Document:

Securities Purchase Agreement

 Exhibit 10.1 
  
 SECURITIES PURCHASE AGREEMENT 
  

SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of November 30, 2005 by and among Microvision, Inc., a Delaware
corporation, with headquarters located at 19910 North Creek Parkway, Bothell, Washington 98011 (the “Company”), and the investors listed on the Schedule of Buyers attached hereto (individually, a “Buyer” and
collectively, the “Buyers”). 
  
 WHEREAS:

  
 A. The Company and each Buyer is executing and delivering
this Agreement in reliance upon the exemption from securities registration afforded by Section 4(2) of the Securities Act of 1933, as amended (the “1933 Act”), and Rule 506 of Regulation D (“Regulation D”) as
promulgated by the United States Securities and Exchange Commission (the “SEC”) under the 1933 Act. 
  
 B. The Company has authorized the issuance and sale of (i) $7,000,000 in principal amount of senior secured exchangeable convertible notes of the
Company in the form attached hereto as Exhibit A (together with any senior secured exchangeable convertible notes issued in replacement or exchange thereof in accordance with the terms thereof, the “Notes”), which Notes shall
be, in accordance with the terms of the Notes, in whole or in part, convertible into shares of the Company’s common stock, par value $.001 per share (“Company Common Stock”) (as converted, the “Conversion
Shares”), (ii) 837,986 shares of Company Common Stock and (iii) Warrants in substantially the form attached hereto as Exhibit B (the “Warrants”) to purchase 1,089,386 shares of Company Common Stock.

  
 C. The Notes bear interest, which at the option of the
Company, subject to certain conditions, may be paid in shares of Company Common Stock (“Interest Shares”). 
  
 D. The principal of the Notes will be payable in five installments, which at the option of the Company and each Buyer, subject to certain conditions, may
be paid in Conversion Shares. 
  
 E. Each Buyer wishes to
purchase, severally but not jointly, and the Company wishes to sell, upon the terms and conditions stated in this Agreement, (i) that aggregate principal amount of Notes set forth opposite such Buyer’s name in column (3) on the
Schedule of Buyers (which aggregate principal amount for all Buyers shall be $7,000,000), (ii) that number of shares of Company Common Stock (the “Purchased Shares”) set forth opposite such Buyer’s name in column
(4) on the Schedule of Buyers and (iii) Warrants to acquire that number of shares of Company Common Stock (as exercised, collectively, the “Warrant Shares”) set forth opposite such Buyer’s name in column (5) on
the Schedule of Buyers. 
  
 F. Contemporaneously with the
execution and delivery of this Agreement, the parties hereto are executing and delivering a registration rights agreement, substantially in the form attached hereto as Exhibit C (the “Registration Rights Agreement”), pursuant
to which the Company has agreed to provide certain registration rights with respect to the Conversion Shares, 

 
the Warrant Shares and the Interest Shares under the 1933 Act and the rules and regulations promulgated thereunder, and applicable state securities laws.

  
 G. Contemporaneously with the execution and delivery of this
Agreement, the parties hereto are amending and restating each of the Pledge and Security Agreements dated as of March 11, 2005, by and among the Company and each of the Buyers, substantially in the form attached hereto as Exhibit D (as amended
and restated, each an “Amended and Restated Pledge and Security Agreement” and collectively, the “Amended and Restated Pledge and Security Agreements”), pursuant to which the Company has agreed to secure its
obligations to pay interest on and principal of the Notes with 1,750,000 shares (the “Lumera Shares”) of common stock, par value $.001 per share (“Lumera Common Stock”), of Lumera Corporation
(“Lumera”) as set forth in the Amended and Restated Pledge and Security Agreements. 
  
 H. The Notes, the Conversion Shares, the Interest Shares, the Purchased Shares, the Warrants and the Warrant Shares collectively are referred to herein as
the “Securities.” 
  
 NOW, THEREFORE, the
Company and each Buyer hereby agree as follows: 
  

	1.	PURCHASE AND SALE OF NOTES AND WARRANTS. 

  
 (a) Amount. Subject to the satisfaction (or waiver) of the conditions set forth in Sections 6 and 7 below, the Company shall issue and sell to each
Buyer, and each Buyer severally, but not jointly, agrees to purchase from the Company on the Closing Date (as defined below), a principal amount of Notes, as is set forth opposite such Buyer’s name in column (3) on the Schedule of Buyers,
the number of Purchased Shares as is set forth opposite such Buyer’s name in column (4) on the Schedule of Buyers and Warrants to acquire that number of Warrant Shares as is set forth opposite such Buyer’s name in column (5) on
the Schedule of Buyers. 
  
 (b) Closing. The closing (the
“Closing”) of the purchase of the Notes and the Warrants by the Buyers shall occur at the offices of Proskauer Rose, LLP, 1585 Broadway, New York, New York 10036. The date and time of the Closing (the “Closing
Date”) shall be 10:00 a.m., New York City Time, on December 1, 2005, subject to notification of satisfaction (or waiver) of the conditions to the Closing set forth in Sections 6 and 7 below (or such later date as is mutually agreed to
by the Company and each Buyer). 
  
 (c) Purchase Price. The
purchase price for each Buyer (the “Purchase Price”) of the Notes and related Warrants to be purchased by each such Buyer at the Closing shall be equal to $1.00 for each $1.00 of principal amount of Notes being purchased by such
Buyer at the Closing plus the product of $3.58 and the number of Purchased Shares being purchased by such Buyer at the Closing. 
  

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 (d) Form of Payment. On the Closing Date, (A) each Buyer shall pay its aggregate applicable
Purchase Price to the Company for the Notes, Purchased Shares and the Warrants to be issued and sold to such Buyer at the Closing, by wire transfer of immediately available funds in accordance with the Company’s written wire instructions, and
(B) the Company shall deliver to each Buyer the Notes (in the principal amounts as such Buyer shall have requested prior to the Closing), Purchased Shares and Warrants which such Buyer is then purchasing, (each in the amounts as such Buyer
shall have requested prior to the Closing) such Buyer is purchasing, duly executed on behalf of the Company and registered in the name of such Buyer or its designee. 
  

	2.	BUYER’S REPRESENTATIONS AND WARRANTIES. 

  
 Each Buyer represents and warrants with respect to only itself that: 
  
 (a) No Public Sale or Distribution. Such Buyer is (i) acquiring the Notes, Purchased Shares and the Warrants,
(ii) upon conversion or exchange of the Notes will acquire the Conversion Shares, (iii) upon exercise of the Warrants will acquire the Warrant Shares and (iv) may acquire Interest Shares in accordance with the Notes, in each case, for
its own account and not with a view towards, or for resale in connection with, the public sale or distribution thereof, except pursuant to sales registered or exempted under the 1933 Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold any of the Securities for any minimum or other specific term and reserves the right to dispose of the Securities at any time in accordance with or pursuant to a registration statement or an
exemption under the 1933 Act. Such Buyer is acquiring the Securities hereunder in the ordinary course of its business. Such Buyer does not presently have any agreement or understanding, directly or indirectly, with any Person to distribute any of
the Securities. 
  
 (b) Accredited Investor Status. Such
Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D. 
  
 (c) Reliance on Exemptions. Such Buyer understands that the Securities are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and such Buyer’s compliance with, the representations, warranties, agreements, acknowledgments
and understandings of such Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of such Buyer to acquire the Securities. 
  
 (d) Information. Such Buyer and its advisors, if any, have been furnished with all materials relating to the
business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by such Buyer. Such Buyer and its advisors, if any, have been afforded the opportunity to ask questions of the
Company. Neither such inquiries nor any other due diligence investigations conducted by such Buyer or its advisors, if any, or its representatives shall modify, amend or affect such Buyer’s right to rely on the Company’s representations
and warranties contained herein. 
  

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 (e) Experience of such Buyer. Such Buyer understands that its investment in the Securities
involves a high degree of risk. Such Buyer, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the
prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Such Buyer is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of
such investment. 
  
 (f) No Governmental Review. Such Buyer
understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment in the Securities nor
have such authorities passed upon or endorsed the merits of the offering of the Securities. 
  
 (g) Transfer or Resale. Such Buyer understands that except as provided in the Registration Rights Agreement: (i) the Securities have not been and are not being registered under the 1933 Act or any state
securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) such Buyer shall have delivered to the Company or Lumera, as the case may be, an opinion of counsel, in a
generally acceptable form, to the effect that such Securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) such Buyer provides the Company or Lumera, as the
case may be, with reasonable assurance that such Securities will be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the 1933 Act, as amended (or a successor rule thereto) (collectively, “Rule 144”),
or (D) such Securities are eligible for sale under Rule 144(k); (ii) any sale of the Securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144 and further, if Rule 144 is not applicable, any resale
of the Securities under circumstances in which the seller (or the Person (as defined in Section 3(r)) through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the 1933 Act) may require compliance with some
other exemption under the 1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other Person is under any obligation to register the Securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder. The Securities may be pledged in connection with a bona fide margin account or other loan or financing arrangement secured by the Securities and such pledge of Securities shall not be
deemed to be a transfer, sale or assignment of the Securities hereunder, and no Buyer effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to this
Agreement or any other Transaction Document (as defined in Section 3(b)), including, without limitation, this Section 2(g) provided, that in order to make any sale, transfer or assignment of Securities, such Buyer and its pledgee makes
such disposition in accordance with or pursuant to a registration statement or an exemption under the 1933 Act. 
  

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 (h) Legends. Such Buyer understands that the certificates or other instruments representing the
Notes, Purchased Shares and the Warrants and, until such time as the resale of the Conversion Shares and the Warrant Shares have been registered under the 1933 Act as contemplated by the Registration Rights Agreement, the stock certificates
representing the Conversion Shares and the Warrant Shares, except as set forth below, shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer
order may be placed against transfer of such stock certificates): 
  
 [NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE [CONVERTIBLE][EXERCISABLE] HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN]
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT AND APPLICABLE STATE SECURITIES LAWS
OR (II) UNLESS SOLD PURSUANT TO RULE 144(K) UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES; PROVIDED,
HOWEVER THAT ANY TRANSFER OF THE SECURITIES PURSUANT TO SUCH PLEDGE ARRANGEMENT MUST COMPLY WITH THE FOREGOING.  
  
 The legend set forth above shall be removed and the Company shall issue a certificate without such legend to the holder of the Securities upon which it is stamped, if,
unless otherwise required by state securities laws, (i) such Securities are registered for resale under the 1933 Act; provided, that each Buyer has complied with or covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of such Securities pursuant to a registration statement, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of
counsel, in a generally acceptable form, to the effect that such legend is not required under applicable requirements of the 1933 Act, or (iii) such holder provides the Company with reasonable assurance that the Securities can be sold, assigned
or transferred pursuant to Rule 144(k). 
  
 (i) Validity;
Enforcement. This Agreement, the Registration Rights Agreement and the Amended and Restated Pledge and Security Agreement have been duly and validly authorized, executed and delivered on behalf of such Buyer and shall constitute the legal, valid
and binding obligations of such Buyer, enforceable against such Buyer in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable creditors’ rights and remedies. 
  

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 (j) No Conflicts. The execution, delivery and performance by such Buyer of this Agreement, the
Registration Rights Agreement and the Amended and Restated Pledge and Security Agreement to which such Buyer is a party and the consummation by such Buyer of the transactions contemplated hereby and thereby will not (i) result in a violation of
the organizational documents of such Buyer or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any agreement, indenture or instrument to which such Buyer is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state securities laws)
applicable to such Buyer, except in the case of clauses (ii) and (iii) above, for such conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on
the ability of such Buyer to perform its obligations hereunder. 
  
 (k) Residency. Such Buyer is a resident of that jurisdiction specified below its address on the Schedule of Buyers. 
  
 (l) Such Buyer was not solicited by the Registration Statement (defined to be the registration statement on Form S-3 (File No. 333-128019) filed
by the Company on September 1, 2005 with the SEC (including the prospectus dated September 8, 2005 filed pursuant to Rule 424(b) under the 1933 Act) in connection with its purchase of Securities. 
  

	3.	REPRESENTATIONS AND WARRANTIES OF THE COMPANY. 

  
 The Company represents and warrants to each of the Buyers that: 
  

(a) Organization and Qualification. The Company is duly organized and validly existing in good standing under the laws of the State of Delaware,
and has the requisite power and authorization to own its properties and assets and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction
in which its ownership of property or assets or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
As used in this Agreement, “Material Adverse Effect” means any material adverse effect on the business, properties, assets, operations, results of operations, financial condition or prospects of the Company or on the transactions
contemplated hereby and the other Transaction Documents or by the agreements and instruments to be entered into in connection herewith or therewith, or on the authority or ability of the Company to perform its obligations under the Transaction
Documents (as defined below). The Company has no subsidiaries (which for purposes of this Agreement means any entity in which the Company, directly or indirectly, owns 50% or more of the capital stock or holds 50% or more of the equity or similar
interest). 
  

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 (b) Authorization; Enforcement; Validity. The Company has the requisite power and authority to
enter into and perform its obligations under this Agreement, the Notes, the Registration Rights Agreement, the Irrevocable Transfer Agent Instructions (as defined in Section 5(b)), the Warrants, the Amended and Restated Pledge and Security
Agreements and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Transaction Documents”) and to issue the Securities in accordance
with the terms hereof and thereof. The execution and delivery of the Transaction Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby, including, without limitation, the issuance of the
Notes, the Purchased Shares and the Warrants, the reservation for issuance and the issuance of the Conversion Shares issuable upon conversion of the Notes, and the reservation for issuance and issuance of Warrant Shares issuable upon exercise of the
Warrants and the pledging of the Lumera Shares have been duly authorized by the Company’s Board of Directors and no further corporate action is required by the Company, its Board of Directors or its stockholders. This Agreement and the other
Transaction Documents of even date herewith have been duly executed and delivered by the Company, and constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies. 
  
 (c) Issuance of
Securities. The issuance of the Notes, Purchased Shares and the Warrants and the pledging of the Lumera Shares is duly authorized and is free from all taxes, liens and charges with respect to the issue thereof. As of the Closing, a number of
shares of Company Common Stock shall have been duly authorized and reserved for issuance which equals the sum of 100% of the maximum number of shares Company Common Stock issuable as Interest Shares pursuant to the terms of the Notes, issuable upon
conversion of the Notes and issuable upon exercise of the Warrants. The Purchased Shares, and upon issuance or conversion or exchange in accordance with the Notes or exercise in accordance with the Warrants, as the case may be, the Interest Shares,
the Conversion Shares and the Warrant Shares, respectively, will be validly issued, fully paid and nonassessable and free from all preemptive or similar rights, taxes, liens and charges with respect to the issue thereof, with the holders being
entitled to all rights accorded to a holder of Company Common Stock. The offer and issuance by the Company of the Securities is exempt from registration under the 1933 Act. 
  

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 (d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the
Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Notes, Purchased Shares and the Warrants, the pledging of the Lumera Shares and reservation for
issuance and issuance of the Interest Shares, the Conversion Shares and the Warrant Shares) will not (i) result in a violation of the Certificate of Incorporation (as defined in Section 3(q)) of the Company, any capital stock of the
Company or Bylaws (as defined in Section 3(q)) of the Company or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including federal and state
securities laws and regulations and the rules and regulations of the Nasdaq Stock Market (the “Principal Market”)) applicable to the Company or by which any property or asset of the Company is bound or affected. 
  
 (e) Consents. Except as disclosed in Schedule 3(e) and except for
those failure of which to obtain or make would not have a Material Adverse Effect, and other than the filing with the SEC of the Registration Statement (as defined in the Registration Rights Agreement), and any filings required pursuant to
Section 4(b) hereof, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order
for it to execute, deliver or perform any of its obligations under or contemplated by the Transaction Documents, in each case in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the
Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the Closing Date, and the Company is unaware of any facts or circumstances which might prevent the Company from obtaining or effecting any
of the registration, application or filings pursuant to the preceding sentence. The Company is not in violation of the listing requirements of the Principal Market and has no knowledge of any facts which would reasonably lead to delisting or
suspension of the Company Common Stock in the foreseeable future. The Company, without having made an investigation, has no knowledge of any violation by Lumera of the listing requirements of the Principal Market with respect to the Lumera Common
Stock. The Company, without having made an investigation, has no knowledge of any facts which would reasonably lead to delisting or suspension of the Lumera Common Stock in the foreseeable future. 
  

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 (f) Acknowledgment Regarding Buyer’s Purchase of Securities. The Company acknowledges and
agrees that each Buyer is acting solely in the capacity of arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated hereby and thereby and that no Buyer is (i) an officer or director of the
Company, (ii) to the knowledge of the Company, an “affiliate” of the Company (as defined in Rule 144) or (iii) to the knowledge of the Company, a “beneficial owner” of more than 10% of the shares of Company Common Stock
(as defined for purposes of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the “1934 Act”)). The Company further acknowledges that no Buyer is acting as a financial advisor or fiduciary of the Company (or in any
similar capacity) with respect to the Transaction Documents and the transactions contemplated hereby and thereby, and any advice given by a Buyer or any of its representatives or agents in connection with the Transaction Documents and the
transactions contemplated hereby and thereby is merely incidental to such Buyer’s purchase of the Securities. The Company further represents to each Buyer that the Company’s decision to enter into the Transaction Documents has been based
solely on the independent evaluation by the Company and its representatives. 
  
 (g) No General Solicitation; Placement Agent’s Fees. Neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment of any placement agent’s fees, financial advisory fees, or brokers’ commissions
(other than for persons engaged by any Buyer or its investment advisor) relating to or arising out of the transactions contemplated hereby. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including,
without limitation, attorney’s fees and out-of-pocket expenses) arising in connection with any such claim. The Company has not engaged any placement agent or other agent in connection with the sale of the Securities. 
  
 (h) No Integrated Offering. None of the Company, any of its
affiliates, and any Person acting on its behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would require registration of any of the Securities under the
1933 Act or cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the 1933 Act or any applicable stockholder approval provisions, including, without limitation, under the rules and regulations of
any exchange or automated quotation system on which any of the securities of the Company are listed or designated. None of the Company, its affiliates and any Person acting on its behalf will take any action or steps referred to in the preceding
sentence that would require registration of any of the Securities under the 1933 Act or cause the offering of the Securities to be integrated with other offerings. 
  
 (i) Dilutive Effect. The Company acknowledges that its obligation to issue Conversion Shares upon conversion of the
Notes in accordance with this Agreement and the Notes and its obligation to issue the Warrant Shares upon exercise of the Warrants in accordance with this Agreement and the Warrants is, in each case, absolute and unconditional regardless of the
dilutive effect that such issuance may have on the ownership interests of other stockholders of the Company. 
  

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 (j) Application of Takeover Protections; Rights Agreement. The Company and its board of directors
have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the jurisdiction of its formation which is or could become applicable to any Buyer as a result of the transactions contemplated by this Agreement, including, without limitation, the Company’s issuance
of the Securities and any Buyer’s ownership of the Securities. The Company has not adopted a stockholder rights plan or similar arrangement relating to accumulations of beneficial ownership of Company Common Stock or a change in control of the
Company. 
  
 (k) SEC Documents; Financial Statements. Since
December 31, 2004, the Company has filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC pursuant to the reporting requirements of the 1934 Act (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements, notes and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”). The Company has delivered to the
Buyers or their respective representatives true, correct and complete copies of the SEC Documents not available on the EDGAR system. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance
with generally accepted accounting principles, consistently applied, during the periods involved (except (i) as may be otherwise indicated in such financial statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of the dates thereof and the results of its operations and cash
flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). 
  

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 (l) Absence of Certain Changes. Except as specifically disclosed in the SEC Documents filed not
later than 10 days prior to the date hereof, since December 31, 2004, there has been no material adverse change and no material adverse development in the business, properties, assets, operations, results of operations, financial condition or
prospects of the Company. Since September 30, 2005, the Company has not (i) declared or paid any dividends, (ii) sold any assets, individually or in the aggregate, in excess of $500,000 outside of the ordinary course of business or
(iii) had capital expenditures, individually or in the aggregate, in excess of $500,000. The Company has not taken any steps to seek protection pursuant to any bankruptcy law nor does the Company have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. The Company, is not as of the date hereof, and after giving effect to the transactions contemplated
hereby to occur at the Closing, will not be Insolvent (as defined below). For purposes of this Section 3(l), “Insolvent” means, with respect to any Person (as defined in Section 3(r)), (i) the present fair saleable
value of such Person’s assets is less than the amount required to pay such Person’s total Indebtedness (as defined in Section 3(r)), (ii) the Company is unable to pay its debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured, (iii) such Person intends to incur or believes that it will incur debts that would be beyond its ability to pay as such debts mature or (iv) such Person has unreasonably
small capital with which to conduct the business in which it is engaged as such business is now conducted and is proposed to be conducted. 
  

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 (m) Conduct of Business; Regulatory Permits. The Company is not in violation of any term of or in
default under its Certificate of Incorporation or Bylaws. The Company is not in violation of any judgment, decree or order or any statute, ordinance, rule or regulation applicable to it, and the Company will not conduct its business in violation of
any of the foregoing, except for possible violations which would not, individually or in the aggregate, have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the Principal Market and has no knowledge of any facts or circumstances that would reasonably lead to delisting or suspension of the Company Common Stock by the Principal Market in the foreseeable future. Since
December 31, 2004, (i) the Company Common Stock has been designated for quotation on the Principal Market, (ii) trading in the Company Common Stock has not been suspended by the SEC or the Principal Market, (iii) the Company has
received no communication, written or oral, from the SEC or the Principal Market regarding the suspension or delisting of the Company Common Stock from the Principal Market (iv) to the knowledge of the Company, without having made an
investigation, trading in Lumera Common Stock has not been suspended by the SEC or the Principal Market and (v) to the knowledge of the Company, without having made an investigation, Lumera has received no communication, written or oral, from
the SEC or the Principal Market regarding the suspension or delisting of the Lumera Common Stock from the Principal Market. Since the date of the initial public offering of the Lumera Common Stock, to the knowledge of the Company, without having
made an investigation, the Lumera Common Stock has been designated for quotation or listed on the Principal Market. The Company possesses all certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory
authorities necessary to conduct their respective businesses, except where the failure to possess such certificates, authorizations or permits would not have, individually or in the aggregate, a Material Adverse Effect, and the Company has not
received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit. 
  
 (n) Foreign Corrupt Practices. Neither the Company, nor any director, officer, agent, employee or other Person acting on behalf of the Company has,
in the course of its actions for, or on behalf of, the Company (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expenses relating to political activity; (ii) made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any unlawful
bribe, rebate, payoff, influence payment, kickback or other unlawful payment to any foreign or domestic government official or employee. 
  
 (o) Sarbanes-Oxley Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and regulations promulgated by the SEC thereunder that are effective as of the date hereof, except where such noncompliance would not have, individually or in the aggregate, a Material Adverse
Effect. 
  

 12 

 (p) Transactions With Affiliates. Except as disclosed in Schedule 3(p) and except as set forth in
the SEC Documents filed at least ten days prior to the date hereof, and other than the grant of stock options disclosed that are required to be publicly disclosed, none of the officers, directors or employees of the Company is presently a party to
any transaction with the Company (other than for ordinary course services as employees, officers or directors) required to be disclosed pursuant to Regulation S-K Item 404, including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any such officer, director or employee or, to the knowledge of the Company, any corporation, partnership,
trust or other entity in which any such officer, director, or employee has a substantial interest or is an officer, director, trustee or partner, which such transaction would be required to be disclosed. 
  

 13 

 (q) Equity Capitalization. As of the date hereof, the authorized capital stock of the Company
consists of (i) 73,000,000 shares of Company Common Stock, of which as of the date hereof, 24,151,491 are issued and outstanding, 5,391,743 shares are reserved for issuance pursuant to the Company’s stock option plans, 3,030,424 shares are
reserved for issuance upon conversion of warrants (other than the Warrants which are the subject of this agreement) and 740,741 shares are reserved for issuance upon conversion of 5,000 shares of convertible preferred stock listed as issued and
outstanding hereafter and (ii) 25,000,000 shares of preferred stock, $.001 par value per share, of which as of the date hereof, 5,000 shares are issued and outstanding as preferred stock convertible into common stock as disclosed above. All of
such outstanding shares have been, or upon issuance will be, validly issued and are fully paid and nonassessable. Except as disclosed in Schedule 3(q): (i) none of the Company’s share capital is subject to preemptive rights or any
other similar rights that would be triggered upon issuance of the Securities; (ii) except as disclosed in the Form 10-K/A of the Company filed in April 2005 with the SEC or subsequently filed Forms 10-Q or Forms 8-K, there are no outstanding
options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company, or contracts,
commitments, understandings or arrangements by which the Company is or may become bound to issue additional share capital of the Company or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating
to, or securities or rights convertible into, or exercisable or exchangeable for, any share capital of the Company; (iii) there are no outstanding debt securities, notes, credit agreements, credit facilities or other agreements, documents or
instruments evidencing Indebtedness (as defined in Section 3(r)) of the Company or by which the Company is or may become bound; (iv) there are no financing statements securing obligations in any material amounts, either singly or in the
aggregate, filed in connection with the Company; (v) except as disclosed in the Form 10-K/A of the Company filed in April 2005 with the SEC or in subsequently filed Forms 10-Q or Forms 8-K, there are no agreements or arrangements under which
the Company is obligated to register the sale of any of their securities under the 1933 Act (except the Registration Rights Agreement); (vi) there are no outstanding securities or instruments of the Company which contain any redemption or
similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company is or may become bound to redeem a security of the Company; (vii) there are no securities or instruments containing anti-dilution
or similar provisions that will be triggered by the issuance of the Securities; (viii) the Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement; and (ix) the
Company has no liabilities or obligations required to be disclosed in the SEC Documents but not so disclosed in the SEC Documents, other than those incurred in the ordinary course of the Company’s businesses and which, individually or in the
aggregate, do not or would not have a Material Adverse Effect. The Company has made available to each Buyer true, correct and complete copies of the Company’s Certificate of Incorporation, as amended and as in effect on the date hereof (the
“Certificate of Incorporation”), and the Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”), and the terms of all securities convertible into, or exercisable or exchangeable for,
shares of Company Common Stock and the material rights of the holders thereof in respect thereto. 
  

 14 

 (r) Indebtedness and Other Contracts. Except as disclosed in Schedule 3(r), the Company
(i) has no outstanding Indebtedness (as defined below), (ii) except as disclosed in the exhibits filed as SEC Documents of the Company, is not a party to any contract, agreement or instrument, the violation of which, or default under
which, by the other party(ies) to such contract, agreement or instrument would result in a Material Adverse Effect; provided, however, that the Company has no knowledge of any such violations or default, (iii) is not in violation of any term of
or in default under any contract, agreement or instrument relating to any Indebtedness, except where such violations and defaults would not result, individually or in the aggregate, in a Material Adverse Effect, or (iv) is not a party to any
contract, agreement or instrument relating to any Indebtedness, the performance of which, in the judgment of the Company’s officers, has or is expected to have a Material Adverse Effect. Schedule 3(r) provides a detailed description of
the material terms of any such outstanding Indebtedness, except as otherwise disclosed therein. For purposes of this Agreement: (x) “Indebtedness” of any Person means, without duplication (A) all indebtedness for borrowed
money, (B) all obligations issued, undertaken or assumed as the deferred purchase price of property or services (including, without limitation, “capital leases” in accordance with generally accepted accounting principals) (other than
trade payables entered into in the ordinary course of business), (C) all reimbursement or payment obligations with respect to letters of credit, surety bonds and other similar instruments, (D) all obligations evidenced by notes, bonds,
debentures or similar instruments, including obligations so evidenced incurred in connection with the acquisition of property, assets or businesses, (E) all indebtedness created or arising under any conditional sale or other title retention
agreement, or incurred as financing, in either case with respect to any property or assets acquired with the proceeds of such indebtedness (even though the rights and remedies of the seller or bank under such agreement in the event of default are
limited to repossession or sale of such property), (F) all monetary obligations under any leasing or similar arrangement which, in connection with generally accepted accounting principles, consistently applied for the periods covered thereby,
is classified as a capital lease, (G) all indebtedness referred to in clauses (A) through (F) above secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any
mortgage, lien, pledge, charge, security interest or other encumbrance upon or in any property or assets (including accounts and contract rights) owned by any Person, even though the Person which owns such assets or property has not assumed or
become liable for the payment of such indebtedness, and (H) all Contingent Obligations in respect of indebtedness or obligations of others of the kinds referred to in clauses (A) through (G) above; (y) “Contingent
Obligation” means, as to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to any indebtedness, lease, dividend or other obligation of another Person if the primary purpose or intent of the
Person incurring such liability, or the primary effect thereof, is to provide assurance to the obligee of such liability that such liability will be paid or discharged, or that any agreements relating thereto will be complied with, or that the
holders of such liability will be protected (in whole or in part) against loss with respect thereto; and (z) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization and a government or any department or agency thereof. 
  

 15 

 (s) Absence of Litigation. Except as set forth in Schedule 3(s), there is no action, suit,
proceeding, inquiry or investigation before or by the Principal Market, any court, public board, government agency, self-regulatory organization or body pending other than those which would not, individually or in the aggregate, have a Material
Adverse Effect or, to the knowledge of the management of the Company, threatened against or affecting the Company, the Company Common Stock or any of the Company’s officers or directors in their capacities as such. 
  
 (t) Insurance. The Company is insured by insurers of recognized
financial responsibility against such losses and risks and in such amounts as management of the Company believes to be prudent and customary in the businesses in which the Company is engaged. The Company has not been refused any insurance coverage
sought or applied for and the Company has no reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue
its business at a cost that would not have a Material Adverse Effect. 
  
 (u) Employee Relations. (i) The Company is not a party to any collective bargaining agreement or employs any member of a union. The Company believes that its relations with its employees are good. No executive officer of the
Company (as defined in Rule 501(f) of the 1933 Act) has notified the Company that such officer intends to leave the Company or otherwise terminate such officer’s employment with the Company. No executive officer of the Company, to the knowledge
of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement, non-competition agreement, or any other contract or agreement or any
restrictive covenant, and the continued employment of each such executive officer does not subject the Company to any liability with respect to any of the foregoing matters. 
  
 (ii) The Company is in compliance with all federal, state, local and foreign laws and regulations respecting
labor, employment and employment practices and benefits, terms and conditions of employment and wages and hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to result in a
Material Adverse Effect. 
  
 (v) Title. Except as disclosed
in Schedule 3(v), the Company has good and marketable title in fee simple to all real property and good and marketable title to all personal property owned by them which is material to the businesses of the Company, in each case free and
clear of all liens and encumbrances (other than such liens and encumbrances on Intellectual Property Rights (as defined below)), and defects except such as do not interfere with the use made and proposed to be made of such property by the Company or
that would not have a Material Adverse Effect. Any material real property and facilities held under lease by the Company are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere
with the use made and proposed to be made of such property and buildings by the Company. 
  

 16 

 (w) Intellectual Property Rights. The Company owns or possesses adequate rights or licenses to use
all trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and other intellectual property rights
(“Intellectual Property Rights”) necessary to conduct their respective businesses as now conducted. Except as set forth in Schedule 3(w), none of the Company’s Intellectual Property Rights have expired or terminated, or
are expected to expire or terminate, within three years from the date of this Agreement. The Company does not have any knowledge of any infringement by the Company of Intellectual Property Rights of others. There is no claim, action or proceeding
being made or brought, or to the knowledge of the Company, being threatened, against the Company regarding its Intellectual Property Rights. The Company is unaware of any facts or circumstances which might give rise to any of the foregoing
infringements or claims, actions or proceedings. The Company has taken reasonable security measures to protect the secrecy, confidentiality and value of all of their Intellectual Property Rights. 
  
 (x) Environmental Laws. The Company (i) is in compliance with any
and all Environmental Laws (as hereinafter defined), (ii) has received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses and (iii) is in compliance with all
terms and conditions of any such permit, license or approval where, in each of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse
Effect. The term “Environmental Laws” means all federal, state, local or foreign laws relating to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively,
“Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes,
decrees, demands or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated or approved thereunder. 
  
 (y) Investment Company. The Company is not, and is not an affiliate of, an “investment company” within the
meaning of the Investment Company Act of 1940, as amended. 
  
 (z)
Tax Status. Except as could not reasonably have a Material Adverse Effect, the Company (i) has made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith and
(iii) has set aside on its books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to
be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim. 
  

 17 

 (aa) Internal Accounting and Disclosure Controls. The Company maintains a system of internal
accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles and to maintain asset and liability accountability, (iii) access to assets or incurrence of liabilities is permitted only in accordance with management’s
general or specific authorization and (iv) the recorded accountability for assets and liabilities is compared with the existing assets and liabilities at reasonable intervals and appropriate action is taken with respect to any difference. The
Company maintains disclosure controls and procedures (as such term is defined in Rule 13a-14 under the 1934 Act) that are effective in ensuring that information required to be disclosed by the Company in the reports that it files or submits under
the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in the rules and forms of the SEC, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by
the Company in the reports that it files or submits under the 1934 Act is accumulated and communicated to the Company’s management, including its principal executive officer or officers and its principal financial officer or officers, as
appropriate, to allow timely decisions regarding required disclosure. 
  
 (bb) Off Balance Sheet Arrangements. There is no transaction, arrangement, or other relationship between the Company and an unconsolidated or other off balance sheet entity that is required to be disclosed by the Company in its
Exchange Act filings and is not so disclosed or that otherwise would be reasonably likely to have a Material Adverse Effect. 
  
 (cc) Ranking of Notes. Except as disclosed on Schedule 3(cc), no Indebtedness of the Company is senior to or ranks pari passu with
the Notes in right of payment, whether with respect of payment of redemptions, interest, damages or upon liquidation or dissolution or otherwise. 
  
 (dd) Form S-3 Eligibility. The Company is eligible to register the Purchased Shares, Conversion Shares, the Warrant Shares and the Interest Shares
for resale by the Buyers using Form S-3 promulgated under the 1933 Act. 
  
 (ee) Lumera Shares. 
  
 (i) The
Company is the beneficial and record owner of all of the Lumera Shares, free and clear of any Liens, and upon transfer in accordance with the applicable Transaction Documents, the Company will transfer to the Buyers good and marketable title to such
Lumera Shares, free and clear of any Liens. Upon any such transfer in accordance with the applicable Transaction Documents to the Buyers of any Lumera Shares, the Lumera Shares shall be unrestricted and freely tradable on the Principal Market
without any delivery or other requirements whatsoever and without the need to make any registration or other filing with the SEC. 
  
 (ii) The Company has no legal obligation, absolute or contingent, to any other Person to transfer or sell any of the Lumera Shares. There
is no action, claim, suit, investigation or proceeding pending or, to the knowledge of the Company, threatened by or against or affecting the Company or the Company’s ownership of the Lumera Shares before any court or governmental or regulatory
authority or body, that could effect the ability of the Company to 

  

 18 

 
pledge and transfer to the Buyers any Lumera Shares. There are no writs, decrees, injunctions or orders of any court or governmental or regulatory agency,
authority or body outstanding against the Company with respect to the Lumera Shares. 
  
 (ff) Transfer Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the sale and transfer of the Securities to be
sold to each Buyer hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with. 
  
 (gg) Manipulation of Price. The Company has not, and to its knowledge no one acting on its behalf has,
(i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases in the marketplace of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase in the marketplace any other securities
of the Company. 
  
 (hh) Disclosure. The Company confirms
that neither it nor any other Person acting on its behalf has provided any of the Buyers or their agents or counsel with any information that constitutes or could reasonably be expected to constitute material, nonpublic information. The Company
understands and confirms that each of the Buyers will rely on the foregoing representations in effecting transactions in securities of the Company. All disclosure provided to the Buyers in writing regarding the Company, its business and the
transactions contemplated hereby, including the Schedules to this Agreement, furnished by or on behalf of the Company, in the aggregate, is true and correct in all material respects and does not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading. Each press release issued by the Company during the twelve (12) months
preceding the date of this Agreement did not at the time of release contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of
the circumstances under which they are made, not misleading. No event or circumstance has occurred or information exists with respect to the Company or its businesses, properties, prospects, operations or financial conditions, which, under
applicable law, rule or regulation, currently requires public disclosure or announcement by the Company on or before the date hereof but which has not been so publicly announced or disclosed. 
  
 (ii) Seniority. As of the date of this Agreement, no
Indebtedness of the Company is or will be senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution. 
  

	4.	COVENANTS. 

  
 (a) Best Efforts. Each party shall use its best efforts timely to satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement. 
  

 19 

 (b) Form D and Blue Sky. The Company agrees to file a Form D with respect to the Securities as
required under Regulation D and to provide a copy thereof to each Buyer promptly after such filing. The Company shall, on or before the Closing Date, take such action as the Company shall reasonably determine is necessary to be taken on or before
the Closing Date in order to obtain an exemption for or to qualify the Securities for sale to the Buyers at the Closing pursuant to this Agreement under applicable securities or “Blue Sky” laws of the states of the United States (or to
obtain an exemption from such qualification), and shall provide evidence of any such action so taken to the Buyers on or prior to the Closing Date. The Company shall make all filings and reports relating to the offer and sale of the Securities
required under applicable securities or “Blue Sky” laws of the states of the United States following the Closing Date. 
  
 (c) Use of Proceeds. The Company will use the proceeds from the sale of the Notes and Warrants for working capital purposes and not for the
redemption or repurchase of any of its equity securities. 
  
 (d)
Financial Information. The Company agrees to send the following to each Investor during the Reporting Period (i) unless the following are filed with the SEC through EDGAR and are available to the public through the EDGAR system, within
one (1) Business Day after the filing thereof with the SEC, a copy of its Annual Reports on Form 10-K its Quarterly Reports on Form 10-Q, any Current Reports on Form 8-K and any registration statements (other than on Form S-8) or amendments
filed pursuant to the 1933 Act, (ii) on the same day as the release thereof, facsimile copies of all press releases issued by the Company, and (iii) copies of any notices and other information made available or given to the stockholders of
the Company generally, contemporaneously with the making available or giving thereof to the stockholders. For the purposes of this Section 4(d) only, the Company may send notice to the Investors by electronic mail to their respective electronic
mail addresses as set forth in the Schedule of Buyers attached hereto. As used herein, “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed. 
  
 (e) Listing. The
Company shall promptly secure the listing of all of the Registrable Securities (as defined in the Registration Rights Agreement) upon each national securities exchange and automated quotation system, if any, upon which the Company Common Stock is
then listed (subject to official notice of issuance) and shall maintain such listing of all Registrable Securities from time to time issuable under the terms of the Transaction Documents. The Company shall maintain the Company Common Stocks’
authorization for listing on the Principal Market. The Company shall not take any action which would be reasonably expected to result in the delisting or suspension of the Company Common Stock on the Principal Market. The Company shall pay all fees
and expenses in connection with satisfying its obligations under this Section 4(e). 
  

 20 

 (f) Fees. Subject to Section 8 below, at the Closing, the Company shall pay an expense
allowance to Omicron Master Trust (a Buyer) or its designee(s) (in addition to any other expense amounts paid to any Buyer prior to the date of this Agreement) to cover expenses reasonably incurred by Omicron Master Trust (a Buyer) or any
professionals engaged by Omicron Master Trust in relation to due diligence and investment documentation, in an amount not to exceed $70,000, which amount shall be withheld by such Buyer from its Purchase Price at the Closing. The Company shall be
responsible for the payment of any placement agent’s fees, financial advisory fees, or broker’s commissions relating to or arising out of the transactions contemplated hereby, including, without limitation, any fees or commissions payable
to the Agent. The Company shall pay, and hold each Buyer harmless against, any liability, loss or expense (including, without limitation, reasonable attorney’s fees and out-of-pocket expenses) arising in connection with any claim relating to
any such payment. Except as otherwise set forth in the Transaction Documents, each party to this Agreement shall bear its own expenses in connection with the sale of the Securities to the Buyers. 
  
 (g) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights Agreement) in connection with a bona fide margin agreement or other loan or financing arrangement that is secured by the Securities. The pledge of Securities shall not
be deemed to be a transfer, sale or assignment of the Securities hereunder, and no Investor effecting a pledge of Securities shall be required to provide the Company with any notice thereof or otherwise make any delivery to the Company pursuant to
this Agreement or any other Transaction Document, including, without limitation, Section 2(g) hereof; provided that an Investor and its pledgee shall be required to comply with the provisions of Section 2(g) hereof in order to effect a
sale, transfer or assignment of Securities to such pledgee. The Company hereby agrees to execute and deliver such documentation as a pledgee of the Securities may reasonably request in connection with a pledge of the Securities to such pledgee by an
Investor. 
  

 21 

 (h) Disclosure of Transactions and Other Material Information. On or before 8:30 a.m., New York
City time, on the first Business Day following the date of this Agreement, the Company shall file a Current Report on Form 8-K describing the terms of the transactions contemplated by the Transaction Documents in the form required by the 1934 Act
and attaching the material Transaction Documents (including, without limitation, this Agreement (and all schedules to this Agreement), the form of the Note, the form of Warrant, the form of Amended and Restated Pledge and Security Agreement and the
Registration Rights Agreement) as exhibits to such filing (including all attachments, the “8-K Filing”). From and after the filing of the 8-K Filing with the SEC, unless required pursuant to a Transaction Document, no Buyer shall be
in possession of any material, nonpublic information received from the Company or any of its officers, directors, employees or agents, that is not disclosed in the 8-K Filing. Unless required pursuant to a Transaction Document, the Company shall
not, and shall cause each of its officers, directors, employees and agents, not to, provide any Buyer with any material, nonpublic information regarding the Company from and after the filing of the 8-K Filing with the SEC without the express written
consent of such Buyer. In the event of a breach of the foregoing covenant by the Company, or any of its officers, directors, employees and agents, in addition to any other remedy provided herein or in the Transaction Documents, a Buyer shall have
the right to make a public disclosure, in the form of a press release, public advertisement or otherwise, of such material, nonpublic information without the prior approval by the Company, or any of its officers, directors, employees or agents. No
Buyer shall have any liability to the Company, or any of its officers, directors, employees, stockholders or agents for any such disclosure. Subject to the foregoing, neither the Company nor any Buyer shall issue any press releases or any other
public statements with respect to the transactions contemplated hereby; provided, however, that the Company shall be entitled, without the prior approval of any Buyer, to make any press release or other public disclosure with respect to such
transactions (i) in substantial conformity with the 8-K Filing and contemporaneously therewith and (ii) as is required by applicable law and regulations (provided that in the case of clause (i) each Buyer shall be consulted by the
Company in connection with any such press release or other public disclosure prior to its release). 
  
 (i) Restriction on Redemption and Cash Dividends. So long as any Notes are outstanding, the Company shall not, directly or indirectly, redeem, or
declare or pay any cash dividend or distribution on, the Company Common Stock without the prior express written consent of the holders of Notes representing not less than a majority of the aggregate principal amount of the then outstanding Notes
other than (i) in connection with employee stock repurchases pursuant to an Approved Stock Plan (as defined in the Notes) existing as of the date hereof and (ii) cash payments in lieu of fractional shares of Company Common Stock issuable
upon conversion or exercise of Convertible Securities or Options. 
  
 (j) Conduct of Business. The businesses of the Company shall not be conducted in violation of any law, ordinance or regulation of any governmental entity, except where such violations would not result, either individually or in the
aggregate, in a Material Adverse Effect. 
  

 22 

 (k) Additional Notes; Variable Securities; Dilutive Issuances. So long as any Buyer beneficially
owns any Securities, the Company will not issue any Notes other than to the Buyers as contemplated hereby and the Company shall not issue any other securities that would cause a breach or default under the Notes. For so long as any Notes remain
outstanding, the Company shall not, in any manner, issue or sell any rights, warrants or options to subscribe for or purchase Company Common Stock or directly or indirectly convertible into or exchangeable or exercisable for Company Common Stock at
a price which varies or may vary after issuance with the market price of the Company Common Stock, including by way of one or more reset(s) to any fixed price unless the conversion, exchange or exercise price of any such security cannot be less than
the then applicable Conversion Price (as defined in the Notes) with respect to the Company Common Stock into which any Note is convertible or the then applicable Exercise Price (as defined in the Warrants) with respect to the Company Common Stock
into which any Warrant is exercisable. For purposes of clarification, this does not prohibit the issuance of securities with customary “weighted average” or “full ratchet” anti-dilution adjustments which adjust a fixed conversion
or exercise price of securities sold by the Company in the future. For so long as any Notes or Warrants remain outstanding, the Company shall not, in any manner, enter into or affect any Dilutive Issuance (as defined in the Notes) if the effect of
such Dilutive Issuance is to cause the Company to be required to issue upon conversion of any Note or exercise of any Warrant any shares of Company Common Stock in excess of that number of shares of Company Common Stock which the Company may issue
upon conversion of the Notes and exercise of the Warrants without breaching the Company’s obligations under the rules or regulations of the Principal Market. 
  
 (l) Corporate Existence. So long as any Buyer beneficially owns any Notes or Warrants, the Company shall not be party
to any Fundamental Transaction (as defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants. 
  
 (m) Incurrence of Liens. So long as any Notes are outstanding, the
Company shall not, directly or indirectly, allow or suffer to exist any Lien, other than Permitted Liens (as defined in the Notes), upon any property or assets (including accounts and contract rights) owned by the Company. 
  
 (n) Reservation of Shares. The Company shall take all action necessary
to at all times have authorized, and reserved for the purpose of issuance, after the Closing Date, 100% of the sum of the number of Interest Shares issuable pursuant to the terms of the Notes, shares of Company Common Stock issuable upon conversion
of all of the Notes and shares of Company Common Stock issuable upon exercise of the Warrants. 
  
 (o) Additional Issuances of Securities. The Company and each of the Buyers agree that Section 4(o) of the Securities Purchase Agreement (the “March SPA”) dated as of March 11, 2005
among the Company and the Buyers, pursuant to which the Company issued certain notes (the “Old Notes”) to the Buyers, is hereby amended and restated to delete the entire Section 4(o) and replace it with: “[Reserved].”
The Notes and the Old Notes are collectively referred to as the “Company Notes.” 
  
 (i) For purposes of this Section 4(o), the following definitions shall apply. 
  
 (A) “Convertible Securities” means any
stock or securities (other than Options) convertible into or exercisable or exchangeable for shares of Company Common Stock. 
  

 23 

 (B) “Options” means any rights, warrants or options to subscribe for or
purchase shares of Company Common Stock or Convertible Securities. 
  
 (C) “Common Stock Equivalents” means, collectively, Options and Convertible Securities. 
  
 (ii) Subject to clause (iii) and (iv) below, from the date hereof until March 11, 2006, the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of (or announce any offer, sale, grant or any option to purchase or other disposition of) any of its equity or equity equivalent securities, including without limitation any
debt, preferred stock or other instrument or security that is, at any time during its life and under any circumstances, convertible into or exchangeable or exercisable for shares of Company Common Stock or Common Stock Equivalents (any such offer,
sale, grant, disposition or announcement being referred to as a “Subsequent Placement”) unless the Company shall have first complied with this Section 4(o)(ii). 
  
 (A) The Company shall deliver to each Buyer a written notice (the ”Pre-Offer Notice”)
of any proposed or intended issuance or sale or exchange (the ”Pre-Offer”) of the securities being offered (the “Pre-Offered Securities”) in a Subsequent Placement, which Pre-Offer Notice shall
(w) identify and describe the Pre-Offered Securities, (x) describe the price and other terms upon which they are to be issued, sold or exchanged, and the number or amount of the Pre-Offered Securities to be issued, sold or exchanged,
(y) identify the persons or entities (if known) to which or with which the Pre-Offered Securities are to be offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers a pro rata portion of 25% of the
Pre-Offered Securities allocated among such Buyers (a) based on such Buyer’s pro rata portion of the aggregate principal amount of Company Notes purchased hereunder or under the March SPA (the “Pre-Basic Amount”), and
(b) with respect to each Buyer that elects to purchase its Pre-Basic Amount, any additional portion of the Pre-Offered Securities attributable to the Pre-Basic Amounts of other Buyers as such Buyer shall indicate it will purchase or acquire
should the other Buyers subscribe for less than their Pre-Basic Amounts (the “Pre-Undersubscription Amount”). 
  
 (B) To accept a Pre-Offer, in whole or in part, such Buyer must deliver a written notice to the Company prior to the end of the fifth
(5th) Business Day after such Buyer’s receipt of the Pre-Offer Notice (the “Pre-Offer
Period”), setting forth the portion of such Buyer’s Pre-Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Pre-Basic Amount, the Pre-Undersubscription Amount, if any, that such Buyer
elects to purchase (in either case, the “Pre-Notice of Acceptance”). If the Pre-Basic Amounts subscribed for by all Buyers are less than the total of all of the Pre-Basic Amounts, then each Buyer who has set forth a
Pre-Undersubscription Amount in its Pre-Notice of Acceptance shall be entitled to purchase, in addition to the Pre-Basic Amounts subscribed for, the Pre-Undersubscription Amount it has subscribed for; provided, however, that if the
Pre-Undersubscription Amounts subscribed for exceed the difference between the total of all the Pre-Basic Amounts and the Pre-Basic Amounts subscribed for (the “Pre-Available Undersubscription Amount”), each Buyer who has subscribed
for any Pre-Undersubscription 

  

 24 

 
Amount shall be entitled to purchase only that portion of the Pre-Available Undersubscription Amount as the Pre-Basic Amount of such Buyer bears to the total
Pre-Basic Amounts of all Buyers that have subscribed for Pre-Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary. 
  
 (C) The Company shall have ten (10) Business Days from the expiration of the Pre-Offer Period above to
offer, issue, sell or exchange all or any part of such Pre-Offered Securities as to which a Pre-Notice of Acceptance has not been given by the Buyers (the “Refused Securities”), but only to the offerees described in the Pre-Offer
Notice (if so described therein) and only upon terms and conditions (including, without limitation, unit prices and interest rates) that are not more favorable to the acquiring person or persons or less favorable to the Company than those set forth
in the Pre-Offer Notice. 
  
 (D) In the event the
Company shall propose to sell less than all the Refused Securities (any such sale to be in the manner and on the terms specified in Section 4(o)(ii)(C) above), then each Buyer may, at its sole option and in its sole discretion, reduce the
number or amount of the Pre-Offered Securities specified in its Pre-Notice of Acceptance to an amount that shall be not less than the number or amount of the Pre-Offered Securities that such Buyer elected to purchase pursuant to
Section 4(o)(ii)(B) above multiplied by a fraction, (i) the numerator of which shall be the number or amount of Pre-Offered Securities the Company actually proposes to issue, sell or exchange (including Pre-Offered Securities to be issued
or sold to Buyers pursuant to Section 4(o)(ii)(C) above prior to such reduction) and (ii) the denominator of which shall be the original amount of the Pre-Offered Securities. In the event that any Buyer so elects to reduce the number or
amount of Pre-Offered Securities specified in its Pre-Notice of Acceptance, the Company may not issue, sell or exchange more than the reduced number or amount of the Pre-Offered Securities unless and until such securities have again been offered to
the Buyers in accordance with Section 4(o)(ii)(A) above. 
  
 (E) Upon the closing of the issuance, sale or exchange of all or less than all of the Refused Securities, the Buyers shall acquire from the Company, and the Company shall issue to the Buyers, the number or amount of
Pre-Offered Securities specified in the Notices of Acceptance, as reduced pursuant to Section 4(o)(ii)(C) above if the Buyers have so elected, upon the terms and conditions specified in the Pre-Offer. The purchase by the Buyers of any
Pre-Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyers of a purchase agreement relating to such Pre-Offered Securities reasonably satisfactory in form and substance to the Buyers and
their respective counsel. 
  
 (F) Any Pre-Offered
Securities not acquired by the Buyers or other persons in accordance with Section 4(o)(ii)(C) above may not be issued, sold or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement. 
  
 (iii) Subject to clause (iv) below, from the date
hereof until March 11, 2006, in lieu of complying with the provisions of Section 4(o)(ii) above, the Company may, at its option, effect a Subsequent Placement, provided that it shall comply with this Section 4(o)(iii). 
  
 (A) The Company shall deliver to each Buyer a written notice
(the ”Post-Offer Notice”) of any completed issuance or sale or exchange (the ”Post-Offer”) of the securities that were offered (the “Post-Offered Securities”) in a Subsequent Placement no

  

 25 

 
later than one Business Day before the public announcement of such Post-Offer, which Post-Offer Notice shall (w) identify and describe the Post-Offered
Securities, (x) describe the price and other terms upon which they were issued, sold or exchanged, and the number or amount of the Post-Offered Securities that were issued, sold or exchanged, (y) identify the persons or entities (if known)
to which or with which the Post-Offered Securities were offered, issued, sold or exchanged and (z) offer to issue and sell to or exchange with such Buyers a pro rata portion of 33 1/3% of the Post-Offered Securities that were purchased by such
other investors on the same terms and conditions as such third party sale, allocated among such Buyers (a) based on such Buyer’s pro rata portion of the aggregate principal amount of Company Notes purchased hereunder or under the March SPA
(the “Post-Basic Amount”), and (b) with respect to each Buyer that elects to purchase its Post-Basic Amount, any additional portion of the Post-Offered Securities attributable to the Post-Basic Amounts of other Buyers as such
Buyer shall indicate it will purchase or acquire should the other Buyers subscribe for less than their Post-Basic Amounts (the “Post-Undersubscription Amount”). 
  
 (B) To accept a Post-Offer, in whole or in part, such Buyer must deliver a written notice to the Company
(i) in the case of issuances by the Company of Company Common Stock pursuant to an effective shelf registration statement in transactions marketed by independent agents to a syndicated group of investors (commonly known as “registered
direct offerings”), prior to the end of the fifth (5th) Business Day, and (ii) in all other cases,
prior to the end of the tenth (10th) Business Day, after such Buyer’s receipt of the Offer Notice (the
“Post-Offer Period”), setting forth the portion of such Buyer’s Post-Basic Amount that such Buyer elects to purchase and, if such Buyer shall elect to purchase all of its Post-Basic Amount, the Post-Undersubscription Amount, if
any, that such Buyer elects to purchase (in either case, the “Post-Notice of Acceptance”). If the Post-Basic Amounts subscribed for by all Buyers are less than the total of all of the Post-Basic Amounts, then each Buyer who has set
forth a Post-Undersubscription Amount in its Post-Notice of Acceptance shall be entitled to purchase, in addition to the Post-Basic Amounts subscribed for, the Post-Undersubscription Amount it has subscribed for; provided, however,
that if the Post-Undersubscription Amounts subscribed for exceed the difference between the total of all the Post-Basic Amounts and the Post-Basic Amounts subscribed for (the “Post-Available Undersubscription Amount”), each Buyer
who has subscribed for any Post-Undersubscription Amount shall be entitled to purchase only that portion of the Post-Available Undersubscription Amount as the Post-Basic Amount of such Buyer bears to the total Post-Basic Amounts of all Buyers that
have subscribed for Post-Undersubscription Amounts, subject to rounding by the Company to the extent its deems reasonably necessary. 
  
 (C) The Company shall have no right to offer, issue, sell or exchange all or any part of such Post-Offered Securities as to which a
Post-Notice of Acceptance has not been given by the Buyers. 
  
 (D) The purchase by the Buyers of any Post-Offered Securities is subject in all cases to the preparation, execution and delivery by the Company and the Buyers of a purchase agreement and other agreements relating to
such Post-Offered Securities which contain substantially the same price and other terms upon which such securities were issued, sold or exchanged to other investors. 
  

 26 

 (E) Any Post-Offered Securities not acquired by the Buyers above may not be issued, sold
or exchanged until they are again offered to the Buyers under the procedures specified in this Agreement. 
  
 (iv) The restrictions contained in subsection (ii) and (iii) of this Section 4(o) shall not apply in connection with the
issuance of any Excluded Securities (as defined in the Notes). 
  
 (p) Transfer of Lumera Shares. Upon transfer of any Lumera Shares to a Buyer pursuant to the terms of the Transaction Documents, including, without limitation, pursuant to an Event of Default (as defined in the Notes), the Company
shall take all actions necessary to transfer to Buyer, in accordance with the applicable terms of the Transaction Documents, the Lumera Shares free and clear of all Liens or restrictions such that after such transfer, the Lumera Shares will be
unrestricted and freely tradable by the Buyer. In connection with the foregoing, the Company shall (i) cause Ropes & Gray LLP or other counsel reasonably acceptable to holders of Notes representing at least a majority of the aggregate
principal amount of the Notes then outstanding to deliver to the transfer agent of Lumera any necessary legal opinion, and (ii) use reasonable best efforts to take any other actions reasonably requested by any Buyer in connection with any such
transfer. 
  

	5.	REGISTER; TRANSFER AGENT INSTRUCTIONS. 

  
 (a) Register. The Company shall maintain at its principal executive offices (or such other office or agency of the Company as it may designate by
notice to each holder of Notes or Warrants), a register for the Notes and the Warrants, in which the Company shall record the name and address of the Person in whose name the Notes and the Warrants have been issued (including the name and address of
each transferee), the principal amount of the Notes held by such Person and the number of Warrant Shares issuable upon exercise of the Warrants held by such Person. The Company shall keep the register open and available during business hours for
inspection by any Buyer or its legal representatives upon prior written notice. 
  

 27 

 (b) Transfer Agent Instructions. The Company shall issue irrevocable instructions to its transfer
agent, and any subsequent transfer agent, to issue certificates or credit shares to the applicable balance accounts at The Depository Trust Company (“DTC”), registered in the name of each Buyer or its respective nominee(s), for the
Conversion Shares, the Interest Shares, if any, and the Warrant Shares in such amounts as specified from time to time by each Buyer to the Company upon conversion of the Notes or exercise of the Warrants in the form of Exhibit E attached
hereto (the “Irrevocable Transfer Agent Instructions”). The Company warrants that no instruction other than the Irrevocable Transfer Agent Instructions referred to in this Section 5(b), and stop transfer instructions to give
effect to Section 2(g) hereof, will be given by the Company to its transfer agent with respect to the Securities, and that the Securities shall otherwise be freely transferable on the books and records of the Company, as applicable, and to the
extent provided in this Agreement and the other Transaction Documents. If a Buyer effects a sale, assignment or transfer of the Securities in accordance with Section 2(g), the Company shall permit the transfer and shall promptly instruct its
transfer agent to issue one or more certificates or credit shares to the applicable balance accounts at DTC in such name and in such denominations as specified by such Buyer to effect such sale, transfer or assignment. In the event that such sale,
assignment or transfer involves Purchased Shares, Conversion Shares, Interest Shares, Warrant Shares sold, assigned or transferred pursuant to an effective registration statement or pursuant to Rule 144, the transfer agent shall issue such
Securities to the Buyer, assignee or transferee, as the case may be, without any restrictive legend. The Company shall cause its counsel to issue the letter included in the Irrevocable Transfer Agent Instructions to the Company’s transfer agent
on the effective date of the registration statement. Following the effective date of the registration statement or at such earlier time as a legend is no longer required for certain securities, the Company will, no later than three Business Days
following the receipt by the Company of notice that a Purchaser has delivered to the Company or the Company’s transfer agent a legended certificate representing such securities, deliver or cause to be delivered to such Purchaser a certificate
representing such securities that is free from all restrictive legends. The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to a Buyer. Accordingly, the Company acknowledges that the remedy at law
for a breach of its obligations under this Section 5(b) will be inadequate and agrees, in the event of a breach or threatened breach by the Company of the provisions of this Section 5(b), that a Buyer shall be entitled, in addition to all
other available remedies, to an order and/or injunction restraining any breach and requiring immediate issuance and transfer, without the necessity of showing economic loss and without any bond or other security being required. 
  

	6.	CONDITIONS TO THE COMPANY’S OBLIGATION TO SELL. 

  
 The obligation of the Company hereunder to issue and sell the Notes, Purchased Shares and the related Warrants to each Buyer at the Closing is subject to
the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing each Buyer
with prior written notice thereof: 
  
 (a) Such Buyer shall have
executed each of the Transaction Documents to which it is a party and delivered the same to the Company. 
  

 28 

 (b) Such Buyer shall have delivered to the Company the Purchase Price for the Notes, Purchased Shares and
the related Warrants being purchased by such Buyer at the Closing by wire transfer of immediately available funds pursuant to the wire instructions provided by the Company. 
  
 (c) The representations and warranties of such Buyer shall be true and correct as of the date when made and as of the
Closing Date as though made at that time (except for representations and warranties that speak as of a specific date), and such Buyer shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by such Buyer at or prior to the Closing Date. 
  

	7.	CONDITIONS TO EACH BUYER’S OBLIGATION TO PURCHASE. 

  
 The obligation of each Buyer hereunder to purchase the Notes, Purchased Shares and the related Warrants at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that these conditions are for each Buyer’s sole benefit and may be waived by such Buyer at any time in its sole discretion by providing the Company with prior written
notice thereof: 
  
 (a) The Company shall have executed and
delivered to such Buyer (A) each of the Transaction Documents and (B) the Notes (in such principal amounts as such Buyer shall have requested prior to the Closing), the Purchased Shares and the related Warrants (each in such amounts as
such Buyer shall have requested prior to the Closing) being purchased by such Buyer at the Closing pursuant to this Agreement. 
  
 (b) Such Buyer shall have received the opinion of Ropes & Gray LLP, the Company’s counsel, dated as of the Closing Date, in form, scope and
substance reasonably satisfactory to such Buyer and in substantially the form of Exhibit F attached hereto. 
  
 (c) The Company shall have delivered to such Buyer a certificate evidencing the incorporation and good standing of the Company issued by the Secretary of
State of the State of Delaware as of a date within 10 days of the Closing Date. 
  
 (d) The Company shall have delivered to such Buyer a certificate evidencing the Company’s qualification as a foreign corporation and good standing issued by the Secretary of State of Washington as of a date
within 10 days of the Closing Date. 
  
 (e) The Company shall have
delivered to such Buyer a certified copy of the Certificate of Incorporation as certified by the Secretary of State of the State of Delaware within 10 days of the Closing Date. 
  
 (f) The Company shall have delivered to such Buyer a copy of the Irrevocable Transfer Agent Instructions, in the form of
Exhibit E attached hereto, which instructions shall have been delivered to and acknowledged in writing by the Company’s transfer agent. 
  

 29 

 (g) The Company shall have delivered to such Buyer a certificate, executed by the Secretary of the
Company and dated as of the Closing Date, as to (i) the resolutions consistent with Section 3(b) as adopted by the Company’s Board of Directors or a committee thereof in a form reasonably acceptable to such Buyer, (ii) the
Certificate of Incorporation and (iii) the Bylaws, each as in effect at the Closing, in the form attached hereto as Exhibit G. 
  
 (h) The representations and warranties of the Company shall be true and correct in all material respects (except for those representations and warranties
that are qualified by materiality or Material Adverse Effect, which shall be true and correct in all respects) as of the date when made and as of the Closing Date as though made at that time (except for representations and warranties that speak as
of a specific date) and the Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required by the Transaction Documents to be performed, satisfied or complied with by the Company at or
prior to the Closing Date. Such Buyer shall have received a certificate, executed by the Chief Executive Officer of the Company, dated as of the Closing Date, to the foregoing in the form attached hereto as Exhibit H. 
  
 (i) The Company shall have obtained all governmental, regulatory or third
party consents and approvals, if any, necessary for the sale of the Notes and the Warrants. 
  
 (j) The Company shall have delivered to such Buyer a letter from the Company’s transfer agent certifying the number of shares of Company Common Stock outstanding as of a date within ten days of the Closing Date.

  
 (k) The Company Common Stock (I) shall be designated for
quotation or listed on the Principal Market and (II) shall not have been suspended by the SEC or the Principal Market from trading on the Principal Market nor shall suspension by the SEC or the Principal Market have been threatened either
(A) in writing by the SEC or the Principal Market or (B) by falling below the minimum listing maintenance requirements of the Principal Market. 
  
 (l) The Company shall have delivered to such Buyer such other documents relating to the transactions contemplated by this Agreement as such Buyer or its
counsel may reasonably request. 
  

	8.	TERMINATION. 

  
 In the event that the Closing shall not have occurred with respect to a Buyer on or before ten (10) Business Days from the date hereof due to the
Company’s or such Buyer’s failure to satisfy the conditions set forth in Sections 6 and 7 above (and the nonbreaching party’s failure to waive such unsatisfied condition(s)), the nonbreaching party shall have the option to terminate
this Agreement with respect to such breaching party at the close of business on such date without liability of any party to any other party; provided, however, if this Agreement is terminated pursuant to this Section 8, the Company shall remain
obligated to reimburse the non-breaching Buyers for the expenses described in Section 4(f) above. 
  

 30 

	9.	MISCELLANEOUS. 

  
 (a) Governing Law; Jurisdiction; Jury Trial. All questions concerning the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the
laws of any jurisdictions other than the State of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and
consents to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of
process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY
TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.  
  
 (b) Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement
and shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile signature shall be considered due execution and shall be binding upon the signatory thereto with the same force
and effect as if the signature were an original, not a facsimile signature. 
  
 (c) Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement. 
  
 (d) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in
any other jurisdiction. 
  

 31 

 (e) Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written
agreements between the Buyers, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement and the instruments referenced herein contain the entire understanding of the parties
with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor any Buyer makes any representation, warranty, covenant or undertaking with respect to such matters. No provision
of this Agreement may be amended other than by an instrument in writing signed by the Company and the holders of Notes representing at least a majority of the aggregate principal amount of the Notes, or, if prior to the Closing Date, the Company and
the Buyers listed on the Schedule of Buyers as being obligated to purchase at least a majority of the aggregate principal amount of the Notes, and any amendment to this Agreement made in conformity with the provisions of this Section 9(e) shall
be binding on all Buyers and holders of Notes, as applicable. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. No such amendment shall be effective to the extent that it
applies to less than all of the holders of the Notes then outstanding. No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of any of the Transaction Documents unless the same
consideration also is offered to all of the parties to the Transaction Documents, holders of Notes or holders of the Warrants, as the case may be. The Company has not, directly or indirectly, made any agreements with any Buyers relating to the terms
or conditions of the transactions contemplated by the Transaction Documents except as set forth in the Transaction Documents. 
  
 (f) Notices. Any notices, consents, waivers or other communications required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when delivered personally; (ii) upon receipt, when sent by facsimile (provided confirmation of transmission is mechanically or electronically generated and kept on file
by the sending party); or (iii) one Business Day after deposit with an overnight courier service, in each case properly addressed to the party to receive the same. The addresses and facsimile numbers for such communications shall be:

  
 If to the Company: 
  
 Microvision, Inc. 
 19910 North Creek Parkway 
 Bothell,
Washington 98011 

			
	 Telephone:
	  	(425) 415-6847
	 Facsimile:
	  	(425) 415-6795
	 Attention:
	  	Thomas M. Walker, Esq.

  
 with a copy to:

  
 Ropes & Gray LLP 
 One International Place 
 Boston,
Massachusetts 02110 

			
	 Telephone:
	  	(617) 951-7000
	 Facsimile:
	  	(617) 951-7050
	 Attention:
	  	Joel F. Freedman, Esq.

  

 32 

 If to the Transfer Agent: 
  
 American Stock Transfer & Trust Company 
 Operations Center 
 6201 15th Avenue

 Brooklyn, New York 11219 

			
	 Telephone:
	  	(718) 921-8145
	 Facsimile:
	  	(718) 921-8116
	 Attention:
	  	Office of General Counsel

  
 If to a Buyer, to its address and
facsimile number set forth on the Schedule of Buyers, with copies to such Buyer’s representatives as set forth on the Schedule of Buyers, 
  
 with a copy (for informational purposes only) to: 
  
 Proskauer Rose LLP 
 1585 Broadway 

New York, New York 10036-8299 
 Facsimile
No.: (212) 969-2900 
 Telephone No.: (212) 969-3000 
 Attn: Adam J. Kansler, Esq. 
  
 or to such other
address and/or facsimile number and/or to the attention of such other Person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. Written confirmation of
receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by an overnight courier service shall be rebuttable evidence of personal service, receipt by facsimile or receipt from an overnight courier service in accordance with clause (i),
(ii) or (iii) above, respectively. 
  
 (g) Successors
and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, including any purchasers of the Notes or the Warrants. The Company shall not assign this Agreement or any
rights or obligations hereunder without the prior written consent (not to be unreasonably withheld) of the holders of at least a majority of the aggregate number of Registrable Securities issued and issuable hereunder, including by way of a
Fundamental Transaction (unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set forth in the Notes and the Warrants). A Buyer may assign some or all of its rights hereunder in connection with
transfer of its Securities without the consent of the Company, in which event such assignee shall be deemed to be a Buyer hereunder with respect to such assigned rights; provided, that such Buyer shall give prompt written notice to the Company after
such assignment. 
  
 (h) No Third Party Beneficiaries. This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for the benefit of, nor may any provision hereof be enforced by, any other Person. 
  

 33 

 (i) Survival. Unless this Agreement is terminated under Section 8, the representations and
warranties of the Company and the Buyers contained in Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and 9 shall survive the Closing. Each Buyer shall be responsible only for its own representations, warranties,
agreements and covenants hereunder. 
  
 (j) Further
Assurances. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably
request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby. 
  
 (k) Indemnification. In consideration of each Buyer’s execution and delivery of the Transaction Documents and acquiring the Securities
thereunder and in addition to all of the Company’s other obligations under the Transaction Documents, the Company shall defend, protect, indemnify and hold harmless each Buyer and each other holder of the Securities and all of their
stockholders, partners, members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other representatives (including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in
connection therewith (irrespective of whether any such Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’ fees and disbursements (the “Indemnified
Liabilities”), incurred by any Indemnitee as a result of, or arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in the Transaction Documents or any other
certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation of the Company contained in the Transaction Documents or any other certificate, instrument or document contemplated
hereby or thereby or (c) any cause of action, suit or claim brought or made against such Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company) and arising out of or resulting from
(i) the execution, delivery, performance or enforcement of the Transaction Documents or any other certificate, instrument or document contemplated hereby or thereby, (ii) any transaction financed or to be financed in whole or in part,
directly or indirectly, with the proceeds of the issuance of the Securities, (iii) any disclosure made by such Buyer pursuant to Section 4(h), or (iv) the status of such Buyer or holder of the Securities as an investor in the Company
pursuant to the transactions contemplated by the Transaction Documents. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities which is permissible under applicable law. Except as otherwise set forth herein, the mechanics and procedures with respect to the rights and obligations under this Section 9(k) shall be the same as those
set forth in Section 6 of the Registration Rights Agreement. 
  
 (l) No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party.

  

 34 

 (m) Remedies. Each Buyer and each holder of the Securities shall have all rights and remedies set
forth in the Transaction Documents and all rights and remedies which such holders have been granted at any time under any other agreement or contract and all of the rights which such holders have under any law. Any Person having any rights under any
provision of this Agreement shall be entitled to enforce such rights specifically (without posting a bond or other security), to recover damages by reason of any breach of any provision of this Agreement and to exercise all other rights granted by
law. Furthermore, the Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under the Transaction Documents, any remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and permanent injunctive relief in any such case without the necessity of proving actual damages and without posting a bond or other security. 
  
 (n) Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) the Transaction Documents, whenever any Buyer exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related
obligations within the periods therein provided, then such Buyer may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to
its future actions and rights. 
  
 (o) Payment Set Aside.
To the extent that the Company makes a payment or payments to the Buyers hereunder or pursuant to any of the other Transaction Documents or the Buyers enforce or exercise their rights hereunder or thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the
Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, foreign, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or
part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred. 
  

 35 

 (p) Independent Nature of Buyers’ Obligations and Rights. The obligations of each Buyer under
any Transaction Document are several and not joint with the obligations of any other Buyer, and no Buyer shall be responsible in any way for the performance of the obligations of any other Buyer under any Transaction Document. Nothing contained
herein or in any other Transaction Document, and no action taken by any Buyer pursuant hereto or thereto, shall be deemed to constitute the Buyers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption
that the Buyers are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction Documents and the Company acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction Documents. Each Buyer confirms that it has independently participated in the negotiation of the transaction contemplated hereby with the advice of its own counsel and
advisors. Each Buyer shall be entitled to independently protect and enforce its rights, including, without limitation, the rights arising out of this Agreement or out of any other Transaction Documents, and it shall not be necessary for any other
Buyer to be joined as an additional party in any proceeding for such purpose. Each Buyer represents that it has been represented by its own separate legal counsel in its review and negotiations of this Agreement and the Transaction Documents and
that Proskauer Rose LLP represents only Omicron Master Trust in connection with this Agreement and the Transaction Documents. 
  
 (q) Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof, or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of
such loss, theft or destruction and customary and reasonable indemnity, if requested. The applicants for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs associated with the issuance of such
replacement Securities. 
  
 (r) Waiver and Amendment. The
Company and each of the Buyers hereby agree that Sections 4(k) and 4(o) of the March SPA do not apply to, or prohibit the issuance of, the Securities pursuant to this Agreement, notwithstanding anything to the contrary that may be provided in those
Sections. The Company and each of the Buyers on behalf of themselves and each other Buyer hereby amend Section 17(a) of the Old Notes to delete everything after the phrase “other than” and replace it with: “(i) the Indebtedness
evidenced by this Note, (ii) Permitted Indebtedness and (iii) Indebtedness evidenced by the Notes (as defined in the November SPA) issued pursuant to the Securities Purchase Agreement (the “November SPA”) dated as of
November 30, 2005 among the Company and the Buyers named therein.” 
  
 [Signature Page Follows] 
  

 36 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	COMPANY:
	
	MICROVISION, INC.
		
	By:	 	/s/    RICHARD A. RAISIG        
	 Name:
	 	Richard A. Raisig
	 Title:
	 	Chief Financial Officer

  
 Signature Page to
Securities Purchase Agreement 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	IROQUOIS CAPITAL, L.P.
		
	By:	 	/s/    JOSHUA SILVERMAN        
	 Name:
	 	Joshua Silverman
	 Title:
	 	Authorized Signatory

  
 Signature Page to
Securities Purchase Agreement 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	SMITHFIELD FIDUCIARY LLC
		
	By:	 	/s/    ADAM J. CHILL        
	 Name:
	 	Adam J. Chill
	 Title:
	 	Authorized Signatory

  
 Signature Page to
Securities Purchase Agreement 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	OMICRON MASTER TRUST
	 By: Omicron Capital L.P., as advisor

	 By: Omicron Capital Inc., its general partner

		
	By:	 	/s/    BRUCE BERNSTEIN        
	 Name:
	 	Bruce Bernstein
	 Title:
	 	Managing Partner

  
 Signature Page to
Securities Purchase Agreement 

 IN WITNESS WHEREOF, each Buyer and the Company have caused their respective signature page to this
Securities Purchase Agreement to be duly executed as of the date first written above. 
  

			
	BUYERS:
	
	CRANSHIRE CAPITAL L.P.
		
	By:	 	/s/    MITCHELL D. KOPIN        
	 Name:
	 	Mitchell D. Kopin
	 Title:
	 	 President - Downsview Capital, Inc.
 The General Partner

  
 Signature Page to
Securities Purchase Agreement 

 SCHEDULE OF BUYERS 
  

											
	 (1)

	  	 (2)

	  	(3)

	  	(4)

	  	(5)

	  	(6)

	 Buyer  

	  	 Address and Facsimile Number

	  	Aggregate
Principal
Amount
of Notes

	  	Aggregate
Number of
Purchased Shares

	  	Aggregate
Number of
Warrants

	  	Legal Representative’s Address
and Facsimile Number

						
	Iroquois Capital, L.P.	  	 Iroquois Capital, L.P.
 641 Lexington Ave., 26th
Floor
 New York, New York 10022
 Facsimile: (212)
207-3452
 Telephone: (212) 974-3070
 E-mail: jsilverman@icfund.com
 Attention: Joshua Silverman
 Residence: Delaware
	  	1,400,000	  	167,597	  	217,877	  	 
						
	Smithfield Fiduciary LLC	  	 c/o Highbridge Capital Management, LLC
 9 West 57th Street, 27th Floor
 New York, New York 10019
 Attention: Ari J. Storch
                   Adam J. Chill
 Facsimile: (212)
751-0755
 Telephone: (212) 287-4720
 E-mail: ari.storch@hcmny.com
 adam.chill@hcmny.com
 Residence: Cayman Islands
	  	2,100,000	  	251,396	  	326,816	  	 
						
	Omicron Master Trust	  	 c/o Omicron Capital L.P.
 650 Fifth Ave.,
24th Floor
 New York,
New York 10019
 Attention: Bruce Bernstein
 Facsimile: (212)
258-2315
 Telephone: (212) 258-2301
 Residence:
Bermuda
	  	2,100,000	  	251,396	  	326,816	  	Proskauer Rose LLP
1585 Broadway
New York, New York 10036-8299
Facsimile No.: (212) 969-2900
Telephone No.: (212) 969-3000
Attn: Adam J. Kansler, Esq.
						
	Cranshire Capital L.P.	  	 c/o Downsview Capital, Inc.
 The General
Partner
 666 Dundee Road, Suite 1901
 Northbrook, IL
60062
 Attention: Mitchell D. Kopin
 Facsimile: (847)
562-9031
 Telephone: (847) 562-9030
 E-mail: mkopin@cranshirecapital.com
 Residence: Illinois
	  	1,400,000	  	167,597	  	217,877	  	 

 EXHIBITS 
  

			
		
	Exhibit A	  	Form of Notes
		
	Exhibit B	  	Form of Warrants
		
	Exhibit C	  	Form of Registration Rights Agreement
		
	Exhibit D	  	Form of Amended and Restated Pledge and Security Agreement
		
	Exhibit E	  	Form of Irrevocable Transfer Agent Instructions
		
	Exhibit F	  	Form of Company Counsel Opinion
		
	Exhibit G	  	Form of Secretary’s Certificate
		
	Exhibit H	  	Form of Chief Executive Officer’s Certificate

  
 SCHEDULES

  

			
		
	Schedule 3(e)	  	Consents
		
	Schedule 3(p)	  	Transaction with Affiliates
		
	Schedule 3(q)	  	Capitalization
		
	Schedule 3(r)	  	Indebtedness and Other Contracts
		
	Schedule 3(s)	  	Litigation
		
	Schedule 3(v)	  	Title
		
	Schedule 3(w)	  	Intellectual Property
		
	Schedule 3(cc)	  	Ranking of Notes

 DISCLOSURE SCHEDULES 
  
 to the Securities Purchase Agreement (the “Agreement”) dated as of November 30, 2005 between Microvision, Inc. (the
“Company”) and the investors listed on the Schedule of Buyers thereto. 
  
 Introduction 
  
 The
representations and warranties in Section 3 of the Agreement are made and given subject to the disclosures in these Schedules. Unless otherwise defined herein, terms used in these Schedules have the meaning given to them in the Agreement.

  
 The Schedules are qualified in their entirety by reference to
specific provisions of the Agreement and are not intended to constitute, and shall not be construed as constituting, any representation or warranty of the Company except to the extent provided in the Agreement. 

 Schedule 3(e) 
  
 Consents 
  
 The Company has filed with the NASDAQ Stock Market a notification form for the listing of additional shares. 

 Schedule 3(p) 
  
 Transactions with Affiliates 
  

None. 

 Schedule 3(q) 
  
 Equity Capitalization. 
  
 (i) None. 
  
 (ii) See attached. 
  
 (iii) Outstanding Debt Securities 
  
 See Schedule 3(r). 
  
 (iv) Financing Statements Securing Obligations in Material Amounts 
  
 None, except under capital leases. 
  

(v) Securities Containing Registration Rights 
  
 The shares of Series A Convertible Preferred Stock issued in September 2004, the senior secured convertible notes issued as of March 11, 2005 (as
amended and restated in July 2005), the warrants issued in March 2005 and July 2005, and the shares and warrants issued in August 2005 and September 2005 all have registration rights. 
  
 (vi) Redemption Rights 
  
 The Company is required to redeem the Series A Convertible Preferred Stock for cash in certain circumstances, including in the event of a material breach
of the Company’s representations, warranties or covenants under the Securities Purchase Agreement dated as of September 9, 2004 by and between the Company and Satellite Strategic Finance Associates, LLC or a change in control. 

 
 (vii) Securities Containing Anti-dilution Adjustments 

 
 The shares of Series A Convertible Preferred Stock issued in September
2004, the senior secured convertible notes issued as of March 11, 2005 (as amended and restated in July 2005), the warrants issued in March 2005 and July 2005, and the warrants issued in August 2005 and September 2005 all have anti-dilution
adjustments. See also attached. 

 Microvision, Inc. 
 Schedule 3(q) 
 Equity Capitalization 
 At November 28, 2005 
  

			
	A. Shares Capitalization	  	 
		
	 	  	Shares

	 Preferred Stock
	  	 
	 Authorized
	  	25,000,000
	 Outstanding-Convertible Preferred Series A
	  	5,000
	 Retired-Convertible Preferred Series A
	  	5,000
	 	  	

	 Available
	  	24,990,000
	 	  	

	 Common Stock
	  	 
	 Authorized
	  	73,000,000
	 	  	

	 Issued and outstanding
	  	24,151,491
	 Reserved for warrants issued (A)
	  	1,456,299
	 Reserved for options issued (B)
	  	5,391,743
	 Conversion of Debt & Related Warrants:
	  	 
	 Common Stock (C)
	  	1,411,360
	 Warrants (C)
	  	1,212,330
	 Conversion of Series A Preferred & Related Warrants:
	  	 
	 Common Stock (C)
	  	740,741
	 Warrants (C)
	  	361,795
	 	  	

	 	  	34,725,759
	 	  	

	 Available
	  	38,274,241
	 	  	

  

	(A)	Balance includes 300,409 Warrants subject to anti-dilution rights 

  

	(B)	Balance excludes 3,063,734 authorized but ungranted option shares 

  

	(C)	Subject to anti-dilution rights 

 Schedule 3(r) 
  
 Indebtedness and Other Contracts 
  
 See attached. 

 Microvision, Inc. 
 Schedule 3(r) 
 Indebtedness & Other Contracts 
 At November 28, 2005 
  

				
	A. Debt	  	 	 
		
	 	  	Balance

	 Redeemable Preferred Stock
	  	$	5,000,000
	 	  	
	

	 Convertible Notes
	  	$	8,200,000
	 	  	
	

	 Tenant improvement loan on existing building & capital leases
	  	$	165,645
	 	  	
	

	 Contracted pass-thru tenant improvement costs to be amortized into new building rent
	  	$	2,578,076
	 	  	
	

		
	B. Lumera Corporation Common Stock Pledged	  	 	 
		
	 	  	Shares

	 Lumera Corp. common stock pledged as collateral
	  	 	1,750,000
	 	  	
	

 Schedule 3(s) 
  
 Absence of Litigation 
  
 On March 6, 2003 the Company received a letter from Feldman Weinstein, LLP, counsel to Crestview Capital Fund I, Crestview Capital Fund II and
Crestview Capital Offshore Fund, Inc., (the “Fund”), claiming that the Fund had been defrauded in the Microvision public offering by failure of Microvision to disclose “material adverse information.” No further correspondence has
been received by the Company with respect to this matter. 
  
 On
March 11, 2003 the Company received a letter from Fish & Richardson, P.C., counsel to Gryphon Master Fund, L.P. (“Gryphon”), stating that Gryphon had sustained financial losses in its investment in the common stock of the
Company, due to “securities laws improprieties” by the Company’s failure to disclose certain financial information in its Prospectus Supplement. No further correspondence has been received by the Company with respect to this matter.

  
 On September 14, 2004, Adil Lahrichi, a former employee
of Lumera Corporation (“Lumera”), filed a complaint against Microvision, Inc., Lumera and Tom Mino, alleging discrimination and negligence, all stemming from Mr. Lahrichi’s termination from Lumera in April 2004. The defendants
answered Mr. Lahrichi’s complaint by denying the allegations. The discovery cut-off has passed and Defendants filed motions for summary judgment on November 8, 2005. A trial date of February 6, 2006 has been set. The Company
believes it has meritorious defenses to Mr. Lahrichi’s claims against it. 

 Schedule 3(v) 
  
 Title 
  
 1,750,000 shares of Lumera Corporation’s common stock have been pledged to secure the Company’s obligations under the convertible notes issued
in March 2005. 

 Schedule 3(w) 
  
 Intellectual Property Rights 
  

The following patents will expire before November 30, 2008: (1) 4,902,083, (2) 4,934,773, (3) 5,003,300, (4) 5,048,077 and
(5) 5,023,905. 

 Schedule 3(cc) 
  
 Ranking of Notes 
  
 None.Indenture, dated as of November 1,2005

 Exhibit 4.1 
  

EXECUTION COPY 
  
 INDENTURE 
  
 dated as of November 1, 2005 
  
 by and between 
  
 ACCREDITED
MORTGAGE LOAN TRUST 2005-4, 
  
 as Issuer 
  
 and 
  
 DEUTSCHE BANK NATIONAL TRUST COMPANY 
  

as Indenture Trustee 

 TABLE OF CONTENTS 
  
 ARTICLE I 
  
 DEFINITIONS 
  

					
	Section 1.01.	 	General Definitions	  	2
			
	 	 	ARTICLE II	  	 
			
	 	 	THE NOTES	  	 
			
	Section 2.01.	 	Forms Generally	  	2
	Section 2.02.	 	Form of Certificate of Authentication	  	2
	Section 2.03.	 	General Provisions with Respect to Principal and Interest Payment	  	2
	Section 2.04.	 	Denominations	  	3
	Section 2.05.	 	Execution, Authentication, Delivery and Dating	  	3
	Section 2.06.	 	Registration, Registration of Transfer and Exchange	  	4
	Section 2.07.	 	Mutilated, Destroyed, Lost or Stolen Notes	  	5
	Section 2.08.	 	Payments of Principal and Interest	  	6
	Section 2.09.	 	Persons Deemed Owner	  	7
	Section 2.10.	 	Cancellation	  	8
	Section 2.11.	 	Authentication and Delivery of Notes	  	8
	Section 2.12.	 	Book-Entry Note	  	9
	Section 2.13.	 	Termination of Book Entry System	  	10
			
	 	 	ARTICLE III	  	 
			
	 	 	COVENANTS, REPRESENTATIONS AND WARRANTIES	  	 
			
	Section 3.01.	 	Payment of Notes	  	10
	Section 3.02.	 	Maintenance of Office or Agency	  	11
	Section 3.03.	 	Money for Note Payments to Be Held in Trust	  	11
	Section 3.04.	 	Existence of Issuer	  	13
	Section 3.05.	 	Protection of Trust Estate	  	13
	Section 3.06.	 	Opinions as to the Trust Estate	  	14
	Section 3.07.	 	Performance of Obligations	  	14
	Section 3.08.	 	Investment Company Act	  	15
	Section 3.09.	 	Negative Covenants	  	15
	Section 3.10.	 	Annual Statement as to Compliance	  	16
	Section 3.11.	 	Restricted Payments	  	16
	Section 3.12.	 	Treatment of Notes as Debt for Tax Purposes	  	16
	Section 3.13.	 	Notice of Events of Default	  	16
	Section 3.14.	 	Further Instruments and Acts	  	17
	Section 3.15.	 	Representation and Warranties of the Issuer.	  	17

  

 i 

					
	 	 	ARTICLE IV	  	 
			
	 	 	SATISFACTION AND DISCHARGE	  	 
			
	 Section 4.01.
	 	Satisfaction and Discharge of Indenture	  	18
	 Section 4.02.
	 	Application of Trust Money	  	19
			
	 	 	ARTICLE V	  	 
			
	 	 	DEFAULTS AND REMEDIES	  	 
			
	 Section 5.01.
	 	Event of Default	  	19
	 Section 5.02.
	 	Acceleration of Maturity; Rescission and Annulment	  	21
	 Section 5.03.
	 	Collection of Indebtedness and Suits for Enforcement by Indenture Trustee	  	21
	 Section 5.04.
	 	Remedies	  	22
	 Section 5.05.
	 	Indenture Trustee May File Proofs of Claim	  	22
	 Section 5.06.
	 	Indenture Trustee May Enforce Claims Without Possession of Notes	  	23
	 Section 5.07.
	 	Application of Money Collected	  	23
	 Section 5.08.
	 	Limitation on Suits	  	25
	 Section 5.09.
	 	Unconditional Rights of Noteholders to Receive Principal and Interest	  	26
	 Section 5.10.
	 	Restoration of Rights and Remedies	  	26
	 Section 5.11.
	 	Rights and Remedies Cumulative	  	26
	 Section 5.12.
	 	Delay or Omission Not Waiver	  	26
	 Section 5.13.
	 	Control by Noteholders	  	26
	 Section 5.14.
	 	Waiver of Past Defaults	  	27
	 Section 5.15.
	 	Undertaking for Costs	  	27
	 Section 5.16.
	 	Waiver of Stay or Extension Laws	  	27
	 Section 5.17.
	 	Sale of Trust Estate	  	28
	 Section 5.18.
	 	Action on Notes	  	29
	 Section 5.19.
	 	No Recourse	  	29
	 Section 5.20.
	 	Application of the Trust Indenture Act	  	29
			
	 	 	ARTICLE VI	  	 
			
	 	 	THE INDENTURE TRUSTEE	  	 
			
	 Section 6.01.
	 	Duties of Indenture Trustee	  	29
	 Section 6.02.
	 	Notice of Default	  	31
	 Section 6.03.
	 	Rights of Indenture Trustee	  	32
	 Section 6.04.
	 	Not Responsible for Recitals, Issuance of Notes or Mortgage Loans	  	33
	 Section 6.05.
	 	May Hold Notes	  	33
	 Section 6.06.
	 	Money Held in Trust	  	33
	 Section 6.07.
	 	Eligibility, Disqualification	  	34
	 Section 6.08.
	 	Indenture Trustee’s Capital and Surplus	  	34
	 Section 6.09.
	 	Resignation and Removal; Appointment of Successor	  	34
	 Section 6.10.
	 	Acceptance of Appointment by Successor Indenture Trustee	  	35

  

 ii 

					
	 Section 6.11.
	 	Merger, Conversion, Consolidation or Succession to Business of Indenture Trustee	  	36
	 Section 6.12.
	 	Preferential Collection of Claims Against Issuer	  	36
	 Section 6.13.
	 	Co-Indenture Trustees and Separate Indenture Trustees	  	36
	 Section 6.14.
	 	Authenticating Agents	  	37
	 Section 6.15.
	 	Review of Mortgage Files	  	38
	 Section 6.16.
	 	Indenture Trustee Fees and Expenses Indemnification	  	39
			
	 	 	ARTICLE VII	  	 
			
	 	 	NOTEHOLDERS’ LISTS AND REPORTS	  	 
			
	 Section 7.01.
	 	Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders	  	40
	 Section 7.02.
	 	Preservation of Information: Communications to Noteholders	  	40
	 Section 7.03.
	 	Reports by Indenture Trustee	  	40
	 Section 7.04.
	 	Reports by Issuer	  	41
			
	 	 	ARTICLE VIII	  	 
			
	 	 	ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES	  	 
			
	 Section 8.01.
	 	Accounts; Investment; Collection of Moneys	  	41
	 Section 8.02.
	 	Allocation of Realized Losses.	  	48
	 Section 8.03.
	 	[Reserved].	  	48
	 Section 8.04.
	 	General Provisions Regarding the Payment Account and Mortgage Loans	  	48
	 Section 8.05.
	 	Releases of Deleted Mortgage Loans	  	49
	 Section 8.06.
	 	Reports by Indenture Trustee to Noteholders; Access to Certain Information	  	50
	 Section 8.07.
	 	Release of Trust Estate	  	50
	 Section 8.08.
	 	Amendment to Sale and Servicing Agreement	  	50
	 Section 8.09.
	 	Delivery of the Mortgage Files Pursuant to Sale and Servicing Agreement	  	51
	 Section 8.10.
	 	Servicer as Agent	  	51
	 Section 8.11.
	 	Termination of Servicer	  	51
	 Section 8.12.
	 	Opinion of Counsel	  	51
	 Section 8.13.
	 	Appointment of Collateral Agents	  	52
			
	 	 	ARTICLE IX	  	 
			
	 	 	SUPPLEMENTAL INDENTURES	  	 
			
	 Section 9.01.
	 	Supplemental Indentures Without Consent of Noteholders	  	52
	 Section 9.02.
	 	Supplemental Indentures with Consent of Noteholders	  	53
	 Section 9.03.
	 	Execution of Supplemental Indentures	  	54
	 Section 9.04.
	 	Effect of Supplemental Indentures	  	54
	 Section 9.05.
	 	Conformity With Trust Indenture Act	  	54
	 Section 9.06.
	 	Reference in Notes to Supplemental Indentures	  	55

  

 iii 

					
	Section 9.07.	 	Amendments to Governing Documents	  	55
			
	 	 	ARTICLE X	  	 
			
	 	 	REDEMPTION OF NOTES	  	 
			
	Section 10.01.	 	Redemption of Notes	  	55
	Section 10.02.	 	Form of Redemption Notice	  	56
	Section 10.03.	 	Notes Payable on Optional Redemption	  	56
			
	 	 	ARTICLE XI	  	 
			
	 	 	MISCELLANEOUS	  	 
			
	Section 11.01.	 	Compliance Certificates and Opinions	  	57
	Section 11.02.	 	Form of Documents Delivered to Indenture Trustee	  	58
	Section 11.03.	 	Acts of Noteholders	  	59
	Section 11.04.	 	Notices, etc., to Indenture Trustee and Issuer	  	60
	Section 11.05.	 	Notices and Reports to Noteholders; Waiver of Notices	  	61
	Section 11.06.	 	Rules by Indenture Trustee	  	61
	Section 11.07.	 	Conflict with Trust Indenture Act	  	62
	Section 11.08.	 	Effect of Headings and Table of Contents	  	62
	Section 11.09.	 	Successors and Assigns	  	62
	Section 11.10.	 	Separability	  	62
	Section 11.11.	 	Benefits of Indenture	  	62
	Section 11.12.	 	Legal Holidays	  	62
	Section 11.13.	 	Governing Law	  	62
	Section 11.14.	 	Counterparts	  	62
	Section 11.15.	 	Recording of Indenture	  	62
	Section 11.16.	 	Issuer Obligation	  	63
	Section 11.17.	 	No Petition	  	63
	Section 11.18.	 	Inspection	  	64
	Section 11.19.	 	Usury	  	64
	Section 11.20.	 	Rights of Swap Provider	  	64

  
 APPENDICES, SCHEDULES
AND EXHIBITS 
  

			
	Appendix I	  	Defined Terms
		
	Schedule 1	  	Mortgage Loan Schedule
		
	Schedule 2	  	Swap Notional Balances
		
	Exhibit A	  	Form of Note

  

 iv 

 This INDENTURE, dated as of November 1, 2005 (as amended or supplemented from time to time as
permitted hereby, this “Indenture”), is between ACCREDITED MORTGAGE LOAN TRUST 2005-4, a Delaware statutory trust (together with its permitted successors and assigns, the “Issuer”), and DEUTSCHE BANK NATIONAL TRUST
COMPANY, a national banking association, as Indenture Trustee (together with its permitted successors in the trusts hereunder, the “Indenture Trustee”). 
  
 Preliminary Statement 
  
 The Issuer has duly authorized the execution and delivery of this Indenture to provide for its Asset-Backed Notes, Series 2005-4 (the
“Notes”), issuable as provided in this Indenture. All covenants and agreements made by the Issuer herein are for the benefit and security of the Holders of the Notes and the Swap Provider. The Issuer is entering into this Indenture,
and the Indenture Trustee is accepting the trusts created hereby, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged. 
  
 All things necessary to make this Indenture a valid agreement of the Issuer in accordance with its terms have been done.

  
 Granting Clause 
  
 Subject to the terms of this Indenture, the Issuer hereby Grants to the
Indenture Trustee at the Closing Date, as Indenture Trustee for the benefit of the Noteholders and the Swap Provider, all of the Trust’s right, title and interest in and to: (i) the Mortgage Loans; (ii) all right, title and interest
of the Issuer in the Sale and Servicing Agreement with respect to the Mortgage Loans (including the Trust’s right to cause the Sponsor to repurchase Mortgage Loans from the Issuer under certain circumstances described therein); (iii) all
funds on deposit from time to time in (a) the Collection Account and (b) the Payment Account; (iv) the Swap Agreement; (v) all other property of the Issuer from time to time; and (vi) all present and future claims, demands,
causes of action and choses in action in respect of any or all of the foregoing and all payments on or under and all proceeds of every kind and nature whatsoever in respect of any or all of the foregoing, including all proceeds of the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash proceeds, accounts, accounts receivable, notes, drafts, acceptances, chattel paper, checks, deposit accounts, insurance proceeds, condemnation awards, rights to payment
of any and every kind and other forms of obligations and receivables, instruments and other property which at any time constitute all or part of or are included in the proceeds of any of the foregoing (collectively, the
“Collateral”). 
  
 The foregoing Grant is made in
trust to secure the payment of principal of and interest on, and any other amounts owing in respect of, the Notes, equally and ratably without prejudice, priority or distinction, and to secure compliance with the provisions of this Indenture, all as
provided in this Indenture. 
  
 The Indenture Trustee, as
Indenture Trustee on behalf of the holders of the Notes and the Swap Provider, acknowledges the foregoing Grant, accepts the trusts hereunder in good faith and without notice of any adverse claim or liens and agrees to perform its duties required in
this Indenture as specifically set forth herein to the end that the interests of the holders of the related 
  

 1 

 Notes may be adequately and effectively protected. The Indenture Trustee agrees and acknowledges that each item of
Collateral that is physically delivered to the Indenture Trustee will be held by the Indenture Trustee in California. 
  
 ARTICLE I 
  
 DEFINITIONS 
  
 Section 1.01. General Definitions. Except as otherwise specified or as the context may otherwise require, the terms defined in Appendix I have the respective meanings set forth in such Appendix I for all purposes of this
Indenture, and the definitions of such terms are applicable to the singular as well as to the plural forms of such terms and to the masculine as well as to the feminine genders of such terms. Whenever reference is made herein to an Event of Default
or a Default known to the Indenture Trustee or of which the Indenture Trustee has notice or knowledge, such reference shall be construed to refer only to an Event of Default or Default of which the Indenture Trustee is deemed to have notice or
knowledge pursuant to Section 6.01(d). All other terms used herein that are defined in the Trust Indenture Act (as hereinafter defined), either directly or by reference therein, have the meanings assigned to them therein. 
  
 ARTICLE II 
  
 THE NOTES 
  
 Section 2.01. Forms Generally. The Notes shall be substantially
in the form set forth as Exhibit A attached hereto. Each Note may have such letters, numbers or other marks of indemnification and such legends or endorsements placed thereon as may be required to comply with the rules of any securities
exchange on which the Notes may be listed, or as may, consistently herewith, be determined by the Issuer, as evidenced by its execution thereof. Any portion of the text of any Note may be set forth on the reverse thereof with an appropriate
reference on the face of the Note. 
  
 The Definitive Notes may be
produced in any manner determined by the Issuer, as evidenced by its execution thereof. 
  
 Section 2.02. Form of Certificate of Authentication. The form of the Authenticating Agent’s certificate of authentication is as set forth on the signature page of the form of the Note attached hereto
as Exhibit A. 
  
 Section 2.03. General Provisions
with Respect to Principal and Interest Payment. The Notes shall be designated generally as the “Accredited Mortgage Loan Trust 2005-4, Asset-Backed Notes, Series 2005-4”. 
  
 The Notes shall be issued in the form specified in Section 2.01 hereof. The Notes shall be issued in fourteen Classes,
the Class A-1 Notes, Class A-2A Notes, Class A-2B Notes, Class A-2C Notes, Class A-2D Notes, Class M-1 Notes, Class M-2 Notes, Class M-3 Notes, Class M-4 Notes, Class M-5 Notes, Class M-6 Notes, Class M-7 Notes, Class M-8
Notes and Class M-9 
  

 2 

 Notes. The aggregate Original Note Principal Balance of Notes that may be authenticated and delivered under the Indenture
is limited to $354,752,000 of Class A-1 Notes, $258,711,000 of Class A-2A Notes, $140,874,000 of Class A-2B Notes, $128,843,000 of Class A-2C Notes, $106,374,000 of Class A-2D Notes, $40,634,000 of Class M-1 Notes,
$37,646,000 of Class M-2 Notes, $23,305,000 of Class M-3 Notes, $20,317,000 of Class M-4 Notes, $19,719,000 of Class M-5 Notes, $17,329,000 of Class M-6 Notes, $13,744,000 of Class M-7 Notes, $11,951,000 of Class M-8 Notes and $11,951,000 of Class
M-9 Notes, except for the Notes authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu of, other Notes pursuant to Sections 2.06, 2.07, or 9.06 of this Indenture. 
  
 Subject to the provisions of Sections 3.01, 5.07, 5.09 and 8.01 of this
Indenture, the principal of each Class of Notes shall be payable in installments ending no later than the related Final Stated Maturity Date, unless the unpaid principal of such Notes become due and payable at an earlier date by declaration of
acceleration or call for redemption or otherwise. 
  
 All payments
made with respect to any Note shall be applied first to the interest then due and payable on such Note and then to the principal thereof. All computations of interest accrued on any LIBOR Note shall be made on the basis of a year of 360 days and the
actual number of days elapsed in the related Interest Accrual Period. 
  
 Notwithstanding any of the foregoing provisions with respect to payments of principal of and interest on the Notes, if the Notes have become or been declared due and payable following an Event of Default and such acceleration of maturity
and its consequences have not been rescinded and annulled, then payments of principal of and interest on the Notes shall be made in accordance with Section 5.07 hereof. 
  
 Section 2.04. Denominations. The Notes shall be issuable only as registered Notes in the denominations equal to
the Authorized Denominations. 
  
 Section 2.05. Execution,
Authentication, Delivery and Dating. The Notes shall be executed on behalf of the Issuer by an Authorized Officer of the Owner Trustee, acting at the direction of the Certificateholders. The signature of such Authorized Officer of the Owner
Trustee on the Notes may be manual or by facsimile. 
  
 Notes
bearing the manual or facsimile signature of an individual who was at any time an Authorized Officer of the Owner Trustee shall bind the Issuer, notwithstanding that such individual has ceased to be an Authorized Officer of the Owner Trustee prior
to the authentication and delivery of such Notes or was not an Authorized Officer of the Owner Trustee at the date of such Notes. 
  
 At any time and from time to time after the execution and delivery of this Indenture, the Issuer may deliver Notes executed on behalf of the Issuer to the
Authenticating Agent for authentication, and the Authenticating Agent shall authenticate and deliver such Notes as provided in this Indenture and not otherwise. 
  

Each Note authenticated on the Closing Date shall be dated the Closing Date. All other Notes that are authenticated after the Closing Date for any
other purpose hereunder shall be dated the date of their authentication. 
  

 3 

 No Note shall be entitled to any benefit under this Indenture or be valid or obligatory for any purpose,
unless there appears on such Note a certificate of authentication substantially in the form provided for in Section 2.02 hereof, executed by the Authenticating Agent by the manual signature of one of its Authorized Officers or employees, and
such certificate of authentication upon any Note shall be conclusive evidence, and the only evidence, that such Note has been duly authenticated and delivered hereunder. 
  
 Section 2.06. Registration, Registration of Transfer and Exchange. The Issuer shall cause to be kept a register
(the “Note Register”) in which, subject to such reasonable regulations as it may prescribe, the Issuer shall provide for the registration of Notes and the registration of transfers of Notes. The Indenture Trustee is hereby initially
appointed “Note Registrar” for the purpose of registering Notes and transfers of Notes as herein provided. The Indenture Trustee shall remain the Note Registrar throughout the term hereof. Upon any resignation of the Indenture
Trustee, the Servicer, on behalf of the Issuer, shall promptly appoint a successor or, in the absence of such appointment, the Servicer, on behalf of the Issuer, shall assume the duties of Note Registrar. 
  
 If a Person other than the Indenture Trustee is appointed by the Issuer as
Note Registrar, the Issuer will give the Indenture Trustee prompt written notice of the appointment of such Note Registrar and of the location, and any change in the location, of the Note Register, and the Indenture Trustee shall have the right to
inspect the Note Register at all reasonable times and to obtain copies thereof, and the Indenture Trustee shall have the right to rely upon a certificate executed on behalf of the Note Registrar by an Authorized Officer thereof as to the names and
addresses of the Holders of the Notes and the principal amounts and number of such Notes. 
  
 Upon surrender for registration of transfer of any Note at the office or agency of the Issuer to be maintained as provided in Section 3.02 hereof, the Owner Trustee on behalf of the Issuer, acting at the
direction of the Certificateholders, shall execute, and the Authenticating Agent shall authenticate and deliver, in the name of the designated transferee or transferees; one or more new Notes of any authorized denominations and of a like aggregate
initial Class Note Balance. 
  
 At the option of the Holder, Notes
may be exchanged for other Notes of any authorized denominations, and of a like aggregate Class Note Balance, upon surrender of the Notes to be exchanged at such office or agency. Whenever any Notes are so surrendered for exchange, the Owner Trustee
shall execute, and the Authenticating Agent shall authenticate and deliver, the Notes that the Noteholder making the exchange is entitled to receive. 
  
 All Notes issued upon any registration of transfer or exchange of Notes shall be the valid obligations of the 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. 
  
 Every Note presented or surrendered for registration of transfer or exchange shall be duly endorsed, or be accompanied by a written instrument of transfer
in the form included in Exhibit A attached hereto, duly executed by the Holder thereof or its attorney duly authorized in writing, with such signature guaranteed by an “eligible guarantor institution” meeting the requirements
of the Note Registrar, which requirements include membership or participation in 
  

 4 

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

 5 

 destroyed, lost or stolen Note shall be at any time enforceable by anyone, and shall be entitled to all the benefits of
this Indenture equally and proportionately with any and all other Notes duly issued hereunder. 
  
 The provisions of this Section 2.07 are exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement or payment of mutilated, destroyed, lost or stolen Notes.

  
 Section 2.08. Payments of Principal and Interest.
(a) Payments on Notes issued as Book-Entry Notes will be made by or on behalf of the Indenture Trustee to the Clearing Agency or its nominee. Any installment of interest or principal payable on any Definitive Notes that is punctually paid or
duly provided for by the Issuer on the applicable Payment Date shall be paid to the Person in whose name such Note (or one or more Predecessor Notes) is registered at the close of business on the Record Date for such Class of Notes and such Payment
Date by either (i) wire transfer of immediately available funds to the account of a Noteholder, if such Noteholder has provided the Indenture Trustee with wiring instructions in writing by five (5) Business Days prior to the related Record
Date or has provided the Indenture Trustee with such instructions for any previous Payment Date or (ii) check mailed to such Person’s address as it appears in the Note Register on such Record Date, except for the final installment of
principal payable with respect to such Note, which shall be payable as provided in subsection (b) of this Section 2.08. A fee may be charged by the Indenture Trustee to a Holder of Definitive Notes for any payment made by wire transfer.
Any installment of interest or principal not punctually paid or duly provided for shall be payable as soon as funds are available to the Indenture Trustee for payment thereof, or if Section 5.07 applies, pursuant to Section 5.07.

  
 Payments on Certificates will be made by or on behalf of the
Indenture Trustee to or at the direction of the Person in whose name such Certificate is registered by either (i) wire transfer of immediately available funds to the account directed by a Certificateholder, if such Certificateholder (A) is
Accredited Home Lenders, Inc. or its affiliate and (B) has provided the Indenture Trustee with wiring instructions in writing by five (5) Business Days prior to the related payment Date or has provided the Indenture Trustee with such
instructions for any previous Payment Date or (ii) check mailed to such Person’s address as it appears in the Certificate Register on such Record Date. A fee may be charged by the Indenture Trustee to a Certificateholder for any payment
made by wire transfer. The Indenture Trustee shall be entitled to rely on information provided by the Owner Trustee as Certificate Registrar as to all matters related to the Certificate Registrar and the Certificates. 
  
 (b) All reductions in the Class Note Balance of a Note (or one or more
Predecessor Notes) effected by payments of installments of principal made on any Payment Date shall be binding upon all Holders of such Note and of any Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof,
whether or not such payment is noted on such Note. The final installment of principal of each Note shall be payable only upon presentation and surrender thereof on or after the Payment Date therefor at the designated office of the Indenture Trustee
located within the United States of America pursuant to Section 3.02. 
  
 Whenever the Indenture Trustee expects that the entire unpaid Class Note Balance of any Note will become due and payable on the next Payment Date, other than pursuant to a 
  

 6 

 redemption pursuant to Article X, it shall, no later than two (2) Business Days prior to such Payment Date, mail to
each Person in whose name a Note to be so retired is registered at the close of business on such otherwise applicable Record Date a notice to the effect that: 
  

(i) the Indenture Trustee expects that funds sufficient to pay such final installment will be available in the Payment Account on such
Payment Date; and 
  
 (ii) if such funds are
available, (a) such final installment will be payable on such Payment Date, but only upon presentation and surrender of such Note at the office or agency of the Note Registrar maintained for such purpose pursuant to Section 3.02 (the
address of which shall be set forth in such notice) and (b) no interest shall accrue on such Note after such Payment Date. 
  
 Notices in connection with redemptions of Notes shall be mailed to Noteholders in accordance with Section 10.02 hereof. 
  
 (c) Subject to the foregoing provisions of this Section 2.08, each Note
delivered under this Indenture upon registration of transfer of or in exchange for or in lieu of any other Note shall carry the rights to unpaid principal and interest that were carried by such other Note. Any checks mailed pursuant to paragraph
(a) of this Section 2.08 and returned undelivered shall be held in accordance with Section 3.03 hereof. 
  
 (d) The Indenture Trustee’s Remittance Report, shall be prepared by the Indenture Trustee based on the loan level data provided in the Servicer
Remittance Report delivered to the Indenture Trustee pursuant to the Sale and Servicing Agreement. The Indenture Trustee shall not have any responsibility to recalculate, verify or recompute information contained in any tape, electronic data file or
disk or Servicer Remittance Report delivered to the Indenture Trustee pursuant to the Sale and Servicing Agreement except to the extent necessary to satisfy all obligations under this Section 2.08(d). 
  
 Within thirty (30) days after the end of each calendar year, the
Indenture Trustee will be required to furnish to each Person who at any time during the calendar year was a Noteholder, if requested in writing by such person, a statement containing the information set forth in subclauses (a), (b) and
(c) in the definition of “Indenture Trustee’s Remittance Report,” aggregated for such calendar year. Such obligation will be deemed to have been satisfied to the extent that substantially comparable information is provided
pursuant to any requirements of the Code as are from time to time in force. 
  
 From time to time (but no more than once per calendar month), upon the written request of the Depositor, the Sponsor, the Servicer, the Indenture Trustee shall report to the Depositor, the Sponsor and the Servicer the
amount then held in each Account (including with respect to the Collection Account, investment earnings accrued) held by the Indenture Trustee and the identity of the investments included therein. 
  
 Section 2.09. Persons Deemed Owner. Prior to due presentment for
registration of transfer of any Note, any agent on behalf of the Issuer including but not limited to the Indenture Trustee, may treat the Person in whose name any Note is registered as the owner of such Note (a) on the applicable Record Date
for the purpose of receiving payments of the principal of and 
  

 7 

 interest on such Note and (b) on any other date for all other purposes whatsoever, and none of the Issuer, the
Indenture Trustee or any other agent of the Issuer, shall be affected by notice to the contrary. 
  
 Section 2.10. Cancellation. All Notes surrendered for payment, registration of transfer, exchange or redemption shall, if surrendered to any
Person other than the Note Registrar, be delivered to the Note Registrar and shall be promptly canceled by it. The Owner Trustee, on behalf of the Issuer, shall deliver to the Note Registrar for cancellation any Note previously authenticated and
delivered hereunder which the Owner Trustee, on behalf of the Issuer may have acquired in any manner whatsoever, and all Notes so delivered shall be promptly canceled by the Note Registrar. No Notes shall be authenticated in lieu of or in exchange
for any Notes canceled as provided in this Section 2.10, except as expressly permitted by this Indenture. All canceled Notes held by the Note Registrar shall be held by the Note Registrar in accordance with its standard retention policy, unless
the Owner Trustee, on behalf of the Issuer shall direct within 5 Business Days of receipt of the cancelled Note by a Trust Order that they be destroyed or returned to it. 
  
 Section 2.11. Authentication and Delivery of Notes. The Notes shall be executed by an Authorized Officer of the
Owner Trustee, on behalf of the Trust; and delivered to the Authenticating Agent for authentication, and thereupon the same shall be authenticated and delivered by the Authenticating Agent, upon a Trust Request and upon receipt by the Authenticating
Agent of all of the following: 
  
 (a) A Trust Order authorizing
the execution, authentication and delivery of the Notes and specifying the Class Note Balance and the Percentage Interest of such Notes to be authenticated and delivered. 
  
 (b) If required, one or more Opinions of Counsel (which opinion shall not be at the expense of the Indenture Trustee or the
Trust) addressed to the Authenticating Agent or upon which the Authenticating Agent is expressly permitted to rely, complying with the requirements of Section 11.01, reasonably satisfactory in form and substance to the Authenticating Agent.

  
 In rendering the opinions set forth above, such counsel may
rely upon Officer’s Certificates of the Issuer, the Owner Trustee, the Depositor, the Sponsor, the Servicer and the Indenture Trustee, without independent confirmation or verification with respect to factual matters relevant to such opinions.
In rendering the opinions set forth above, such counsel need express no opinion as to (a) the existence of, or the priority of the security interest created by the Indenture against, any liens or other interests that arise by operation of law
and that do not require any filing or similar action in order to take priority over a perfected security interest or (b) the priority of the security interest created by this Indenture with respect to any claim or lien in favor of tile United
States or any agency or instrumentality thereof (including federal tax liens and liens arising under Title IV of ERISA). 
  

 8 

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

 
 (e) An executed counterpart of the Swap Agreement. 
  
 (f) An executed counterpart of the Trust Agreement. 
  
 (g) A copy of a letter from each of the Rating Agencies that it has assigned
the ratings to each Class of the Notes as set forth in the Prospectus Supplement. 
  
 (h) Evidence of the establishment of the Accounts. 
  
 Section 2.12. Book-Entry Note. The Notes will be issued initially as one or more certificates in the name of Cede & Co., as nominee for the Clearing Agency maintaining book-entry records with
respect to ownership and transfer of such Notes, and registration of the Notes may not be transferred by the Note Registrar except upon the termination of the book-entry system as described in Section 2.13. In such case, the Note Registrar
shall deal with the Clearing Agency as representative of the Beneficial Owners of such Notes for purposes of exercising the rights of Noteholders hereunder. Each payment of principal of and interest on a Book-Entry Note shall be paid to the Clearing
Agency, which shall credit the amount of such payments to the accounts of its Clearing Agency Participants in accordance with its normal procedures. Each Clearing Agency Participant shall be responsible for disbursing such payments to the Beneficial
Owners of the Book-Entry Notes that it represents and to each indirect participating brokerage firm (a “brokerage firm” or “indirect participating firm”) for which it acts as agent. Each 
  

 9 

 brokerage firm shall be responsible for disbursing funds to the Beneficial Owners of the Book-Entry Notes that it
represents. All such credits and disbursements are to be made by the Clearing Agency and the Clearing Agency Participants in accordance with the provisions of the Notes. None of the Indenture Trustee, the Note Registrar, if any, or the Issuer shall
have any responsibility therefor except as otherwise provided by applicable law. Requests and directions from, and votes of, such representatives shall not be deemed to be inconsistent if they are made with respect to different Beneficial Owners.

  
 Section 2.13. Termination of Book Entry System.
(a) The book-entry system through the Clearing Agency with respect to the Book-Entry Notes may be terminated upon the happening of any of the following: 
  

(i) The Clearing Agency advises the Indenture Trustee that the Clearing Agency is no longer willing or able to discharge properly its
responsibilities as nominee and depository with respect to the Notes and a qualified successor Clearing Agency satisfactory to the Servicer is not located, on behalf of the Trust; or 
  
 (ii) After the occurrence of an Event of Default (at which time the Indenture Trustee shall promptly notify
the Clearing Agency of such Event of Default and instruct the Clearing Agency to forward such notice to the Beneficial Owners), the Beneficial Owners representing in the aggregate more than 50% of the Class Note Balance of the Book-Entry Notes
advise the Indenture Trustee in writing, through the related Clearing Agency Participants and the Clearing Agency, that the continuation of a book-entry system through the Clearing Agency to the exclusion of any Definitive Notes being issued to any
person other than the Clearing Agency or its nominee is no longer in the best interests of the Beneficial Owners. 
  
 (b) Upon the occurrence of any event described in subsection (a) of this Section 2.13, the Indenture Trustee shall instruct the Clearing Agency
to notify all Beneficial Owners, of the occurrence of such event and of the availability of Definitive Notes to Beneficial Owners requesting the same, in an aggregate outstanding Class Note Balance representing the interest of each, making such
adjustments and allowances as it may find necessary or appropriate as to accrued interest and previous calls for redemption. Definitive Notes shall be issued only upon surrender to the Indenture Trustee of the global Note by the Clearing Agency,
accompanied by registration instructions for the Definitive Notes. Neither the Issuer nor the Indenture Trustee shall be liable for any delay in delivery of such instructions and may conclusively rely on, and shall be protected in relying on, such
instructions. Upon issuance of the Definitive Notes, all references herein to obligations imposed upon or to be performed by the Clearing Agency shall cease to be applicable and the provisions relating to Definitive Notes shall be applicable.

  
 ARTICLE III 
  
 COVENANTS, REPRESENTATIONS AND WARRANTIES 
  
 Section 3.01. Payment of Notes. The Issuer will pay or cause to
be duly and punctually paid the principal of, and interest on, the Notes in accordance with the terms of the 
  

 10 

 Notes and this Indenture. The Notes shall be non-recourse obligations of the Issuer and shall be limited in right of
payment to amounts available from the Trust Estate as provided in this Indenture and the Issuer shall not otherwise be liable for payments on the Notes. No person shall be personally liable for any amounts payable under the Notes. If any other
provision of this Indenture conflicts or is deemed to conflict with the provisions of this Section 3.01, the provisions of this Section 3.01 shall control. 
  
 Section 3.02. Maintenance of Office or Agency. The Indenture Trustee will always maintain an office at a
location in the United States of America where Notes may be surrendered for registration of transfer or exchange, which as of the Closing Date shall be located at c/o DB Services Tennessee, 648 Grassmere Park Road, Nashville, Tennessee 37211-3658,
Attention: Transfer Unit. Notices and demands to or upon the Issuer in respect of the Notes and this Indenture may be delivered at the Corporate Trust Office of the Indenture Trustee. 
  
 The Owner Trustee, at the direction of the Certificateholders, on behalf of the Issuer may also from time to time, at the
expense of the Certificateholders, designate one or more other offices or agencies within the United States of America where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations;
provided, however, any designation of an office or agency for payment of Notes shall be subject to Section 3.03 hereof. The Owner Trustee, at the direction of the Certificateholders, on behalf of the Issuer will give prompt written notice to
the Indenture Trustee of any such designation or rescission and of any change in the location of any such other office or agency. 
  
 Section 3.03. Money for Note Payments to Be Held in Trust. All payments of amounts due and payable with respect to any Notes that are to be
made from amounts withdrawn from the Payment Account pursuant to Sections 5.07 or 8.01 hereof shall be made on behalf of the Issuer by the Indenture Trustee, and no amounts so withdrawn from the Payment Account for payments on the Notes shall be
paid over to the Issuer under any circumstances except as provided in this Section 3.03 or in Sections 5.07 or 8.01 hereof. 
  
 With respect to Definitive Notes, if the Issuer shall have a Note Registrar that is not also the Indenture Trustee, such Note Registrar shall furnish, no
later than the fifth (5th) calendar day after each Record Date, a list, in such form as such Indenture Trustee may reasonably require, of the names and addresses of the Holders of Notes and of the number of Individual Notes held by each such
Holder. 
  
 Whenever the Issuer shall have a Paying Agent other
than the Indenture Trustee, the Servicer, on behalf of the Issuer, will, on or before the Business Day next preceding each Payment Date, direct the Indenture Trustee to deposit with such Paying Agent an aggregate sum sufficient to pay the amounts
then becoming due (to the extent funds are then available for such purpose in the Payment Account), such sum to be held in trust for the benefit of the Persons entitled thereto. Any moneys deposited with a Paying Agent in excess of an amount
sufficient to pay the amounts then becoming due on the Notes with respect to which such deposit was made shall, upon Trust Order, be paid over by such Paying Agent to the Indenture Trustee for application in accordance with Article VIII hereof.

  

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 Any Paying Agent, other than the Indenture Trustee, may be appointed by Trust Order and at the expense of
the Issuer. The Issuer shall not appoint any Paying Agent (other than the Indenture Trustee) that is not, at the time of such appointment, a depository institution or trust company whose obligations would be Permitted Investments pursuant to clause
(b) of the definition of the term “Permitted Investments”. The Servicer, on behalf of the Issuer, will cause each Paying Agent other than the Indenture Trustee to execute and deliver to the Indenture Trustee and the Owner Trustee, on
behalf of the Issuer, an instrument in which such Paying Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts as Paying Agent, it hereby so agrees), subject to the provisions of this Section 3.03, that such Paying
Agent will: 
  
 (a) allocate all sums received for payment to the
Holders of Notes on each Payment Date among such Holders in the proportion specified in the applicable Indenture Trustee’s Remittance Report, in each case to the extent permitted by applicable law; 
  
 (b) hold all sums held by it for the payment of amounts due with respect to
the Notes in trust for the benefit of the Persons entitled thereto until such sums shall be paid to such Persons or otherwise disposed of as herein provided and pay such sums to such Persons as herein provided; 
  
 (c) if such Paying Agent is not the Indenture Trustee, immediately resign as
a Paying Agent and forthwith pay to the Indenture Trustee all sums held by it in trust for the payment of the Notes if at any time the Paying Agent ceases to meet the standards set forth above required to be met by a Paying Agent at the time of its
appointment; 
  
 (d) if such Paying Agent is not the Indenture
Trustee, give the Indenture Trustee notice of any Default by the Issuer (or any other obligor upon the Notes) in the making of any payment required to be made with respect to any Notes for which it is acting as Paying Agent; 
  
 (e) if such Paying Agent is not the Indenture Trustee, at any time during the
continuance of any Default by the Issuer (or any other obligor upon the Notes), upon the written request of the Indenture Trustee, forthwith pay to the Indenture Trustee all sums so held in trust by such Paying Agent; and 
  
 (f) comply with all requirements of the Code, and all regulations thereunder,
with respect to withholding from any payments made by it on any Notes or pursuant to the Swap Agreement of any applicable withholding taxes imposed thereon and with respect to any applicable reporting requirements in connection therewith;
provided, however, that with respect to withholding and reporting requirements applicable to original issue discount (if any) on any of the Notes, the Servicer, on behalf of the Issuer, has provided the calculations pertaining thereto
to the Indenture Trustee and the Paying Agent. 
  
 The Issuer may
at any time, for the purpose of obtaining the satisfaction and discharge of this Indenture or any other purpose, by Trust Order direct any Paying Agent, if other than the Indenture Trustee, to pay to the Indenture Trustee all sums held in trust by
such Paying Agent, such sums to be held by the Indenture Trustee in the same trusts as such sums were held by such Paying Agent; and upon such payment by any Paying Agent to the Indenture Trustee, such Paying Agent shall be released from all further
liability with respect to such money. 
  

 12 

 Any money held by the Indenture Trustee or any Paying Agent in trust for the payment of any amount due
with respect to any Note and remaining unclaimed for two and one-half years after such amount has become due and payable to the Holder of such Note (or if earlier, three months before the date on which such amount would escheat to a governmental
entity under applicable law) shall be discharged from such trust and paid to the Trust; and the Holder of such Note shall thereafter, as an unsecured general creditor, look only to the Issuer for payment thereof (but only to the extent of the
amounts so paid to the Trust), and all liability of the Indenture Trustee or such Paying Agent with respect to such trust money shall thereupon cease. The Indenture Trustee may adopt and employ, at the expense of the Issuer, any reasonable means of
notification of such repayment (including, but not limited to, mailing notice of such repayment to Holders whose Notes have been called but have not been surrendered for redemption or whose right to or interest in moneys due and payable but not
claimed is determinable from the records of the Indenture Trustee or an), Paying Agent, at the last address of record for each such Holder). 
  
 Section 3.04. Existence of Issuer. (a) Subject to paragraphs (b) and (c) of this Section 3.04, the Issuer will keep in
full effect its existence, rights and franchises as a statutory trust under the laws of the State of Delaware or under the laws of any other state of the United States of America, and will obtain and preserve its qualification to do business in each
jurisdiction in which such qualification is or shall be necessary to protect the validity and enforceability of this Indenture, the Notes and the other Basic Documents. 
  
 (b) Subject to Section 3.09(g) hereof, any entity into which the Issuer may be merged or with which it may be
consolidated, or any entity resulting from any merger or consolidation to which the Issuer shall be a party, shall be the successor issuer under this Indenture without the execution or filing of any paper, instrument or further act to be done on the
part of the parties hereto, anything in any agreement relating to such merger or consolidation, by which any such Issuer may seek to retain certain powers, rights and privileges therefore obtaining for any period of time following such merger or
consolidation to the contrary notwithstanding (other than Section 3.09(g)). 
  
 (c) Upon any consolidation or merger of or other succession to the Issuer in accordance with this Section 3.04, the Person formed by or surviving such consolidation or merger (if other than the Trust) may
exercise every right and power of, and shall have all of the obligations of, the Issuer under this Indenture with the same effect as if such Person had been named as the issuer herein. 
  
 Section 3.05. Protection of Trust Estate. (a) The Issuer will, from time to time, execute and deliver all
such supplements and amendments hereto and all such financing statements, continuation statements, instruments of further assurance and other instruments, and will take such other action as may be necessary or advisable to: 
  
 (i) Grant more effectively all or any portion of the Trust
Estate as made by this Indenture; 
  

 13 

 (ii) maintain or preserve the lien of this Indenture or carry out more effectively the
purposes hereof; 
  
 (iii) perfect, publish
notice of or protect the validity of any Grant made or to be made by this Indenture; 
  
 (iv) enforce any of the Mortgage Loans or the Sale and Servicing Agreement; or 
  
 (v) preserve and defend title to the Trust Estate and the
rights of the Indenture Trustee, the Swap Provider and the Noteholders in the Mortgage Loans and the other property held as part of the Trust Estate against the claims of all Persons and parties. 
  
 (b) The Indenture Trustee shall not remove any portion of the Trust Estate
that consists of money or is evidenced by an instrument, certificate or other writing from the jurisdiction in which it was held at the Closing Date (provided that the Indenture Trustee may allow for the release of the Indenture Trustee’s
Mortgage File as provided in the Sale and Servicing Agreement and may also move its files to the State of California) or cause or permit ownership or the pledge of any portion of the Trust Estate that consists of book-entry securities to be recorded
on the books of a Person located in a different jurisdiction from the jurisdiction in which such ownership or pledge was recorded at such time unless the Indenture Trustee shall have first received an Opinion of Counsel to the effect that the lien
and security interest created by this Indenture with respect to such property will continue to be maintained after giving effect to such action or actions. 
  
 Section 3.06. Opinions as to the Trust Estate. On or before March 15th in each calendar year, beginning in 2006, the Servicer, on behalf
of the Issuer, shall furnish to the Indenture Trustee an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee either stating that, in the opinion of such counsel, such action has been taken as is necessary to
maintain the lien and security interest created by this Indenture and reciting the details of such action or stating that in the opinion of such counsel no such action is necessary to maintain such lien and security interest. Such Opinion of Counsel
shall also describe all such action, if any, that will, in the opinion of such counsel, be required to be taken to maintain the lien and security interest of this Indenture with respect to the Trust Estate until May 1st in the following
calendar year. 
  
 Section 3.07. Performance of
Obligations. (a) The Issuer shall punctually perform and observe all of its obligations under this Indenture and the other Basic Documents. 
  
 (b) The Issuer shall not take any action and will use its Best Efforts not to permit any action to be taken by others that would release any Person from
any of such Person’s covenants or obligations under any of the Mortgage Files or under any instrument included in the Trust Estate, or that would result in the amendment, hypothecation, subordination, termination or discharge of, or impair the
validity or effectiveness of, any of the documents or instruments contained in the Mortgage Files, except as expressly permitted in this Indenture, the other Basic Documents or such document included in the Mortgage File or other instrument or
unless such action will not adversely affect the interests of the Noteholders. 
  

 14 

 (c) If the Servicer or the Owner Trustee, on behalf of the Issuer, shall have actual knowledge of the
occurrence of a Servicer Event of Default, the Servicer or the Owner Trustee, as applicable, shall promptly notify the Indenture Trustee, the Swap Provider and the Rating Agencies thereof, and, in the case of the Servicer, shall specify in such
notice the action, if any, the Servicer is taking with respect to such default. 
  
 (d) Upon any termination of the Servicer’s rights and powers pursuant to the Sale and Servicing Agreement, the Indenture Trustee shall promptly notify the Rating Agencies and the Swap Provider. As soon as any
successor Servicer is appointed, the Indenture Trustee shall notify the Rating Agencies, specifying in such notice the name and address of such successor Servicer. 
  
 Section 3.08. Investment Company Act. The Issuer shall at all times conduct its operations so as not to be
subject to, or shall comply with, the requirements of the Investment Company Act of 1940, as amended (or any successor statute), and the rules and regulations thereunder. 
  
 Section 3.09. Negative Covenants. The Issuer shall not: 
  
 (a) sell, transfer, exchange or otherwise dispose of any portion of the
Trust Estate, except as expressly permitted by this Indenture and the other Basic Documents; 
  
 (b) claim any credit on, or make any deduction from, the principal of, or interest on, any of the Notes (other than amounts properly withheld from such payments under the Code) or assert any claim against any present
or former Noteholder by reason of the payment of any taxes levied or assessed upon any portion of the Trust Estate; 
  
 (c) engage in any business or activity other than as permitted by the Trust Agreement or other than in connection with, or relating to, the issuance of
the Notes pursuant to this Indenture, or amend the Trust Agreement, as in effect on the Closing Date, other than in accordance with Section 12.01 of the Trust Agreement; 
  
 (d) incur, issue, assume or otherwise become liable for any indebtedness other than the Notes; 
  
 (e) incur, assume, guaranty or agree to indemnify any Person with respect to
any indebtedness of any Person, except for such indebtedness as may be incurred by the Issuer in connection with the issuance of the Notes pursuant to this Indenture; 
  
 (f) subject to Article X of the Trust Agreement, dissolve or liquidate in whole or in part (until the Notes are paid in
full); 
  
 (g) (i) permit the validity or effectiveness of
this Indenture or any Grant to be impaired, or permit the lien of this Indenture to be impaired, amended, hypothecated, subordinated, terminated or discharged, or permit any Person to be released from any covenants or obligations under this
Indenture, except as may be expressly permitted hereby, (ii) permit any lien, charge, security interest, mortgage or other encumbrance (other than the lien of this Indenture) to be created on or extend to or otherwise arise upon or burden the
Trust Estate or any 
  

 15 

 pall thereof or any interest therein or the proceeds thereof; or (iii) permit the lien of this Indenture not to
constitute a valid perfected first priority (other than with respect to any such tax, mechanics’ or other lien) security interest in the Trust Estate; or 
  

(h) take any other action that should reasonably be expected to, or fail to take any action if such failure should reasonably be expected to, cause the
Issuer to be subject to federal income tax. 
  
 Section 3.10.
Annual Statement as to Compliance. On or before March 15, 2006, and each March 15 thereafter, the Servicer, on behalf of the Issuer, shall deliver to the Indenture Trustee and the Sponsor a written statement, signed by an Authorized
Officer of the Servicer, on behalf of the Issuer, stating that: 
  
 (i) a review of the fulfillment by the Issuer during such year of its obligations under this Indenture has been made under such Authorized Officer’s supervision; and 
  
 (ii) to the best of such Authorized Officer’s
knowledge, based on such review, the Issuer has complied with all conditions and covenants under this Indenture throughout such year, or, if there has been a Default in the fulfillment of any such covenant or condition, specifying each such Default
known to such Authorized Officer and the nature and status thereof. 
  
 Section 3.11. Restricted Payments. The Issuer shall not, directly or indirectly, (i) pay any dividend or make any distribution (by reduction of capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the Issuer or otherwise with respect to any ownership or equity interest or security in or of the Issuer or to the Servicer, (ii) redeem, purchase, retire or otherwise
acquire for value any such ownership or equity interest or security or (iii) set aside or otherwise segregate any amounts for any such purpose; provided, however, that the Issuer may make, or cause to be made, distributions to the Servicer, the
Indenture Trustee, the Owner Trustee, the Swap Provider, the Noteholders and the Certificateholders as contemplated by, and to the extent funds are available for such purpose under this Indenture and the other Basic Documents and the Issuer will
not, directly or indirectly, make or cause to be made payments to or distributions from the Payment Account except in accordance with this Indenture. 
  
 Section 3.12. Treatment of Notes as Debt for Tax Purposes. For purposes of federal, state and local income, franchise and any other income
taxes, the Issuer will treat the Notes, other than the Notes held by the Depositor, as indebtedness, and hereby instructs the Indenture Trustee, Paying Agent and the Servicer, on behalf of the Issuer to treat the Notes, other than the Notes held by
the Depositor, as indebtedness for all applicable tax reporting purposes. 
  
 Section 3.13. Notice of Events of Default. The Servicer, on behalf of the Issuer, shall give the Indenture Trustee, the Rating Agencies, the Swap Provider and the Sponsor prompt written notice of each
Event of Default hereunder of which it has knowledge, each default on the part of the Servicer of its obligations under the Sale and Servicing Agreement and each default on the part of the Sponsor of its obligations under the Sale and Servicing
Agreement. 
  

 16 

 Section 3.14. Further Instruments and Acts. Upon written request of the Indenture Trustee,
the Owner Trustee, on behalf of the Issuer, will execute and deliver such further instruments and do such further acts as may be reasonably necessary or proper to carry out more effectively the purpose of this Indenture. 
  
 Section 3.15. Representation and Warranties of the Issuer.

  
 (a) The Issuer represents and warrants to the Indenture
Trustee, the Swap Provider, the Depositor, the Sponsor and the Servicer that the Issuer is duly authorized under applicable law and the Trust Agreement to create and issue the Notes, to execute and deliver this Indenture, the Swap Agreement, the
Sale and Servicing Agreement, the other documents referred to herein to which it is a party and all instruments included in the Collateral which it has executed and delivered, and that all Issuer action and governmental consents, authorizations and
approvals necessary or required therefor have been duly and effectively taken or obtained. The Notes, when issued, will be, and this Indenture and such other documents are, valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium, liquidation, fraudulent conveyance or other similar laws affecting the enforcement of creditors’ rights in general and by general
principles of equity, regardless of whether such enforceability shall be considered in a proceeding in equity or in law. 
  
 (b) The Issuer represents and warrants that, immediately prior to its Grant of the Collateral provided for herein, it had good title to, and was the sole
owner of, the Mortgage Loans, free and clear of any pledge, lien, encumbrance or security interest. 
  
 (c) The Issuer represents and warrants that the Indenture Trustee has a valid and enforceable first priority security interest in the Mortgage Loans,
subject only to exceptions permitted hereby. 
  
 (d) The Issuer
represents and warrants it is not required to be registered as an “investment company” under the 1940 Act. 
  
 (e) This Indenture shall constitute a security agreement under applicable law and shall be deemed to create a valid and continuing security interest (as
defined in the applicable UCC) in the Mortgage Loans in favor of the Indenture Trustee, which security interest is prior to all other Liens, and is enforceable as such as against creditors of and purchasers from the Issuer. 
  
 (f) Other than the security interest granted to the Indenture Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted a security interest in, or otherwise conveyed any of the Mortgage Loans. The Issuer has not authorized the filing of and is not aware of any financing statements against
the Mortgage Loans that includes a description of collateral covering the Mortgage Loans other than any financing statement relating to the security interest granted to the Indenture Trustee hereunder or that has been terminated. The Issuer is not
aware of any judgment or tax lien filings against the Issuer. 
  
 (g) The Issuer owns and has good and marketable title to the Mortgage Loans free and clear of any Lien, claim or encumbrance of any Person. 
  

 17 

 (h) The Issuer has caused or will have caused, within ten days, the filing of all appropriate financing
statements in the proper filing office in the appropriate jurisdiction under applicable law in order to perfect the security interest in the Mortgage Loans granted to the Indenture Trustee hereunder. The Issuer has in its possession all original
copies of the mortgage notes that constitute or evidence the Mortgage Loans. The mortgage notes that constitute or evidence the Mortgage Loans do not have any marks or notations indicating that they have been pledged, assigned or otherwise conveyed
to any Person other than the Indenture Trustee. All financing statements filed or to be filed against the Issuer in favor of the Indenture Trustee (or any subsequent assignee, without limitation) in connection herewith describing the Mortgage Loans
contain a statement to the following effect: “A purchase of or security interest in, any collateral described in this financing statement will violate the rights of the Indenture Trustee.” 
  
 (i) The mortgage notes evidencing the Mortgage Loans constitute instruments,
and the derivative evidenced by the Swap Agreement constitutes general intangibles, within the meaning of the applicable UCC. 
  
 (j) The Issuer shall, to the extent consistent with this Indenture, take such additional reasonable actions as may be necessary to ensure that, if this
Indenture were deemed to create a security interest in the Mortgage Loans and the other assets of the Collateral, such security interest would be a perfected security interest of first priority under applicable law and will be maintained as such
throughout the life of this Indenture. 
  
 The foregoing
representations and warranties may not be waived and shall survive the issuance of the Notes. 
  
 ARTICLE IV 
  
 SATISFACTION AND DISCHARGE 
  
 Section 4.01.
Satisfaction and Discharge of Indenture. Whenever the following conditions shall have been satisfied: 
  
 (a) either; 
  
 (i) all Notes theretofore authenticated and delivered (other than (x) Notes that have been destroyed, lost or stolen and that have
been replaced or paid as provided in Section 2.07 hereof, and (y) Notes for whose payment money has theretofore been deposited in trust and thereafter repaid to the Issuer, as provided in Section 3.03 hereof) have been delivered to
the Note Registrar for cancellation; or 
  
 (ii)
all Notes not theretofore delivered to the Note Registrar for cancellation, (a) have become due and payable, or (b) will become due and payable at the Final Stated Maturity Date within one (1) year, or (c) are to be called for
redemption pursuant to Section 10.01 hereof within one (1) year under irrevocable arrangements satisfactory to the Indenture Trustee for the giving of notice of redemption by the Indenture Trustee in the name, and at the expense, of the
Sponsor, 
  

 18 

 and the Sponsor, in the case of clause ii(c), or Servicer, in the case of clauses (ii)(a) or (ii)(b) above, has
irrevocably deposited or caused to be deposited with the Indenture Trustee, in trust for such purpose, an amount sufficient to pay and discharge the entire unpaid Class Note Balance of such Notes not theretofore delivered to the Indenture Trustee
for cancellation, for principal and interest to the Final Stated Maturity Date or to the applicable Redemption Date, as the case may be, and in the case of Notes that were not paid at the Final Stated Maturity Date of their entire unpaid Class Note
Balance, for all overdue principal and all interest payable on such Notes to the next succeeding Payment Date therefor; 
  
 (b) the Servicer, on behalf of the Issuer, has paid or caused to be paid all other sums payable hereunder by the Trust; and 
  
 (c) the Servicer, on behalf of the Issuer, has delivered to the Indenture
Trustee an Officer’s Certificate and an Opinion of Counsel and, if the Servicer determines that TIA Section 314(c)(3) requires it, a certificate from a firm of certified public accountants, satisfactory in form and substance to the
Indenture Trustee each stating that all conditions precedent herein providing for the satisfaction and discharge of this Indenture have been complied with, 
  
 then, upon a Trust Request, this Indenture and the lien, rights and interests created hereby and thereby shall cease to be of further effect, and the Indenture Trustee
and each co-trustee and separate trustee, if any, then acting as such hereunder shall, at the expense of the Issuer, execute and deliver all such instruments as may be necessary to acknowledge the satisfaction and discharge of this Indenture and
shall pay, or assign or transfer and deliver, to the Issuer or upon Trust Order all cash, securities and other property held by it as part of the Trust Estate remaining after satisfaction of the conditions set forth in paragraphs (a) and
(b) above. 
  
 Notwithstanding the satisfaction and discharge
of this Indenture, the obligations of the Indenture Trustee and any Paying Agent to the Issuer and the Holders of Notes under Section 3.03 hereof, the obligations of the Indenture Trustee to the Holders of Notes under Section 4.02 hereof
and the provisions of Section 2.07 hereof with respect to lost, stolen, destroyed or mutilated Notes, registration of transfers of Notes and rights to receive payments of principal of and interest on the Notes shall survive. 
  
 Section 4.02. Application of Trust Money. All money deposited
with the Indenture Trustee pursuant to Sections 3.03 and 4.01 hereof shall be held in trust and applied by it, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent, as the
Indenture Trustee may determine, to the Persons entitled thereto, of the principal and interest for whose payment such money has been deposited with the Indenture Trustee. 
  
 ARTICLE V 
  
 DEFAULTS AND REMEDIES 
  
 Section 5.01. Event of Default. “Event of Default”, wherever used herein, means, with respect to Notes issued hereunder, any
one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body): 
  
 (a) if the
Issuer shall fail to distribute or cause to be distributed to the Indenture Trustee, for the benefit of the holders of the Notes, (x) on any Payment Date, any Interest Payment Amount due and payable on such Payment Date and such failure
continues for three Business Days or (y) on the applicable Final Stated Maturity Date for each class of Notes, any remaining Basis Risk Carryforward Amount and any remaining Deferred Interest for such Class, as applicable; 
  

 19 

 (b) if the Issuer shall fail to distribute or cause to be distributed to the Indenture Trustee, for the
benefit of the holders of the Notes, (x) on any Payment Date (other than the Final Stated Maturity Date), an amount equal to the related Principal Distribution Amount due on the Notes on such Payment Date, to the extent that, after application
in the order specified in Section 8.01 hereof, sufficient funds are on deposit in the Collection Account and such failure continues for three Business Days or (y) on the Final Stated Maturity Date for any Class of Notes, the aggregate
Class Note Balance of the related Class of Notes; 
  
 (c) if the
Issuer shall breach or default in the due observance of any one or more of the covenants hereof and such breach or default continues unremedied for a period of 30 Business Days; 
  
 (d) if the Issuer shall consent to the appointment of a custodian, receiver, trustee or liquidator (or other similar
official) of itself, or of a substantial part of its property, or shall admit in writing, its inability to pay its debts generally as they come due, or a court of competent jurisdiction shall determine that the Issuer is generally not paying its
debts as they come due, or the Issuer shall make a general assignment for the benefit of creditors; 
  
 (e) if the Issuer shall file a voluntary petition in bankruptcy or a voluntary petition or an answer seeking reorganization in a proceeding under any
bankruptcy laws (as now or hereafter in effect) or an answer admitting the material allegation of a petition filed against the Issuer in any, such proceeding, or the Issuer shall, by voluntary petition, answer or consent, seek relief under the
provisions of any now existing or future bankruptcy or other similar law providing for the reorganization or winding-up of debtors, or providing for an agreement, composition, extension or adjustment with its creditors; 
  
 (f) if an order, judgment or decree shall be entered in any proceeding by any
court of competent jurisdiction appointing, without the consent (express or legally implied) of the Issuer, a custodian, receiver, trustee or liquidator (or other similar official) of the Issuer or any substantial part of its property, or
sequestering any substantial part of its respective property, and any such order, judgment or decree or appointment or sequestration shall remain in force undismissed, unstayed or unvacated for a period of ninety (90) days after the date of
entry thereof; or 
  
 (g) if a petition against the Issuer in a
proceeding under applicable bankruptcy laws or other insolvency laws, as now or hereafter in effect, shall be filed and shall not be stayed, withdrawn or dismissed within ninety (90) days thereafter, or if, under the provisions of any law

  

 20 

 providing for reorganization or winding-up of debtors which may apply to the Issuer, any court of competent jurisdiction
shall assume jurisdiction, custody or control of the Issuer or any substantial part of its property, and such jurisdiction, custody or control shall remain in force unrelinquished, unstayed or unterminated for a period of ninety (90) days.

  
 Section 5.02. Acceleration of Maturity; Rescission and
Annulment. If an Event of Default occurs and is continuing, then and in every such case, the Indenture Trustee may, and at the direction of Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes, shall,
declare all the Notes to be immediately due and payable by a notice in writing to the Issuer (and to the Indenture Trustee if given by Noteholders), and upon any such declaration such Notes, in an amount equal to the entire unpaid Class Note Balance
of such Notes, together with accrued and unpaid interest thereon to the date of such acceleration, shall become immediately due and payable. 
  
 At any time after such a declaration of acceleration of maturity of the Notes has been made and before a judgment or decree for payment of the money due
has been obtained by the Indenture Trustee as hereinafter provided in this Article V, the Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes, by written notice to the Issuer, the Indenture Trustee and the
Swap Provider, may rescind and annul such declaration and its consequences if: 
  
 (a) the Issuer has paid or deposited with the Indenture Trustee a sum sufficient to pay: 
  
 (i) all payments of principal of, and interest on, all Outstanding Notes and all other amounts that would then be due hereunder or upon
such Notes if the Event of Default giving rise to such acceleration had not occurred; 
  
 (ii) any Swap Termination Payment other than a Defaulted Swap Termination Payment; 
  
 (iii) all sums paid or advanced by the Indenture Trustee
hereunder and the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel. 
  
 (b) all Events of Default, other than the nonpayment of the principal of Notes that have become due solely by such acceleration, have been cured or waived
as provided in Section 5.14 hereof. 
  
 No such rescission
shall affect any subsequent Default or impair any right consequent thereon. 
  
 Section 5.03. Collection of Indebtedness and Suits for Enforcement by Indenture Trustee. Subject to the provisions of Section 3.01 hereof and the following sentence, if an Event of Default occurs and
is continuing, the Indenture Trustee may, and shall at the written direction of the Holders of Notes representing at least 50% of the Class Note Balance of the Outstanding Notes, proceed to protect and enforce its rights and the rights of the
Noteholders by any Proceedings the Indenture Trustee deems appropriate to protect and enforce any such rights, 
  

 21 

 whether for the specific enforcement of any covenant or agreement in this Indenture or in aid of the exercise of any
power granted herein, or enforce any other proper remedy. Any Proceedings brought by the Indenture Trustee; on behalf of the Noteholders, or any Noteholder against the Issuer shall be limited to the preservation, enforcement and foreclosure of the
liens; assignments, rights and security interests under the Indenture and no attachment, execution or other unit or process shall be sought, issued or levied upon any assets, properties or funds of the Issuer, other than the Trust Estate relative to
the Notes in respect of which such Event of Default has occurred. If there is a foreclosure of any such liens, assignments, rights and security interests under this Indenture, by private power of sale or otherwise, no judgment for any deficiency
upon the indebtedness represented by the Notes may be sought or obtained by the Indenture Trustee or any Noteholder against the Issuer. The Indenture Trustee shall be entitled to recover the costs and expenses expended by it pursuant to this Article
V including reasonable compensation, expenses, or disbursements incurred of the Indenture Trustee, its agents and counsel from the Trust Estate. 
  
 Section 5.04. Remedies. If an Event of Default shall have occurred and be continuing and the Notes been declared due and payable and such
declaration and its consequences have not been rescinded and annulled, the Indenture Trustee (subject to Section 5.17 hereof, to the extent applicable) shall, for the benefit of the Noteholders, do one or more of the following: 
  
 (a) institute Proceedings for the collection of all amounts then payable on
the Notes, or under this Indenture, whether by declaration or otherwise, enforce any judgment obtained, and collect from the Issuer moneys adjudged due, subject in all cases to the provisions of Sections 3.01 and 5.03 hereof; 
  
 (b) in accordance with Section 5.17 hereof, sell the Trust Estate or any
portion thereof or rights or interest therein, at one or more public or private Sales called and conducted in any manner permitted by law; 
  
 (c) institute Proceedings from time to time for the complete or partial foreclosure of this Indenture with respect to the Trust Estate; 
  
 (d) exercise any remedies of a secured party under the Uniform Commercial
Code and take any other appropriate action to protect and enforce the rights and remedies of the Indenture Trustee or the Holders of the Notes hereunder; and 
  
 (e) refrain from selling the Trust Estate and apply all funds on deposit in each of the Accounts pursuant to Section 5.07 hereof. 
  
 Section 5.05. Indenture Trustee May File Proofs of Claim. In case
of the pendency of any receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, composition or other judicial Proceeding relative to the Issuer or any other obligor upon any of the Notes or the property of the Issuer or of
such other obligor or their creditors, the Indenture Trustee irrespective of whether the Notes shall then be due and payable as therein expressed or by declaration or otherwise and irrespective of whether the Indenture Trustee shall have made any
demand on the Issuer for the payment of any overdue principal or interest shall be entitled and empowered, by intervention in such Proceeding or otherwise to: 
  

(a) file and prove a claim for the whole amount of principal and interest owing and unpaid in respect of the Notes and file such other papers or
documents as may be necessary or advisable in order to have the claims of the Indenture Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its agents and counsel), the
Noteholders allowed in such Proceeding; and 
  

 22 

 (b) collect and receive any moneys or other property payable or deliverable on any such claims and to
distribute the same; and any receiver, assignee, trustee, liquidator, or sequestrator (or other similar official) in any such Proceeding is hereby authorized by each Noteholder to make such payments to the Indenture Trustee and, in the event that
the Indenture Trustee shall consent to the making of such payments directly to the Noteholders, to pay to the Indenture Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Indenture Trustee, its
agents and counsel. 
  
 Nothing herein contained shall be deemed
to authorize the Indenture Trustee to authorize or consent to or accept or adopt on behalf of any Noteholder any plan of reorganization, arrangement, adjustment or composition affecting any of the Notes or the rights of any Holder thereof, or to
authorize the Indenture Trustee to vote in respect of the claim of any Noteholder in any such Proceeding. 
  
 Section 5.06. Indenture Trustee May Enforce Claims Without Possession of Notes. All rights of action and claims under this Indenture or any of
the Notes may be prosecuted and enforced by the Indenture Trustee without the possession of any of the Notes or the production thereof in any Proceeding relating thereto, and any such Proceeding instituted by the Indenture Trustee, at the written
direction of the Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes shall be brought in its own name as trustee of an express trust, and any recovery of judgment shall be for the ratable benefit of the
Holders of the Notes in respect of which such judgment has been recovered after payment of amounts required to be paid pursuant to paragraph (i) of Section 5.07 hereof. 
  
 Section 5.07. Application of Money Collected. If the Notes have been declared due and payable following an Event
of Default and such declaration and its consequences have not been rescinded and annulled, any money collected by the Indenture Trustee with respect to each Class of Notes pursuant to this Article V or otherwise and any other monies that may then be
held or thereafter received by the Indenture Trustee as security for such Class of Notes shall be applied in the following order, at the date or dates fixed by the Indenture Trustee and, in case of the payment of the entire amount due on account of
principal of, and interest on, such Class of Notes, upon presentation and surrender thereof: 
  
 (i) first, to the Indenture Trustee, any unpaid Indenture Trustee Fees then due and any other amounts payable and due to the
Indenture Trustee under this Indenture including any amounts in respect of indemnification or reimbursement of costs and expenses including costs or expenses incurred by it in connection with the enforcement of the remedies provided for in this
Article V (subject to Section 6.16 herein), and any Owner Trustee Fees then due to the extent not already paid pursuant to Section 9.01 of the Trust Agreement and to the Owner Trustee, any amounts in respect of indemnification then due
under Section 9.02 of the Trust Agreement to the extent not already paid pursuant to Section 9.02 of the Trust Agreement, in an amount not to exceed $50,000 in any calendar year; 
  

 23 

 (ii) second, any Swap Termination Payment payable to the Swap Provider, other than
a Defaulted Swap Termination Payment; 
  
 (iii)
third, concurrently, (a) from money collected with respect to the Group I Mortgage Loans, any Accrued Note Interest to the Class A-1 Notes, and (b) from money collected with respect to the Group II Mortgage Loans, any Accrued
Note Interest pro rata to the Class A-2 Notes; 
  
 provided,
that if after making distributions pursuant to paragraph (iii) above Accrued Note Interest is owed on the Class A Notes, then any remaining amount of money relating to the other Group of Mortgage Loans after making distributions on the
related Class of Class A Notes will be available to pay Accrued Note Interest to the other Class of Class A Notes; 
  
 (iv) fourth, concurrently, (a) from money collected with respect to the Group I Mortgage Loans, to the Class A-1 Notes as
a payment of principal in reduction of its Class Note Balances until it has been reduced to zero; and (b) from money collected with respect to the Group II Mortgage Loans, first, to the Class A-2A Notes until their Class Note
Balance has been reduced to zero, second, to the Class A-2B Notes until their Class Note Balance has been reduced to zero, third, to the Class A-2C Notes until their Class Note Balance has been reduced to zero and
fourth, to the Class A-2D Notes until their Class Note Balance has been reduced to zero; 
  
 provided, that if after making distributions pursuant to paragraph (iv) above any remaining Class Note Balance is owed on the Class A Notes
related to a Group, then any remaining amount of money relating to the other Group of Mortgage Loans will be available to make payments of principal to the such Classes of Class A Notes, in accordance with the payment priorities set forth in
paragraph (iv) above; 
  
 (v) fifth,
any Accrued Note Interest to the Class M Notes, sequentially, in ascending numerical order; 
  
 (vi) sixth, any remaining Class Note Balance to the Class M Notes, sequentially, in ascending numerical order; 
  
 (vii) seventh, concurrently, any Class A-1 Basis
Risk Carry Forward Amount to the Class A-1 Notes, any Class A-2A Basis Risk Carry Forward Amount to the Class A-2A Notes, any Class A-2B Basis Risk Carry Forward Amount to the Class A-2B Notes, any Class A-2C Basis Risk
Carry Forward Amount to the Class A-2C Notes pro rata by the respective Basis Risk Carry Forward Amounts due to such classes of Notes and Class A-2D Basis Risk Carry Forward Amount to the Class A-2D Notes pro rata by the respective
Basis Risk Carry Forward Amounts due to such classes of Notes; 
  
 (viii) eighth, any Basis Risk Carry Forward Amount to the Class M Notes, sequentially, in ascending numerical order; 
  

 24 

 (ix) ninth, any Deferred Interest to the Class M Notes, sequentially, in ascending
numerical order; 
  
 (x) tenth, any
amounts due to the Indenture Trustee to the extent not paid pursuant to Section 5.07(i) hereof and any amounts due to the Owner Trustee under Article IX of the Trust Agreement or the other Basic Documents to the extent not already paid pursuant
to Section 5.07(i) or Section 9.02 of the Trust Agreement; 
  
 (xi) eleventh, any Defaulted Swap Termination Payment; and 
  
 (xii) twelfth, any remainder to the Certificates. 
  
 All distributions in paragraphs (i) above, shall be made from money collected with respect to the Group I Mortgage
Loans and the Group II Mortgage Loans, pro rata based on the aggregate amount of money collected with respect to such Group and available to make the related payment and all distributions in paragraphs (ii) above, shall be made from money
collected with respect to the Group I Mortgage Loans and the Group II Mortgage Loans, pro rata based on upon each group’s related component notional amount, as shown in Schedule 2 to this Indenture. 
  
 Section 5.08. Limitation on Suits. No Holder of a Note shall have
any right to institute any Proceedings, judicial or otherwise, with respect to this Indenture, or for the appointment of a receiver or trustee, or for any other remedy hereunder, unless: 
  
 (a) such Holder has previously given written notice to the Indenture Trustee of a continuing Event of Default; 

 
 (b) the Holders of Notes representing not less than 25% of the Class Note
Balance of the Outstanding Notes shall have made written request to the Indenture Trustee to institute Proceedings in respect of such Event of Default in its own name as Indenture Trustee hereunder; 
  
 (c) such Holder or Holders have offered to the Indenture Trustee indemnity
satisfactory to it in full against the costs, expenses and liabilities to be incurred in compliance with such request; 
  
 (d) the Indenture Trustee, for sixty (60) days after its receipt of such notice, request and offer of indemnity, has failed to institute any such
Proceeding; 
  
 (e) no direction inconsistent with such written
request has been given to the Indenture Trustee during such sixty (60) day period by the Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes; and 
  
 (f) in the event the Indenture Trustee shall receive conflicting or
inconsistent requests and indemnity from two or more groups of Holders of Notes, each representing less than 50% of the Class Note Balance of the Outstanding Notes, the Indenture Trustee shall take the action prescribed by the group representing a
greater percentage of the Class Note Balance of the Outstanding Notes. 
  

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 Section 5.09. Unconditional Rights of Noteholders to Receive Principal and Interest. Subject
to the provisions in this Indenture (including Sections 3.01 and 5.03 hereof) limiting the right to recover amounts due on a Note to recovery from amounts in the portion of the Trust Estate relating to such Note, the Holder of any Note shall have
the right, to the extent permitted by applicable law, which right is absolute and unconditional, to receive payment of each installment of interest on such Note on the respective Payment Date for such installments of interest, to receive payment of
each installment of principal of such Note when due (or, in the case of any Note called for redemption, on the date fixed for such redemption) and to institute suit for the enforcement of any such payment, and such right shall not be impaired
without the consent of such Holder. 
  
 Section 5.10.
Restoration of Rights and Remedies. If the Indenture Trustee or any Noteholder has instituted any Proceeding to enforce any right or remedy under this Indenture and such Proceeding has been discontinued or abandoned for any reason, or has
been determined to be adverse to the Indenture Trustee or to such Noteholder, then and in every such case the Indenture Trustee and the Noteholders shall, subject to any determination in such Proceeding, be restored severally and respectively to
their former positions hereunder, and thereafter all rights and remedies of the Indenture Trustee and the Noteholders shall continue as though no such Proceeding had been instituted. 
  
 Section 5.11. Rights and Remedies Cumulative. No right or remedy herein conferred upon or reserved to the
Indenture Trustee or to the Noteholders is intended to be exclusive of any other right or remedy, and every right and remedy shall, to the extent permitted by law, be cumulative and in addition to every other right and remedy given hereunder or now
or hereafter existing at law or in equity or otherwise. The assertion or employment of a, right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other appropriate right or remedy. 
  
 Section 5.12. Delay or Omission Not Waiver. No delay or omission
of the Indenture Trustee or of any Holder of any Note to exercise any right or remedy accruing upon any Event of Default shall impair any such right or remedy or constitute a waiver of any such Event of Default or an acquiescence therein. Every
right and remedy given by this Article V or by law to the Indenture Trustee or to the Noteholders may be exercised from time to time, and as often as may be deemed expedient, by the Indenture Trustee or by the Noteholders, as the case may be.

  
 Section 5.13. Control by Noteholders. The Holders
of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes on the applicable Record Date shall have the right to direct the time, method and place of conducting any Proceeding for any remedy available to the Indenture
Trustee or exercising any trust or power conferred on the Indenture Trustee; provided that: 
  
 (a) such written direction shall not be in conflict with any rule of law or with this Indenture; 
  
 (b) any direction to the Indenture Trustee to undertake a Sale of the Trust Estate shall be by the Holders of Notes representing the percentage of the
Class Note Balance of the Outstanding Notes specified in Section 5.17(b)(i) hereof, unless Section 5.17(b)(ii) hereof is applicable; and 
  

 26 

 (c) the Indenture Trustee may take any other action deemed proper by the Indenture Trustee that is not
inconsistent with such direction; provided, however, that, subject to Section 6.01 hereof, the Indenture Trustee need not take any action that it determines might involve it in liability or be unjustly prejudicial to the Noteholders not
consenting. 
  
 Section 5.14. Waiver of Past Defaults.
The Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes on the applicable Record Date may on behalf of the Holders of all the Notes, waive any past Default hereunder and its consequences, except a Default:

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

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 Section 5.17. Sale of Trust Estate. (a) The power to effect any sale (a
“Sale”) of any portion of the Trust Estate pursuant to Section 5.04 hereof shall not be exhausted by any one or more Sales as to any portion of the Trust Estate remaining unsold, but shall continue unimpaired until the entire
Trust Estate shall have been sold or all amounts payable on the Notes and under this Indenture with respect thereto shall have been paid. The Indenture Trustee may, from time to time postpone any public Sale by public announcement made at the time
and place of such Sale. 
  
 (b) To the extent permitted by law,
the Indenture Trustee shall not in any private Sale sell or otherwise dispose of the Trust Estate, or any portion thereof, unless: 
  
 (i) the Holders of Notes representing more than 50% of the Class Note Balance of the Notes of the Class or Classes then Outstanding
consents to or directs the Indenture Trustee in writing to make such Sale; or 
  
 (ii) the proceeds of such Sale would be not less than the entire amount that would be payable to the Holders of the Notes, in full payment thereof in accordance with Section 5.07 hereof, on the Payment Date next
succeeding the date of such Sale. 
  
 The purchase by the
Indenture Trustee of all or any portion of the Trust Estate at a private Sale shall not be deemed a Sale or disposition thereof for purposes of this Section 5.17(b). 
  
 (c) Unless the Holders of all Outstanding Notes have otherwise consented or directed the Indenture Trustee, at any public
Sale of all or any portion of the Trust Estate at which a minimum bid equal to or greater than the amount described in paragraph (b)(ii) of this Section 5.17 has not been established by the Indenture Trustee and no Person bids an amount equal
to or greater than such amount, the Indenture Trustee, acting in its capacity as Indenture Trustee (i) on behalf of the Noteholders, shall prevent such Sale and bid an amount (which shall include the Indenture Trustee’s right, in its
capacity as Indenture Trustee, to credit bid) at least $1.00 more than the highest other bid in order to preserve the Trust Estate on behalf of the Noteholders. 
  

(d) In connection with a Sale of all or any portion of the Trust Estate: 
  
 (i) any Holder or Holders of Notes may bid for and purchase the property offered for Sale, and upon
compliance with the terms of sale may hold, retain and possess and dispose of such property, without further accountability, and may, in paying the purchase money therefor, deliver any Outstanding Notes or claims for interest thereon in lieu of cash
up to the amount that shall, upon distribution of the net proceeds of such Sale, be payable thereon, and such Notes, in case the amounts so payable thereon shall be less than the amount due thereon, shall be returned to the Holders thereof after
being appropriately stamped to show such partial payment; 
  
 (ii) the Indenture Trustee may bid for and acquire the property offered for Sale in connection with any public Sale thereof, and, in lieu of paying cash therefor, may make settlement for the purchase price by
crediting the gross Sale price against the sum of (a) the amount that would be payable to the Holders of the Notes as a result of such Sale in accordance with Section 5.07 hereof on the Payment Date next succeeding the 
  

 28 

 date of such Sale and (b) the expenses of the Sale and of any Proceedings in connection therewith
which are reimbursable to it, without being required to produce the Notes in order to complete any such Sale or in order for the net Sale price to be credited against such Notes, and any property so acquired by the Indenture Trustee shall be held
and dealt with by it in accordance with the provisions of this Indenture; 
  
 (iii) the Indenture Trustee shall execute and deliver an appropriate instrument of conveyance transferring its interest in any portion of the Trust Estate in connection with a Sale thereof; 
  
 (iv) the Indenture Trustee is hereby irrevocably appointed
the agent and attorney in-fact of the Issuer to transfer and convey its interest in any portion of the Trust Estate in connection with a Sale thereof, and to take all action necessary to effect such Sale; and 
  
 (v) no purchaser or transferee at such a Sale shall be bound
to ascertain the Indenture Trustee’s authority, inquire into the satisfaction of any conditions precedent or see to the application of any moneys. 
  
 Section 5.18. Action on Notes. The Indenture Trustee’s right to seek and recover judgment under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect to this Indenture. Neither the lien of this Indenture nor any rights or remedies of the Indenture Trustee or the Holders of Notes shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any execution under such judgment upon any portion of the Trust Estate. Any money or property collected by the Indenture Trustee shall be applied in accordance with
Section 5.07 hereof. 
  
 Section 5.19. No
Recourse. The Trust Estate Granted to the Indenture Trustee as security for the Notes serves as security only for the Notes and the Swap Provider. The Noteholders shall have no recourse against the Owner Trustee, the Indenture Trustee, the Note
Registrar, the Authenticating Agent, the Depositor, the Sponsor, the Servicer or any of their respective Affiliates, or to the assets of any of the foregoing entities. 
  
 Section 5.20. Application of the Trust Indenture Act. Pursuant to Section 316(a) of the TIA, all provisions
automatically provided for in Section 316(a) are hereby expressly excluded. 
  
 ARTICLE VI 
  
 THE
INDENTURE TRUSTEE 
  
 Section 6.01. Duties of
Indenture Trustee. (a) If an Event of Default has occurred and is continuing of which a Responsible Officer of the Indenture Trustee has actual knowledge, the Indenture Trustee shall exercise such of the rights and powers vested in it by
this Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. 
  

 29 

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

 30 

 (d) Except with respect to duties of the Indenture Trustee prescribed by the TIA, as to which this
Section 6.01(d) shall not apply, for all purposes under this Indenture, the Indenture Trustee shall not be deemed to have notice or knowledge of any Event of Default described in Sections 5.01(c), 5.01(d), 5.01(e), 5.01(f), 5.01(g) or 5.01(h)
hereof or any Default described in Sections 5.01(c) hereof or of any event described in Section 3.05 hereof unless a Responsible Officer assigned to and working in the Indenture Trustee’s corporate trust department and having direct
responsibility for this Indenture has actual knowledge thereof or unless written notice of any event that is in fact such an Event of Default or Default is received by the Indenture Trustee at the Corporate Trust Office, and such notice references
the Notes generally, the Issuer, the Trust Estate or this Indenture. 
  
 (e) No provision of this Indenture shall require the Indenture Trustee to expend or risk its own funds or otherwise incur any financial liability in the performance of any of its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such funds or adequate indemnity against such risk or liability is not reasonably assured to it under this Indenture or the other Basic Documents. 
  
 (f) Every provision of this Indenture that in any way relates to the
Indenture Trustee is subject to the provisions of this Section 6.01 and to the provisions of the TIA. 
  
 (g) Notwithstanding any extinguishment of all right, title and interest of the Issuer in and to the Trust Estate following an Event of Default and a
consequent declaration of acceleration of the maturity of the Notes, whether such extinguishment occurs through a Sale of the Trust Estate to another Person, the acquisition of the Trust Estate by the Indenture Trustee or otherwise, the rights,
powers and duties of the Indenture Trustee with respect to the Trust Estate (or the proceeds thereof), the Noteholders and the rights of Noteholders shall continue to be governed by the terms of this Indenture. 
  
 (h) The Indenture Trustee shall at all times retain possession of the
Indenture Trustee’s Mortgage Files in the State of Illinois or the State of California, except for those Indenture Trustee’s Mortgage Files or portions thereof released to the Servicer pursuant to this Indenture or the Sale and Servicing
Agreement. 
  
 (i) Subject to the other provisions of this
Indenture and without limiting the generality of this Section 6.01, the Indenture Trustee shall have no duty (a) to see to any recording, filing, or depositing of this Indenture or any agreement referred to herein or any financing
statement or continuation statement evidencing a security interest, or to see to the maintenance of any such recording, filing or depositing or to any rerecording, refiling or redepositing of any thereof, (b) to see to any insurance,
(c) to see to the payment or discharge of any tax, assessment, or other governmental charge or any lien or encumbrance of any kind owing with respect to, assessed or levied against, any part of the Trust Estate from funds available in the
Payment Account or (d) to confirm or verify the contents of any reports or certificates of the Servicer delivered to the Indenture Trustee pursuant to this Indenture believed by the Indenture trustee to be genuine and to have been signed or
presented by the proper party or parties. 
  
 Section 6.02.
Notice of Default. Immediately after the occurrence of any Default known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall transmit by 
  

 31 

 mail to the Sponsor notice of each such Default and, within ninety (90) days after the occurrence of any Default
known to a Responsible Officer of the Indenture Trustee, the Indenture Trustee shall transmit by mail to all Holders of Notes notice of each such Default, unless such Default shall have been cured or waived; provided, however, that in
no event shall the Indenture Trustee provide notice, or fail to provide notice of a Default of which a Responsible Officer of the Indenture Trustee has actual knowledge in a manner contrary to the requirements of the Trust Indenture Act.
Concurrently with the mailing of any such notice to the Holders of the Notes, the Indenture Trustee shall transmit by mail a copy of such notice to the Rating Agencies and the Swap Provider. 
  
 Section 6.03. Rights of Indenture Trustee. (a) Except as
otherwise provided in Section 6.01 hereof, the Indenture Trustee may rely on, and be protected in acting or refraining to act upon any document believed by it to be genuine and to have been signed or presented by the proper Person. The
Indenture Trustee need not investigate any fact or matter stated in any such document. 
  
 (b) Before the Indenture Trustee acts or refrains from acting, it may require an Officer’s Certificate or an Opinion of Counsel reasonably satisfactory in form and substance to the Indenture Trustee. The
Indenture Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on any such Officer’s Certificate or Opinion of Counsel. 
  
 (c) The Indenture Trustee may act through agents and shall not be responsible for the misconduct or negligence of any agent
appointed with due care. 
  
 (d) The Indenture Trustee shall not
be liable for any action it takes or omits to take in good faith that it believes to be authorized or within its rights or powers. 
  
 (e) The Indenture Trustee shall be under no obligation to exercise any of the trusts or powers vested in it by this Indenture or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order or direction of any of the Noteholders, pursuant to the provisions of this Indenture, unless such Noteholders shall have offered to the Indenture Trustee reasonable security
or indemnity against the costs, expenses and liabilities which may be incurred therein or thereby; nothing contained herein shall, however, relieve the Indenture Trustee of the obligation, upon the occurrence of an Event of Default of which a
Responsible Officer of the Indenture Trustee shall have actual knowledge (which has not been cured), to exercise such of the rights and powers vested in it by this Indenture, and to use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of such person’s own affairs. 
  
 (f) The Indenture Trustee shall not be bound to make any investigation into the facts of the matters stated in any resolution, certificate, statement,
instrument, opinion, report notice, request, consent, order, approval, bond or other paper or document, unless requested in writing to do so by the Noteholders and provided further that payment within a reasonable time to the Indenture Trustee of
the costs, expenses or liabilities likely to be incurred by it in tile making of such investigation is, in the opinion of the Indenture Trustee, reasonably assured to the Indenture Trustee by the security afforded to it by the terms of this
Indenture or such other security or indemnity as the Indenture Trustee may reasonably require as a condition to taking any such action. 
  

 32 

 (g) The right of the Indenture Trustee to perform any discretionary act enumerated in this Indenture
shall not be construed as a duty, and the Indenture Trustee shall not be answerable for anything other than its negligence or willful misconduct in the performance of such act. 
  
 Section 6.04. Not Responsible for Recitals, Issuance of Notes or Mortgage Loans. The recitals contained herein
and in the Notes, except, with respect to the Indenture Trustee, the certificates of authentication on the Notes, shall be taken as the statements of the Issuer, and the Owner Trustee, the Indenture Trustee and the Authenticating Agent assume no
responsibility for their correctness. The Owner Trustee and the Indenture Trustee make no representations with respect to the Trust Estate or as to the validity or sufficiency of this Indenture or of the Notes. Neither the Indenture Trustee nor the
Owner Trustee shall be accountable for the use or application by the Issuer of the Notes or the proceeds thereof or any money paid to the Issuer or upon a Trust Order pursuant to the provisions hereof. 
  
 The Indenture Trustee shall at no time have any responsibility or liability
for or with respect to the legality, validity and enforceability of any Mortgage or any Mortgage Loan, or the recordability, sufficiency, perfection and priority of any mortgage or the maintenance of any such perfection and priority or for or with
respect to the sufficiency of the Trust Estate or its ability to generate the payments to be distributed to Noteholders under this Indenture, including, without limitation: the existence, condition and ownership of any Mortgaged Property; the
existence and enforceability of any hazard insurance or primary mortgage insurance thereon; the validity of the assignment of any Mortgage Loan to the Indenture Trustee or of any intervening assignment; the completeness of any Mortgage Loan; the
performance or enforcement of any Mortgage Loan; the compliance by the Depositor, the Sponsor, Issuer or Servicer with any warranty or representation made under this Indenture, the Sale and Servicing Agreement or in any related document or the
accuracy of any such warranty or representation; any investment of monies by or at the direction of the Sponsor or the Servicer or any loss resulting therefrom; the acts or omissions of any of the Sponsor, the Servicer or any Mortgagor; any action
of the Servicer taken in the name of the Indenture Trustee; the failure of the Servicer to act or perform any duties acquired of it as agent of the Indenture Trustee hereunder; or any action by the Indenture Trustee taken at the instruction of the
Servicer. The Indenture Trustee shall have no responsibility for filing any financing or continuation statement in any public office at any time or otherwise to perfect or maintain the perfection of any security interest or lien granted to it
hereunder. 
  
 Section 6.05. May Hold Notes. The
Indenture Trustee, any Agent, or any other agent of the Issuer, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 6.07, 6.09 and 6.12 hereof, may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not Indenture Trustee, Agent or such other agent. 
  
 Section 6.06. Money Held in Trust. Money held by the Indenture Trustee in trust hereunder need not be segregated from other funds except to
the extent required by this 
  

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 Indenture or by law. The Indenture Trustee shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed with the Issuer and except to the extent of income or other gain on investments that are obligations of the Indenture Trustee, in its commercial capacity, and income or other gain actually received by the Indenture Trustee
on investments, which are obligations of others. 
  
 Section 6.07. Eligibility, Disqualification. Irrespective of whether this Indenture is qualified under the TIA, this Indenture shall always have an indenture trustee who satisfies the requirements of TIA Sections 310(a)(1) and
310(a)(5). The Indenture Trustee shall always have a combined capital and surplus as stated in Section 6.08 hereof. The Indenture Trustee shall be subject to TIA Section 310(b). 
  
 Section 6.08. Indenture Trustee’s Capital and Surplus. The Indenture Trustee shall at all times (a)(i) have
a combined capital and surplus of at least $550,000,000, or (ii) be a member of a bank holding company system, the aggregate combined capital and surplus of which is at least $100,000,000 and (b) be rated (or have long- term debt rated)
“BBB” or better by S&P and “Baa2” by Moody’s; provided, however, that the Indenture Trustee’s separate capital and surplus shall at all times be at least the amount required by TIA Section 310(a)(2). If the
Indenture Trustee publishes annual reports of condition of the type described in TIA Section 310(a)(1), its combined capital and surplus for purposes of this Section 6.08 shall be as set forth in the latest such report. The Indenture
Trustee shall at all times be a corporation or association organized or doing business under the laws of a state or of the United States; authorized to exercise corporate powers and subject to supervision or examination by federal or state
authority. If at any time the Indenture Trustee shall cease to be eligible in accordance with the provisions of this Section 6.08 and TIA Section 310(a)(2), it shall resign immediately in the manner and with the effect hereinafter
specified in this Article VI. 
  
 Section 6.09.
Resignation and Removal; Appointment of Successor. (a) No resignation or removal of the Indenture Trustee and no appointment of a successor Indenture Trustee pursuant to this Article VI shall become effective until the acceptance of
appointment by the successor Indenture Trustee under Section 6.10 hereof. 
  
 (b) The Indenture Trustee may resign at any time by giving written notice thereof to the Issuer and each Rating Agency. If an instrument of acceptance by a successor Indenture Trustee shall not have been delivered to
the Indenture Trustee within thirty (30) days after the giving of such notice of resignation, the resigning Indenture Trustee may petition any court of competent jurisdiction for the appointment of a successor Indenture Trustee. 
  
 (c) The Indenture Trustee may be removed at any time by Act of the Holders
representing more than 50% of the Class Note Balance of the Outstanding Notes, by written notice delivered to the Indenture Trustee and to the Issuer. 
  
 (d) If at any time: 
  
 (i) the Indenture Trustee shall have a conflicting interest prohibited by Section 6.07 hereof and shall fail to resign or eliminate
such conflicting interest in accordance with Section 6.07 hereof after written request therefor by the Issuer or by any Noteholder; or 
  

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 (ii) the Indenture Trustee shall cease to be eligible under Section 6.08 hereof or
shall become incapable of acting or shall be adjudged bankrupt or insolvent, or a receiver of the Indenture Trustee or of its property shall be appointed, or any public officer shall take charge or control of the Indenture Trustee or of its property
or affairs for the purpose of rehabilitation, conservation or liquidation; 
  
 then, in any such case, (x) the Owner Trustee, on behalf of the Issuer, by a Trust Order, may remove the Indenture Trustee, and the Owner Trustee, on behalf of the Issuer, by a Trust Order, shall join with the Indenture Trustee in the
execution, delivery and performance of all instruments and agreements necessary or proper to appoint a successor Indenture Trustee to vest in such successor Indenture Trustee any property, title, right or power deemed necessary or desirable, subject
to the other provisions of this Indenture; provided, however, if the Owner Trustee, on behalf of the Issuer, does not join in such appointment within thirty (30) days after the receipt by it of a request to do so, (either by reason of
resignation or removal) or in case an Event of Default has occurred and is continuing, the Indenture Trustee may petition a court of competent jurisdiction to make such appointment, or (y) subject to Section 5.15 hereof, and, in the case
of a conflicting interest as described in clause (i) above, unless the Indenture Trustee’s duty to resign has been stayed as provided in TIA Section 310(b), any Noteholder who has been a bona fide Holder of a Note for at least six
(6) months may, on behalf of himself and all others similarly situated, petition any court of competent jurisdiction for the removal of the Indenture Trustee and the appointment of a successor Indenture Trustee. 
  
 (e) If the Indenture Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of the Indenture Trustee for any cause, the Servicer, on behalf of the Issuer, by a Trust Order, shall promptly, appoint a successor Indenture Trustee reasonably acceptable to the Sponsor.

  
 (f) The Servicer, on behalf of the Issuer, shall give notice
of each resignation and each removal of the Indenture Trustee and each appointment of a successor Indenture Trustee to the Holders of Notes and the Swap Provider. Each notice shall include the name of the successor Indenture Trustee and the address
of its Corporate Trust Office. 
  
 Section 6.10.
Acceptance of Appointment by Successor Indenture Trustee. Every successor Indenture Trustee appointed hereunder shall execute, acknowledge and deliver to the Issuer and the retiring Indenture Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the retiring Indenture Trustee shall become effective and such successor Indenture Trustee, without any further act, deed or conveyance, shall become vested with all the rights, powers, trusts and duties
of the retiring Indenture Trustee. Notwithstanding the foregoing, upon a Trust Request of the Owner Trustee, on behalf of the Issuer, or the successor Indenture Trustee, such retiring Indenture Trustee shall, upon payment of its charges and any
fees, expenses or other amounts owing the Indenture trustee, execute and deliver an instrument transferring to such successor Indenture Trustee all the rights, powers and trusts of the retiring Indenture Trustee, and shall duly assign, transfer and
deliver to such successor Indenture Trustee all property and money held by such retiring Indenture Trustee 
  

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

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 Every co-trustee or separate trustee shall, to the extent permitted by law, but to such extent only, be
appointed subject to the following terms: 
  
 (a) The Notes shall
be authenticated and delivered and all rights, powers, duties and obligations hereunder in respect of the custody of securities, cash and other personal property held by, or required to be deposited or pledged with, the Indenture Trustee hereunder,
shall be exercised, solely by the Indenture Trustee. 
  
 (b) As
required by TIA Section 310 (a)(3), the rights, powers, duties and obligations hereby conferred or imposed upon the Indenture Trustee in respect of any property covered by such appointment shall be conferred or imposed upon and exercised or
performed by the Indenture Trustee or by the Indenture Trustee and such co-trustee or separate trustee jointly, as shall be provided in the instrument appointing such co-trustee or separate trustee, except to the extent that under any law of any
jurisdiction in which any particular act is to be performed, the Indenture Trustee shall be incompetent or unqualified to perform such act, in which event such rights, powers, duties and obligations shall be exercised and performed by such
co-trustee or separate trustee. 
  
 (c) The Indenture Trustee at
any time may accept the resignation of or remove any co-trustee or separate trustee appointed under this Section 6.13. A successor to any co-trustee or separate trustee so resigned or removed may be appointed in the manner provided in this
Section 6.13. 
  
 (d) The Indenture Trustee shall not be
liable by reason of any act or omission of a co-trustee or separate trustee appointed by the Indenture Trustee with due care. No co-trustee or separate trustee hereunder shall be personally liable by reason of any act or omission of the Indenture
Trustee, or any other such trustee hereunder. 
  
 (e) Any Act of
Noteholders delivered to the Indenture Trustee shall be deemed to have been delivered to each such co-trustee and separate trustee. 
  
 (f) Any co-trustee or separate trustee appointed hereunder shall be afforded the same rights, protections and immunities as the Indenture Trustee.

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

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

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 (b) In giving each of the acknowledgements, the Initial Certification and the Final Certification
referred to in paragraphs (a) and (b) of this Section 6.15, the Indenture Trustee shall not be under any duty or obligation (i) to inspect, review or examine any such documents, instruments, securities or other papers to
determine that they or the signatures thereto are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face, (ii) to determine
whether any Mortgage File should include a flood insurance policy, any rider, addenda, surety or guaranty agreement, power of attorney, buy down agreement, assumption agreement, modification agreement, written assurance or substitution agreement, or
(iii) to determine the validity, sufficiency, recordability, perfection, or priority of any document in the Mortgage File. 
  
 Section 6.16. Indenture Trustee Fees and Expenses Indemnification. The Indenture Trustee shall be entitled to receive the Indenture Trustee
Fee on each Payment Date as provided herein. The Indenture Trustee also shall be entitled to (i) payment of or reimbursement for expenses and disbursements incurred or made by the Indenture Trustee in accordance with any of the provisions of
this Indenture or the Sale and Servicing Agreement (including, but not limited to, the reasonable compensation and the expenses and disbursements of its counsel and of all persons not regularly in its employ), and (ii) indemnification against
losses, liability costs and expenses, including reasonable attorney’s fees, incurred, arising out of or in connection with this Indenture, the Notes, the Certificates, the Sale and Servicing Agreement or any other documents or agreements
relating to the Issuer or the Notes, other than any loss, liability, cost or expense incurred solely by reason of willful malfeasance, bad faith or negligence of the Indenture Trustee in the performance of its duties under the Basic Documents or by
reason of its failure to perform its obligations hereunder. The Indenture Trustee and any director, officer, employee or agent of the Indenture Trustee shall be indemnified by, first, the Trust Estate, in an amount not to exceed $125,000 in
any calendar year as a first-priority expense pursuant to the second sentence of Section 8.01(b) hereof and Section 5.07 hereof; second, the Trust Estate on any Payment Date, to the extent that the Indenture Trustee’s claims
for indemnification exceed $125,000 in any calendar year, pursuant to Sections 8.01 and 5.07 hereof, and third, the Servicer, to the extent that the Indenture Trustee’s claims for indemnification exceed $125,000 in any calendar year and
there are no funds available at priority second above available for such purpose, and held harmless against any loss, liability costs or reasonable expense incurred in connection with this Indenture or the Notes, other than any loss,
liability, cost or expense incurred by reason of willful misfeasance, bad faith or negligence in the performance by the Indenture Trustee of its duties hereunder or by reason of its failure to perform its obligations hereunder. The obligations of
the Servicer and the Issuer under this Section 6.16 shall survive termination of the Issuer and payment of the Notes, and shall extend to any co-Indenture Trustee or separate-Indenture Trustee appointed pursuant to this Article VI. 

 
 The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee’s economic self-interest for (i) serving as investment adviser, administrator, shareholder, servicing agent, custodian or sub-custodian with respect to certain
Permitted Investments, (ii) using Affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. Such compensation is not payable pursuant to this Indenture.

  

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 ARTICLE VII 
  
 NOTEHOLDERS’ LISTS AND REPORTS 
  
 Section 7.01. Note Registrar to Furnish Indenture Trustee Names and Addresses of Noteholders. (a) The Note
Registrar shall furnish or cause to be furnished to the Indenture Trustee (i) semiannually, not less than forty-five (45) days nor more than sixty (60) days after the Payment Date occurring closest to six (6) months after the
Closing Date and each Payment Date occurring at six (6) month intervals thereafter, all information in the possession or control of the Note Registrar, in such form as the Indenture Trustee may reasonably require, as to names and addresses of
the Noteholders, and (ii) at such other times, as the Indenture Trustee may request in writing, within thirty (30) days after receipt by the Note Registrar of any such request, a list of similar form and content as of a date not more than
ten (10) days prior to the time such list is furnished; provided, however, that so long as the Indenture Trustee is the Note Registrar, no such list shall be required to be furnished. 
  
 (b) In addition to furnishing to the Indenture Trustee the Noteholder lists,
if any, required under paragraph (a) of this Section 7.01, the Note Registrar shall also furnish all Noteholder lists, if any, required under Section 3.03 hereof at the times required by such Section 3.03. 
  
 Section 7.02. Preservation of Information: Communications to
Noteholders. (a) The Indenture Trustee shall preserve, in as current a form as is reasonably practicable, the names and addresses of the Holders of Notes contained in the most recent list, if any, furnished to the Indenture Trustee as
provided in Section 7.01 hereof and the names and addresses of the Holders of Notes received by the Indenture Trustee in its capacity as Note Registrar. The Indenture Trustee may destroy any list furnished to it as provided in Section 7.01
hereof upon receipt of a new list so furnished. 
  
 (b)
Noteholders may communicate pursuant to TIA Section 312(b) with other Noteholders with respect to their rights under this Indenture or under the Notes. To the extent that the Notes are Book Entry, upon the request of such Noteholders, the
Indenture Trustee will obtain for such Noteholders at such Noteholders’ expense, the names and addresses of the Clearing Agency Participants needed to allow such Noteholders to communicate. 
  
 (c) The Issuer, the Indenture Trustee and the Note Registrar shall have the
protection of TIA Section 312(c). 
  
 Section 7.03.
Reports by Indenture Trustee. Within sixty (60) days after December 31 of each year (the “reporting date”), commencing December 31, 2005, (i) the Indenture Trustee shall, if required by TIA Section 313(a),
mail to all Noteholders described in TIA Section 313(c) a brief report dated as of such reporting date that complies with TIA Section 313(a); (ii) the Indenture Trustee shall, to the extent not set forth in the Indenture
Trustee’s Remittance Report pursuant to Section 2.08(d) hereof, also mail to Holders of Notes described in TIA Section 313(c) with respect to which it has made advances, any reports with respect to such advances that are required by
TIA Section 313(b)(2); and, the Indenture Trustee shall also mail to Holders of Notes described in TIA Section 313(c) any reports required by TIA Section 313(b)(1). For 
  

 40 

 purposes of the information required to be included in any such reports pursuant to TIA Sections 313(a)(2), 313(b)(1) (if
applicable), or 313(b)(2), the principal amount of indenture securities outstanding on the date as of which such information is provided shall be the Class Note Balance of the then Outstanding Notes covered by the report. 
  
 A copy of each report at the time of its mailing to Noteholders will be filed
by the Trustee with the Commission and each stock exchange, if any, on which the Notes are listed. The Issuer will notify the Trustee if and when the Notes are listed on any stock exchange. 
  
 Section 7.04. Reports by Issuer. The Issuer shall cause the
Servicer, on behalf of the Issuer, (a) to deliver to the Indenture Trustee at least five days before the Issuer is required to file the same with the Commission copies of the annual reports and of the information, documents and other reports
(or copies of such portions of any of the foregoing as the Commission may by rules and regulations prescribe) that the Issuer is required to file with the Commission pursuant to Section 13 or 15(d) of the Exchange Act, and (b) to also
comply with the other provisions of TIA Section 314(a). 
  
 A
copy of each report required under this Section 7.04 shall, at the time of such transmission to Holders of Notes be filed by the Sponsor with the Commission and with each securities exchange upon which the Notes are listed. The Servicer, on
behalf of the Issuer, will notify the Indenture Trustee when the Notes are listed on any securities exchange. 
  
 ARTICLE VIII 
  
 ACCOUNTS, PAYMENTS OF INTEREST AND PRINCIPAL, AND RELEASES 
  
 Section 8.01. Accounts; Investment; Collection of Moneys. (a) The Issuer hereby directs the Indenture Trustee to establish, on or before the Closing Date, an Eligible Account that shall be the
“Payment Account” for the Notes. The Indenture Trustee shall promptly deposit in the Payment Account: 
  
 (i) the Servicer Remittance Amount for each Group received by it from the Servicer on the Servicer Remittance Date pursuant to the Sale
and Servicing Agreement; 
  
 (ii) any other funds
from any deposits to be made by the Servicer pursuant to the Sale and Servicing Agreement; 
  
 (iii) any amount required to be deposited in the Payment Account pursuant to Section 8.01(c); 
  
 (iv) the Termination Price received by it from the Depositor
on the Clean-up Call Date pursuant to Section 10.01; 
  
 (v) any amounts received from the Swap Provider under the Swap Agreement, including the Net Swap Payment and any Swap Termination Payment; and 
  

 41 

 (vi) all other amounts received for deposit in the Payment Account from the Servicer, and
the payment of any Loan Repurchase Price or Substitution Adjustment for a Mortgage Loan received by the Indenture Trustee. 
  
 All amounts that are deposited from time to time in the Payment Account are subject to withdrawal by the Indenture Trustee for the purposes set forth in
Section 8.01 hereof. All funds withdrawn from the Payment Account pursuant to this Section 8.01 for the purpose of making payments to the Holders of Notes shall be applied in accordance with this Section 8.01 and Section 3.03
hereof. 
  
 Any Net Swap Payment received from the Swap Provider
shall be allocated by the Indenture Trustee into two amounts relating to Group I and Group II, pro rata based on the aggregate scheduled Principal Balance of the Mortgage Loans in the related group with respect to the related Payment Date. These two
amounts are referred to herein as the “Group I Swap Payment” and the “Group II Swap Payment.” Similarly, any payment to be made to the Swap Provider pursuant to Section 8.01(b)(i) below shall be allocated
between Group I and Group II pro rata based on the aggregate scheduled Principal Balance of the Mortgage Loans in the related group with respect to the related Payment Date; provided that, if there are insufficient funds in either group to pay the
Swap Provider pursuant to Section 8.01(b) below, then the remaining amount that would have been distributable on such Payment Date shall be paid from amounts relating to the other group. The amount to be paid or received by the Issuer that
relates to Group I is referred to as the “Group I Swap Payment” and the amount to be paid or received by the Issuer that relates to Group II is referred to as the “Group II Swap Payment.” 
  
 (b) On each Payment Date, the Indenture Trustee shall make the payment to the
Swap Provider set forth in clause (i)(x) below, but only to the extent that there are sufficient funds on deposit in the Payment Account to make such payment after making each of the payments described below to be made on such Payment Date that are
senior to such payment. On each Payment Date, the Indenture Trustee shall withdraw from the Payment Account such amounts on deposit therein relating to the Indenture Trustee Fees and the Indenture Trustee’s expenses and other amounts then due
to it, including any payments with respect to reimbursement or indemnification due to the Indenture Trustee (subject to Section 6.16) and shall pay such amounts to itself. On each Payment Date, unless the Notes have been declared due and
payable pursuant to Section 5.02 hereof and moneys collected by the Indenture Trustee are being applied in accordance with Section 5.07 hereof, the Interest Remittance Amount on deposit in the Payment Account on any Payment Date or
Redemption Date shall be withdrawn from the Payment Account, in the amounts required (based on the Indenture Trustee’s Remittance Report prepared by the Indenture Trustee on or before such Payment Date in reliance on the related Servicer
Remittance Report), for application on such Payment Date in respect of payments for the each Class of Notes as follows. Subject to the preceding, on each Payment Date, funds will be applied in the following order of priority: 
  
 (i) From Available Funds, to the Swap Provider the sum of
(x) all Net Swap Payments, paid from the Available Funds related to each Group pro rata based on the aggregate scheduled Principal Balance of the Mortgage Loans in the related Group and (y) any Swap Termination Payments other than a
Defaulted Swap Termination Payment, paid from the Available Funds related to each group pro rata based on the aggregate 
  

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 scheduled Principal Balance of the Mortgage Loans in the related Group. To the extent that any swap
payments owed to the Swap Provider remain unpaid, amounts owed under (x) or (y) above will be paid from the other group’s Available Funds (such payment to be made on the Payment Date, as set forth above); 
  
 (ii) Concurrently, 
  
 (x) from the Distributable Interest Amount related to the Group I Mortgage
Loans, to the Class A-1 Notes, their Accrued Note Interest, and any unpaid Accrued Note Interest from prior Payment Dates; and 
  
 (y) from the Distributable Interest Amount related to the Group II Mortgage Loans, concurrently to the Class A-2A, Class A-2B, Class A-2C
and Class A-2D Notes, their Accrued Note Interest and any unpaid Accrued Note Interest from prior Payment Dates allocated based on their entitlement to those amounts, 
  
 provided, that if the Distributable Interest Amount for either Group of Mortgage Loans is insufficient to make the related
payments set forth in clause (a) or (b) above, as applicable, any Distributable Interest Amount relating to the other Group of Mortgage Loans remaining after making the related payments set forth in clause (a) or (b) above, as
applicable, will be available to cover that shortfall; and 
  
 (iii) from any remaining Distributable Interest Amount, to the Class M Notes, sequentially, in ascending numerical order, their Accrued Note Interest. 
  
 (c) The Principal Distribution Amount will be paid from the amount on deposit in the Payment Account (after making the
payments set forth in paragraph (b) above) on each Payment Date as follows: 
  
 A. On each Payment Date (a) prior to the Stepdown Date or (b) with respect to which a Trigger Event is in effect, the Principal Distribution Amount will be applied in the following order of priority:

  
 (i) Concurrently, 
  
 (a) to the Class A-1 Notes, the Group I Principal
Distribution Amount, until its Class Note Balance has been reduced to zero; 
  
 (b) to the Class A-2A, Class A-2B, Class A-2C and Class A-2D Notes, sequentially, in that order, the Group II Principal Distribution Amount, until their respective Class Note Balances have been
reduced to zero; 
  
 provided, that if after making distributions
pursuant to paragraphs (a) and (b) above on any Payment Date (without giving effect to this proviso) the Class Note Balance of any class of Class A Notes is reduced to zero (considering the Class A-2 Notes as one class for the
purposes of this proviso only), then the remaining amount of principal that would have been distributable on such Payment Date and the amount of principal distributable on all subsequent Payment Dates 
  

 43 

 pursuant to this subsection (i) to the class of Class A Notes that have been repaid on that Payment Date or a
prior Payment Date, will be required to be distributed to the other Class A Notes remaining outstanding (in accordance with the paragraphs (a) or (b) above, as applicable), until their respective Class Note Balances have been reduced
to zero; and 
  
 (ii) to the Class M Notes,
sequentially, in ascending numerical order, until their respective Class Note Balances have been reduced to zero. 
  
 B. On each Payment Date (a) on or after the Stepdown Date and (b) with respect to which a Trigger Event is not in effect, the Principal
Distribution Amount will be applied in the following order of priority: 
  
 (i) Concurrently, 
  
 (a) to the Class A-1 Notes, the lesser of the Group I Principal Distribution Amount and the portion of the Class A Principal Distribution Amount determined in accordance with the Class A Principal Allocation Percentage for
the Class A-1 Notes, until its Class Note Balance has been reduced to zero, 
  
 (b) to the Class A-2A, Class A-2B, Class A-2C and Class A-2D Notes, sequentially, in that order, the lesser of the
Group II Principal Distribution Amount and the portion of the Class A Principal Distribution Amount determined in accordance with the Class A Principal Allocation Percentage for the Class A-2 Notes, until their respective Class Note
Balances have been reduced to zero; 
  
 provided,
that if after making distributions pursuant to paragraphs (a) and (b) above on any Payment Date (without giving effect to this proviso) the Class Note Balance of any class of Class A Notes is reduced to zero (considering the
Class A-2 Notes as one class for the purposes of this proviso only), then the remaining amount of principal that would have been distributable on such Payment Date and the amount of principal distributable on all subsequent Payment Dates
pursuant to this subsection (i) to the class of Class A Notes that have been repaid on that Payment Date or a prior Payment Date, will be required to be distributed to the other Class A Notes remaining outstanding (in accordance with
the paragraphs (a) or (b) above, as applicable), until their respective Class Note Balances have been reduced to zero; 
  
 (ii) to the Class M-1 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-1 Principal Distribution Amount,
until their Class Note Balance has been reduced to zero, 
  
 (iii) to the Class M-2 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-2 Principal Distribution Amount, until their Class Note Balance has been reduced to zero, 
  
 (iv) to the Class M-3 Notes, the lesser of the remaining
Principal Distribution Amount and the Class M-3 Principal Distribution Amount, until their Class Note Balance has been reduced to zero, 
  

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 (v) to the Class M-4 Notes, the lesser of the remaining Principal Distribution Amount and
the Class M-4 Principal Distribution Amount, until their Class Note Balance has been reduced to zero, 
  
 (vi) to the Class M-5 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-5 Principal Distribution Amount,
until their Class Note Balance has been reduced to zero, 
  
 (vii) to the Class M-6 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-6 Principal Distribution Amount, until their Class Note Balance has been reduced to zero, 
  
 (viii) to the Class M-7 Notes, the lesser of the remaining
Principal Distribution Amount and the Class M-7 Principal Distribution Amount, until their Class Note Balance has been reduced to zero, 
  
 (ix) to the Class M-8 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-8 Principal Distribution Amount,
until their Class Note Balance has been reduced to zero, and 
  
 (x) to the Class M-9 Notes, the lesser of the remaining Principal Distribution Amount and the Class M-9 Principal Distribution Amount, until their Class Note Balance has been reduced to zero. 
  
 (d) For any Payment Date, any Net Monthly Excess Cashflow shall be paid as
follows: 
  
 (i) to the Class M Notes,
sequentially and in ascending numerical order, their Unpaid Interest Shortfall Amount, 
  
 (ii) concurrently, any Basis Risk Carry Forward Amount to each class of Class A Notes, pro rata by the respective Basis Risk Carry
Forward Amount due to such classes of Notes, 
  
 (iii) sequentially, to the Class M Notes in ascending numerical order, any Basis Risk Carry Forward Amount for such classes, 
  
 (iv) to the Class M Notes, sequentially in ascending numerical order, any Deferred Interest in respect of any Principal Deficiency Amount
allocated to such classes, thus, for instance, the Principal Deficiency Amount for any Payment Date will first be allocated to the Class M-9 Notes and, to the extent the Principal Deficiency Amount for such Payment Date exceeds the aggregate Class
Note Balance of the Class M-9 Notes, such excess Principal Deficiency Amount shall be allocated to the Class M-8 Notes, and so on. 
  
 (v) to pay to the indenture trustee and the owner trustee, any amounts due to them, in the case of the indenture trustee to the extent not
previously paid or reimbursed under this Section 8.01 by reason of Section 6.16 hereof and in the case of the owner trustee to the extent not previously paid or reimbursed under this Section 8.01 pursuant to Article IX of the Trust
Agreement, 
  

 45 

 (x) to pay any Defaulted Swap Termination Payment to the Swap Provider, 
  
 (xi) if applicable, for application to the purchase of a
replacement Swap Agreement, and 
  
 (xii) to the
trust certificates, any remaining amounts. 
  
 (e) The aggregate,
cumulative amount of principal payments made to the holders of any Class of Notes shall not exceed the Original Note Principal Balance of the related Class. 
  
 (f) [Reserved. ] 
  
 (g) So long as no Default or Event of Default shall have occurred and be continuing, amounts held in the Accounts, other than the Payment Account, shall
at the written direction of the Servicer be invested in Permitted Investments, which Permitted Investments shall mature no later than the Business Day preceding the immediately following Payment Date; provided, however, that the Indenture Trustee
shall have no obligation to invest funds deposited into the Accounts later than 12:15 p.m. (Pacific Time) on the day of receipt. Absent written direction, all such amounts shall be held uninvested. Amounts in the Payment Account may be invested in
Permitted Investments at the direction of the Indenture Trustee or remain uninvested. 
  
 All income or other gains, if any, from investment of moneys deposited in the Collection Account shall be for the benefit of the Servicer, and in the Payment Account for the benefit of the Indenture Trustee,
respectively and on or after each Payment Date, any such amounts may be released from such Accounts and paid to the Servicer or Indenture Trustee, as applicable, as part of its compensation hereunder. Any loss resulting from such investment of
moneys deposited in the Collection Account or the Payment Account, respectively, shall be reimbursed immediately as incurred to the related Account by the Servicer or Indenture Trustee, respectively. Subject to Section 6.01 hereof and the
preceding sentence, neither the Indenture Trustee nor the Servicer shall in any way be held liable by reason of any insufficiency in the Accounts. 
  
 The Indenture Trustee shall not in any way be held liable by reason of any insufficiency in any Account (other than the Payment Account) held by the
Indenture Trustee resulting from any investment loss on any Permitted Investment included therein (except to the extent that the Indenture Trustee is the obligor and has defaulted thereon). 
  
 In order to comply with its duties under the U.S.A. Patriot Act of 2001, the
Indenture Trustee shall obtain and verify certain information and documentation from the other party to this Indenture including, but not limited to, such party’s name, address, and other identifying information. 
  
 (h) Except as otherwise expressly provided herein, the Indenture Trustee may
demand payment or delivery of, and shall receive and collect, directly and without intervention or assistance of any fiscal agent or other intermediary, all money and other property payable to 
  

 46 

 or receivable by the Indenture Trustee pursuant to this Indenture. The Indenture Trustee shall hold all such money and
property received by it as part of the Trust Estate and shall apply it as provided in this Indenture. 
  
 If the Indenture Trustee shall not have received the Servicer Remittance Amount by close of business on any related Servicer Remittance Date, the
Indenture Trustee shall, unless the Servicer shall have made provisions satisfactory to the Indenture Trustee for delivery to the Indenture Trustee of an amount equal to such Servicer Remittance Amount, deliver a notice to the Servicer of the
Servicer’s failure to remit such Servicer Remittance Amount and that such failure, if not remedied by the close of business on the Business Day after the date upon which such notice is delivered to the Servicer, shall constitute a Servicer
Event of Default under the Sale and Servicing Agreement. If the Indenture Trustee shall subsequently receive any such Servicer Remittance Amount by the close of business on such Business Day (along with interest at the Prime Rate as set forth in the
Wall Street Journal, accruing from the Servicer Remittance Date to the date such Servicer Remittance Amount was actually received, and payable to the Indenture Trustee) such Servicer Event of Default shall not be deemed to have occurred.
Notwithstanding any other provision hereof, the Indenture Trustee shall deliver to the Servicer, or its designee or assignee, any Servicer Remittance Amount received with respect to a Mortgage Loan after the related Servicer Remittance Date to the
extent that the Servicer previously made payment or provision for payment with respect to such Servicer Remittance Amount in accordance with this Section 8.01, and any such Servicer Remittance Amount shall not be deemed part of the Trust
Estate. 
  
 Except as otherwise expressly provided in this
Indenture and the Sale and Servicing Agreement, if, following delivery by the Indenture Trustee of the notice described above, the Servicer shall fail to remit the Servicer Remittance Amount on any Servicer Remittance Date, the Indenture Trustee
shall deliver a second notice to the Servicer and the Issuer by the close of business on the Business Day immediately prior to the related Payment Date indicating that a Servicer Event of Default occurred and is continuing under the Sale and
Servicing Agreement. Thereupon, the Indenture Trustee shall take such actions as are required of the Indenture Trustee under Article VII of the Sale and Servicing Agreement. In addition, if a default occurs in any other performance required under
the Sale and Servicing Agreement, the Indenture Trustee may, and upon the request of the Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes shall, take such action as may be appropriate to enforce such
payment or performance including the institution and prosecution of appropriate Proceedings. Any such action shall be without prejudice to any right to claim a Default or Event of Default under this Indenture and to proceed thereafter as provided in
Article V hereof. 
  
 (i) In the event that the Swap Provider
elects to post collateral as provided in the Swap Agreement, the Indenture Trustee shall establish and maintain a non-interest bearing separate trust account which shall be an Eligible Account with respect to the Swap Agreement (the “Swap
Collateral Account”) for the benefit of the Swap Provider and the Noteholders, as their interests may appear, into which such collateral shall be deposited. The Indenture Trustee may or shall (as indicated) make withdrawals from the Swap
Collateral Account for the purposes of (i) entering into a substitute swap agreement, (ii) funding the amount of any payment due to be made by the Swap Provider under the related Swap Agreement following the failure by the Swap Provider to
make that payment or (iii) as required pursuant to the Swap Agreement or this 
  

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 Indenture. The Indenture Trustee shall make withdrawals from the Swap Collateral Account and transfer the collateral
(i) as required of the Indenture Trustee pursuant to the Swap Agreement or (ii) if the circumstances which required the posting of collateral no longer exist; and the Indenture Trustee is permitted to liquidate any investments held in the
Swap Collateral Account for any such purpose. In the event that additional collateral is required to be posted by the Swap Provider under the Swap Agreement, the Indenture Trustee shall promptly make a demand on the Swap Provider to post such
additional collateral. To the extent cash makes up all or any portion of the collateral in the Swap Collateral Account, such cash shall be invested in Permitted Investments as directed in writing by the Swap Provider. Absent timely instructions in
writing, the Trustee shall hold such funds uninvested. In connection with the maintenance and administration of the Swap Collateral Account, the Indenture Trustee may request and rely on written instructions from the Servicer, which the Servicer
hereby agrees to provide, with respect to the maintenance and administration of such account. For the avoidance of doubt, the Indenture Trustee shall not have any right to apply any amounts or assets in any Swap Collateral Account except in
accordance with the enforcement and realization of its security interest pursuant to the Swap Agreement or otherwise in accordance with the Swap Agreement. 
  
 Section 8.02. Allocation of Realized Losses. 
  
 (a) All Realized Losses on the Mortgage Loans shall be allocated by the Indenture Trustee on each Payment Date as follows: first, pursuant to the
provisions hereof set forth in Section 8.01(c), to amounts of Net Monthly Excess Cashflow; second, to prepayment penalties; and third, to the Overcollateralization Amount. 
  
 (b) Subsequent Recoveries will count as additional Liquidation Proceeds and
be distributed on the related Payment Date pursuant to Section 8.01(c) hereof. 
  
 Section 8.03. [Reserved]. 
  
 Section 8.04. General Provisions Regarding the Payment Account and Mortgage Loans. (a) The Payment Account shall relate solely to the Notes, Permitted Investments and other property securing the Notes and the obligations of
the Swap Agreement. Funds and other property in the Payment Account shall not be commingled with any other moneys or property of the Issuer or any Affiliate thereof. Notwithstanding the foregoing, the Indenture Trustee may hold any funds or other
property received or held by it as part of a Payment Account in collective accounts maintained by it in the normal course of its business and containing funds or property held by it for other Persons (which may include the Issuer or an Affiliate);
provided, that such accounts are under the sole control of the Indenture Trustee and the Indenture Trustee maintains adequate records indicating the ownership of all such funds or property and the portions thereof held for credit to the Payment
Account. 
  
 (b) If any amounts are needed for payment from the
Payment Account and sufficient uninvested funds are not available therein to make such payment, the Indenture Trustee shall cause to be sold or otherwise converted to cash, to the extent available, a sufficient amount of the investments in the
Payment Account. 
  

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 (c) The Indenture Trustee shall, at all times while any Notes are Outstanding, maintain in its
possession, or in the possession of an agent whose actions with respect to such items are under the sole control of the Indenture Trustee, all certificates or other instruments, if any, evidencing any investment of funds in the Payment Account. The
Indenture Trustee shall relinquish possession of such items, or direct its agent to do so, only for purposes of collecting the final payment receivable on such investment or certificate or, in connection with the sale of any investment held in the
Payment Account, against delivery of the amount receivable in connection with any sale. 
  
 (d) The Servicer shall not direct the Indenture Trustee to invest any part of the Trust Estate in Permitted Investments that constitute uncertificated securities (as defined in Section 8-102 of the Uniform
Commercial Code, as enacted in the relevant jurisdiction) unless it has delivered an Opinion of Counsel addressed to the Indenture Trustee and reasonably satisfactory in form and substance to the Indenture Trustee setting forth, with respect to each
type of security for which authority to invest is being sought, the procedures that must be followed to maintain the lien and security interest created by this Indenture with respect to the Trust Estate. 
  
 (e) With respect to any portion of the Trust Estate invested in Permitted
Investments, the Indenture Trustee acknowledges and agrees that: 
  
 (i) any Permitted Investment that is held in a deposit account shall be held solely in an Eligible Account; and each such Eligible Account shall be subject to the sole and exclusive dominion, custody and control of
the Indenture Trustee; and, without limitation on the foregoing, the Indenture Trustee shall have sole signature authority with respect thereto; 
  
 (ii) any Permitted Investment that constitutes Physical Property shall be delivered to the Indenture Trustee in accordance with paragraph
(a) and/or (b) of the definition of “Delivery,” as applicable, and shall be held, pending maturity or disposition, solely by the Indenture Trustee or a securities intermediary (as such term is defined in Section 8-102(a)(14)
of the Uniform Commercial Code) acting solely for the Indenture Trustee; and 
  
 (iii) any Permitted Investment that is a book-entry security held through the Federal Reserve System pursuant to federal book-entry regulations shall be delivered in accordance with paragraph (c) of the
definition of “Delivery” and shall be maintained by the Indenture Trustee, pending maturity or disposition, through continued book-entry registration of such Permitted Investment as described in such paragraph. 
  
 Section 8.05. Releases of Deleted Mortgage Loans. Upon notice or
discovery by a Responsible Officer of the Indenture Trustee that any of the representations or warranties of the Sponsor set forth in Section 4.01 of the Sale and Servicing Agreement was materially incorrect or otherwise misleading with respect
to any Mortgage Loan as of the time made, the Indenture Trustee shall direct the Sponsor to either cure, repurchase or substitute for such Mortgage Loan as provided in Section 4.02 of the Sale and Servicing Agreement. Upon any purchase of or
substitution for a Deleted Mortgage Loan by the Sponsor in accordance with Section 2.06 or 
  

 49 

 Section 4.02 of the Sale and Servicing Agreement, the Indenture Trustee shall deliver the Indenture Trustee’s
Mortgage File relating to such Deleted Mortgage Loan to the Sponsor, and the Issuer and the Indenture Trustee shall execute such instruments of transfer as are necessary to convey title to such Deleted Mortgage Loan to the Sponsor from the lien of
this Indenture. Nothing in this Section 8.05 should be construed to obligate the Indenture Trustee to actively monitor the correctness or accuracy of the representations and warranties of the Sponsor. 
  
 Section 8.06. Reports by Indenture Trustee to Noteholders; Access to
Certain Information. On each Payment Date, the Indenture Trustee, shall provide the written reports required by the first paragraph of Section 2.08(d) to Noteholders of record as of the related Record Date (including the Clearing Agency, if
any). The Indenture Trustee will make available the Indenture Trustee’s Remittance Report (and, at its option, any additional files containing the same information in an alternative format) to any interested person via the Indenture
Trustee’s internet website. The Indenture Trustee’s internet website shall initially be located at https://www.tss.db.com/invr and assistance in using the website can be obtained by calling the Indenture Trustee’s investor
relations desk at 800.735.7777. The Indenture Trustee shall have the right to alter the manner in which it provides its Indenture Trustee’s Remittance Reports to Noteholders upon notice to Noteholders in the manner in which such Indenture
Trustee’s Remittance Reports are then being provided. 
  
 The
Indenture Trustee shall make available at its Corporate Trust Office, during normal business hours, for review by any Noteholder or designees of the Issuer, originals or copies of the following items: (a) the Indenture and any amendments
thereto, (b) all Indenture Trustee’s Remittance Reports and other reports delivered since the Closing Date pursuant to Section 2.08(d) hereof, (c) any Officers’ Certificates delivered to the Indenture Trustee since the
Closing Date as described in the Indenture and (d) any Accountants’ reports delivered to the Indenture Trustee since the Closing Date as required under the Sale and Servicing Agreement. Copies of any and all of the foregoing items will be
available from the Indenture Trustee upon request; however, the Indenture Trustee will be permitted to require payment of a sum sufficient to cover the reasonable costs and expenses of providing such copies and shall not be required to provide such
copies without reasonable assurances that such sum will be paid. 
  
 Section 8.07. Release of Trust Estate. The Indenture Trustee shall, at such time as there are no Notes Outstanding and no amounts are owing to the Swap Provider, as confirmed to the Indenture Trustee in writing, release all of
the Trust Estate to the Issuer (other than any cash held for the payment of the Notes pursuant to Section 3.03 or 4.02 hereof and amounts due to the Indenture Trustee hereunder). 
  
 Section 8.08. Amendment to Sale and Servicing Agreement. The Indenture Trustee may, without the consent of any
Holder or the Swap Provider, enter into or consent to any amendment or supplement to the Sale and Servicing Agreement for the purpose of increasing the obligations or duties of any party other than the Indenture Trustee, the Swap Provider or the
Holders of the Notes. The Indenture Trustee shall not enter into or consent to any such supplement or amendment unless the Indenture Trustee receives (i) an Opinion of Counsel that the position of the Holders would not be materially adversely
affected or written confirmation of satisfaction of the Rating Agency Condition has been delivered to it and (ii) an Opinion of Counsel experienced in federal income tax matters that such amendment or supplement will not 
  

 50 

 prevent the Notes from being characterized as debt for United States federal income tax purposes and will not cause the
Issuer to be subject to federal income tax. The Indenture Trustee may in its discretion decline to enter into any such supplement or amendment if its own rights, duties or immunities would be adversely affected. Prior to entering into any supplement
or amendment an Opinion of Counsel shall be delivered to the Indenture Trustee (upon which it may conclusively rely) to the effect that such amendment or supplement is permitted and authorized by this Indenture and the Sale and Servicing Agreement.

  
 Section 8.09. Delivery of the Mortgage Files Pursuant
to Sale and Servicing Agreement. As is appropriate for the servicing or foreclosure of any Mortgage Loan, the Indenture Trustee shall deliver to the Servicer (if directed in writing by the Servicer) the Indenture Trustee’s Mortgage Files
for such Mortgage Loan upon receipt by the Indenture Trustee on or prior to the date such release is to be made of: 
  
 (a) such Officer’s Certificates, if any, as are required by the Sale and Servicing Agreement; and 
  
 (b) a Request for Release, executed by the Servicer, providing that the
Servicer (if directed in writing by the Servicer) will hold or retain the Indenture Trustee’s Mortgage Files in trust for the benefit of the Indenture Trustee and the Holders of Notes. 
  
 Section 8.10. Servicer as Agent. In order to facilitate the
servicing of the Mortgage Loans by the Servicer of such Mortgage Loans, the Servicer of the Mortgage Loans has been appointed by the Issuer to retain, in accordance with the provisions of the Sale and Servicing Agreement and this Indenture, all
Servicer Remittance Amounts on such Mortgage Loans prior to their deposit into the Payment Account on or prior to the related Servicer Remittance Date. 
  
 Section 8.11. Termination of Servicer. In the event of the occurrence of a Servicer Event of Default specified in Section 7.01 of the
Sale and Servicing Agreement, the Indenture Trustee may, and, upon the request of the Holders of Notes representing more than 50% of the Class Note Balance of the Outstanding Notes, shall (or as otherwise provided in the Sale and Servicing
Agreement), terminate the Servicer as provided in Section 7.01 of the Sale and Servicing Agreement. If the Indenture Trustee terminates the Servicer, the Indenture Trustee as successor servicer shall, pursuant to Section 7.02 of the Sale
and Servicing Agreement, assume the duties of the Servicer or the Indenture Trustee shall appoint a successor servicer acceptable to the Rating Agencies and meeting the requirements set forth in the Sale and Servicing Agreement and shall provide
notice to the Swap Provider of such appointment. 
  
 Section 8.12. Opinion of Counsel. The Indenture Trustee shall be entitled to receive at least five (5) Business Days’ notice of any action to be taken pursuant to Sections 8.08 and 8.09 hereof (other than in connection
with releases of Mortgage Loans that were subject to a prepayment in full), accompanied by copies of any instruments involved, and the Indenture Trustee shall be entitled to receive an Opinion of Counsel, in form and substance reasonably
satisfactory to the Indenture Trustee, stating the legal effect of any such action, outlining the steps required to complete the same, and concluding that all conditions precedent to the taking of such action have been complied with. Counsel
rendering any such opinion may rely, without independent investigation, on the accuracy and validity of any certificate or other instrument delivered to the Indenture Trustee in connection with any such action. 
  

 51 

 Section 8.13. Appointment of Collateral Agents. The Indenture Trustee may, at no additional
cost to the Issuer or to the Indenture Trustee, appoint one or more Collateral Agents to hold all or a portion of the Indenture Trustee Mortgage Files, as Agent for the Indenture Trustee. Such Collateral Agent shall meet the requirements of Article
IX of the Sale and Servicing Agreement. Matters concerning the Collateral Agents shall be governed by said Article IX. 
  
 ARTICLE IX 
  
 SUPPLEMENTAL INDENTURES 
  
 Section 9.01. Supplemental Indentures Without Consent of Noteholders. Without the consent of the Holders of any Notes or the Swap Provider, the Issuer and the Indenture Trustee, at any time and from time
to time, may enter into one or more indenture supplemental hereto, in form satisfactory to the Indenture Trustee, for any of the following purposes: 
  
 (a) to correct or amplify the description of any property at any time subject to the lien of this Indenture, or better to assure, convey and confirm unto
the Indenture Trustee any property subject or required to be subjected to the lien of this Indenture, or to subject to the lien of this Indenture additional property; 
  
 (b) to add to the conditions, limitations and restrictions on the authorized amount, terms and purposes of the issuance,
authentication and delivery of any Notes, as herein set forth, additional conditions, limitations and restrictions thereafter to be observed; 
  
 (c) to evidence the succession of another Person to the Issuer to the extent permitted herein, and the assumption by any such successor of the covenants
of the Issuer herein and in the Notes contained; 
  
 (d) to add to
the covenants of the Issuer, for the benefit of the Holders of all Notes, or to surrender any right or power herein conferred upon the Trust; 
  
 (e) to cure any ambiguity, to correct or supplement any provision herein that may be defective or inconsistent with any other provision herein, or to
amend any other provisions with respect to matters or questions arising under this Indenture, which shall not be inconsistent with the provisions of this Indenture; or 
  
 (f) to modify, eliminate or add to the provisions of this Indenture to such extent as shall be necessary to effect the
qualification of this Indenture under the TIA or under any similar federal statute hereafter enacted, and to add to this Indenture such other provisions as may be expressly required by the TIA; 
  
 provided that such action shall not adversely affect in any material respect the interests of
the Holders of the Notes or the Certificateholders or the Swap Provider (unless the consent of the Swap Provider is obtained) and will not prevent the Notes from being characterized as debt for 
  

 52 

 United States federal income tax purposes or cause the Issuer to be subject to federal income tax; provided, that the
amendment shall be deemed not to adversely affect in any material respect the interests of the Holders of the Notes and will not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuer to
be subject to federal income tax if the Person requesting the amendment obtains either (i) an Opinion of Counsel delivered to, but not at the expense of, the Indenture Trustee, to such effect or (ii) written confirmation of the
satisfaction of the Rating Agency Condition. 
  
 Section 9.02. Supplemental Indentures with Consent of Noteholders. With the consent of Holders of Notes representing not less than a majority of the Class Note Balance of all Outstanding Notes of the Classes affected thereby by
Act of said Holders delivered to the Issuer and the Indenture Trustee and the consent of the Swap Provider (if the Swap Agreement is still outstanding, unless an Opinion of Counsel is delivered to the Indenture Trustee to the effect that the Swap
Agreement is not materially affected by such supplemental indenture), the Issuer and the Indenture Trustee may enter into an indenture or indentures supplemental hereto for the purpose of adding any provisions to, or changing in any manner or
eliminating any of the provisions of, this Indenture or of modifying in any manner the rights of the Holders of the Notes under this Indenture; provided, however, that no such supplemental indenture shall, without the consent of the Holder of each
Outstanding Note affected thereby: 
  
 (a) change any Payment
Date or the Final Stated Maturity Date of the Notes or, with respect to the Notes, reduce the Class Note Balance thereof or the Interest Rate thereon, change the earliest date on which any Note may be redeemed at the option of the Sponsor, change
payment where, or the coin or currency in which, any Note or any interest thereon is payable, or impair the right to institute suit for the enforcement of the payment of any installment of interest due on any Note on or after the Final Stated
Maturity Date thereof or for the enforcement of the payment of the entire remaining unpaid principal amount of any Note on or after the Final Stated Maturity Date (or, in the case of redemption, on or after the applicable Redemption Date);

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

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 (f) modify any of the provisions of this Indenture in such manner as to affect the calculation of the
Interest Payment Amount or Principal Distribution Amount for any Payment Date (including the calculation of any of the individual components of such amounts) or to affect rights of the Holders of the Notes to the benefits of any provisions for the
redemption of Notes contained herein. 
  
 The Indenture Trustee
may in its discretion determine whether or not any Notes would be affected by any supplemental indenture and any such determination shall be conclusive upon the Holders of all Notes, whether theretofore or thereafter authenticated and delivered
hereunder. The Indenture Trustee shall not be liable for any such determination made in good faith. 
  
 It shall not be necessary for any Act of Noteholders under this Section 9.02 to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof. 
  
 Promptly after the execution by the Issuer and the Indenture Trustee of any supplemental indenture pursuant to this Section 9.02, the Indenture Trustee shall mail to the Holders of the Notes and the Swap Provider
to which such supplemental indenture relates a notice setting forth in general terms the substance of such supplemental indenture. Any failure of the Indenture Trustee to mail such notice, or any defect therein, shall not, however, in any way impair
or affect the validity of any such supplemental indenture. 
  
 Section 9.03. Execution of Supplemental Indentures. In executing, or accepting the additional trusts created by, any supplemental indenture permitted by this Article IX or the modifications thereby of the trusts created by this
Indenture, the Indenture Trustee shall be entitled to receive, and shall be fully protected in relying upon, (i) an Opinion of Counsel stating that the execution of such supplemental indenture is authorized or permitted by this Indenture and
such supplemental indenture does not adversely affect the interests of the Noteholders in any material respect; (ii) an Opinion of Counsel experienced in federal income tax matters stating that the execution of such supplemental indenture will
not prevent the Notes from being characterized as debt for United States federal income tax purposes or cause the Issuer to be subject to federal income tax; or (iii) written confirmation of satisfaction of the Rating Agency Condition. The
Indenture Trustee may, but shall not be obligated to, enter into any such supplemental indenture that affects the Indenture Trustee’s own rights, duties or immunities under this Indenture or otherwise. The Servicer, on behalf of the Issuer,
shall cause executed copies of any supplemental indentures to be delivered to the Rating Agencies. 
  
 Section 9.04. Effect of Supplemental Indentures. Upon the execution of any supplemental indenture under this Article IX, this Indenture shall
be modified in accordance therewith, and such supplemental indenture shall form a part of this Indenture for all purposes; and every Holder of Notes to which such supplemental indenture relates that have theretofore been or thereafter are
authenticated and delivered hereunder shall be bound thereby. 
  
 Section 9.05. Conformity With Trust Indenture Act. Every supplemental indenture executed pursuant to this Article IX shall conform to the requirements of the TIA as then in effect so long as this Indenture shall then be
qualified under the TIA. 
  

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 Section 9.06. Reference in Notes to Supplemental Indentures. Notes authenticated and
delivered after the execution of any supplemental indenture pursuant to this Article IX may, and if required by the Indenture Trustee shall, bear a notation in form approved by the Indenture Trustee as to any matter provided for in such supplemental
indenture. If the Owner Trustee, acting at the direction of the Certificateholders, shall so determine, new Notes so modified as to conform, in the opinion of the Indenture Trustee and the Owner Trustee, acting at the direction of the
Certificateholders, to any such supplemental indenture may be prepared by the Servicer and executed by the Owner Trustee, acting at the direction of the Certificateholders, on behalf of the Issuer, and authenticated and delivered by the Indenture
Trustee in exchange for Outstanding Notes. 
  
 Section 9.07.
Amendments to Governing Documents. The Indenture Trustee shall, upon a Trust Request, consent to any proposed amendment to the Trust’s governing documents, or an amendment to or waiver of any provision of any other document relating to
the Trust’s governing documents, such consent to be given without the necessity of obtaining the consent of the Holders of any Notes upon receipt by the Indenture Trustee of: 
  
 (a) an Officer’s Certificate, to which such proposed amendment or waiver shall be attached, stating that such attached
copy is a true copy of the proposed amendment or waiver and that all conditions precedent to such consent specified in this Section 9.07 have been satisfied; and 
  
 (b) written confirmation of the satisfaction of the Rating Agency Condition with respect to such proposed amendment.

  
 Notwithstanding the foregoing, the Indenture Trustee may
decline to consent to a proposed waiver or amendment that adversely affects its own rights, duties or immunities under this Indenture or otherwise. 
  
 Nothing in this Section 9.07 shall be construed to require that any Person obtain the consent of the Indenture Trustee to any amendment or waiver or
any provision of any document where the making of such amendment or the giving of such waiver without obtaining the consent of the Indenture Trustee is not prohibited by this Indenture or by the terms of the document that is the subject of the
proposed amendment or waiver. 
  
 ARTICLE X 
  
 REDEMPTION OF NOTES 
  
 Section 10.01. Redemption of Notes. (a) The Depositor may,
at its sole cost and expense, terminate this Indenture and all the Notes then Outstanding may be redeemed in whole, but not in part, on any Redemption Date on and after the related Clean-Up Call Date at the related Termination Price. 
  
 (b) Any such purchase or redemption shall be accomplished by deposit by the
Depositor into the Payment Account of the related Termination Price on the Servicer Remittance Date preceding the Redemption Date. The amounts on deposit therein shall be distributed by the Indenture Trustee on such Redemption Date in accordance
with the priority set forth in Section 8.01 hereof. 
  

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 (c) [Reserved]. 
  

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

  

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 ARTICLE XI 
  

MISCELLANEOUS 
  
 Section 11.01. Compliance Certificates and Opinions. (a) Upon any application or request by any Person to the Indenture Trustee to take
any action under any provision of this Indenture, such Person shall furnish to the Indenture Trustee an Officer’s Certificate stating that all conditions precedent, if any, provided for in this Indenture relating to the proposed action have
been complied with and an Opinion of Counsel, if requested by the Indenture Trustee, stating that in the opinion of such counsel all such conditions precedent, if any, have been complied with, except that in the case of any such application or
request as to which the furnishing of such documents is specifically required by any provision of this Indenture relating to such particular application or request, no additional certificate or opinion need be furnished. 
  
 (b) Every certificate, opinion or letter with respect to compliance with a
condition or covenant provided for in this Indenture, including one furnished pursuant to specific requirements of this Indenture relating to a particular application or request (other than certificates provided pursuant to TIA
Section 314(a)(4)) shall include and shall be deemed to include (regardless of whether specifically stated therein) the following: 
  
 (i) a statement that each individual signing such certificate, opinion or letter has read such covenant or condition and the definitions
herein relating thereto; 
  
 (ii) a brief
statement as to the nature and scope of the examination or investigation upon which the statements or opinions contained in such certificate, opinion or letter are based; 
  
 (iii) a statement that, in the opinion of each such individual, he has made such examination or
investigation as is necessary to enable him to express an informed opinion as to whether or not such covenant or condition has been complied with; and 
  
 (iv) a statement as to whether, in the opinion of each such individual, such condition or covenant has been complied with. 
  
 (c) (i) Other than with respect to the release of any Liquidated
Mortgage Loans, Mortgage Loans that are purchased pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or in connection with the Optional Redemption contemplated by Article X hereof, prior to the deposit of any
Collateral or other property or securities with the Indenture Trustee that is to be made the basis for the release of any Collateral or other property or securities subject to the lien of this Indenture, the Issuer shall, in addition to any
obligation imposed in Section 11.01(a) or elsewhere in this Indenture, furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days
of such deposit) to the Issuer of the Collateral or other property or securities to be so deposited. 
  
 (ii) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (i) above, the Issuer shall also deliver to the Indenture Trustee a certificate of 
  

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 a firm of independent public accountants as to the same matters, if the fair value to the Issuer of the property to be so
deposited and of all other such property (other than Liquidated Mortgage Loans, Mortgage Loans that are sold pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or Mortgage Loans to be sold in connection with the
Optional Redemption contemplated by Article X hereof) made the basis of any such withdrawal or release since the commencement of the then-current fiscal year of the Issuer, as set forth in the certificates delivered pursuant to clause (i) above
and this clause (ii), is 10% or more of the aggregate outstanding Class Note Balances of the Notes, but such a certificate need not be furnished with respect to any property so deposited, if the fair value thereof to the Issuer as set forth in the
related Officer’s Certificate is less than $25,000 or less than 1% percent of the aggregate outstanding Class Note Balances of the Notes. 
  
 (iii) Other than with respect to the release of any Liquidated Mortgage Loans, Mortgage Loans that are purchased pursuant to Section 4.02 or
Section 5.15 of the Sale and Servicing Agreement, or in connection with the Optional Redemption contemplated by Article X hereof, whenever any property or securities are to be released from the lien of this Indenture, the Issuer shall also
furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of each person signing such certificate as to the fair value (within 90 days of such release) of the property or securities proposed to be released and
stating that in the opinion of such person the proposed release will not impair the security under this Indenture in contravention of the provisions hereof. 
  
 (iv) Whenever the Issuer is required to furnish to the Indenture Trustee an Officer’s Certificate certifying or stating the opinion of any signer
thereof as to the matters described in clause (iii) above, the Issuer shall also furnish to the Indenture Trustee an a certificate of a firm of independent public accountants as to the same matters if the fair value of the property or
securities and of all other property or securities (other than Liquidated Mortgage Loans, Mortgage Loans that are sold pursuant to Section 4.02 or Section 5.15 of the Sale and Servicing Agreement, or Mortgage Loans to be sold in connection
with the Optional Redemption contemplated by Article X hereof) released from the lien of this Indenture since the commencement of the then current calendar year, as set forth in the certificates required by clause (iii) above and this clause
(iv), equals 10% or more of the aggregate outstanding Class Note Balances of the Notes, but such certificate need not be furnished in the case of any release of property or securities if the fair value thereof as set forth in the related
Officer’s Certificate is less than $25,000 or less than 1 percent of the then aggregate outstanding Class Note Balances of the Notes. 
  
 Section 11.02. Form of Documents Delivered to Indenture Trustee. In any case where several matters are required to be certified by, or covered
by an opinion of, any specified Person, it is not necessary that all such matters be certified by, or covered by the opinion of, only one such Person, or that they be so certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons as to other matters, and any such Person may certify or give an opinion as to such matters in one or several documents. 
  
 Any certificate or opinion of the Issuer may be based, insofar as it relates
to legal matters, upon a certificate or opinion of, or representations by, counsel, unless such officer knows, or in 
  

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 the exercise of reasonable care should know, that the certificate or opinion or representations with respect to the
matters upon which his certificate or opinion is based are erroneous. Any Opinion of Counsel may be based on the written opinion of other counsel, in which event such Opinion of Counsel shall be accompanied by a copy of such other counsel’s
opinion and shall include a statement to the effect that such counsel believes that such counsel and the Indenture Trustee may reasonably rely upon the opinion of such other counsel. 
  
 Where any Person is required to make, give or execute two or more applications, requests, consents, certificates,
statements, opinions or other instruments under this Indenture, they may, but need not, be consolidated and form one instrument. 
  
 Wherever in this Indenture, in connection with any application or certificate or report to the indenture Trustee, it is provided that the Issuer shall
deliver any document as a condition of the reporting of such application, or as evidence of the Trust’s compliance with any term hereof, it is intended that the truth and accuracy, at the time of the granting of such application or at the
effective date of such certificate or report (as the case may be), of the facts and opinions stated in such document shall in such case be conditions precedent to the right of the Issuer to have such application granted or to the sufficiency of such
certificate or report. The foregoing shall not, however, be construed to affect the Indenture Trustee’s right to rely upon the truth and accuracy of any statement or opinion contained in any such document as provided in Section 6.01(b)(ii)
hereof. 
  
 Whenever in this Indenture it is provided that the
absence of the occurrence and continuation of a Default or Event of Default is a condition precedent to the taking of any action by the Indenture Trustee at the request or direction of the Issuer, then, notwithstanding that the satisfaction of such
condition is a condition precedent to the Trust’s right to make such request or direction, the Indenture Trustee shall be protected in acting in accordance with such request or direction if it does not have knowledge of the occurrence and
continuation of such Default or Event of Default as provided in Section 6.01 (d) hereof. 
  
 Section 11.03. Acts of Noteholders. (a) Any request, demand, authorization, direction, notice, consent, waiver or other action provided
by this Indenture to be given or taken by Noteholders may be embodied in and evidenced by one or more instruments of substantially similar tenor signed by such Noteholders in person or by an agent duly appointed in writing; and, except as herein
otherwise expressly provided, such action shall become effective when such instrument or instruments are delivered to the Indenture Trustee, and, where it is hereby expressly required, to the Issuer. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the “Act” of the Noteholders signing such instrument or instruments. Proof of execution of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01 hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in the manner provided in this Section 11.03. 
  
 (b) The fact and date of the execution by any Person of any such instrument
or writing may be proved by the affidavit of a witness of such execution or by the certificate of any notary public or other officer authorized by law to take acknowledgments of deeds, certifying that the individual signing such instrument or
writing acknowledged to him the execution 
  

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 thereof. Whenever such execution is by an officer of a corporation or a member of a partnership on behalf of such
corporation or partnership, such certificate or affidavit shall also constitute sufficient proof of his authority. 
  
 (c) The ownership of Notes shall be proved by the Note Register. 
  

(d) Any request, demand, authorization, direction, notice, consent, waiver or other action by the Holder of any Notes shall bind the Holder of every
Note issued upon the registration of transfer thereof or in exchange therefor or in lieu thereof, in respect of anything done, omitted or suffered to be done by the Indenture Trustee or the Issuer in reliance thereon; whether or not notation of such
action is made upon such Notes. 
  
 Section 11.04.
Notices, etc., to Indenture Trustee and Issuer. Any request, demands authorization, direction, notice, consent, waiver or Act of Noteholders or other documents provided or permitted by this Indenture to be made upon, given or furnished to, or
filed with: 
  
 (a) the Indenture Trustee by any Noteholder or by
the Issuer shall be sufficient for every purpose hereunder if in writing and made, given, furnished or filed and received by the Indenture Trustee at its Corporate Trust Office; or 
  
 (b) the Issuer by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder (except as
provided in Section 5.01 (c) and (d)) hereof if in writing and mailed, first-class postage prepaid, to the Issuer addressed to it at Accredited Mortgage Loan Trust 2005-4, in care of U.S. Bank Trust National Association, 209 South LaSalle
Street, Suite 300, Chicago, Illinois 60604, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture Trustee by the Trust; or 
  
 (c) the Sponsor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing
and mailed, first-class, postage paid, to Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California, 92128, Attention: Corporate Trust Administration, or at any other address previously furnished in writing to the Indenture
Trustee by the Sponsor; or 
  
 (d) the Servicer by the Indenture
Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class, postage paid, to Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: Corporate Trust
Administration or at any other address previously furnished in writing to the Indenture Trustee by the Servicer; or 
  
 (e) the Depositor by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose hereunder if in writing and mailed, first-class,
postage paid, to Accredited Home Lenders, Inc., 15090 Avenue of Science, San Diego, California 92128, Attention: Corporate Trust Administration or at any other address previously furnished in writing to the Indenture Trustee by the Depositor; or

  
 (f) the Underwriter by any party or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first-class, postage prepaid, to Goldman, Sachs & Co., 85 Broad Street, New York, New York 10004, or at any other address previously furnished in writing to the Indenture
Trustee by the Underwriter; or 
  

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 (g) the Swap Provider by the Indenture Trustee or by any Noteholder shall be sufficient for every purpose
hereunder if in writing and mailed, first-class, postage paid, to Barclays Bank PLC, 200 Park Avenue, 4th Floor, New York, NY 10166, Attention: General Counsel, or at any other address previously furnished in writing to the Indenture Trustee by the
Swap Provider. 
  
 Notices required to be given to the Rating
Agencies by the Issuer or the Indenture Trustee shall be in writing, personally delivered or mailed first-class postage pre-paid, to (i) in the case of Moody’s, at the following address: Moody’s Investors Service, Inc., RMBS
Monitoring Department, 4th Floor, 99 Church Street, New York, New York 10004, (ii) in the case of S&P, at the following address: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., 55 Water
Street, New York, New York, 10041, Attention: Asset-Backed Surveillance Department and (iii) in the case of Dominion, at the following address: Dominion Bond Rating Service, 55 Broadway, 15th Floor, New York, New York 10006; or as to each of
the foregoing, at such other address as shall be designed by written notice to the other parties. 
  
 Section 11.05. Notices and Reports to Noteholders; Waiver of Notices. Where this Indenture provides for notice to Noteholders of any event or
the mailing of any report to Noteholders, such notice or report shall be sufficiently given (unless otherwise herein expressly provided) if mailed, first-class postage prepaid, to each Noteholder affected by such event or to whole such report is
required to be mailed, at the address of such Noteholder as it appears on the Note Register, not later than the latest date, and not earlier than the earliest date, prescribed for the giving of such notice or the mailing of such report. In any case
where a notice or report to Noteholders is mailed in the manner provided above, neither the failure to mail such notice or report, nor any defect in any notice or report so mailed, to any particular Noteholder shall affect the sufficiency of such
notice or report with respect to other Noteholders, and any notice or report that is mailed in the manner herein provided shall be conclusively presumed to have been duly given or provided. 
  
 Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before or after the event, and such waiver shall be the equivalent of such notice. Waivers of notice by Noteholders shall be filed with the Indenture Trustee, but such filing
shall not be a condition precedent to the validity of any action taken in reliance upon such waiver. 
  
 In case, by reason of the suspension of regular mail service as a result of a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Noteholders when such notice is required to be given pursuant to any provision of this Indenture, then any manner of giving such notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a sufficient
giving of such notice. 
  
 Section 11.06. Rules by
Indenture Trustee. The Indenture Trustee may (but is not obligated to) make reasonable rules for any meeting of Noteholders. 
  

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 Section 11.07. Conflict with Trust Indenture Act. If any provision hereof limits, qualifies
or conflicts with another provision hereof that is required to be included in this Indenture by any of the provisions of the TIA, such required provision shall control. 
  
 Section 11.08. Effect of Headings and Table of Contents. The Article and Section headings herein and the Table
of Contents are for convenience only and shall not affect the construction hereof. 
  
 Section 11.09. Successors and Assigns. All covenants and agreements in this Indenture by the Issuer shall bind its successors and assigns, whether so expressed or not. 
  
 Section 11.10. Separability. In case any provision in this
Indenture or in the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby. 
  
 Section 11.11. Benefits of Indenture. Nothing in this Indenture
or in the Notes, expressed or implied, shall give to any Person, other than the parties hereto and their successors hereunder, any separate trustee or co-trustee appointed under Section 6.14 hereof and the Noteholders, any benefit or any legal
or equitable right, remedy or claim under this Indenture. 
  
 Section 11.12. Legal Holidays. In any case where the date of any Payment Date, Redemption Date or any other date on which principal of or interest on any Note is proposed to be paid shall not be a Business Day, then
(notwithstanding any other provision of the Notes or this Indenture) payment need not be made on such date, but may be made on the next succeeding Business Day, with the same force and effect as if made on the nominal date of any such Payment Date,
Redemption Date or other date for the payment of principal of or interest on any Note and no interest shall accrue for the period from and after any such nominal date, provided such payment is made in full on such next succeeding Business Day.

  
 Section 11.13. Governing Law. IN VIEW OF THE FACT
THAT NOTEHOLDERS ARE EXPECTED TO RESIDE IN MANY STATES AND OUTSIDE THE UNITED STATES AND THE DESIRE TO ESTABLISH WITH CERTAINTY THAT THIS INDENTURE WILL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAW OF A STATE HAVING A
WELL-DEVELOPED BODY OF COMMERCIAL AND FINANCIAL LAW RELEVANT TO TRANSACTIONS OF THE TYPE CONTEMPLATED HEREIN, THIS INDENTURE AND EACH NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
AGREEMENTS MADE AND TO BE PERFORMED THEREIN, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS. 
  
 Section 11.14. Counterparts. This instrument may be executed in
any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. 
  
 Section 11.15. Recording of Indenture. This Indenture is subject to recording in any appropriate public
recording offices, such recording to be effected by the Servicer, on behalf of the Issuer, and at its expense in compliance with any Opinion of Counsel delivered pursuant to Sections 2.11 (c) or 3.06 hereof. 
  

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 Section 11.16. Issuer Obligation. (a) No recourse, may be taken, directly or indirectly,
with respect to the obligations of the Issuer, the Owner Trustee or the Indenture Trustee on the Notes or under this Indenture or any certificate or other writing delivered in connection herewith or therewith, against (i) the Indenture Trustee
(except as expressly stated herein regarding performance of its own obligations) Owner Trustee in its individual capacity, (ii) any manner of a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary, agent, officer,
director, employee or agent of the Indenture Trustee or the Owner Trustee in its individual capacity, any holder of a beneficial interest in the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or assign of the Indenture
Trustee or the Owner Trustee in its individual capacity, except as any such Person may have expressly agreed (it being understood that the Indenture Trustee and the Owner Trustee have no such obligations in their individual capacity) and except that
any such partner, owner or beneficiary shall be fully liable, to the extent provided by applicable law, for any unpaid consideration for stock, unpaid capital contribution or failure to pay any installment or call owing to such entity. For all
purposes of this Indenture, in the performance of any duties or obligations of the Issuer hereunder, the Owner Trustee shall be subject to, and entitled to the benefits of, the terms and provisions of the Trust Agreement. 
  
 (b) It is expressly understood and agreed by the parties hereto that
(i) this Indenture is executed and delivered by U.S. Bank Trust National Association, not individually or personally but solely as Owner Trustee of the Issuer, in the exercise of the powers and authority conferred and vested in it under the
Trust Agreement, (ii) each of the representations, undertakings and agreements herein made on the part of the Issuer is made and intended not as personal representations, undertakings and agreements by U.S. Bank Trust National Association but
is made and intended for the purpose for binding only the Issuer, (iii) nothing herein contained shall be construed as creating any liability on U.S. Bank Trust National Association, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (iv) under no circumstances shall U.S. Bank Trust National
Association be personally liable for the payment of any indebtedness or expenses of the Issuer or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Issuer under this Indenture or
any other related documents. 
  
 Section 11.17. No
Petition. The Indenture Trustee, by entering into this Indenture, and each Noteholder and Beneficial Owner, by accepting a Note, hereby covenant and agree that they will not at any time institute against the Depositor or the Issuer, or join in
any institution against the Depositor or the Issuer of, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law in connection with
any obligations relating to the Notes, this Indenture or any of the Basic Documents. In addition, the Indenture Trustee will, if directed in writing by the Majority Noteholders and indemnity is provided as set forth herein, on behalf of the Holders
of the Notes, (a) file a written objection to any motion or the Sponsor with the Depositor or other proceeding seeking the substantive consolidation of the Sponsor with the Issuer, (b) file an appropriate memorandum of points and
authorities or other brief in support of such objection, or 
  

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 (c) endeavor to establish at the hearing on such objection that the substantive consolidation of such entities would be
materially prejudicial to the Noteholders. 
  
 This
Section 11.17 will survive for one year and one day following the termination of this Indenture. 
  
 Section 11.18. Inspection. The Issuer agrees that, on reasonable prior notice, it will permit any representative of the Indenture Trustee,
during the Trust’s normal business hours, to examine all of books of account, records, reports and other papers of the Issuer, to make copies and extracts therefrom, to cause such books to be audited by Independent Accountants selected by the
Indenture Trustee, and to discuss its affairs, finances and accounts with its officers, employees and Independent Accountants (and by this provision the Issuer hereby authorizes its Accountants to discuss with such representatives such affairs,
finances and accounts), all at such reasonable times and as often as may be reasonably requested. Any expense incident to the exercise by the Indenture Trustee of any right under this Section 11.18 shall be borne by the Issuer. 
  
 Section 11.19. Usury. The amount of interest payable or paid on
any Note under the terms of this Indenture shall be limited to an amount that shall not exceed the maximum nonusurious rate of interest allowed by the applicable laws of the United States or the State of New York (whichever shall permit the higher
rate), that could lawfully be contracted for, charged or received (the “Highest Lawful Rate”). In the event any payment of interest on any Note exceeds the Highest Lawful Rate, the Issuer stipulates that such excess amount will be
deemed to have been paid as a result of an error on the part of both the Indenture Trustee, acting on behalf of the Holder of such Note, and the Issuer, and the Holder receiving such excess payment shall promptly, upon discovery of such error or
upon notice thereof from the Issuer or the Indenture Trustee, refund the amount of such excess or, at the option of the Indenture Trustee, apply the excess to the payment of principal of such Note, if any, remaining unpaid. In addition, all sums
paid or agreed to be paid to the Indenture Trustee for the benefit of Holders of Notes for the use, forbearance or detention of money shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full
term of such Notes. 
  
 Section 11.20. Rights of Swap
Provider. The Swap Provider shall be deemed a third-party beneficiary of this Indenture to the same extent as if it were a party hereto and shall have the right, upon designation of an “Early Termination Date” (as defined in the Swap
Agreement), to enforce its rights under this Indenture, which rights include but are not limited to the obligation of the Indenture Trustee (A) to deposit any Net Swap Payment required pursuant to Section 8.01(a)(v) and any Swap
Termination Payment required pursuant to Section 8.01(a)(v) into the Payment Account and (B) to pay any Net Swap Payment required pursuant to Section 8.01(b)(i) or Swap Termination Payment required pursuant to Section 8.01(b)(i)
to the Swap Counterparty. For the protection and enforcement of the provisions of this Section, the Swap Counterparty shall be entitled to such relief as can be given either at law or in equity, subject to the provisions hereof. 
  
 [Remainder of Page Intentionally Left Blank] 
  

 64 

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

			
	 ACCREDITED MORTGAGE LOAN
 TRUST 2005-4

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

		
	 By:
	 	  

		
	 Name:
	 	 
		
	 Title:
	 	 
	
	 DEUTSCHE BANK NATIONAL TRUST COMPANY

		
	 	 	 as Indenture Trustee

		
	 By:
	 	  

		
	 Name:
	 	 
		
	 Title:
	 	 
		
	 By:
	 	  

		
	 Name:
	 	 
		
	 Title:
	 	 

  
 [Signature page
to Indenture] 
  

 65 

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

					
	 	  	 Trust Indenture Act of 1939

	  	 Indenture Section

	 Section 310
	  	 
	 	  	(a) (1)	  	6.07
	 	  	(a) (2)	  	6.08
	 	  	(a) (3)	  	6.13
	 	  	(a) (4)	  	Not Applicable
	 	  	(a) (5)	  	6.07
	 	  	(b)	  	6.07
	 	  	(c)	  	Not Applicable
	 Section 311
	  	 
	 	  	(a)	  	6.12
	 	  	(b)	  	6.12
	 	  	(c)	  	Not Applicable
	 Section 312
	  	 
	 	  	(a)	  	7.01(A), 7.02(a)
	 	  	(b)	  	7.02(b)
	 	  	(c)	  	7.02(c)
	 Section 313
	  	 
	 	  	(a)	  	7.03
	 	  	(b)	  	7.03
	 	  	(c)	  	7.03
	 	  	(d)	  	7.03
	 Section 314
	  	 
	 	  	(a)(1)	  	7.04
	 	  	(a)(2)	  	7.04
	 	  	(a)(3)	  	7.03, 7.04
	 	  	(a)(4)	  	3.10
	 	  	(b)(1)	  	2.11(b)
	 	  	(b)(2)	  	3.06
	 	  	(c)(1)	  	2.11,4.01, 11.01
	 	  	(c)(2)	  	2.11, 4.01, 11.01
	 	  	(c)(3)	  	4.01
	 	  	(d)(1)	  	11.01
	 	  	(d)(2)	  	11.01
	 	  	(d)(3)	  	11.01
	 	  	(e)	  	11. 01(b)
	 Section 315
	  	 
	 	  	(a)	  	6.01(b)(ii), 6.01(c)(i)
	 	  	(b)	  	6.02
	 	  	(c)	  	6.01(a)
	 	  	(d)(1)	  	6.01(b), 6.01(c)
	 	  	(d)(2)	  	6.01(c)(iii)
	 	  	(d)(3)	  	6.01(c)(iv)
	 	  	(e)	  	5.15
	 Section 316
	  	 
	 	  	(a)	  	5.13
	 	  	(b)	  	5.09
	 	  	(c)	  	10.02
	 Section 317
	  	 
	 	  	(a)(1)	  	5.03
	 	  	(a)(2)	  	5.05
	 	  	(b)	  	3.03
	 Section 318
	  	 
	 	  	(a)	  	11.07

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

  

 i

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