officers’ Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this Indenture have been
complied with. 

    
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Issuer to the Trustee and any predecessor Trustee under
Section 8.06 and, if money shall have been deposited with and held by the
Trustee pursuant to subclause (ii) of clause (a) of this Section 12.01, the
provisions of Sections 2.05, 2.06, 2.07 and 4.02 and Article 15 and this Article
12 shall survive until the Notes have been paid in full. 

    
Section 12.02 Application of Trust Funds.
All money deposited with the Trustee pursuant to Section 12.01 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
(including the Issuer acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any interest
for whose payment such money has been deposited with or received by the Trustee,
but such money need not be segregated from other funds except to the extent
required by law. All moneys deposited with the Trustee (and held by it or any
Paying Agent) for the payment of Notes subsequently exchanged shall be returned
to the Issuer upon request. 

    
Section 12.03 Paying Agent to Repay Monies Held. Subject to the provisions of Section 12.04 the Trustee or a Paying
Agent shall hold in trust, for the benefit of the Noteholders, all money
deposited with it pursuant to Section 12.01 and shall apply the deposited money
in accordance with this Indenture and the Notes to the payment of the principal
of (including the Fundamental Change Purchase Price upon purchase pursuant to
Article 4) and interest on the Notes. 

    
Section 12.04 Return of Unclaimed Monies.
The Trustee and each Paying Agent shall pay to the Issuer upon request any money
held by them for the payment of principal or interest that remains unclaimed for
two years after a right to such money has matured; provided, however, that the Trustee or such
Paying Agent, before being required to make any such payment, may, at the
expense of the Issuer, either publish in a newspaper of general circulation in
The City of New York, or cause to be mailed to each Holder entitled to such
money, notice that such money remains unclaimed and that after a date specified
therein, which shall be at least thirty (30) calendar days from the date of such
mailing or publication, any unclaimed balance of such money then remaining will
be repaid to the Issuer. After payment to the Issuer,
Holders entitled to money must look to the Issuer for payment as general
creditors unless an applicable abandoned property law designates another Person,
and the Trustee and each Paying Agent shall be relieved of all liability with
respect to such money. 

 

40 

     Section
12.05 Reinstatement. If the Trustee or the
Paying Agent is unable to apply any money in accordance with this Article 12 by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, the Issuer’s
obligations under this Indenture and the Notes shall be revived and reinstated
as though no deposit had occurred pursuant to this Article 12 until such time as
the Trustee or Paying Agent is permitted to apply all money held in trust with
respect to the Notes; provided, however, that if the Issuer makes any payment of principal of or
interest on any Notes following the reinstatement of its obligations, the Issuer
shall be subrogated to the rights of the Holders of the Notes to receive such
payment from the money so held by the Trustee or Paying Agent in trust;
provided,
further,
that, if the Issuer’s obligations are revived and reinstated as herein provided,
the Trustee or Paying Agent shall discharge from trust and pay to the Issuer all
funds (together with the earnings thereon, if any) previously deposited
therewith pursuant to Section 12.02 and thereupon the Issuer, the Trustee, any
Paying Agent and the Holders of the Notes shall be restored severally and
respectively to their former positions hereunder as if no satisfaction and
discharge had been effected. 

ARTICLE 13
GUARANTEE

    
Section 13.01 Guarantee. 

         
(a) The Guarantor hereby fully and unconditionally guarantees to each Holder
of a Note authenticated and delivered by the Trustee: (i) the due and punctual
payment of the principal of and interest on such Note when and as the same shall
become due and payable, whether at the Stated Maturity, by acceleration,
repurchase or otherwise, and the due and punctual performance of all other
obligations of the Issuer to the Holders or the Trustee, all in accordance with
the terms of such Note and of this Indenture and (ii) in the case of any
extension of time of payment or renewal of such Note or any of such other
obligations, that the same will be promptly paid in full when due or performed
in accordance with the terms of the extension or renewal, whether at the Stated
Maturity or by acceleration, repurchase or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in clause (b) of this
Section 13.01. 

         
(b) The Guarantor and by its acceptance hereof each Holder hereby confirms
that it is the intention of all such parties that the Guarantee by the Guarantor
not constitute a fraudulent transfer or conveyance for purposes of the United
States Bankruptcy Code, the Uniform Fraudulent Conveyance Act, the Uniform
Fraudulent Transfer Act or any similar Federal or state law. To effectuate the
foregoing intention, the Holders and the Guarantor hereby irrevocably agree that
the obligations of the Guarantor under its Guarantee shall be limited to the
maximum amount as will, after giving effect to all other contingent and fixed
liabilities of the Guarantor, result in the obligations of the Guarantor under
its Guarantee not constituting such fraudulent transfer or conveyance.

         
(c) The Guarantor hereby agrees that its obligations hereunder shall be
absolute, unconditional, irrespective of, and shall be unaffected by, the
validity, regularity or enforceability of such Note or this Indenture, the
absence of any action to enforce the same or any release, amendment, waiver or
indulgence granted to the Issuer or any guarantor or any consent to departure
from any requirement of any other guarantee of all or any of the Notes or any
other circumstances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor; provided, however, that, notwithstanding the
foregoing, no such release, amendment, waiver or indulgence shall, without the
consent of the Guarantor, increase the principal amount of such Note, or
increase the interest rate thereon, or alter the Stated Maturity thereof. The
Guarantor hereby waives the benefits of diligence, presentment, demand for
payment, any requirement that the Trustee or any of the Holders exhaust any
right or take any action against the Issuer or any other Person, filing of
claims with a court in the event of insolvency or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, protest or notice with
respect to such Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that the Guarantee will not be discharged in respect
of such Note except by complete performance of the obligations contained in such
Note and in such Guarantee. The Guarantor agrees that if, after the occurrence
and during the continuance of an Event of Default, the Trustee or any of the
Holders are prevented by applicable law from exercising their respective rights
to accelerate the maturity of the Notes, to collect interest on the Notes, or to
enforce or exercise any other right or remedy with
respect to the Notes, the Guarantor agrees to pay to the Trustee for the account
of the Holders, upon demand therefor, the amount that would otherwise have been
due and payable had such rights and remedies been permitted to be exercised by
the Trustee or any of the Holders. 

41 

          (d) The Guarantor shall be subrogated to all rights of the Holders
of the Notes upon which its Guarantee is endorsed against the Issuer in respect
of any amounts paid by the Guarantor on account of such Note pursuant to the
provisions of its Guarantee or this Indenture; provided, however, that the Guarantor shall not
be entitled to enforce or to receive any payments arising out of, or based upon,
such right of subrogation until all payment and delivery obligation with respect
to each Notes issued hereunder shall have been satisfied in full. 

         
(e) The Guarantee shall remain in full force and effect and continue to be
effective should any petition be filed by or against the Issuer for liquidation
or reorganization, should the Issuer become insolvent or make an assignment for
the benefit of creditors or should a receiver or trustee be appointed for all or
any part of the Issuer’s assets, and shall, to the fullest extent permitted by
law, continue to be effective or be reinstated, as the case may be, if at any
time payment and performance of the Notes, is, pursuant to applicable law,
rescinded or reduced in amount, or must otherwise be restored or returned by any
Holder of the Notes, whether as a “voidable preference,” “fraudulent transfer,”
or otherwise, all as though such payment or performance had not been made. In
the event that any payment, or any part thereof, is rescinded, reduced, restored
or returned, the Notes shall, to the fullest extent permitted by law, be
reinstated and deemed reduced only by such amount paid and not so rescinded,
reduced, restored or returned. 

    
Section 13.02 Execution and Delivery of Guarantees. 

    
The Guarantee to be endorsed on the Notes shall include the terms of the
Guarantee set forth in Section 13.01 and any other terms that may be set forth
in the form established pursuant to Section 2.02. The Guarantor hereby agrees to
execute its Guarantee, in a form established pursuant to Section 2.02, to be
endorsed on each Note authenticated and delivered by the Trustee. 

    
The Guarantee shall be signed in the name and on behalf of the Guarantor
by the manual or facsimile signature of an Officer of the Guarantor. 

    
In case any Officer who shall have signed a Guarantee shall cease to be
such Officer before the Note on which the Guarantee is endorsed shall have been
authenticated and delivered by the Trustee, such Guarantee nevertheless shall
bind the Guarantor, and a Guarantee may be signed on behalf of the Guarantor by
such persons as, at the actual date of the execution of such Guarantee, shall be
the proper Officers, although at the date of the execution of this Indenture any
such person was not such an Officer. 

    
The delivery of any Note by the Trustee, after the authentication thereof
hereunder, shall constitute due delivery of the Guarantee endorsed thereon on
behalf of the Guarantor and shall bind the Guarantor notwithstanding the fact
that the Guarantee may not bear the signature of the Guarantor. The Guarantor
hereby agrees that its Guarantee set forth in Section 13.01 and in the form of
Guarantee established pursuant to Section 2.02 shall remain in full force and
effect notwithstanding any failure to endorse a Guarantee on any Note.

    
Section 13.03 Release of the Guarantor.

    
The Guarantee will remain in effect with respect to the Guarantor until
(i) the entire principal of and interest on the Notes to which the Guarantee
relates shall have been paid in full or otherwise discharged in accordance with
the provisions of such Notes and this Indenture and (ii) all amounts owing to
the Trustee hereunder have been paid or the Guarantor has been released from its
obligations pursuant to Section 11.02; provided, however, that if the Notes are
satisfied and discharged pursuant to Section 12.01, then upon delivery by the
Issuer of an Officers’ Certificate and an Opinion of Counsel stating that all
conditions precedent herein provided for relating to the release of the
Guarantor from its obligations under its Guarantee and this Article 13 have been
complied with, the Guarantor shall be released and discharged of its obligations
under its Guarantee and under this Article 13 without any action on the part of
the Trustee or any Holder, and the Trustee shall execute any documents
reasonably required in order to acknowledge the release
of the Guarantor from its obligations under its Guarantee endorsed on the Notes
of a series and under this Article 13. 

42 

ARTICLE 14 
IMMUNITY OF INCORPORATORS, STOCKHOLDERS, PARTNERS, ADVISORS,
OFFICERS,
DIRECTORS AND OTHERS

     Section
14.01 Indenture and Notes Solely Corporate Obligations. No recourse for the payment of the principal of (including
the Fundamental Change Purchase Price upon purchase pursuant to Article 4) or
interest on any Note, or for any claim based thereon or otherwise in respect
thereof, and no recourse under or upon any obligation, covenant or agreement of
the Issuer or ZAIS Financial Corp. in this Indenture or in any supplemental
indenture or in any Note, or because of the creation of any indebtedness
represented thereby, shall be had against ZAIS REIT Management, LLC or ZAIS
Group, LLC, any incorporator, stockholder, partner, member, manager, advisor,
employee, agent, officer, director or Subsidiary, as such, past, present or
future, of ZAIS Financial Corp., the Issuer, ZAIS REIT Management, LLC or ZAIS
Group, LLC or any of their Subsidiaries or of any successor thereto, either
directly or through ZAIS Financial Corp., the Issuer, ZAIS REIT Management, LLC
or ZAIS Group, LLC or any of their Subsidiaries or of any successor thereto,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise; it being expressly
understood that all such liability is hereby expressly waived and released as a
condition of, and as a consideration for, the execution of this Indenture and
the issue of the Notes. 

ARTICLE 15
EXCHANGE OF NOTES

    
Section 15.01 Right to Exchange. (a) Upon
compliance with the provisions of this Indenture, at any time prior to the Close
of Business on the Scheduled Trading Day immediately preceding the Maturity
Date, the Holder of any Notes not previously repurchased shall have the right,
at such Holder’s option, to exchange its Notes, or any portion thereof which is
a multiple of $1,000, into Common Stock, as provided in Section 15.10, by
surrender of such Notes so to be exchanged in whole or in part, together with
any required funds, under the circumstances and in the manner described in this
Article 15. 

         
(b) Notwithstanding any other provision of the Notes or this Indenture, no
Holder of Notes will be entitled to receive Common Stock following exchange of
such Notes to the extent that receipt of such Common Stock would cause such
Holder to exceed the ownership limits contained in ZAIS Financial Corp.’s
charter, which prohibit any stockholder from beneficially or constructively owning (applying certain attribution rules under the Internal Revenue Code) more
than 9.8% (by value or number, whichever is more restrictive) of the shares of
Common Stock or of ZAIS Financial Corp.’s Capital Stock outstanding at such time
unless the Board of Directors waives the ownership limit or establishes a
different limit on ownership. Any attempted exchange of Notes that would result
in the issuance of shares Common Stock in excess of such ownership limits in the
absence of such a waiver of modification shall be void to the extent of the
number of shares of Common Stock that would cause such violation, and the
related Notes or portion thereof shall be returned to the Holder as promptly as
practical.

         
(c) A
Note in respect of which a Holder has delivered a Fundamental Change Purchase
Notice exercising such Holder’s right to require the Issuer to purchase such
Note pursuant to Section 4.01 may be exchanged only if such Fundamental Change
Purchase Notice is properly withdrawn in accordance with, and within the time
periods set forth in, Section 4.03. 

         
(d) A
Holder of Notes is not entitled to any rights of a Holder of Common Stock until
such time as such Holder is entitled to receive shares of Common Stock pursuant
to this Article 15. 

43 

    
Section 15.02 Exercise of Exchange Right; No Adjustment for Interest or
Dividends. In order to exercise the exchange
right with respect to any Note in certificated form, the Issuer must receive at
the office or agency of the Issuer maintained for that purpose in the
Borough of Manhattan or, at the option of such Holder, the Corporate Trust
Office, such Note with the original or facsimile of the form entitled
“Exchange Notice” on the reverse thereof, duly completed and signed manually or by
facsimile, together with such Notes duly endorsed for transfer, accompanied by
the funds, if any, required by this Section 15.02. Such notice shall also state
the name or names (with address or addresses) in which the certificate or
certificates for shares of Common Stock that shall be issuable on such exchange
shall be issued, and shall be accompanied by transfer or similar taxes, if
required pursuant to Section 15.06. 

    
To exchange Notes held in book-entry form, a Holder must exchange by
book-entry transfer to the Exchange Agent through the facilities of DTC and, if
required, pay all taxes and duties, if any, and, if required, pay all funds
equal to interest payable on the next interest payment date to which the Holder
is not entitled. The Exchange Notice for Notes held in book-entry form must
comply with all applicable DTC procedures. 

    
To exchange the Notes that are in certificated form, a Holder must (a)
complete and manually sign the Exchange Notice on the reverse of the Note (or
complete and manually sign a facsimile of such notice), (b) deliver such
Exchange Notice, which is irrevocable, and the Notes to the Exchange Agent, (c)
furnish appropriate endorsements and transfer documents if required by the
Exchange Agent, (d) pay any transfer or similar tax, if required and (e) pay
funds equal to the interest payable on the next interest payment date to which
the Holder is not entitled, if required. 

    
The date on which the Holder satisfies all such requirements shall be
deemed to be the date on which the applicable Notes shall have been tendered for
exchange. 

    
Whether the Notes to be exchanged are held in book-entry or certificated
form, the Exchange Notice will require the Holder to certify that it is a QIB.

    
If the Issuer is required to deliver shares of Common Stock (upon
settlement in accordance with Sections 15.10 and 15.11, if applicable, on the
third Business Day immediately following the Exchange Date), after satisfaction
of the requirements for exchange set forth above, subject to compliance with any
restrictions on transfer if shares issuable on exchange are to be issued in a
name other than that of the Noteholder (as if such transfer were a transfer of
the Note or Notes (or portion thereof) so exchanged), and in accordance with the
time periods set forth in this Article 15, the Issuer shall deliver to such
Noteholder at the office or agency maintained by the Issuer for such purpose
pursuant to Section 5.02, (i) a certificate or certificates for the number of
full shares of Common Stock (if any) deliverable upon the exchange of such Note
or portion thereof as determined by the Issuer in accordance with the provisions
of Sections 15.10 and 15.11 and (ii) a check or cash in respect of any
fractional interest in respect of a share of Common Stock arising upon such
exchange, calculated by the Issuer as provided in Section 15.03. A certificate
or certificates for the number of full shares of Common Stock into which the
Notes are exchanged (and cash in lieu of fractional shares) will be delivered to
an exchanging Holder after satisfaction of the requirements for exchange set
forth above, in accordance with this Section 15.02 and Sections 15.10 and, if
applicable, 15.11. 

    
Each exchange shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.02 have been satisfied as to such Note (or portion thereof) (the
“Exchange Date”), and the Person in whose name any certificate or certificates for
shares of Common Stock shall be issuable upon such exchange shall be deemed to
have become the holder of record of the shares represented thereby for all
purposes at the Close of Business on the Exchange Date. 

    
Any Note or portion thereof surrendered for exchange during the period
from the Close of Business on the Record Date for any interest payment date to
the Open of Business on the applicable interest payment date shall be
accompanied by payment, in immediately available funds or other funds acceptable
to the Issuer, of an amount equal to the interest otherwise payable on such
interest payment date on the principal amount being exchanged; provided that no such
payment need be made (1) if a Holder exchanges its Notes in connection with a
Fundamental Change and the Issuer has specified a Fundamental Change Purchase
Date that is after a Record Date and on or prior to the Business Day immediately
succeeding the corresponding interest payment date, (2) with respect to any
exchange on or following the Record Date immediately preceding the Maturity
Date, or (3) to the extent of any Defaulted Interest, if any Defaulted Interest
exists at the time of exchange with respect to such Note. Except as otherwise
provided above in this Article 15, no payment or other adjustment shall be made
for interest accrued on any Note exchanged or for
dividends on any shares issued upon the exchange of such Note as provided in
this Article 15. Notwithstanding the foregoing, in the case of Notes submitted
for exchange in connection with a Fundamental Change, such Notes shall continue
to represent the right to receive the Additional Shares, if any, payable
pursuant to Section 15.11, until such Additional Shares are so paid.

44 

     Upon the exchange
of an interest in a Global Note, the Trustee (or other Exchange Agent appointed
by the Issuer), or the Custodian at the direction of the Trustee (or other
Exchange Agent appointed by the Issuer), shall make a notation on such Global
Note as to the reduction in the principal amount represented thereby. The Issuer
shall notify the Trustee in writing of any exchanges of Notes effected through
any Exchange Agent other than the Trustee. 

    
Upon the exchange of a Note, the accrued but unpaid interest attributable
to the period from the issue date of the Note to the Exchange Date, with respect
to the exchanged Note, shall not be deemed canceled, extinguished or forfeited,
but rather shall be deemed to be paid in full to the Holder thereof through
delivery of shares of Common Stock (together with the cash payment, if any) in
exchange for the Note being exchanged pursuant to the provisions hereof.

    
In case any Note of a denomination greater than $1,000 shall be
surrendered for partial exchange, and subject to Section 2.04, the Issuer shall
execute and upon receipt of such new Note or Notes the Trustee shall
authenticate and deliver to the Holder of the Note so surrendered, without
charge to the Holder, a new Note or Notes in authorized denominations in an
aggregate principal amount equal to the unexchanged portion of the surrendered
Note. 

    
Section 15.03 Cash Payments in Lieu of Fractional Shares. No fractional shares of Common Stock or scrip certificates
representing fractional shares shall be issued upon exchange of Notes. If more
than one Note shall be surrendered for exchange at one time by the same Holder,
the number of full shares that shall be issuable upon exchange shall be computed
on the basis of the aggregate principal amount of the Notes (or specified
portions thereof to the extent permitted hereby) so surrendered. If any
fractional share of Common Stock would be issuable upon the exchange of any Note
or Notes, the Issuer shall make a payment therefor in cash to the Holder of
Notes equal to the product of (i) such fraction of a share and (ii) the Last
Reported Sale Price of the Common Stock on the relevant Exchange Date (or, if
the Exchange Date is not a Trading Day, the next following Trading Day).

    
Section 15.04 Exchange Rate. The initial
Exchange Rate for the Notes is 52.5417 shares of Common Stock per each $1,000
principal amount of the Notes, subject to adjustment as provided in Sections
15.05 and 15.11 (herein called the “Exchange
Rate”). 

    
Section 15.05 Adjustment of Exchange Rate. The Exchange Rate will be adjusted as described in this Section 15.05,
except that the Issuer shall not make any adjustment to the Exchange Rate if
Holders participate (other than in the case of a share split or share
combination), at the same time and upon the same terms as holders of the Common
Stock and as a result of holding the Notes, in any of the transactions described
below without having to exchange their Notes, as if they held a number of shares
of Common Stock equal to the applicable Exchange Rate, multiplied by the
principal amount (expressed in thousands) of Notes held by such Holder.

         
(a) If
ZAIS Financial Corp. exclusively issues shares of Common Stock as a dividend or
distribution on all or substantially all shares of the Common Stock, or if ZAIS
Financial Corp. effects a share split or share combination, the Exchange Rate
will be adjusted based on the following formula: 

	           
    	ER1	      	=	      	ER0 	      	x	      	     OS1     
										OS0

     where,

ER0
= the Exchange Rate in effect immediately prior to the Open of Business on the
Ex-Dividend Date of such dividend or distribution, or immediately prior to the
Open of Business on the effective date of such share split or share combination,
as applicable;

45 

ER1
= the Exchange Rate in effect immediately after the Open of Business on such
Ex-Dividend Date or effective date; 

OS0
= the number of shares of Common Stock outstanding immediately prior to the Open
of Business on such Ex-Dividend Date or effective
date, as applicable, before giving effect to such dividend, distribution, share
split or share combination; and 

OS1
= the number of shares of Common Stock outstanding immediately after giving
effect to such dividend, distribution, share
split or share combination, as applicable. 

     Any adjustment
made pursuant to this paragraph (a) shall become effective immediately after the
Open of Business on the Ex-Dividend Date for such dividend or distribution, or
immediately after the Open of Business on the effective date for such share
split or share combination. If any dividend or distribution of the type
described in this paragraph (a) is declared but not so paid or made, the
Exchange Rate shall be immediately readjusted, effective as of the date the
Board of Directors determines not to pay such dividend or distribution to the
Exchange Rate that would then be in effect if such dividend or distribution had
not been declared. 

         
(b) If
ZAIS Financial Corp. issues to all or substantially all holders of the Common
Stock any rights, warrants or options entitling them, for a period of not more
than forty-five (45) calendar days after the announcement date of such issuance,
to subscribe for or purchase shares of the Common Stock, at a price per share
less than the average of the Last Reported Sale Prices of the Common Stock for
the 10 consecutive Trading Day period ending on, and including, the Trading Day
immediately preceding the date of announcement of such issuance, the Exchange
Rate will be increased based on the following formula: 

	           
    	ER1	      	=	      	ER0 	      	x	      	     OS0 + X     
										OS0 + Y

    
where 

ER0 = the Exchange Rate in effect immediately prior to
the Open of Business on the Ex-Dividend Date for
such issuance; 

ER1
= the Exchange Rate in effect immediately after the Open of Business on such
Ex-Dividend Date; 

OS0
= the number of shares of Common Stock outstanding immediately prior to the Open
of Business on such Ex-Dividend Date; 

X = the total
number of shares of Common Stock issuable pursuant to such rights, warrants or
options; and 

Y = the number
of shares of Common Stock equal to the aggregate price payable to exercise such
rights, warrants or options divided by the average of the Last
Reported Sale Prices of the Common Stock over the 10 consecutive Trading Day
period ending on the Trading Day immediately preceding the date of announcement
of the issuance of such rights, options or warrants. 

    
Any increase made under this paragraph (b) will be made successively
whenever any such rights, options or warrants are issued and shall become
effective immediately after the Open of Business on the record date for such
issuance. To the extent that such rights, options or warrants are not exercised
prior to their expiration or shares of the Common Stock are not delivered upon
the expiration of such rights, options or warrants, the Exchange Rate shall be
readjusted to the Exchange Rate that would then be in effect had the increase
with respect to the issuance of such rights, options or warrants been made on
the basis of delivery of only the number of shares of the Common Stock actually delivered. If such rights,
options or warrants are not so issued, or if no such rights, options or warrants
are exercised prior to their expiration, the Exchange Rate shall be decreased to
be the Exchange Rate that would then be in effect if such Ex-Dividend Date for
such issuance had not occurred.

46 

     For purposes of
this paragraph (b), in determining whether any rights, options or warrants
entitle the holders to subscribe for or purchase shares of the Common Stock at a
price per share less than such average of the Last Reported Sale Prices of the
Common Stock for the 10 consecutive Trading Day period ending on the Trading Day
immediately preceding the date of announcement for such issuance, and in
determining the aggregate offering price of such shares of the Common Stock,
there shall be taken into account any consideration received by ZAIS Financial
Corp. for such rights, options or warrants and any amount payable on exercise or
exchange thereof, the value of such consideration, if other than cash, to be
determined by the Board of Directors.

         
(c) If ZAIS
Financial Corp. distributes shares of its Capital Stock, evidences of its
indebtedness, its other assets or property, or rights, options or warrants to
acquire its Capital Stock or other securities, to all or substantially all
holders of the Common Stock, excluding:

         
(A) dividends,
distributions, rights, warrants or options as to which an adjustment was
effected pursuant to paragraph (a) or (b) above;

         
(B) dividends or
distributions paid exclusively in cash; and

         
(C) Spin-Offs
described below in this paragraph (c),

then the Exchange Rate will be
increased based on the following formula:

	          	ER1	     	=	     	ER0	  x	     	SP0	
				 		 			SP0 - FMV	

     where

ER0
= the Exchange Rate in effect immediately prior to the Open of Business on the
Ex-Dividend Date for such
distribution;

ER1
= the Exchange Rate in effect immediately after the Open of Business on such
Ex-Dividend Date;

SP0
= the average of the Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period ending on, and
including, the Trading Day immediately preceding the Ex-Dividend Date for such
distribution; and

FMV = the fair
market value (as determined by the Board of Directors) of the shares of ZAIS
Financial Corp.’s Capital Stock, evidences of its indebtedness, its other assets
or property, or rights, options or warrants to acquire its Capital Stock or
other securities distributed with respect to each outstanding share of Common
Stock on the Ex-Dividend Date for such distribution.

provided that if “FMV” with
respect to any distribution of shares of ZAIS Financial Corp.’s Capital Stock,
evidences of its indebtedness, its other assets or property, or rights, options
or warrants to acquire its Capital Stock or other securities is equal to or greater
than “SP0” with respect to such distribution, then in lieu of the
foregoing increase, each Holder of a Note shall
receive, in respect of each $1,000 principal amount of Notes it holds, at the
same time and upon the same terms as holders of the Common Stock, the amount and
kind of ZAIS Financial Corp.’s Capital Stock, evidences of its indebtedness, its
other assets or property, or rights, options or warrants to acquire its Capital
Stock or other securities that such Holder would have received as if such Holder
owned a number of shares of Common Stock equal to the Exchange Rate in effect on
the record date for the distribution.

47

     Any increase made
under the portion of this paragraph (c) above will become effective immediately
after the Open of Business on the Ex-Dividend Date for such distribution. If
such distribution is not so paid or made, the Exchange Rate shall be decreased
to be the Exchange Rate that would then be in effect if such dividend or
distribution had not been declared.

     With respect to an adjustment pursuant to
this paragraph (c) where there has been a payment of a dividend or other
distribution on the Common Stock of shares of Capital Stock of any class or
series, or similar equity interest, of or relating to ZAIS Financial Corp.’s
Subsidiary or other business unit, and such Capital Stock or similar equity
interest is listed or quoted (or will be listed or quoted upon the consummation
of the distribution) on a United States national securities exchange (a
“Spin-Off”), the Exchange Rate will be increased based on the following
formula:

	          	ER1	     	=	     	ER0	  x	     	FMV0 + MP0	
				 		 			MP0	

     where

ER0
= the Exchange Rate in effect immediately prior to the end of the Valuation
Period;

ER1
= the Exchange Rate in effect immediately after the end of the Valuation
Period;

FMV0
= the average of the Last Reported Sale Prices of the Capital Stock or similar
equity interest distributed to holders of Common
Stock applicable to one share of Common Stock over the first 10 consecutive
Trading Day period after, and including, the record date of the Spin-Off (the
“Valuation Period”); and

MP0
= the average of the Last Reported Sale Prices of Common Stock over the
Valuation Period.

     An adjustment to the Exchange Rate under
the preceding paragraph of this paragraph (c) will be made immediately after the
Open of Business on the day after the last day of the Valuation Period, provided
that in respect of any exchange during the Valuation Period, references with
respect to 10 Trading Days in the portion of this paragraph (c) relating to
Spin-Offs shall be deemed replaced with such lesser number of Trading Days as
have elapsed between the Ex-Dividend Date of such Spin-Off and the Exchange Date
in determining the applicable Exchange Rate. If the Ex-Dividend Date of the
Spin-Off is after the 10th Trading Day immediately preceding, and including, the
end of the Averaging Period in respect of an exchange of Notes, references to 10
Trading Days in the portion of this paragraph (c) relating to “Spin-Offs” will
be deemed to be replaced, solely in respect of that exchange, with such lesser
number of Trading Days as have elapsed from, and including, the Ex-Dividend Date
for the Spin-Off to, and including, the last Trading Day of such Averaging
Period.

     For purposes of the second adjustment set
forth in this Section 15.05(c), (i) the Last Reported Sale Price of any Capital
Stock or similar equity interest shall be calculated in a manner analogous to
that used to calculate the Last Reported Sale Price of the Common Stock in the
definition of “Last Reported Sale Price” set forth in Section 1.01 hereof, (ii)
whether a day is a Trading Day (and whether a day is a Scheduled Trading Day and
whether a Market Disruption Event has occurred) for such Capital Stock or
similar equity interest shall be determined in a manner analogous to that used
to determine whether a day is a Trading Day (or whether a day is a Scheduled
Trading Day and whether a Market Disruption Event has occurred) for the Common
Stock, and (iii) whether a day is a Trading Day to be included in a Valuation
Period will be determined based on whether a day is a Trading Day for both the
Common Stock and such Capital Stock or similar equity interest.

48

     Subject to the provisions of this Section
15.05 concerning a rights plan below, for the purposes of this Section 15.05(c),
rights, options or warrants distributed by ZAIS Financial Corp. to all holders
of the Common Stock entitling them to subscribe for or purchase shares of ZAIS
Financial Corp.’s Capital Stock (either initially or under certain
circumstances), which rights, options or warrants, until the occurrence of a
specified event or events (a “Trigger
Event”): (1) are deemed to be transferred
with such shares of Common Stock; (2) are not exercisable; and (3) are also
issued in respect of future issuances of Common Stock, shall be deemed not to
have been distributed for purposes of this Section 15.05(c), (and no adjustment
to the Exchange Rate under this Section 15.05(c) will be required) until the
occurrence of the earliest Trigger Event, whereupon such rights, options or
warrants shall be deemed to have been distributed and an appropriate adjustment
(if any is required) to the Exchange Rate shall be made under this Section
15.05(c). If any such right, option or warrant, distributed prior to the issue
date are subject to events, upon the occurrence of which such rights, options or
warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and Ex-Dividend Date
of such deemed distribution (in which case the original rights, options or
warrants shall be deemed to terminate and expire on such date without exercise
by any of the holders). In addition, in the event of any distribution or deemed
distribution of rights, options or warrants, or any Trigger Event or other event
(of the type described in the preceding sentence) with respect thereto that was
counted for purposes of calculating a distribution amount for which an
adjustment to the Exchange Rate under this Section 15.05(c) was made, (1) in the
case of any such rights, options or warrants which shall all have been redeemed
or purchased without exercise by any holders thereof, upon such final redemption
or purchase (x) the Exchange Rate shall be readjusted as if such rights, options
or warrants had not been issued and (y) the Exchange Rate shall then again be
readjusted to give effect to such distribution, deemed distribution or Trigger
Event, as the case may be, as though it were a cash distribution, equal to the
per share redemption or purchase price received by holders of Common Stock with
respect to such rights, options or warrants (assuming each such holder had
retained such rights, options or warrants), made to all holders of Common Stock
as of the date of such redemption or purchase, and (2) in the case of such
rights, options or warrants which shall have expired or been terminated without
exercise by any holders thereof, the Exchange Rate shall be readjusted as if
such rights and warrants had not been issued. 

     For purposes of
Section 15.05(a) hereof, Section 15.05(b) hereof and this Section 15.05(c), if
any dividend or distribution to which this Section 15.05(c) applies includes one
or both of: 

         
(i) a
dividend or distribution of shares of Common Stock to which Section 15.05(a)
hereof also applies (the “Clause A
Distribution”); or 

         
(ii) a
dividend or distribution of rights, options or warrants to which Section
15.05(b) hereof also applies (the “Clause B
Distribution”), 

then (i) such dividend or distribution,
other than the Clause A Distribution and the Clause B Distribution, shall be
deemed to be a dividend or distribution to which this Section 15.05(c) applies
(the “Clause C Distribution”) and any Exchange Rate adjustment required to be made under
this Section 15.05(c) with respect to such Clause C Distribution shall be made,
(ii) the Clause B Distribution, if any, shall be deemed to immediately follow
the Clause C Distribution and any Exchange Rate adjustment required by Section
15.05(b) hereof with respect thereto shall then be made, except that, if
determined by the Issuer, (A) the “record date” of the Clause B Distribution and
the Clause A Distribution, if any, shall be deemed to be the Ex-Dividend Date of
the Clause C Distribution and (B) any shares of Common Stock included in the
Clause A Distribution or the Clause B Distribution shall not be deemed to be
“outstanding immediately prior to the Open of Business on such record date”
within the meaning of Section 15.05(b) hereof, and (iii) the Clause A
Distribution, if any, shall be deemed to immediately follow the Clause C
Distribution or the Clause B Distribution, as the case may be, except that, if
determined by the Issuer, (A) the “record date” of the Clause A Distribution and
the Clause B Distribution, if any, shall be deemed to be the Ex-Dividend Date of
the Clause C Distribution, and (B) any shares of Common Stock included in the
Clause A Distribution shall not be deemed to be “outstanding immediately prior
to the Open of Business on such record date or such effective date” within the
meaning of Section 15.05(a) hereof. 

         
(d) If any
cash dividend or distribution is made to all or substantially all holders of the
Common Stock to the extent that the aggregate of all such cash dividends or
distributions paid in any quarter exceeds the dividend threshold amount (the
“DTA”) for
such quarter, the Exchange Rate will be adjusted based on the following formula:

	          	ER1	     	=	     	ER0	  x	     	SP0 -DTA	
				 		 			SP0
      –
      C	

49 

     where

ER0
= the Exchange Rate in effect immediately prior to the Open of Business on the
Ex-Dividend Date for such dividend or
distribution;

ER1
= the Exchange Rate in effect immediately after the Open of Business on the
Ex-Dividend Date for such dividend or
distribution;

SP0
= the Daily VWAP of the Common Stock on the Trading Day immediately preceding
the Ex-Dividend Date for such dividend or
distribution;

DTA = the
dividend threshold amount, which shall initially be $0.50 per quarter;
and

C = the amount
in cash per share that ZAIS Financial Corp. distributes to holders of the Common
Stock in any dividend.

     The DTA is subject to
adjustment on an inversely proportional basis whenever the Exchange Rate is
adjusted other than adjustments made pursuant to this paragraph (d). If an
adjustment is required to be made as set forth in this paragraph (d) as a result
of a distribution that is not a regular quarterly dividend, the DTA will be
deemed to be zero with respect to that particular adjustment.

     If C is equal to or greater
than SP0 , in lieu of the foregoing increase, each Holder shall receive, for
each $1,000 principal amount of Notes it holds, at the same time and upon the
same terms as holders of shares of the Common Stock, the amount of cash that
such Holder would have received as if such Holder owned a number of shares of
Common Stock equal to the Exchange Rate on the record date for such cash
dividend or distribution. Such increase shall become effective immediately after
the Open of Business on the record date for such dividend or distribution. If
such dividend or distribution is not so paid, the Exchange Rate shall be
decreased to be the Exchange Rate that would then be in effect if such dividend
or distribution had not been declared.

         
(e) If ZAIS
Financial Corp. or any of its Subsidiaries (including the Issuer) makes a
payment in respect of a tender offer or exchange offer for Common Stock to the
extent that the cash and value of any other consideration included in the
payment per share of Common Stock exceeds the average of the Last Reported Sale
Price of the Common Stock over the 10 consecutive Trading Day period commencing
on, and including, the Trading Day next succeeding the last date on which
tenders or exchanges may be made pursuant to such tender offer or exchange
offer, the Exchange Rate will be increased based on the following
formula:

	          	ER1	     	=	     	ER0	  x	     	AC + (SP1 x OS1)	
				 		 			OS0 x SP1	

     where

ER0
= the Exchange Rate in effect immediately prior to the Close of Business on the
10th Trading Day immediately following, and
including, the Trading Day next succeeding the date such tender or exchange
offer expires (the “Offer Expiration Date”);

ER1
= the Exchange Rate in effect immediately after the Close of Business on the
10th Trading Day immediately following, and
including, the Trading Day next succeeding the Offer Expiration Date;

AC = the
aggregate value of all cash and any other consideration (as determined by the
Board of Directors) paid or payable for the Common Stock purchased in such
tender or exchange offer;

50

OS0
= the number of shares of Common Stock outstanding immediately prior to the
expiration time of the tender or exchange offer
on the Offer Expiration Date (prior to giving effect to the purchase of all
shares accepted for purchase or exchange in such tender offer or exchange
offer);

OS1
= the number of shares of Common Stock outstanding immediately after the
expiration time of the tender or exchange offer
on the Offer Expiration Date (after giving effect to the purchase of all shares
accepted for purchase or exchange in such tender offer or exchange offer);
and

SP1
= the average of the Last Reported Sale Prices of the Common Stock over the 10
consecutive Trading Day period commencing on the
Trading Day next succeeding the Offer Expiration Date.

     The adjustment to
the applicable Exchange Rate under the preceding paragraph of this Section
15.05(e) will occur at the Close of Business on the 10th Trading Day immediately
following, and including, the Trading Day next succeeding the Offer Expiration
Date; provided that in respect of any exchange within the 10 Trading Days
immediately following, and including, the Trading Day next succeeding the Offer
Expiration Date of any tender or exchange offer, references with respect to 10
Trading Days shall be deemed replaced with such lesser number of Trading Days as
have elapsed between the Offer Expiration Date of such tender or exchange offer
and the Exchange Date in determining the applicable Exchange Rate. In addition,
if the Trading Day next succeeding the Offer Expiration Date is after the 10th
Trading Day immediately preceding, and including, the end of the Averaging
Period in respect of an exchange of Notes, references in the preceding paragraph
to 10 Trading Days shall be deemed to be replaced, solely in respect of that
exchange, with such lesser number of Trading Days as have elapsed from, and
including, the Trading Day next succeeding the Offer Expiration Date to, and
including, the last Trading Day of such Averaging Period.

    
If ZAIS Financial Corp. has in effect a rights plan while any Notes
remain outstanding, Holders of Notes will receive, upon exchange of Notes, in
addition to any shares of Common Stock otherwise received in connection with
such exchange, the rights under the rights plan unless, prior to exchange, the
rights have expired, terminated or been redeemed or unless the rights have
separated from the Common Stock, in which case, and only in such case, the
Exchange Rate will be adjusted at the time of separation as if ZAIS Financial
Corp. distributed to all holders of the Common Stock, shares of ZAIS Financial
Corp.’s Capital Stock, evidences of indebtedness, assets, property, rights,
options or warrants pursuant to paragraph (c) above, subject to readjustment in
the event of the expiration, termination or redemption of such rights

         
(f) In
addition to the adjustments pursuant to paragraphs (a) through (e) above, the
Issuer may, to the extent permitted by applicable law and the rules of the New
York Stock Exchange or any other securities exchange or market on which the
Common Stock is then listed, increase the Exchange Rate of the Notes by any
amount for a period of at least 20 Business Days if the Board of Directors
determines that such increase would be in best interests of the Issuer or ZAIS
Financial Corp. The Issuer may also (but is not required to) increase the
Exchange Rate to avoid or diminish income tax to holders of the Common Stock or
rights to purchase shares of the Common Stock in connection with a dividend or
distribution of shares (or rights to acquire shares) or similar
event.

    
Adjustments to the applicable Exchange Rate will be calculated to the
nearest 1/10,000th of a share.

    
Except as stated in this Section 15.05, the Issuer shall not adjust the
Exchange Rate for the issuance of shares of Common Stock or any securities
convertible into or exchangeable for shares of Common Stock or the right to
purchase shares of the Common Stock or such convertible or exchangeable
securities. If, however, the application of the formulas in Section 15.05(a)
through (e) would result in a decrease in the Exchange Rate, except to the
extent of any readjustment to the Exchange Rate, no adjustment to the Exchange
Rate will be made (other than as a result of a reverse share split, share
combination or readjustment).

    
Notwithstanding this Section 15.05, if an Exchange Rate adjustment
becomes effective on any Ex-Dividend Date, and a Noteholder that has exchanged
its Notes on or after such Ex-Dividend Date and on or prior to the related
Record Date would be treated as the record holder of the shares of the Common
Stock as of the related Exchange Date based on an adjusted Exchange Rate for
such Ex-Dividend Date, then, notwithstanding the Exchange Rate adjustment
provisions of this Section 15.05, the Exchange Rate adjustment relating to such
Ex-Dividend Date will not be made for such exchanging Noteholder. Instead, such
Noteholder will be treated as if such Noteholder were the record owner of the
shares of the Common Stock on an unadjusted basis and will participate in the
related dividend, distribution or other event giving rise to such
adjustment.

51

     Notwithstanding
anything to the contrary contained herein, and in addition to the other events
set forth herein on account of which no adjustment to the Exchange Rate shall be
made, the applicable Exchange Rate shall not be adjusted for: 

         
(i) on
account of stock repurchases that are not tender offers referred to in Section
15.05(e) above, including structured or derivative transactions, or transactions
pursuant to a stock repurchase program approved by the Board of Directors, or
otherwise; 

         
(ii) upon
the issuance of any shares of the Common Stock pursuant to any present or future
plan providing for the reinvestment of dividends or interest payable on ZAIS
Financial Corp.’s securities and the investment of additional optional amounts
in shares of the Common Stock under any plan; 

         
(iii) upon
the issuance of any shares of the Common Stock or options or rights to purchase
those shares pursuant to any present or future employee, director or consultant
benefit plan, program or agreement of or assumed by ZAIS Financial Corp. or any
of its Subsidiaries, including pursuant to ZAIS Financial Corp.’s 2012 equity
incentive plan; 

         
(iv) upon
the issuance of any shares of the Common Stock pursuant to any option, warrant,
right or exercisable, exchangeable or convertible security not described in the
preceding clause (iii) and outstanding as of the date the Notes were first
issued; 

         
(v) for a
change in the par value of the Common Stock; 

         
(vi) for
accrued and unpaid interest, if any; or 

         
(vii) for
an event otherwise requiring an adjustment under this Indenture if such event is
not consummated. 

    
Whenever the Exchange Rate is adjusted as herein provided, ZAIS Financial
Corp. or the Issuer shall as promptly as reasonably practicable file with the
Trustee and any Exchange Agent other than the Trustee an Officers’ Certificate
setting forth the Exchange Rate after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. Promptly after delivery of
such certificate, ZAIS Financial Corp. or the Issuer shall prepare a notice of
such adjustment of the Exchange Rate setting forth the adjusted Exchange Rate
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Exchange Rate to the Holders of the Notes
within 20 Business Days of the effective date of such adjustment. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment. 

    
For purposes of this Section 15.05, the number of shares of Common Stock
at any time outstanding shall not include shares held in the treasury of ZAIS
Financial Corp. so long as ZAIS Financial Corp. does not pay any dividend or
make any distribution on shares of Common Stock held in the treasury of ZAIS
Financial Corp., but shall include shares issuable in respect of scrip
certificates issued in lieu of fractions of shares of Common Stock. 

    
In addition the adjustments to the applicable Exchange Rate as set forth
in this Article 15, the Issuer shall increase the Exchange Rate by 3% for each
$1,000 principal amount of Notes exchanged at a time when a Registration Default
has occurred and is continuing as set forth in the Registration Rights
Agreement. 

52 

     (g) If any of the following events
occur, namely (i) any recapitalization, reclassification or change of the Common
Stock (other than a change in par value, or from par value to no par value, or
from no par value to par value, or as a result of a split, subdivision or
combination for which an adjustment was made pursuant to Section 15.05(a)
above), (ii) any consolidation, merger or combination involving ZAIS Financial
Corp., (iii) any sale, lease or other transfer to a third party of the
consolidated assets of ZAIS Financial Corp. and its Subsidiaries substantially
as an entirety; or (iv) any statutory share exchange, and, in each case, as a
result of which the Common Stock would be converted into, or exchanged for,
stock, other securities, other property or assets (including cash or any
combination thereof) (any such event, a “Merger Event,” any such stock, other
securities, other property or assets, “Reference Property,” and the amount of
kind of Reference Property that a holder of one share of Common Stock (x) is
entitled to receive in the applicable Merger Event or (y) if as a result of the
applicable Merger Event, each share of Common Stock is converted into the right
to receive more than a single type of consideration (determined based in part
upon any form of stockholder election), the per-share of Common Stock weighted
average of the types and amounts of Reference Property received by the holders
of Common Stock that affirmatively make such an election, a “Unit of Reference Property”) then, at the effective time of such Merger Event, the right to
exchange each $1,000 principal amount of Notes into a number of shares of the
Common Stock equal to the applicable Exchange Rate will, without the consent of
the Holders, be changed into a right to exchange each $1,000 principal amount of
Notes based on a number of Units of Reference Property equal to the applicable
Exchange Rate and, prior to or at the effective time of such Merger Event, ZAIS
Financial Corp. or the successor or purchasing Person, as the case may be, shall
execute with the Trustee a supplemental indenture (which shall comply with the
Trust Indenture Act as in force at the date of execution of such supplemental
indenture) providing for such change in the right to exchange each $1,000
principal amount of Notes. 

    
If the Merger Event causes the Common Stock to be converted into, or
exchanged for, the right to receive more than a single type of consideration
(determined based in part upon any form of stockholder election) as contemplated
by the preceding paragraph such that a Unit of Reference Property is comprised
of the per-share of Common Stock weighted average of the types and amounts of
consideration received by the holders of the Common Stock in the Merger Event
that affirmatively make such an election, the Issuer shall notify Holders of the
weighted average as soon as practicable after such determination is
made.

    
ZAIS Financial Corp. shall not become a party to any Merger Event unless
its terms are consistent with this Section 15.05(g). Such supplemental
indenture described in the second immediately preceding paragraph shall provide
for adjustments which shall be as nearly equivalent to the adjustments provided
for in this Article 15 in the judgment of the Board of Directors or the board of
directors of the successor Person. If, in the case of any such Merger Event, the
Reference Property receivable thereupon by a holder of Common Stock includes
shares of stock, securities or other property or assets (including cash or any
combination thereof) of a Person other than the successor or purchasing Person,
as the case may be, in such Merger Event, then such supplemental indenture shall
also be executed by such other Person. 

    
Section 15.06 Taxes on Shares Issued. The issue of
stock certificates, if any, on exchange of Notes shall be made without charge to
the exchanging Noteholder for any documentary, stamp or similar issue or
transfer tax in respect of the issue thereof. The Issuer shall not, however, be
required to pay any such tax which may be payable in respect of any transfer
involved in the issue and delivery of stock in any name other than that of the
holder of any Note exchanged, and the Issuer shall not be required to issue or
deliver any such stock certificate unless and until the Person or Persons
requesting the issue thereof shall have paid to the Issuer the amount of such
tax or shall have established to the satisfaction of the Issuer that such tax
has been paid. 

    
Section 15.07 Reservation of Shares, Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of
Common Stock. ZAIS Financial Corp. shall
provide, free from preemptive rights, out of its authorized but unissued shares
or shares held in treasury, sufficient shares of Common Stock to provide for the
exchange of the Notes as required by this Indenture from time to time as such
Notes are presented for exchange. 

    
ZAIS Financial Corp. covenants that all shares of Common Stock which may
be issued upon exchange of Notes will upon issue be fully paid and
non-assessable by ZAIS Financial Corp. and free from all taxes, liens and
charges with respect to the issue thereof. 

    
ZAIS Financial Corp. covenants that, if any shares of Common Stock to be
provided for the purpose of exchange of Notes hereunder require registration
with or approval of any governmental authority under any federal or state law
before such shares may be validly issued upon exchange, ZAIS Financial Corp.
shall, as expeditiously as possible, secure such registration or approval, as
the case may be. 

53 

     ZAIS Financial
Corp. further covenants that, if at any time the Common Stock shall be listed on
The New York Stock Exchange or any other national or regional securities
exchange or automated quotation system, ZAIS Financial Corp. shall, if permitted
by the rules of such exchange or automated quotation system, to list and keep
listed, so long as the Common Stock shall be so listed on such exchange or
automated quotation system, all the Common Stock issuable upon exchange of the
Notes; provided that if the rules of such exchange or automated quotation system permit
ZAIS Financial Corp. to defer the listing of such Common Stock until the first
exchange of the Notes in accordance with the provisions of this Indenture, ZAIS
Financial Corp. covenants to list such Common Stock issuable upon exchange of
the Notes in accordance with the requirements of such exchange or automated
quotation system at such time. 

    
Section 15.08 Responsibility of Trustee. The Trustee
and any other Exchange Agent shall not at any time be under any duty or
responsibility to determine the applicable Exchange Rate or whether any facts
exist which may require any adjustment of the Exchange Rate, or with respect to
the nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other Exchange
Agent shall not be accountable with respect to the validity or value (or the
kind or amount) of any shares of Common Stock, or of any Capital Stock, other
securities or other assets or property, which may at any time be issued or
delivered upon the exchange of any Note; and the Trustee and any other Exchange
Agent make no representations with respect thereto. Neither the Trustee nor any
Exchange Agent shall be responsible for any failure of the Issuer or ZAIS
Financial Corp. to issue, transfer or deliver any shares of Common Stock or
stock certificates or other securities or property or cash upon the surrender of
any Note for the purpose of exchange or to comply with any of the duties,
responsibilities or covenants of the Issuer or ZAIS Financial Corp. contained in
this Article 15. Without limiting the generality of the foregoing, neither the
Trustee nor any Exchange Agent shall be under any responsibility to determine
the correctness of any provisions contained in any supplemental indenture
entered into pursuant to Section 15.05 relating either to the kind or amount of
shares of Capital Stock or other securities or other assets or property
(including cash) receivable by Noteholders upon the exchange of their Notes
after any such event referred to in Section 15.05 or to any adjustment to be
made with respect thereto, but, subject to the provisions of Section 8.12, may
accept as conclusive evidence of the correctness of any such provisions, and
shall be protected in relying upon, the Officers’ Certificate and Opinion of
Counsel (which the Issuer shall be obligated to file with the Trustee prior to
the execution of any such supplemental indenture) with respect thereto.

    
Section 15.09 Notice to Holders Prior to Certain Actions. In case: 

         
(a) ZAIS
Financial Corp. shall declare a dividend (or any other distribution) on the
Common Stock that would require an adjustment in the Exchange Rate pursuant to
Section 15.05; or 

         
(b) ZAIS
Financial Corp. shall authorize the granting to the holders of all or
substantially all of the Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or 

         
(c) of any
reclassification or reorganization of the Common Stock (other than a subdivision
or combination of its outstanding Common Stock, or a change in par value, or
from par value to no par value, or from no par value to par value), or of any
consolidation, combination, merger or share exchange to which the Issuer or ZAIS
Financial Corp. is a party and for which approval of any stockholders of ZAIS
Financial Corp. is required, or of the sale or transfer of all or substantially
all of the assets of ZAIS Financial Corp.; or 

         
(d) of the
voluntary or involuntary dissolution, liquidation or winding up of ZAIS
Financial Corp.; 

the Issuer shall cause to be filed with
the Trustee and to be mailed to each holder of Notes at its address appearing on
the Note Register provided for in Section 2.05 of this Indenture, as promptly as
possible but in any event at least ten (10) calendar days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights are to be determined, or (y)(i) the date on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up is expected to become effective or occur, and the date
as of which it is expected that holders of Common Stock of
record shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up and (ii) whether ZAIS Financial
Corp. has determined that it is not a “domestically controlled investment
entity” as defined in Section 897 of the Internal Revenue Code and, therefore,
will withhold under Section 1445 of the Internal Revenue Code unless the
non-U.S. Noteholder would not be treated as having owned (under all applicable
rules for direct, indirect, and constructive ownership) more than five percent
of the fair market value of the Common Stock during the applicable testing
period; provided, however, no notice is required to be provided pursuant to this Section 15.09 in
respect of the declaration of any dividend pursuant to Section 15.09(a) until
ZAIS Financial Corp. has publicly announced such declaration of a dividend and,
upon such time that ZAIS Financial Corp. has publicly announced such declaration
of a dividend, ZAIS Financial Corp. shall provide the notice and other
applicable information required by this Section 15.09 in accordance with this
Section 15.09. Failure to give such notice, or any defect therein, shall not
affect the legality or validity of such dividend, distribution,
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding up.

54 

     Section
15.10 Settlement upon Exchange. (a) Except
as described in Section 15.10(e), upon exchange of any Notes, subject to
Sections 15.01, 15.02 and this Section 15.10, the Issuer shall satisfy its
obligation upon exchange (the “Exchange
Obligation”) by delivery of the shares (and,
if applicable, payment of the cash) described under Section 15.10(b) below.

         
(b) Upon
exchange of Notes, the Issuer shall deliver, in respect of each $1,000 principal
amount of Notes tendered for exchange in accordance with their terms:

         
(i) equal
to (1) (i) the aggregate principal amount of Notes to be exchanged
divided by
(ii) $1,000, multiplied by (2) the applicable Exchange Rate on the date the
exchanging Holder becomes a record owner of the Common Stock;
and 

         
(ii) an
amount in cash in lieu of any fractional shares of Common Stock as provided in
Section 15.03. 

         
(c) Delivery of the shares of Common Stock (and, if applicable, payment of
the cash) pursuant to Section 15.10(b) shall be made by the Issuer on the third
Business Day immediately following the Exchange Date to the holder of a Note
surrendered for exchange, or such holder’s nominee or nominees, and the Issuer
shall deliver to the Exchange Agent or to such holder, or such holder’s nominee
or nominees, certificates or a book-entry transfer through the Depositary for
the number of full shares of Common Stock to which such holder shall be entitled
as part of such Exchange Obligation. 

         
(d) Upon
exchange of Notes, the Holder must deliver to the Issuer cash equal to the
amount the Issuer is required to deduct or withhold under applicable law in
connection with such exchange; provided, however, that if the Holder does not
deliver such cash, the Issuer may (or may instruct the Exchange Agent to) deduct
and withhold from the consideration otherwise deliverable to such Holder the
amount required to be deducted and withheld under applicable law. 

         
(e) Notwithstanding Section 15.10(a) and Section 15.10(b), to the extent the
aggregate number of shares of the Common Stock the Issuer would be required to
deliver upon any exchange, when taken together with any shares of the Common
Stock delivered upon previous exchanges, if any, exceeds the Aggregate Share
Cap, the Issuer shall deliver in lieu of such excess shares of the Common Stock
cash equal to the sum of the Daily Exchange Values during the Averaging Period.
The Issuer shall promptly, and in any event within one Business Day following
any Exchange Date, notify any exchanging Holder if such Holder will receive cash
in lieu of any shares of the Common Stock otherwise issuable to such Holder upon
exchange. ZAIS Financial Corp. may include for vote by its stockholders during
its annual meeting to be held in 2014 and endorse in the proxy materials for
such meeting the approval, in accordance with New York Stock Exchange listing
requirements, of the issuance of shares of the Common Stock upon exchange of the
Notes in excess of the Aggregate Share Cap. If ZAIS Financial Corp. has obtained
such approval, the Aggregate Share Cap shall cease to apply. The Issuer shall
pay any cash in lieu of the shares of the Common Stock otherwise deliverable in
excess of the Aggregate Share Cap not later than the second Business Day
following the last day of the relevant Averaging Period. 

55 

     Section
15.11 Exchange
Rate Adjustment After Make-Whole Fundamental Changes. (a) If a Make-Whole Fundamental Change occurs and a Holder elects to
convert its Notes in connection with such Make-Whole Fundamental Change, the
Issuer shall, under the circumstances described in this Section 15.11, increase
the Exchange Rate for the Notes so surrendered for exchange by a number of
additional shares of Common Stock (the “Additional Shares”) as specified
below; provided that the Additional Shares will only be payable as set forth below. An
exchange of Notes shall be deemed for these purposes to be “in connection with”
a Make-Whole Fundamental Change if the relevant Exchange Notice is received by
the Exchange Agent during the period from, and including, the Effective Date of
the Make-Whole Fundamental Change up to, and including, the Close of Business on
the Business Day immediately prior to the related Fundamental Change Purchase
Date or, if such Make-Whole Fundamental Change is not a Fundamental Change, the
35th Business Day immediately following the Effective Date for such Make-Whole
Fundamental Change. 

         
(b) The
number of Additional Shares will be determined by reference to the table in
paragraph (e) below and is based on the date on which the Make-Whole Fundamental
Change occurs or becomes effective (the “Effective Date”) and the price (the
“Stock Price”) paid (or deemed paid) per share of the Common Stock in the Make-Whole
Fundamental Change. If the holders of the Common Stock receive only cash in a
Make-Whole Fundamental Change described in clause (2) of the definition of
Fundamental Change, the Stock Price shall be the cash amount paid per share.
Otherwise, the Stock Price shall be the average of the Last Reported Sale Prices
of the Common Stock over the ten consecutive Trading Day period ending on, and
including, the Trading Day immediately preceding the Effective Date of the
Make-Whole Fundamental Change. 

         
(c) The
Stock Prices set forth in the first row of the table (i.e., the column headers) below shall
be adjusted as of any date on which the Exchange Rate of the Notes is adjusted.
The adjusted Stock Prices will equal the Stock Prices applicable immediately
prior to such adjustment, multiplied by a fraction, (i) the
numerator of which is the Exchange Rate immediately prior to the adjustment
giving rise to the Stock Price adjustment and (ii) the denominator of which is
the Exchange Rate as so adjusted. 

         
(d) The
number of Additional Shares will be adjusted in the same manner and for the same
events as the Exchange Rate is adjusted pursuant to Section 15.05. 

         
(e) The
following table sets forth the Stock Price and number of Additional Shares to be
added to the applicable Exchange Rate per $1,000 principal amount of Notes:

		ZFC Common Stock Price
	Effective Date	$16.55	$17.00	$17.50	$18.00	$18.50	$19.00	$20.00	$21.00	$22.00	$23.00	$24.00
	November 25, 2013	7.8812	6.7749	5.6728	4.6941	3.8284	3.0688	1.8361	0.9577	0.4023	0.1108	0.0000
	November 15, 2014	7.8812	7.1289	5.9654	4.9374	4.0346	3.2477	1.9858	1.0892	0.5039	0.1702	0.0151
	November 15, 2015	7.8812	6.8434	5.5850	4.4841	3.5324	2.7207	1.4798	0.6838	0.2404	0.0395	0.0000
	November 15, 2016	7.8812	6.2818	4.6012	3.0139	1.5124	0.0899	0.0000	0.0000	0.0000	0.0000	0.0000

         
(f) If the
exact Stock Price and Effective Date are not set forth on the table above, then:

         
(i) if the
Stock Price is between two Stock Prices in the table or the Effective Date is
between two Effective Dates in the table, the Additional Shares will be
determined by a straight-line interpolation between the number of Additional
Shares set forth for the higher and lower Stock Prices and the earlier and later
Effective Dates, as applicable, based on a 365-day year; 

         
(ii) if the
Stock Price is in excess of $24.00 per share of Common Stock (the
“Make Whole Cap”) (subject to adjustment as described below) no Additional Shares will
be added to the applicable Exchange Rate; and 

56 

          (iii) if the Stock Price is less than $16.55 per share of Common Stock (the
“Make Whole Floor”) (subject to adjustment as described below) no Additional Shares will
be added to the applicable Exchange Rate. 

    
The Make Whole Cap and Make Whole Floor shall be adjusted as of any date
on which the Exchange Rate of the Notes is adjusted pursuant to Section 15.05.
The adjusted Make Whole Cap or Make Whole Floor, as the case may be, shall equal
the Make Whole Cap or Make Whole Floor, as the case may be, applicable
immediately prior to such adjustment, multiplied by a fraction, (i) the
numerator of which is the Exchange Rate immediately prior to the adjustment
giving rise to the adjustment and (ii) the denominator of which is the Exchange
Rate as so adjusted. 

         
(g) Notwithstanding anything in this Section 15.11 to the contrary, in no
event will the total number of shares of Common Stock issuable upon exchange of
the Notes exceed 60.4229 per $1,000 principal amount of Notes, subject to
adjustment in the same manner as the Exchange Rate pursuant to Section 15.05.

    
Section 15.12 Calculations in Respect of Notes.
Except as otherwise provided in this Indenture, the Issuer shall be responsible
for making all calculations called for under the Notes. These calculations
include, but are not limited to, determinations of the Last Reported Sale Prices
of the Common Stock, accrued interest payable on the Notes and the Exchange
Rate. The Issuer shall make all these calculations in good faith and, absent
manifest error, the Issuer’s calculations shall be final and binding on Holders
of Notes. The Issuer shall provide a schedule of its calculations to each of the
Trustee and the Exchange Agent, and each of the Trustee and Exchange Agent is
entitled to rely conclusively upon the accuracy of the Issuer’s calculations
without independent verification. The Trustee shall forward the Issuer’s
calculations to any Holder upon the request of that Holder at the sole cost and
expense of the Issuer. 

    
Section 15.13 Adjustment of Prices. Whenever any
provision of this Indenture requires the Issuer to calculate the Last Reported
Sale Prices or any function thereof over a span of multiple days, the Issuer
will make appropriate adjustments to each to account for any adjustment to the
Exchange Rate that becomes effective, or any event requiring an adjustment to
the Exchange Rate where the Effective Date, Record Date or expiration date of
the event occurs, at any time during the period when the Last Reported Sale
Prices or functions thereof are to be calculated. 

ARTICLE 16 
MEETINGS OF HOLDERS OF NOTES 

    
Section 16.01 Purposes for Which Meetings May Be Called. A meeting of Holders of Notes may be called at any time and from time
to time pursuant to this Article 16 to make, give or take any request, demand,
authorization, direction, notice, consent, waiver or other action provided by
this Indenture to be made, given or taken by Holders of Notes. 

    
Section 16.02 Call, Notice and Place of Meetings.
(a) The Trustee may at any time call a meeting of Holders of Notes for any
purpose specified in Section 16.01, to be held at such time and at such place as
the Trustee shall determine. Notice of every meeting of Holders of Notes,
setting forth the time and the place of such meeting and in general terms the
action proposed to be taken at such meeting, shall be given, in the manner
provided in Section 17.04, not less than 20 nor more than 180 days prior to the
date fixed for the meeting. 

         
(b) In case
at any time the Issuer, pursuant to a Board Resolution, ZAIS Financial Corp., or
the Holders of at least 25% in principal amount of the outstanding Notes shall
have requested the Trustee to call a meeting of the Holders of Notes for any
purpose specified in Section 16.01, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the
Trustee shall not have made the first publication of the notice of such meeting
within 20 days after receipt of such request or shall not thereafter proceed to
cause the meeting to be held as provided herein, then the Issuer, ZAIS Financial
Corp. or the Holders of Notes in the amount above specified, as the case may be,
may determine the time and the place for such meeting and may call such meeting
for such purposes by giving notice thereof as provided in subsection (a) of this
Section 16.02. 

57 

      
Section 16.03 Persons Entitled to Vote at Meetings.
To be entitled to vote at any meeting of Holders of Notes, a Person shall be (a)
a Holder of one or more outstanding Notes, or (b) a Person appointed by an
instrument in writing as proxy for a Holder or Holders of one or more
outstanding Notes by such Holder or Holders. The only Persons who shall be
entitled to be present or to speak at any meeting of Holders of Notes shall be
the Persons entitled to vote at such meeting and their counsel, any
representatives of the Trustee and its counsel and any representatives of the
Issuer and ZAIS Financial Corp. and their respective counsel. 

      
Section 16.04 Quorum; Action. The Persons entitled
to vote a majority in principal amount of the outstanding Notes shall constitute
a quorum for a meeting of Holders of Notes; provided, however, that if any action is to be
taken at such meeting with respect to a consent or waiver which this Indenture
expressly provides may be given by the Holders of not less than a specified
percentage in principal amount of the outstanding Notes, the Persons entitled to
vote such specified percentage in principal amount of the outstanding Notes
shall constitute a quorum. In the absence of a quorum within 30 minutes after
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders of Notes, be dissolved. In any other case the meeting may be
adjourned for a period of not less than 10 days as determined by the chairman of
the meeting prior to the adjournment of such meeting. In the absence of a quorum
at the reconvening of any such adjourned meeting, such adjourned meeting may be
further adjourned for a period of not less than 10 days; at the reconvening of
any meeting adjourned or further adjourned for lack of a quorum, the Persons
entitled to vote 25% in aggregate principal amount of the then outstanding Notes
shall constitute a quorum for the taking of any action set forth in the notice
of the original meeting. Notice of the reconvening of any adjourned meeting
shall be given as provided in Section 16.02(a), except that such notice need be given
only once not less than five days prior to the date on which the meeting is
scheduled to be reconvened. 

      
Except as limited by the proviso to Section 10.02, any resolution presented to a
meeting or adjourned meeting duly reconvened at which a quorum is present as
aforesaid may be adopted by the affirmative vote of the Persons entitled to vote
a majority in aggregate principal amount of the outstanding Notes;
provided,
however,
that, except as limited by the proviso to Section 10.02, any resolution with respect
to any request, demand, authorization, direction, notice, consent, waiver or
other action which this Indenture expressly provides may be made, given or taken
by the Holders of a specified percentage, which is less than a majority, in
principal amount of the outstanding Notes may be adopted at a meeting or an
adjourned meeting duly reconvened and at which a quorum is present as aforesaid
by the affirmative vote of the Holders of such specified percentage in principal
amount of the outstanding Notes. 

       Any
resolution passed or decision taken at any meeting of Holders of Notes duly held
in accordance with this Section 16.04 shall be binding on all the Holders of
Notes, whether or not present or represented at the meeting. 

      
Notwithstanding the foregoing provisions of this Section 16.04, if any action is
to be taken at a meeting of Holders of Notes with respect to any request,
demand, authorization, direction, notice, consent, waiver or other action that
this Indenture expressly provides may be made, given or taken by the Holders of
a specified percentage in principal amount of all outstanding Notes affected
thereby: 

             
(i) there shall be
no minimum quorum requirement for such meeting; and 

             
(ii) the principal
amount of the outstanding Notes that vote in favor of such request, demand,
authorization, direction, notice, consent, waiver or other action shall be taken
into account in determining whether such request, demand, authorization,
direction, notice, consent, waiver or other action has been made, given or taken
under this Indenture. 

      
Section 16.05 Determination of Voting Rights; Conduct and Adjournment of
Meetings. (a) Notwithstanding any provisions of this Indenture, the Trustee may make
such reasonable regulations as it may deem advisable for any meeting of Holders
of Notes in regard to proof of the holding of Notes and of the appointment of
proxies and in regard to the appointment and duties of inspectors of votes, the
submission and examination of proxies, certificates and other evidence of the
right to vote, and such other matters concerning the conduct of the meeting as
it shall deem appropriate. Except as otherwise permitted or required by any such
regulations, the holding of Notes shall be proved in the manner specified in
Section 9.02 and the appointment of any proxy shall be proved in the manner
specified in Section 9.01 to certify to the holding of the Notes. Such
regulations may provide that written instruments appointing proxies, regular on
their face, may be presumed valid and genuine without the proof specified in
Section 9.01 or other proof.

58 

             
(b) The Trustee
shall, by an instrument in writing appoint a temporary chairman of the meeting,
unless the meeting shall have been called by the Issuer, ZAIS Financial Corp. or
by Holders of Notes as provided in Section 16.02(b), in which case the Issuer,
ZAIS Financial Corp. or the Holders of Notes calling the meeting, as the case
may be, shall in like manner appoint a temporary chairman. A permanent chairman
and a permanent secretary of the meeting shall be elected by vote of the Persons
entitled to vote a majority in principal amount of the outstanding Notes
represented at the meeting. 

             
(c) At any meeting
each Holder of such Notes or proxy shall be entitled to one vote for each $1,000
principal amount of the outstanding Notes held or represented by him;
provided,
however,
that no vote shall be cast or counted at any meeting in respect of any Note
challenged as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote,
except as a
Holder of Notes or proxy. 

             
(d) Any meeting of
Holders of Notes duly called pursuant to Section 16.02 at which a quorum is
present may be adjourned from time to time by Persons entitled to vote a
majority in principal amount of the outstanding Notes represented at the
meeting, and the meeting may be held as so adjourned without further notice.

      
Section 16.06 Counting Votes and Recording Action of Meetings. The vote upon any resolution submitted to any meeting of
Holders of Notes shall be by written ballots on which shall be subscribed the
signatures of the Holders of Notes or of their representatives by proxy and the
principal amounts and serial numbers of the outstanding Notes held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written reports in duplicate of all votes cast at the meeting. A
record, at least in duplicate, of the proceedings of each meeting of Holders of
Notes shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the fact, setting forth a copy of the notice of the meeting and
showing that said notice was given as provided in Section 16.02 and, if
applicable, Section 16.04. Each copy shall be signed and verified by the
affidavits of the permanent chairman and secretary of the meeting and one such
copy shall be delivered to the Issuer and ZAIS Financial Corp. and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated. 

ARTICLE 17 
MISCELLANEOUS PROVISIONS 

      
Section 17.01 Provisions Binding on Issuer’s and ZAIS Financial Corp.’s
Successors. All the covenants, stipulations,
promises and agreements by the Issuer or ZAIS Financial Corp. contained in this
Indenture shall bind their respective successors and assigns whether so
expressed or not. 

      
Section 17.02 Waiver of Jury Trial. EACH OF THE
ISSUER, ZAIS FINANCIAL CORP. AND THE TRUSTEE, AND EACH HOLDER OF A NOTE BY ITS
ACCEPTANCE THEREOF, HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS INDENTURE, THE NOTES, THE GUARANTEE OR THE TRANSACTION
CONTEMPLATED HEREBY. 

      
Section 17.03 Official Acts by Successor Corporation. Any act or proceeding by any provision of this Indenture authorized or
required to be done or performed by any board, committee or officer of the
Issuer shall and may be done and performed with like force and effect by the
like board, committee or officer of any Person that shall at the time be the
lawful sole successor of the Issuer or ZAIS Financial Corp. 

59 

      
Section 17.04 Addresses for Notices, etc. Any notice
or demand which by any provision of this Indenture is required or permitted to
be given or served by the Trustee or by the Holders of Notes on the Issuer or
ZAIS Financial Corp. shall be in writing and shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box, or sent by overnight courier, or sent by facsimile transmission
addressed as follows: 

             
To the Issuer: 

	                           
      	ZAIS Financial Partners, L.P.
		Two Bridge Avenue, Suite 322
	 	Red Bank, New Jersey 07701
		Facsimile No.: (732) 978-7507
		Attention: Michael
  Szymanski

             
To ZAIS Financial Corp.: 

	                           
      	ZAIS Financial Corp.
		Two Bridge Avenue, Suite 322
	 	Red Bank, New Jersey 07701
		Facsimile No.: (732) 978-7507
		Attention: Michael
  Szymanski

       Any
notice, direction, request or demand hereunder to or upon the Trustee shall be
deemed to have been sufficiently given or made, for all purposes, upon actual
receipt at the following address: 

	                           
      	U.S. Bank National Association, as
      Trustee
		Corporate Trust Services
		One Federal Street, Tenth Floor
	 	Boston, MA 02110
		Ref: ZAIS Financial Partners,
  L.P.
		Facsimile: (617) 603-6683
		E-mail:
  eric.donaghey@usbank.com

       The
Trustee, by notice to the Issuer, may designate additional or different
addresses for subsequent notices or communications. 

       Any
notice or communication mailed to a Noteholder shall be mailed by first class
mail, postage prepaid, at such Noteholder’s address as it appears on the Note
Register and shall be sufficiently given to such Noteholder if so mailed within
the time prescribed.

      
Failure to mail a notice or communication to a Noteholder or any defect in it
shall not affect its sufficiency with respect to other Noteholders. If a notice
or communication is mailed or given in the manner provided above, it is duly
given, whether or not the addressee receives it. 

       The
Trustee agrees to accept and act upon instructions or directions pursuant to
this Indenture sent by e-mail, PDF, facsimile transmission or other similar
electronic methods, regardless of whether such method is unsecured,
provided,
however,
that the Trustee shall have received an incumbency certificate listing persons
designated to give such instructions or directions and containing specimen
signatures of such designated persons, which such incumbency certificate shall
be amended and replaced whenever a person is to be added or deleted from the
listing. If the Issuer or ZAIS Financial Corp. elects to give the Trustee e-mail
or facsimile instructions (or instructions by a similar electronic method) and
the Trustee in its discretion elects to act upon such instructions, the
Trustee’s understanding of such instructions shall be deemed controlling. The
Trustee shall not be liable for any losses, costs or expenses arising directly
or indirectly from the Trustee’s reliance upon and compliance with such
instructions notwithstanding such instructions conflict or are inconsistent with
a subsequent written instruction. The Issuer and ZAIS Financial Corp. agree to
assume all risks arising out of the use of such electronic methods to submit
instructions and directions to the Trustee, including without limitation the
risk of the Trustee acting on unauthorized instructions, and the risk or
interception and misuse by third parties.

60 

      
Section 17.05 Governing Law. This Indenture and the
Notes will be governed by, and construed in accordance with, the internal laws
of the State of New York, including without limitation, sections 5-1401 and
5-1402 of the New York General Obligations Law and New York Civil Practice Laws
and Rules 327(b). 

      
Section 17.06 Evidence of Compliance with Conditions Precedent, Certificates to
Trustee. Upon any application or demand by
the Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officers’ 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 stating that, in the opinion of such counsel, all such conditions
precedent have been complied with, except that (i) 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 and (ii) in the case of the initial issuance of the Notes, no opinion
need be furnished. 

       Each
certificate or opinion provided for in this Indenture and delivered to the
Trustee with respect to compliance with a condition or covenant provided for in
this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, such person has made
such examination or investigation as is necessary to enable such person to
express an informed opinion as to whether or not such covenant or condition has
been complied with; and (4) a statement as to whether or not, in the opinion of
such person, such condition or covenant has been complied with; provided, however, that with respect
to matters of fact an Opinion of Counsel may rely on an Officers’ Certificate or
certificates of public officials. 

      
Section 17.07 Legal Holidays. In any case where any
interest payment date, Fundamental Change Purchase Date, Stated Maturity or
maturity date of any Note, or the last date on which a Holder has the right to
exchange a Note, shall not be a Business Day at any place of payment, then
(notwithstanding any other provision of this Indenture or any Note other than a
provision in such Note which specifically states that such provision shall apply
in lieu hereof), payment of interest or principal or exchange of such security
need not be made at such place of payment on such date, but may be made on the
next succeeding Business Day at such place of payment with the same force and
effect as if made on the interest payment date, Fundamental Change Purchase
Date, Stated Maturity or maturity date, or on such last day for exchange,
provided
that no interest shall accrue on the amount so payable for the period from and
after such interest payment date, Fundamental Change Purchase Date, Stated
Maturity or maturity date, as the case may be. 

      
Section 17.08 No Security Interest Created. Nothing
in this Indenture or in the Notes (including the Guarantee endorsed thereon),
expressed or implied, shall be construed to constitute a security interest under
the Uniform Commercial Code or similar legislation, as now or hereafter enacted
and in effect, in any jurisdiction in which property of the Issuer or its
Subsidiaries is located. 

      
Section 17.09 Benefits of Indenture. Nothing in this
Indenture or in the Notes (including the Guarantee endorsed thereon), express or
implied, shall give to any Person, other than the parties hereto, any Paying
Agent, any authenticating agent, any Note Registrar, any Exchange Agent and
their successors hereunder and the Holders of Notes any benefit or any legal or
equitable right, remedy or claim under this Indenture. 

      
Section 17.10 Table of Contents, Headings, etc. The
table of contents and the titles and headings of the Articles and Sections of
this Indenture have been inserted for convenience of reference only, are not to
be considered a part hereof, and shall in no way modify or restrict any of the
terms or provisions hereof. 

      
Section 17.11 Execution in Counterparts. This
Indenture may be executed in any number of counterparts, each of which shall be
an original, but such counterparts shall together constitute but one and the
same instrument. The exchange of copies of this Indenture and of signature pages
of the parties hereto by facsimile or electronic transmission shall constitute
effective execution and delivery of this Indenture as to the parties hereto and
such copies of this Indenture and of signature pages shall be deemed to be their
originals for all purposes. 

61 

      
Section 17.12 Severability. In case any provision in
this Indenture or in the Notes (including the Guarantee endorsed thereon) shall
be invalid, illegal or unenforceable, then the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby. 

      
Section 17.13 No Stockholder Rights for Noteholders.
Noteholders, as such, will not have any rights as stockholders of ZAIS Financial
Corp., including, without limitation, voting rights and rights to receive any
dividends or other distributions on the Common Stock. 

      
Section 17.14 Trust Indenture Act Controls. Whether
or not this Indenture is qualified under the TIA, whenever this Indenture refers
to a provision of the TIA, such provision is incorporated by reference in, and
made part of, this Indenture, as if this Indenture were qualified under the
TIA.

62 

IN WITNESS WHEREOF, the parties hereto
have caused this Indenture to be duly executed. 

	ZAIS FINANCIAL PARTNERS,
      L.P.
	 
	By:      
      	ZAIS Financial
    Corp.
		Its: General
    Partner
		 
		By:		/s/ Michael F. Szymanski
			       	Name: Michael Szymanski
				Title: President

	ZAIS FINANCIAL CORP.
	 	 
	By:        	/s/ Michael F.
    Szymanski
	 	Name: Michael Szymanski
		Title: President

	U.S. BANK NATIONAL ASSOCIATION,
	as
      Trustee
		 
	By:        	/s/ Eric Donaghey
		Name: Eric Donaghey
		Title: Vice President

63 

EXHIBIT A 

[Include only for Global Notes]

UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) (THE “DEPOSITARY,” WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY
FOR THE CERTIFICATES) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY (AND ANY PAYMENT HEREIN IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), 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. 

[Include only for Notes that are
Restricted Notes] 

THIS NOTE HAS NOT BEEN REGISTERED UNDER
THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE FOLLOWING
SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER AGREES (1) THAT IT WILL NOT
RESELL OR OTHERWISE TRANSFER THE NOTE EVIDENCED HEREBY, EXCEPT (A) TO THE
ISSUER, ZAIS FINANCIAL CORP. OR A SUBSIDIARY OF THE ISSUER OR OF ZAIS FINANCIAL
CORP.; (B) UNDER A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT; (C) TO A PERSON THE SELLER REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A ADOPTED UNDER THE
SECURITIES ACT) THAT IS PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF
ANOTHER QUALIFIED INSTITUTIONAL BUYER AND TO WHOM NOTICE IS GIVEN THAT THE
TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A, ALL IN COMPLIANCE WITH RULE
144A (IF AVAILABLE); OR (D) UNDER ANY OTHER AVAILABLE EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT; AND (2) THAT IT WILL, PRIOR TO
ANY TRANSFER OF THIS NOTE, FURNISH TO THE TRANSFER AGENT AND THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

ZAIS FINANCIAL PARTNERS, L.P.

8.0% EXCHANGEABLE SENIOR NOTES DUE 2016 

No. 

CUSIP: 98886L AA4 

$ 

       ZAIS
Financial Partners, L.P., a Delaware limited partnership (herein called the
“Issuer,”
which term includes any successor under the Indenture referred to on the reverse
hereof), for value received hereby promises to pay to Cede & Co., or its
registered assigns, the principal sum
of                                              
($           ), or such lesser
amount as is set forth in the Schedule of Increases or Decreases in Note on the
other side of this Note, on November 15, 2016 at the office or agency of the
Issuer maintained for that purpose in accordance with the terms of the
Indenture, in such coin or currency of the United States of America as at the
time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on May 15 and November 15 of each
year, commencing May 15, 2014, to Holders of record at the Close of Business on
the preceding May 1 or November 1, respectively, on said principal sum at said
office or agency, in like coin or currency, at the rate per annum of 8.0%, from
the May 15 or November 15, as the case may be, next preceding the date of this
Note to which interest has been paid or duly provided for, unless no interest
has been paid or duly provided for on the Notes, in which case from November 25,
2013 until payment of said principal sum has been made or duly provided for.
Payment of the principal of and interest on the Notes not represented by a
Global Note will be made at the Corporate Trust Office or the office maintained
for that purpose by the Issuer in the Borough of Manhattan, The City of New
York, New York, 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;
provided,
however,
that at the option of the Issuer, payments of interest on the Notes may be made
(i) by check mailed to the address of the Person entitled thereto as such
address shall appear in the Note Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto located within the United States.

       The
Issuer promises to pay interest on overdue principal, and (to the extent that
payment of such interest is enforceable under applicable law) interest at the
rate borne by the Notes. 

      
Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions giving the Holder of
this Note the right to exchange this Note into shares of Common Stock, on the
terms and subject to the limitations referred to on the reverse hereof and as
more fully specified in the Indenture. Such further provisions shall for all
purposes have the same effect as though fully set forth at this place.

       This
Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed manually or by
facsimile by the Trustee or a duly authorized authenticating agent under the
Indenture. 

A-2 

IN WITNESS WHEREOF, the Issuer has caused
this Note to be duly executed. 

Dated: 

	ZAIS FINANCIAL PARTNERS,
      L.P.
	 
	By:      
      	ZAIS Financial Corp.
		Its: General Partner
	 
	By:	
		Name:
		Title:

A-3 

TRUSTEE’S CERTIFICATE OF
AUTHENTICATION 

This is one of the Notes described in the
within-named Indenture. 

Dated: 

	U.S. Bank National Association, as Trustee
		 
	By:        	
		Name:
		Title:

A-4 

[FORM OF REVERSE SIDE OF NOTE]

ZAIS FINANCIAL PARTNERS, L.P.

8.0% EXCHANGEABLE SENIOR NOTES DUE 2016 

       This
Note is one of a duly authorized issue of Notes of the Issuer, designated as its
8.0% Exchangeable Senior Notes due 2016 (herein called the “Notes”), issued under and
pursuant to an Indenture dated as of November 25, 2013 (herein called the
“Indenture”), among the Issuer, ZAIS Financial Corp. and U.S. Bank National
Association, as trustee (herein called the “Trustee”), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Issuer and the Holders of the Notes. Defined terms used but
not otherwise defined in this Note shall have the respective meanings ascribed
thereto in the Indenture. 

       If an
Event of Default (other than an Event of Default specified in Section 7.01(i) or
7.01(j) of the Indenture) occurs and is continuing, the principal of and accrued
and unpaid interest on all Notes may be declared to be due and payable by either
the Trustee or the Holders of at least 25% in aggregate principal amount of the
Notes then outstanding, and, upon said declaration the same shall be immediately
due and payable. If an Event of Default specified in Section 7.01(i) or 7.01(j)
of the Indenture occurs and is continuing, then the principal of and interest
accrued and unpaid on all the Notes shall be immediately due and payable without
any declaration or other action on the part of the Trustee or any Holder of
Notes. 

       The
Indenture contains provisions permitting the Issuer and the Trustee, with the
consent of the Holders of not less than a majority in aggregate principal amount
of the Notes at the time outstanding, to execute supplemental indentures adding
any provisions to or changing in any manner or eliminating any of the provisions
of the Indenture or of any supplemental indenture or modifying in any manner the
rights of the Holders of the Notes, subject to exceptions set forth in Section
10.02 of the Indenture. Subject to the provisions of the Indenture, the Holders
of not less than a majority in aggregate principal amount of the Notes at the
time outstanding may, on behalf of the Holders of all of the Notes, waive
certain past Defaults or Events of Default. 

       No
reference herein to the Indenture and no provision of this Note or of the
Indenture shall impair, as among the Issuer and the Holder of the Notes, the
obligation of the Issuer, which is absolute and unconditional, to pay the
principal of on and interest on this Note at the place, at the respective times,
at the rate and in the coin or currency herein and in the Indenture prescribed.

      
Interest on the Notes shall be computed on the basis of a 360-day year of twelve
(12) 30-day months. 

       The
Notes are issuable in fully-registered form, without coupons, in minimum
denominations of $1,000 principal amount and in integral multiples of $1,000 in
excess thereof. At the office or agency of the Issuer referred to on the face
hereof, and in the manner and subject to the limitations provided in the
Indenture, without payment of any service charge but with payment of a sum
sufficient to cover any tax, assessment or other governmental charge that may be
imposed in connection with any registration or exchange of Notes, Notes may be
exchanged for a like aggregate principal amount of Notes of any other authorized
denominations. 

       The
Notes are not subject to redemption at the option of the Issuer prior to the
Maturity Date and do not benefit from any sinking fund. 

       Upon
the occurrence of a Fundamental Change, Holders shall have the right to require
the Issuer to purchase all or a portion of their Notes pursuant to Section 4.01
of the Indenture. 

      
Subject to and in compliance with the provisions of the Indenture, the Holder
hereof shall have the right to exchange each $1,000 principal amount of this
Note into shares of Common Stock as provided in Article 15 of the Indenture.

A-5 

      
Notwithstanding Section 15.10(a) and Section 15.10(b) of the Indenture, to the
extent the aggregate number of shares of the Common Stock the Issuer would be
required to deliver upon any exchange, when taken together with any shares of the Common Stock
delivered upon previous exchanges, if any, exceeds the Aggregate Share Cap, the
Issuer shall deliver in lieu of such excess shares of the Common Stock cash
equal to the sum of the Daily Exchange Values during the Averaging Period. The
Issuer shall promptly, and in any event within one Business Day following any
Exchange Date, notify any exchanging Holder if such Holder will receive cash in
lieu of any shares of the Common Stock otherwise issuable to such Holder upon
exchange. ZAIS Financial Corp. may include for vote by its stockholders during
its annual meeting to be held in 2014 and endorse in the proxy materials for
such meeting the approval, in accordance with New York Stock Exchange listing
requirements, of the issuance of shares of the Common Stock upon exchange of the
Notes in excess of the Aggregate Share Cap. If ZAIS Financial Corp. has obtained
such approval, the Aggregate Share Cap shall cease to apply. The Issuer shall
pay any cash in lieu of the shares of the Common Stock otherwise deliverable in
excess of the Aggregate Share Cap not later than the second Business Day
following the last day of the relevant Averaging Period. 

     In the event the
Holder surrenders this Note for exchange in connection with certain Fundamental
Changes, the Issuer shall increase the applicable Exchange Rate by the
Additional Shares if, as and when provided in Section 15.11 of the Indenture.

    
No recourse for the payment of the principal of (including the
Fundamental Change Purchase Price upon purchase pursuant to Article 4 of the
Indenture) or interest on this Note, or for any claim based hereon or otherwise
in respect hereof, and no recourse under or upon any obligation, covenant or
agreement of the Issuer in the Indenture or any supplemental indenture or in
this Note, or because of the creation of any indebtedness represented thereby,
shall be had against any incorporator, stockholder, partner, member, manager,
employee, agent, officer, director or Subsidiary, as such, past, present or
future, of ZAIS Financial Corp., the Issuer or any of ZAIS Financial Corp.’s
Subsidiaries or of any successor thereto, either directly or through ZAIS
Financial Corp., the Issuer or any of ZAIS Financial Corp.’s Subsidiaries or of
any successor thereto, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as consideration for, the execution of the
Indenture and the issue of this Note. 

    
In addition to the rights provided to Holders of Notes under the
Indenture, Holders shall have all the rights set forth in the Registration
Rights Agreement, dated November 25, 2013, by and among the Issuer, ZAIS
Financial Corp. and Credit Suisse Securities (USA) LLC. 

    
By its purchase of this Note, the purchaser hereof will be deemed to have
represented and agreed as follows: (1) either (A) no portion of the assets used
by the purchaser to acquire and hold this Note and any Common Stock received in
exchange for this Note constitutes assets of any Benefit Plan Investor or plan
subject to Similar Law, or (B) if the purchaser is a Benefit Plan Investor or
plan subject to Similar Law, (i) the purchaser believes this Note is properly
treated as indebtedness without substantial equity features for purposes of the
Plan Asset Regulation and agrees to so treat this Note, (ii) the purchase and
holding of this Note and any Common Stock received in exchange for this Note by
the purchaser will not constitute a nonexempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Internal Revenue Code or a violation
under any applicable Similar Laws; and (iii) the purchaser has made its own
discretionary decision to acquire and hold this Note and/or exchange this Note
for Common Stock and is not relying upon the Issuer to make any decision
regarding the investment of plan assets; and (2) the purchaser will not transfer
this Note to any person or entity, unless such person or entity could itself
truthfully make the foregoing representations and covenants. 

A-6

GUARANTEE 

     For value
received, ZAIS Financial Corp., a Maryland corporation (the “Guarantor”), hereby
absolutely, fully and unconditionally and irrevocably guarantees to the Holder
of this Note the payment of principal of and interest on this Note upon which
this Guarantee is endorsed in the amounts and at the time when due and payable,
whether by declaration thereof, or otherwise, and interest on the overdue
principal and interest, if any, of this Note, if lawful, and the payment or
performance of all other obligations of the Issuer under the Indenture or the
Notes, to the holder of this Note and the Trustee, all in accordance with and
subject to the terms and limitations of this Note and the Indenture, including
Article 13 thereof. This Guarantee will not become effective until the Trustee
duly executes the certificate of authentication on this Note. This Guarantee
shall be governed by and construed in accordance with the laws of the State of
New York, without regard to conflict of law principles thereof. 

    
IN WITNESS WHEREOF, the Guarantor has caused this Guarantee to be duly
executed. 

	ZAIS FINANCIAL CORP.
	 	
	By:  	 	 
	 	Name:
		Title:

A-7

ABBREVIATIONS 

     The following
abbreviations, when used in the inscription of the face of this Note, shall be
construed as though they were written out in full according to applicable laws
or regulations. 

	TEN-COM	          
    	as tenants in common	          
    	UNIF GIFTMIN ACT -
		 			Custodian
	TEN-ENT		as tenant by the entireties		(Cust) (Minor)
	JT-TEN		as joint tenants with right of survivorship and not
      under		
			Uniform Gifts to Minors Act		
			as tenants in common		(State)

    
Additional abbreviations may also be used though not in the above list.

A-8 

EXCHANGE NOTICE 

	TO:      	ZAIS FINANCIAL PARTNERS, L.P.
		U.S. Bank National Association, as
      Trustee

     The undersigned
registered owner of this Note hereby irrevocably exercises the option to
exchange this Note, or the portion thereof (which is $1,000 or a multiple
thereof) below designated, into shares of Common Stock, in accordance with the
terms of the Indenture referred to in this Note, and directs that the shares of
Common Stock issuable and deliverable upon such exchange, together with any
check in payment for cash, if any, payable upon exchange or for fractional
shares and any Notes representing any unexchanged principal amount hereof, be
issued and delivered to the registered holder hereof unless a different name has
been indicated below. Capitalized terms used herein but not defined shall have
the meanings ascribed to such terms in the Indenture. If shares or any portion
of this Note not exchanged are to be issued in the name of a Person other than
the undersigned, the undersigned will provide the appropriate information below
and pay all transfer taxes payable with respect thereto. Any amount required to
be paid by the undersigned on account of interest accompanies this Note.

    
The undersigned registered owner of this Note hereby certifies that it or
the Person on whose behalf the Notes are being exchanged is a qualified
institutional buyer within the meaning of Rule 144A under the Securities Act of
1933, as amended. 

	Dated:        
    	 	      	 
			  
			  
			Signature(s)
			 
			
      Signature(s) must be guaranteed by
      an “eligible guarantor
      institution” meeting the requirements
      of the Note Registrar, which requirements include membership or
      participation in the Security Transfer Agent 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.
      

			 
			 
			
      Signature Guarantee
  

A-9 

     Fill in the
registration of shares of Common Stock if to be issued, and Notes if to be
delivered, and the Person to whom cash and payment for fractional shares is to
be made, if to be made, other than to and in the name of the registered holder:

Please print name and address 

(Name) 

(Street Address) 

(City, State and Zip Code) 

Principal amount 
to be exchanged

(if less than all): 

$
Social
Security or Other 
Taxpayer Identification Number: 

NOTICE: The signature on this Exchange
Notice must correspond with the name as written upon the face of the Note in
every particular without alteration or enlargement or any change whatever.

A-10 

FUNDAMENTAL CHANGE PURCHASE NOTICE

	TO:      	ZAIS FINANCIAL PARTNERS, L.P.
		U.S. Bank National Association, as
      Trustee

     The undersigned
registered owner of this Note hereby irrevocably acknowledges receipt of a
notice from ZAIS Financial Partners, L.P. (the “Issuer”) regarding the right of
Holders to elect to require the Issuer to purchase the Notes and requests and
instructs the Issuer to pay the entire principal amount of this Note, or the
portion thereof (which is $1,000 or an integral multiple thereof) below
designated, in cash, in accordance with the terms of the Indenture at the price
of 100% of such entire principal amount or portion thereof, together with
accrued and unpaid interest to, but excluding, the Fundamental Change Purchase
Date, as the case may be, to the registered holder hereof. Capitalized terms
used herein but not defined shall have the meanings ascribed to such terms in
the Indenture. The Notes shall be purchased by the Issuer as of the Fundamental
Change Purchase Date, as the case may be, pursuant to the terms and conditions
specified in the Indenture. 

    
NOTICE: The signatures of the Holder(s) hereof must correspond with the
name as written upon the face of the Note in every particular without alteration
or enlargement or any change whatever. Note Certificate Number (if applicable):

    
Principal amount to be purchased (if less than all, must be $1,000 or
whole multiples thereof): 

Social Security or Other 

Taxpayer Identification Number: 

	Dated:        
      	 	      	 
			 
			 
			Signature(s)
			 
			
      Signature(s) must be guaranteed by
      an “eligible guarantor
      institution” meeting the requirements
      of the Note Registrar, which requirements include membership or
      participation in the Security Transfer Agent 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.
      

			 
			 
			
      Signature Guarantee
  

A-11

ASSIGNMENT 

     For value
received                      
hereby sell(s) assign(s) and transfer(s)
unto                      
(Please insert social security or other Taxpayer
Identification Number of assignee) the within Note, and hereby irrevocably
constitutes and
appoints                             
attorney to transfer said Note on the books of the Issuer, with full power of
substitution in the premises. 

     In connection with any
transfer of the Note, the undersigned confirms that such Note is being
transferred: 

	To ZAIS Financial Partners, L.P., ZAIS Financial
  Corp. or a Subsidiary of ZAIS Financial Partners, L.P. or ZAIS Financial Corp.;
 
  
	To a “qualified
  institutional buyer” in compliance with
  Rule 144A under the Securities Act of 1933, as
  amended; or
 
  
	To an “accredited investor” as defined in
  Rule 501(a) of Regulation D under the Securities Act of 1933, as amended and documents are being furnished which comply with
  the conditions of transfer set forth in this
  Note and the Indenture; or 

     Unless one of the boxes is checked, the
Trustee will refuse to register any of the Notes evidenced by this certificate
in the name of any Person other than the registered holder thereof. 

	Dated:        
    	 	      	  
			 
			 
			Signature(s)
			 
			
      Signature(s) must be guaranteed by
      an “eligible guarantor
      institution” meeting the requirements
      of the Note Registrar, which requirements include membership or
      participation in the Security Transfer Agent 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.
      

			 
			 
			
      Signature Guarantee
  

NOTICE: The signature on this Assignment
must correspond with the name as written upon the face of the Note in every
particular without alteration or enlargement or any change whatever. 

A-12

ASSIGNMENT 

     For value
received                      
sell(s) assign(s) and transfer(s)
unto                      
(Please insert social security or other Taxpayer Identification Number of
assignee) shares of Common Stock, and hereby irrevocably constitutes and
appoints                             
attorney to transfer said shares of Common Stock on the books of the Issuer,
with full power of substitution in the premises. 

     In connection
with any transfer of the shares of Common Stock prior to the expiration of the
holding period applicable to sales thereof under Rule 144 under the Securities
Act (or any successor provision) (other than any transfer pursuant to a
registration statement that has been declared effective under the Securities
Act), the undersigned confirms that such shares of Common Stock are being
transferred: 

	To ZAIS Financial Partners, L.P., ZAIS Financial
  Corp. or a Subsidiary of ZAIS Financial Partners, L.P. or ZAIS Financial Corp.; or
 
  
	Pursuant to and in compliance with Rule 144 under
  the Securities Act of 1933, as amended; or
 
  
	To a Person the undersigned reasonably believes is
  a qualified institutional buyer that is purchasing for its own account or for the account of another qualified
  institutional buyer and to whom notice is given
  that the transfer is being made in reliance on Rule 144A, all in compliance with Rule 144A (if available);
  or
 
  
	Pursuant to a Registration Statement which has
  been declared effective under the Securities Act of 1933, as amended, and which continues to be effective at the
  time of transfer. 

Unless one of the boxes is checked, the
Transfer Agent will refuse to register any of the shares of Common Stock
evidenced by this certificate in the name of any Person other than the
registered holder thereof. 

A-13 

[Include Schedule I only for a Global
Note] 

SCHEDULE OF INCREASES OR DECREASES IN
NOTE 

     The initial
principal amount of this Global Note
is                
Dollars ($        ). The following increases
or decreases in part of this Note have been made: 

							Principal Amount
      of		Signature
    of
			Amount of
      Increase	 	Amount of
      Decrease	 	this Note
      following		Authorized
      Signatory
		 	in Principal
      Amount		in Principal
      Amount		such Increase
      or	 	of
	Date	      	of this Note	      	of this Note	      	Decrease	      	Trustee

A-14 

EXHIBIT B 

Form of Certificate to Be 
Delivered
in Connection with 
Transfers to Accredited
Investors 

U.S. Bank National Association 
60
Livingston Ave. 
St. Paul, MN 55107

	     	Re:	     	ZAIS Financial Partners, L.P. (the
      “Issuer”)
	 		 	8.0% Exchangeable Senior Notes due 2016 (the
      “Notes”)

Ladies and Gentlemen: 

     In connection
with our proposed purchase of
$             
aggregate principal amount of the Notes, we confirm that: 

    
1. We understand that any subsequent transfer of the Notes is subject to
certain restrictions and conditions set forth in the Indenture dated as of
November 25, 2013 (the “Indenture”) relating to the Notes and
the undersigned agrees to be bound by, and not to resell, pledge or otherwise
transfer the Notes except in compliance with such restrictions and conditions
and the Securities Act of 1933, as amended (the “Securities Act”). 

    
2. We understand that the offer and sale of the Notes have not been
registered under the Securities Act, and that the
Notes may not be offered or sold except as permitted in the following sentence.
We agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Notes within the time
period referred to in Rule 144(d) or any successor provision of the Notes, we
will do so only (A) to the Issuer, ZAIS Financial Corp. or a Subsidiary of the
Issuer or of ZAIS Financial Corp., (B) in accordance with Rule 144A under the
Securities Act to a “qualified institutional buyer” (as defined therein), (C) to
an “accredited investor” (as defined in Rule 501(a) of Regulation D under the
Securities Act) that, prior to such transfer, furnishes (or has furnished on its
behalf by a U.S. broker-dealer) to you and to the Issuer a signed letter
substantially in the form of this letter, or (D) pursuant to the exemption from
registration provided by Rule 144 under the Securities Act (if available), and
we further agree to provide to any Person purchasing any of the Notes from us a
notice advising such purchaser that resales of the Notes are restricted as
stated herein. 

    
3. We understand that, on any proposed resale of any Notes, we will be
required to furnish to you and the Issuer such certifications, legal opinions
and other information as you and the Issuer may reasonably require to confirm
that the proposed sale complies with the foregoing restrictions. 

    
4. We are an “accredited investor” (as defined in Rule 501(a) of
Regulation D under the Securities Act) and have
such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of our investment in the Notes, and we and
any accounts for which we are acting are each able to bear the economic risk of
our or its investment. 

    
5. We are acquiring the Notes purchased by us for our own account or for
one or more accounts (each of which is an
“accredited investor”) as to each of which we exercise sole investment discretion.

    
You and the Issuer are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. 

	Very truly yours,
		 
	[Name of Transferee]
		 
	By:   	 	 
		Authorized
    Signature

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