Servicing Agreement

POOLING AND SERVICING AGREEMENT Dated as of June 1, 2006

 

 
 
MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC.
Depositor
 
 
WELLS FARGO BANK, N.A
Servicer
 
 
WELLS FARGO BANK, N.A.
Master Servicer and Trust Administrator
 
 
and

 
U.S. BANK NATIONAL ASSOCIATION
Trustee
 
 
Dated as of June 1, 2006
 
 
Mortgage Pass-Through Certificates
Series 2006-HE2
 





TABLE OF CONTENTS
 
ARTICLE I DEFINITIONS
 
   
SECTION 1.01.
Defined Terms.
SECTION 1.02.
Allocation of Certain Interest Shortfalls.
SECTION 1.03.
Rights of the NIMS Insurer.
   
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
 
SECTION 2.01.
Conveyance of the Mortgage Loans.
SECTION 2.02.
Acceptance of REMIC I by Trustee.
SECTION 2.03.
Repurchase or Substitution of Mortgage Loans by an Originator or the Seller.
SECTION 2.04.
Reserved.
SECTION 2.05.
Representations, Warranties and Covenants of the Servicer and the Master Servicer.
SECTION 2.06.
Conveyance of REMIC Regular Interests and Acceptance of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V and REMIC VI by the Trustee; Issuance of Certificates.
SECTION 2.07.
Issuance of Class R Certificates and Class R-X Certificates.
   
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
 
SECTION 3.01.
Servicer to Act as Servicer.
SECTION 3.02.
Sub-Servicing Agreements Between Servicer and Sub-Servicers.
SECTION 3.03.
Successor Sub-Servicers.
SECTION 3.04.
Liability of the Servicer.
SECTION 3.05.
No Contractual Relationship Between Sub-Servicers and the Trustee, the Trust Administrator, the NIMS Insurer or Certificateholders.
SECTION 3.06.
Assumption or Termination of Sub-Servicing Agreements by Master Servicer.
SECTION 3.07.
Collection of Certain Mortgage Loan Payments.
SECTION 3.08.
Sub-Servicing Accounts.
SECTION 3.09.
Collection of Taxes, Assessments and Similar Items; Servicing Accounts.
SECTION 3.10.
Collection Account.
SECTION 3.11.
Withdrawals from the Collection Account.
SECTION 3.12.
Investment of Funds in the Collection Account.
SECTION 3.13.
[Reserved].
SECTION 3.14.
Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage.
SECTION 3.15.
Enforcement of Due-On-Sale Clauses; Assumption Agreements.
SECTION 3.16.
Realization Upon Defaulted Mortgage Loans.
SECTION 3.17.
Trustee to Cooperate; Release of Mortgage Files.
SECTION 3.18.
Servicing Compensation.
SECTION 3.19.
Reports; Collection Account Statements.
SECTION 3.20.
Statement as to Compliance.
SECTION 3.21.
Assessments of Compliance and Attestation Reports.
SECTION 3.22.
Access to Certain Documentation.
SECTION 3.23.
Title, Management and Disposition of REO Property.
SECTION 3.24.
Obligations of the Servicer in Respect of Prepayment Interest Shortfalls.
SECTION 3.25.
Obligations of the Servicer in Respect of Monthly Payments.
SECTION 3.26.
Advance Facility
SECTION 3.27.
Late Remittance.
SECTION 3.28.
Transfer of Servicing for Certain Mortgage Loans.
   
ARTICLE IIIA ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
 
SECTION 3A.01.
Master Servicer to Act as Master Servicer
SECTION 3A.02.
[Reserved].
SECTION 3A.03.
Monitoring of Servicer.
SECTION 3A.04.
Fidelity Bond.
SECTION 3A.05.
Power to Act; Procedures.
SECTION 3A.06.
Due on Sale Clauses; Assumption Agreements.
SECTION 3A.07.
[Reserved].
SECTION 3A.08.
Documents, Records and Funds in Possession of Master Servicer to be Held for Trustee.
SECTION 3A.09.
Compensation for the Master Servicer.
SECTION 3A.10.
Obligations of the Master Servicer in Respect of Prepayment Interest Shortfalls.
SECTION 3A.11.
Distribution Account.
SECTION 3A.12.
Permitted Withdrawals and Transfers from the Distribution Account.
   
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS
   
SECTION 4.01.
Distributions.
SECTION 4.02.
Statements to Certificateholders.
SECTION 4.03.
Remittance Reports, Advances.
SECTION 4.04.
Allocation of Realized Losses.
SECTION 4.05.
Compliance with Withholding Requirements.
SECTION 4.06.
Exchange Commission Filings; Additional Information.
SECTION 4.07.
Net WAC Rate Carryover Reserve Account.
SECTION 4.08.
Swap Account.
SECTION 4.09.
Tax Treatment of Swap Payments and Swap Termination Payments.
SECTION 4.10.
Cap Account.
   
ARTICLE V THE CERTIFICATES
   
SECTION 5.01.
The Certificates.
SECTION 5.02.
Registration of Transfer and Exchange of Certificates.
SECTION 5.03.
Mutilated, Destroyed, Lost or Stolen Certificates.
SECTION 5.04.
Persons Deemed Owners.
SECTION 5.05.
Certain Available Information.
   
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER
   
SECTION 6.01.
Liability of the Depositor, the Servicer and the Master Servicer.
SECTION 6.02.
Merger or Consolidation of the Depositor or the Master Servicer.
SECTION 6.03.
Limitation on Liability of the Depositor, the Servicer, the Master Servicer and Others.
SECTION 6.04.
Limitation on Resignation of the Servicer; Assignment of Master Servicing.
SECTION 6.05.
Successor Master Servicer.
SECTION 6.06.
Rights of the Depositor in Respect of the Servicer.
SECTION 6.07.
[Reserved].
SECTION 6.08.
Duties of the Credit Risk Manager.
SECTION 6.09.
Limitation Upon Liability of the Credit Risk Manager.
SECTION 6.10.
Removal of the Credit Risk Manager.
   
ARTICLE VII DEFAULT
 
SECTION 7.01.
Servicer Events of Default and Master Servicer Events of Termination.
SECTION 7.02.
Master Servicer or Trustee to Act; Appointment of Successor Servicer.
SECTION 7.03.
Trustee to Act; Appointment of Successor Master Servicer.
SECTION 7.04.
Notification to Certificateholders.
SECTION 7.05.
Waiver of Servicer Events of Default and Master Servicer Events of Termination.
SECTION 7.06.
Survivability of Servicer and Master Servicer Liabilities.
   
ARTICLE VIII CONCERNING THE TRUSTEE AND THE TRUST ADMINISTRATOR
   
SECTION 8.01.
Duties of Trustee and Trust Administrator.
SECTION 8.02.
Certain Matters Affecting the Trustee and the Trust Administrator
SECTION 8.03.
Neither Trustee nor Trust Administrator Liable for Certificates or Mortgage Loans.
SECTION 8.04.
Trustee and Trust Administrator May Own Certificates.
SECTION 8.05.
Trust Administrator’s and Trustee’s Fees and Expenses.
SECTION 8.06.
Eligibility Requirements for Trustee and Trust Administrator.
SECTION 8.07.
Resignation and Removal of the Trustee or Trust Administrator.
SECTION 8.08.
Successor Trustee or Trust Administrator.
SECTION 8.09.
Merger or Consolidation of Trustee or Trust Administrator.
SECTION 8.10.
Appointment of Co-Trustee or Separate Trustee.
SECTION 8.11.
Appointment of Office or Agency; Appointment of Custodian.
SECTION 8.12.
Representations and Warranties.
   
ARTICLE IX TERMINATION
   
SECTION 9.01.
Termination Upon Repurchase or Liquidation of All Mortgage Loans.
SECTION 9.02.
Additional Termination Requirements.
   
ARTICLE X REMIC PROVISIONS
   
SECTION 10.01.
REMIC Administration.
SECTION 10.02.
Prohibited Transactions and Activities.
SECTION 10.03.
Servicer, Master Servicer and Trustee Indemnification.
   
ARTICLE XI MISCELLANEOUS PROVISIONS
   
SECTION 11.01.
Amendment.
SECTION 11.02.
Recordation of Agreement; Counterparts.
SECTION 11.03.
Limitation on Rights of Certificateholders.
SECTION 11.04.
Governing Law.
SECTION 11.05.
Notices.
SECTION 11.06.
Severability of Provisions.
SECTION 11.07.
Notice to Rating Agencies and the NIMS Insurer.
SECTION 11.08.
Article and Section References.
SECTION 11.09.
Grant of Security Interest.
SECTION 11.10.
Third Party Rights.
SECTION 11.11.
Intention of the Parties and Interpretation.




Exhibits
 
Exhibit A-1
Form of Class A-1 Certificate
Exhibit A-2
Form of Class A-2 Certificate
Exhibit A-3
Form of Class A-3 Certificate
Exhibit A-4
Form of Class A-4 Certificate
Exhibit A-5
Form of Class M-1 Certificate
Exhibit A-6
Form of Class M-2 Certificate
Exhibit A-7
Form of Class M-3 Certificate
Exhibit A-8
Form of Class M-4 Certificate
Exhibit A-9
Form of Class M-5 Certificate
Exhibit A-10
Form of Class M-6 Certificate
Exhibit A-11
Form of Class M-7 Certificate
Exhibit A-12
Form of Class M-8 Certificate
Exhibit A-13
Form of Class M-9 Certificate
Exhibit A-14
Form of Class M-10 Certificate
Exhibit A-15
Form of Class M-11 Certificate
Exhibit A-16
Form of Class CE Certificate
Exhibit A-17
Form of Class P Certificate
Exhibit A-18
Form of Class R Certificate
Exhibit A-19
Form of Class R-X Certificate
Exhibit B
[Reserved]
Exhibit C-1
Form of Initial Certification
Exhibit C-2
Form of Final Certification
Exhibit C-3
Form of Receipt of Mortgage Notes
Exhibit D
Forms of Assignment Agreements
Exhibit E
Request for Release
Exhibit F-1
Form of Transferor Representation Letter and Form of Transferee Representation
 
Letter in Connection with Transfer of the Private Certificates Pursuant to Rule 144A Under the 1933 Act
Exhibit F-2
Form of Transfer Affidavit and Agreement and Form of Transferor Affidavit in Connection with Transfer of Residual Certificates
Exhibit G
Form of Certification with respect to ERISA and the Code
Exhibit H
Form of Report Pursuant to Section 4.06
Exhibit I
Form of Lost Note Affidavit
Exhibit J-1
Form of Certification to Be Provided by the Master Servicer with Form 10-K
Exhibit J-2
Form of Certification to Be Provided by the Servicer to the Master Servicer
Exhibit K
Form of Cap Contract
Exhibit L
Annual Statement of Compliance pursuant to Section 3.20
Exhibit M
Form of Interest Rate Swap Agreement
Exhibit N
Form of Swap Administration Agreement
Exhibit O
Servicing Criteria to Be Addressed in Assessment of Compliance
Exhibit P
Form 10-D, Form 8-K and Form 10-K Reporting Responsibility
Exhibit Q
Additional Disclosure Notification
Exhibit R-1
Form of Delinquency Report
Exhibit R-2
Form of Monthly Remittance Advice
Exhibit R-3
Form of Realized Loss Report
   
   
Schedule 1
Mortgage Loan Schedule
Schedule 2
Prepayment Charge Schedule




This Pooling and Servicing Agreement, is dated and effective as of June 1, 2006 among MORTGAGE ASSET SECURITIZATION TRANSACTIONS, INC. as Depositor, WELLS FARGO BANK, N.A., as Servicer, WELLS FARGO BANK, N.A. as Master Servicer and Trust Administrator and U.S. BANK NATIONAL ASSOCIATION as Trustee.
 
PRELIMINARY STATEMENT:
 
The Depositor intends to sell pass-through certificates to be issued hereunder in multiple classes, which in the aggregate will evidence the entire beneficial ownership interest in each REMIC (as defined herein) created hereunder. The Trust Fund will consist of a segregated pool of assets comprised of the Mortgage Loans and certain other related assets subject to this Agreement.
 
REMIC I
 
As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of the Mortgage Loans and certain other related assets (other than the Net WAC Rate Carryover Reserve Account, the Swap Account, the Supplemental Interest Trust, the Interest Rate Swap Agreement, the Cap Account, the Cap Contract, any Originator Prepayment Charge Payment Amounts and any Servicer Prepayment Charge Payment Amounts) subject to this Agreement as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC I.” The Class R-I Interest will be the sole class of “residual interests” in REMIC I for purposes of the REMIC Provisions (as defined herein). The following table irrevocably sets forth the designation, the REMIC I Remittance Rate, the initial Uncertificated Balance and, for purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC I Regular Interests (as defined herein). None of the REMIC I Regular Interests will be certificated.
 
 
Designation
 
REMIC 1
Remittance Rate(2)
 
Initial
Uncertificated Balance
 
Latest Possible
Maturity Date(1)
 
I
   
Variable
 
$
497,206.91
   
June 2036
 
I-1-A
   
Variable
 
$
4,448,650.00
   
June 2036
 
I-1-B
   
Variable
 
$
4,448,650.00
   
June 2036
 
I-2-A
   
Variable
 
$
5,420,700.00
   
June 2036
 
I-2-B
   
Variable
 
$
5,420,700.00
   
June 2036
 
I-3-A
   
Variable
 
$
6,382,850.00
   
June 2036
 
I-3-B
   
Variable
 
$
6,382,850.00
   
June 2036
 
I-4-A
   
Variable
 
$
7,325,150.00
   
June 2036
 
I-4-B
   
Variable
 
$
7,325,150.00
   
June 2036
 
I-5-A
   
Variable
 
$
8,238,500.00
   
June 2036
 
I-5-B
   
Variable
 
$
8,238,500.00
   
June 2036
 
I-6-A
   
Variable
 
$
9,112,500.00
   
June 2036
 
I-6-B
   
Variable
 
$
9,112,500.00
   
June 2036
 
I-7-A
   
Variable
 
$
9,937,900.00
   
June 2036
 
I-7-B
   
Variable
 
$
9,937,900.00
   
June 2036
 
I-8-A
   
Variable
 
$
10,673,350.00
   
June 2036
 
I-8-B
   
Variable
 
$
10,673,350.00
   
June 2036
 
I-9-A
   
Variable
 
$
10,794,300.00
   
June 2036
 
I-9-B
   
Variable
 
$
10,794,300.00
   
June 2036
 
I-10-A
   
Variable
 
$
10,329,350.00
   
June 2036
 
I-10-B
   
Variable
 
$
10,329,350.00
   
June 2036
 
I-11-A
   
Variable
 
$
9,844,000.00
   
June 2036
 
I-11-B
   
Variable
 
$
9,844,000.00
   
June 2036
 
I-12-A
   
Variable
 
$
9,381,700.00
   
June 2036
 
I-12-B
   
Variable
 
$
9,381,700.00
   
June 2036
 
I-13-A
   
Variable
 
$
8,941,300.00
   
June 2036
 
I-13-B
   
Variable
 
$
8,941,300.00
   
June 2036
 
I-14-A
   
Variable
 
$
8,521,750.00
   
June 2036
 
I-14-B
   
Variable
 
$
8,521,750.00
   
June 2036
 
I-15-A
   
Variable
 
$
8,122,100.00
   
June 2036
 
I-15-B
   
Variable
 
$
8,122,100.00
   
June 2036
 
I-16-A
   
Variable
 
$
7,742,400.00
   
June 2036
 
I-16-B
   
Variable
 
$
7,742,400.00
   
June 2036
 
I-17-A
   
Variable
 
$
7,379,550.00
   
June 2036
 
I-17-B
   
Variable
 
$
7,379,550.00
   
June 2036
 
I-18-A
   
Variable
 
$
7,228,150.00
   
June 2036
 
I-18-B
   
Variable
 
$
7,228,150.00
   
June 2036
 
I-19-A
   
Variable
 
$
9,833,150.00
   
June 2036
 
I-19-B
   
Variable
 
$
9,833,150.00
   
June 2036
 
I-20-A
   
Variable
 
$
12,512,450.00
   
June 2036
 
I-20-B
   
Variable
 
$
12,512,450.00
   
June 2036
 
I-21-A
   
Variable
 
$
11,308,200.00
   
June 2036
 
I-21-B
   
Variable
 
$
11,308,200.00
   
June 2036
 
I-22-A
   
Variable
 
$
10,140,400.00
   
June 2036
 
I-22-B
   
Variable
 
$
10,140,400.00
   
June 2036
 
I-23-A
   
Variable
 
$
9,015,300.00
   
June 2036
 
I-23-B
   
Variable
 
$
9,015,300.00
   
June 2036
 
I-24-A
   
Variable
 
$
6,761,200.00
   
June 2036
 
I-24-B
   
Variable
 
$
6,761,200.00
   
June 2036
 
I-25-A
   
Variable
 
$
4,591,800.00
   
June 2036
 
I-25-B
   
Variable
 
$
4,591,800.00
   
June 2036
 
I-26-A
   
Variable
 
$
4,289,150.00
   
June 2036
 
I-26-B
   
Variable
 
$
4,289,150.00
   
June 2036
 
I-27-A
   
Variable
 
$
4,049,100.00
   
June 2036
 
I-27-B
   
Variable
 
$
4,049,100.00
   
June 2036
 
I-28-A
   
Variable
 
$
3,823,600.00
   
June 2036
 
I-28-B
   
Variable
 
$
3,823,600.00
   
June 2036
 
I-29-A
   
Variable
 
$
3,612,350.00
   
June 2036
 
I-29-B
   
Variable
 
$
3,612,350.00
   
June 2036
 
I-30-A
   
Variable
 
$
3,413,200.00
   
June 2036
 
I-30-B
   
Variable
 
$
3,413,200.00
   
June 2036
 
I-31-A
   
Variable
 
$
3,225,500.00
   
June 2036
 
I-31-B
   
Variable
 
$
3,225,500.00
   
June 2036
 
I-32-A
   
Variable
 
$
3,048,300.00
   
June 2036
 
I-32-B
   
Variable
 
$
3,048,300.00
   
June 2036
 
I-33-A
   
Variable
 
$
2,880,000.00
   
June 2036
 
I-33-B
   
Variable
 
$
2,880,000.00
   
June 2036
 
I-34-A
   
Variable
 
$
2,721,850.00
   
June 2036
 
I-34-B
   
Variable
 
$
2,721,850.00
   
June 2036
 
I-35-A
   
Variable
 
$
2,573,350.00
   
June 2036
 
I-35-B
   
Variable
 
$
2,573,350.00
   
June 2036
 
I-36-A
   
Variable
 
$
2,433,400.00
   
June 2036
 
I-36-B
   
Variable
 
$
2,433,400.00
   
June 2036
 
I-37-A
   
Variable
 
$
2,301,300.00
   
June 2036
 
I-37-B
   
Variable
 
$
2,301,300.00
   
June 2036
 
I-38-A
   
Variable
 
$
2,176,600.00
   
June 2036
 
I-38-B
   
Variable
 
$
2,176,600.00
   
June 2036
 
I-39-A
   
Variable
 
$
2,058,300.00
   
June 2036
 
I-39-B
   
Variable
 
$
2,058,300.00
   
June 2036
 
I-40-A
   
Variable
 
$
1,946,900.00
   
June 2036
 
I-40-B
   
Variable
 
$
1,946,900.00
   
June 2036
 
I-41-A
   
Variable
 
$
1,842,250.00
   
June 2036
 
I-41-B
   
Variable
 
$
1,842,250.00
   
June 2036
 
I-42-A
   
Variable
 
$
1,743,400.00
   
June 2036
 
I-42-B
   
Variable
 
$
1,743,400.00
   
June 2036
 
I-43-A
   
Variable
 
$
1,650,100.00
   
June 2036
 
I-43-B
   
Variable
 
$
1,650,100.00
   
June 2036
 
I-44-A
   
Variable
 
$
1,562,000.00
   
June 2036
 
I-44-B
   
Variable
 
$
1,562,000.00
   
June 2036
 
I-45-A
   
Variable
 
$
1,478,700.00
   
June 2036
 
I-45-B
   
Variable
 
$
1,478,700.00
   
June 2036
 
I-46-A
   
Variable
 
$
1,400,000.00
   
June 2036
 
I-46-B
   
Variable
 
$
1,400,000.00
   
June 2036
 
I-47-A
   
Variable
 
$
1,325,850.00
   
June 2036
 
I-47-B
   
Variable
 
$
1,325,850.00
   
June 2036
 
I-48-A
   
Variable
 
$
1,255,750.00
   
June 2036
 
I-48-B
   
Variable
 
$
1,255,750.00
   
June 2036
 
I-49-A
   
Variable
 
$
1,189,550.00
   
June 2036
 
I-49-B
   
Variable
 
$
1,189,550.00
   
June 2036
 
I-50-A
   
Variable
 
$
1,127,050.00
   
June 2036
 
I-50-B
   
Variable
 
$
1,127,050.00
   
June 2036
 
I-51-A
   
Variable
 
$
1,067,900.00
   
June 2036
 
I-51-B
   
Variable
 
$
1,067,900.00
   
June 2036
 
I-52-A
   
Variable
 
$
1,012,050.00
   
June 2036
 
I-52-B
   
Variable
 
$
1,012,050.00
   
June 2036
 
I-53-A
   
Variable
 
$
959,250.00
   
June 2036
 
I-53-B
   
Variable
 
$
959,250.00
   
June 2036
 
I-54-A
   
Variable
 
$
909,350.00
   
June 2036
 
I-54-B
   
Variable
 
$
909,350.00
   
June 2036
 
I-55-A
   
Variable
 
$
862,200.00
   
June 2036
 
I-55-B
   
Variable
 
$
862,200.00
   
June 2036
 
I-56-A
   
Variable
 
$
817,550.00
   
June 2036
 
I-56-B
   
Variable
 
$
817,550.00
   
June 2036
 
I-57-A
   
Variable
 
$
775,350.00
   
June 2036
 
I-57-B
   
Variable
 
$
775,350.00
   
June 2036
 
I-58-A
   
Variable
 
$
735,900.00
   
June 2036
 
I-58-B
   
Variable
 
$
735,900.00
   
June 2036
 
I-59-A
   
Variable
 
$
698,100.00
   
June 2036
 
I-59-B
   
Variable
 
$
698,100.00
   
June 2036
 
I-60-A
   
Variable
 
$
13,812,900.00
   
June 2036
 
I-60-B
   
Variable
 
$
13,812,900.00
   
June 2036
 
P
   
Variable
 
$
100.00
   
June 2036
 
________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC I Regular Interest.
(2)
Calculated in accordance with the definition of “REMIC I Remittance Rate” herein.

 



REMIC II
 
As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC II.” The Class R-II Interest will evidence the sole class of “residual interests” in REMIC II for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the REMIC II Remittance Rate, the initial Uncertificated Balance and, for purposes of satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for each of the REMIC II Regular Interests (as defined herein). None of the REMIC II Regular Interests will be certificated.
 
Designation
 
REMIC II
Remittance Rate
 
Initial
Uncertificated Balance
 
Latest Possible
Maturity Date(1)
II-LTAA
 
Variable(2)
 
$
578,226,270.77
 
June 25, 2036
II-LTA1
 
Variable(2)
 
$
2,636,000.00
 
June 25, 2036
II-LTA2
 
Variable(2)
 
$
662,000.00
 
June 25, 2036
II-LTA3
 
Variable(2)
 
$
933,200.00
 
June 25, 2036
II-LTA4
 
Variable(2)
 
$
435,910.00
 
June 25, 2036
II-LTM1
 
Variable(2)
 
$
218,300.00
 
June 25, 2036
II-LTM2
 
Variable(2)
 
$
203,560.00
 
June 25, 2036
II-LTM3
 
Variable(2)
 
$
118,010.00
 
June 25, 2036
II-LTM4
 
Variable(2)
 
$
103,250.00
 
June 25, 2036
II-LTM5
 
Variable(2)
 
$
100,300.00
 
June 25, 2036
II-LTM6
 
Variable(2)
 
$
88,500.00
 
June 25, 2036
II-LTM7
 
Variable(2)
 
$
85,550.00
 
June 25, 2036
II-LTM8
 
Variable(2)
 
$
76,700.00
 
June 25, 2036
II-LTM9
 
Variable(2)
 
$
59,000.00
 
June 25, 2036
II-LTM10
 
Variable(2)
 
$
38,350.00
 
June 25, 2036
II-LTM11
 
Variable(2)
 
$
59,000.00
 
June 25, 2036
II-LTZZ
 
Variable(2)
 
$
5,982,906.14
 
June 25, 2036
II-LTP
 
Variable(2)
 
$
100.00
 
June 25, 2036
II-LTIO
 
Variable(2)
   
N/A(3) 
 
June 25, 2036
________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC II Regular Interest.
(2)
Calculated in accordance with the definition of “REMIC II Remittance Rate” herein.
(3)
REMIC II Regular Interest II-LTIO will not have an Uncertificated Balance, but will accrue interest on its Uncertificated Notional Amou
 



REMIC III
 
As provided herein, the Trustee will elect to treat the segregated pool of assets consisting of the REMIC II Regular Interests as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC III.” The Class R-III Interest will evidence the sole class of “residual interests” in REMIC III for purposes of the REMIC Provisions under federal income tax law. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated Classes of Certificates.
 
Each Certificate, other than the Class P Certificate, the Class CE Certificate and the Class R Certificates, represents ownership of a Regular Interest in REMIC III and also represents (i) the right to receive payments with respect to the Net WAC Rate Carryover Amount (as defined herein) and (ii) the obligation to pay Class IO Distribution Amounts (as defined herein). The entitlement to principal of the Regular Interest which corresponds to each Certificate shall be equal in amount and timing to the entitlement to principal of such Certificate. 
 
Designation
 
Pass-Through Rate
 
Initial Aggregate
Certificate Principal Balance
 
Latest Possible
Maturity Date(1)
Class A-1
 
Variable(2)
 
$ 
263,600,000.00
 
June 25, 2036
Class A-2
 
Variable(2)
 
$ 
66,200,000.00
 
June 25, 2036
Class A-3
 
Variable(2)
 
$ 
93,320,000.00
 
June 25, 2036
Class A-4
 
Variable(2)
 
$ 
43,591,000.00
 
June 25, 2036
Class M-1
 
Variable(2)
 
$ 
21,830,000.00
 
June 25, 2036
Class M-2
 
Variable(2)
 
$ 
20,356,000.00
 
June 25, 2036
Class M-3
 
Variable(2)
 
$ 
11,801,000.00
 
June 25, 2036
Class M-4
 
Variable(2)
 
$ 
10,325,000.00
 
June 25, 2036
Class M-5
 
Variable(2)
 
$ 
10,030,000.00
 
June 25, 2036
Class M-6
 
Variable(2)
 
$ 
8,850,000.00
 
June 25, 2036
Class M-7
 
Variable(2)
 
$ 
8,555,000.00
 
June 25, 2036
Class M-8
 
Variable(2)
 
$ 
7,670,000.00
 
June 25, 2036
Class M-9
 
Variable(2)
 
$ 
5,900,000.00
 
June 25, 2036
Class M-10
 
Variable(2)
 
$ 
3,835,000.00
 
June 25, 2036
Class M-11
 
Variable(2)
 
$ 
5,900,000.00
 
June 25, 2036
Class CE Interest
 
Variable(3)
 
$ 
8,263,806.91
 
June 25, 2036
Class P Interest
 
N/A(4)
 
$ 
100.00
 
June 25, 2036
Class Swap-IO Interest
 
N/A(5)
   
N/A
 
June 25, 2036
_______________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for each REMIC III Regular Interest.
(2)
Calculated in accordance with the definition of “Pass-Through Rate” herein.
(3)
The Class CE Interest will accrue interest at its variable Pass-Through Rate on the Notional Amount of the Class CE Interest outstanding from time to time, which shall equal the Uncertificated Balance of the REMIC II Regular Interests (other than REMIC II Regular Interest II-LTP). The Class CE Interest will not accrue interest on its Uncertificated Balance.
(4)
The Class P Interest will not accrue interest.
(5)
The Class Swap-IO-1 Interest will not have a Pass-Through Rate or a Certificate Principal Balance, but will be entitled to 100% of the amounts distributed on REMIC II Regular Interest II-LTIO.



REMIC IV
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class CE Interest as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC IV.” The Class R-IV Interest represents the sole class of “residual interests” in REMIC IV for purposes of the REMIC Provisions.
 
The following table irrevocably sets forth the Class designation, Pass-Through Rate and Original Class Certificate Principal Balance for the indicated Class of Certificates that represents a “regular interest” in REMIC IV created hereunder:
 
Class Designation
 
Pass-Through Rate
 
Initial Aggregate
Certificate Principal Balance
 
Latest Possible
Maturity Date(1)
 
Class CE Certificates
   
Variable(2)
 
$
8,263,806.91
   
June 25, 2036
 
_______________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the Distribution Date immediately following the maturity date for the Mortgage Loans with the latest maturity date has been designated as the “latest possible maturity date” for the Class CE Certificates.
(2) The Class CE Certificates will receive 100% of amounts received in respect of the Class CE Interest.



REMIC V
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class P Interest as a REMIC for federal income tax purposes, and such segregated pool of assets will be designated as “REMIC V.” The Class R-V Interest represents the sole class of “residual interests” in REMIC V for purposes of the REMIC Provisions.
 
The following table irrevocably sets forth the Class designation, Pass-Through Rate and Original Class Certificate Principal Balance for the indicated Class of Certificates that represents a “regular interest” in REMIC V created hereunder:
 
Class Designation
Pass-Through Rate
Initial Aggregate
Certificate Principal Balance
Latest Possible
Maturity Date(1)
Class P Certificates
Variable(2)
$100.00
June 25, 2036
_______________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, the Distribution Date immediately following the maturity date for the Mortgage Loans with the latest maturity date has been designated as the “latest possible maturity date” for the Class P Certificates.
(2) The Class P Certificates will receive 100% of amounts received in respect of the Class P Interest.
 



REMIC VI
 
As provided herein, the Trustee shall make an election to treat the segregated pool of assets consisting of the Class SWAP-IO-1 Interest as a REMIC for federal income tax purposes, and such segregated pool of assets shall be designated as “REMIC VI.” The Class R-VI Interest represents the sole class of “residual interests” in REMIC VI for purposes of the REMIC Provisions. The following table irrevocably sets forth the designation, the Pass-Through Rate, the initial aggregate Certificate Principal Balance and, for purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the “latest possible maturity date” for the indicated REMIC VI Regular Interest SWAP-IO-1, which will be uncertificated. 
 
Designation
 
Pass-Through Rate
 
Initial Aggregate
Certificate Principal Balance
 
Latest Possible
Maturity Date(1)
 
SWAP-IO
 
Variable(2)
 
N/A
 
June 25, 2036
 
________________
(1)
For purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations, the Distribution Date immediately following the maturity date for the Mortgage Loan with the latest maturity date has been designated as the “latest possible maturity date” for REMIC VI Regular Interest SWAP-IO.
(2)
REMIC VI Regular Interest SWAP-IO shall receive 100% of amounts received in respect of the Class SWAP-IO-1 Interest.

As of the Cut-off Date, the Mortgage Loans had an aggregate Stated Principal Balance equal to $590,026,906.91.
 
In consideration of the mutual agreements herein contained, the Depositor, the Servicer, the Master Servicer, the Trust Administrator and the Trustee agree as follows:
 
 
ARTICLE I
 
DEFINITIONS
 
SECTION 1.01. Defined Terms.
 
Whenever used in this Agreement, including, without limitation, in the Preliminary Statement hereto, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. Unless otherwise specified, all calculations described herein shall be made on the basis of a 360-day year consisting of twelve 30-day months.
 
“10-K Filing Deadline”: The meaning set forth in Section 4.06(a)(iv).
 
“Accepted Master Servicing Practices”: With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage loan master servicing practices of prudent mortgage servicing institutions that master service mortgage loans of the same type and quality as such Mortgage Loan in the jurisdiction where the related Mortgaged Property is located, to the extent applicable to the Master Servicer (except in its capacity as successor to the Servicer), or (y) as provided in Section 3A.01 hereof, but in no event below the standard set forth in clause (x).
 
“Accrual Period”: With respect to the Class A Certificates and the Mezzanine Certificates and each Distribution Date, the period commencing on the preceding Distribution Date (or in the case of the first such Accrual Period, commencing on the Closing Date) and ending on the day preceding the current Distribution Date. With respect to the Class CE Certificates and the REMIC Regular Interests and each Distribution Date, the calendar month prior to the month of such Distribution Date.
 
“Additional Disclosure”: The meaning set forth in Section 4.06(a)(v).
 
“Additional Form 10-D Disclosure”: The meaning set forth in Section 4.06(a)(i).
 
“Additional Form 10-K Disclosure”: The meaning set forth in Section 4.06(a)(iv).
 
“Adjustable-Rate Mortgage Loan”: Each of the Mortgage Loans identified in the Mortgage Loan Schedule as having a Mortgage Rate that is subject to adjustment.
 
“Adjusted Net Maximum Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the applicable Maximum Mortgage Rate for such Mortgage Loan (or the Mortgage Rate in the case of any Fixed-Rate Mortgage Loan) as of the first day of the month preceding the month in which the related Distribution Date occurs minus the sum of (i) the Master Servicing Fee Rate, (ii) the Servicing Fee Rate and (iii) the Credit Risk Manager Fee Rate. 
 
“Adjusted Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the applicable Mortgage Rate for such Mortgage Loan as of the first day of the month preceding the month in which the related Distribution Date occurs minus the sum of (i) the Master Servicing Fee Rate, (ii) the Servicing Fee Rate and (iii) the Credit Risk Manager Fee Rate. 
 
“Adjustment Date”: With respect to each Adjustable-Rate Mortgage Loan, the first day of the month in which the Mortgage Rate of such Mortgage Loan changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-off Date as to each Adjustable-Rate Mortgage Loan is set forth in the Mortgage Loan Schedule.
 
“Advance”: With respect to any Distribution Date, as to any Mortgage Loan or REO Property, any advance made by the Servicer in respect of Monthly Payments due during the related Due Period pursuant to Section 4.03 or by the Master Servicer (in its capacity as successor Servicer) or any other successor Servicer pursuant to Section 4.03.
 
“Advance Facility”: As defined in Section 3.29 hereof.
 
“Advancing Person”: As defined in Section 3.29 hereof.
 
“Affiliate”: With respect to any specified Person, any other Person controlling or controlled by or under common control with such specified Person. For the purposes of this definition, “control” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
 
“Aggregate Loss Severity Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate amount of Realized Losses incurred on any Mortgage Loans from the Cut-off Date to the last day of the preceding calendar month and the denominator of which is the aggregate Stated Principal Balance of such Mortgage Loans immediately prior to the liquidation of such Mortgage Loans.
 
“Agreement”: This Pooling and Servicing Agreement and all amendments hereof and supplements hereto.
 
“Allocated Realized Loss Amount”: With respect to any Distribution Date and any Class of Mezzanine Certificates, (i) the sum of (a) any Realized Losses allocated to such Class of Certificates on such Distribution Date and (b) the amount of any Allocated Realized Loss Amount for such Class of Certificates remaining undistributed from the previous Distribution Date reduced by (ii) the amount of any Subsequent Recoveries added to the Certificate Principal Balance of such Class of Certificates.
 
“Assessment of Compliance”: As defined in Section 3.21.
 
“Assignment”: An assignment of Mortgage, notice of transfer or equivalent instrument, in recordable form (excepting therefrom, if applicable, the mortgage recordation information which has not been required pursuant to Section 2.01 hereof or returned by the applicable recorder’s office), which is sufficient under the laws of the jurisdiction wherein the related Mortgaged Property is located to reflect of record the sale of the Mortgage, which assignment, notice of transfer or equivalent instrument may be in the form of one or more blanket assignments covering Mortgages secured by Mortgaged Properties located in the same county, if permitted by law.
 
“Assignment Agreement”: Each Assignment and Recognition Agreement, dated June 29, 2006, among the Depositor, the Seller and the related Originator, forms of which are attached hereto as Exhibit D, pursuant to which the Seller assigns its rights under the related Originator Master Agreement to the Depositor.
 
“Attestation Report”: As defined in Section 3.21.
 
“Available Funds”: With respect to any Distribution Date, an amount equal to the excess of (i) the sum of (a) the aggregate of the related Monthly Payments received on the Mortgage Loans by the Servicer on or prior to the related Determination Date, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries, proceeds from repurchases of and substitutions for such Mortgage Loans and other unscheduled recoveries of principal and interest in respect of the Mortgage Loans received by the Servicer during the related Prepayment Period, (c) the aggregate of any amounts received by the Servicer in respect of a related REO Property and withdrawn from any REO Account and remitted to the Master Servicer for such Distribution Date, (d) the aggregate of any amounts on deposit in the Distribution Account representing Compensating Interest paid by the Servicer or the Master Servicer in respect of related Prepayment Interest Shortfalls for such Distribution Date, (e) the aggregate of any Advances made by the Servicer for such Distribution Date in respect of the Mortgage Loans and (f) the aggregate of any related Advances made by the Master Servicer (or other successor Servicer) in respect of the Mortgage Loans for such Distribution Date pursuant to Section 4.03 over (ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant to Section 3.11(a) or to the Master Servicer pursuant to Section 3A.21, (b) Extraordinary Trust Fund Expenses reimbursable to the Trustee, the Servicer, the Master Servicer or the Trust Administrator pursuant to Section 3A.12, (c) amounts in respect of the items set forth in clauses (i)(a) through (i)(f) above deposited in the Collection Account or the Distribution Account, as the case may be, in error, (d) the amount of any Prepayment Charges collected by the Servicer in connection with the full or partial prepayment of any of the Mortgage Loans and any Originator Prepayment Charge Payment Amount or Servicer Prepayment Charge Payment Amount, (e) any indemnification and reimbursement amounts owed to the Trust Administrator, the Trustee or the Custodian payable from the Distribution Account pursuant to Section 8.05, (f) the Credit Risk Manager Fee, (g) without duplication, any amounts in respect of the items set forth in clauses (i)(a) and (i)(b) permitted hereunder to be retained by the Master Servicer or to be withdrawn by the Master Servicer from the Distribution Account pursuant to Section 3A.12, (h) Servicing Fees retained by the Servicer pursuant to Section 3.11 and (i) any Net Swap Payment or Swap Termination Payment owed to a Swap Provider (other than any Swap Termination Payment owed to a Swap Provider resulting from a Swap Provider Trigger Event). Notwithstanding any of the foregoing, with respect to any items that are part of the Available Funds as defined above and that are required to be remitted by the Servicer to the Master Servicer, the Available Funds shall not be deemed to include any portion of such items that are not actually remitted by the Servicer to the Master Servicer.
 
“Back-Up Certification”: The meaning set forth in Section 4.06(a)(iv).
 
“Balloon Mortgage Loan”: A Mortgage Loan that provides for the payment of the unamortized principal balance of such Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding monthly payment.
 
“Balloon Payment”: A payment of the unamortized principal balance of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan that is substantially greater than the preceding Monthly Payment.
 
“Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.
 
“Basic Principal Distribution Amount”: With respect to any Distribution Date, the excess of (i) the Principal Remittance Amount for such Distribution Date over (ii) the Overcollateralization Release Amount, if any, for such Distribution Date.
 
“Book-Entry Certificate”: The Class A Certificates and the Mezzanine Certificates for so long as the Certificates of such Class shall be registered in the name of the Depository or its nominee.
 
“Book-Entry Custodian”: The custodian appointed pursuant to Section 5.01.
 
“Business Day”: Any day other than a Saturday, a Sunday or a day on which banking or savings and loan institutions in the State of New Jersey, the State of California, the State of New York, or in the cities in which the Corporate Trust Office of the Trustee or the Corporate Trust Office of the Trust Administrator are located, are authorized or obligated by law or executive order to be closed.
 
“Cap Account”: The account or accounts created and maintained pursuant to Section 4.10. The Cap Account must be an Eligible Account.
 
“Cap Contract”: The cap contract between the Trust Administrator on behalf of the Trust and the counterparty thereunder relating to the Class A Certificates and the Mezzanine Certificates.
 
“Certification Parties”: The meaning set forth in Section 4.06(a)(iv).
 
“Certificate”: Any one of the Mortgage Pass-Through Certificates, Series 2006-HE2, Class A-1, Class A-2, Class A-3, Class A-4, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class M-11, Class CE, Class P, Class R or Class R-X, issued under this Agreement.
 
“Certificate Factor”: With respect to any Class of Regular Certificates as of any Distribution Date, a fraction, expressed as a decimal carried to at least six places, the numerator of which is the aggregate Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates on such Distribution Date (after giving effect to any distributions of principal and allocations of Realized Losses in reduction of the Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates to be made on such Distribution Date), and the denominator of which is the initial aggregate Certificate Principal Balance (or the Notional Amount, in the case of the Class CE Certificates) of such Class of Certificates as of the Closing Date.
 
“Certificate Margin”: With respect to each Class A Certificate and Mezzanine Certificate and, for purposes of the Marker Rate, the specified REMIC II Regular Interest, as follows:
 
Class
REMIC II Regular Interest
Certificate Margin
(1) (%)
(2) (%)
A-1
II-LTA1
0.030
0.060
A-2
II-LTA2
0.090
0.180
A-3
II-LTA3
0.150
0.300
A-4
II-LTA4
0.240
0.480
M-1
II-LTM1
0.260
0.390
M-2
II-LTM2
0.290
0.435
M-3
II-LTM3
0.320
0.480
M-4
II-LTM4
0.360
0.540
M-5
II-LTM5
0.390
0.585
M-6
II-LTM6
0.450
0.675
M-7
II-LTM7
0.900
1.350
M-8
II-LTM8
1.050
1.575
M-9
II-LTM9
2.100
3.150
M-10
II-LTM10
2.500
3.750
M-11
II-LTM11
2.500
3.750
__________
(1)
For the Interest Accrual Period for each Distribution Date on or prior to the Optional Termination Date.
(2)
For the Interest Accrual Period for each Distribution Date after the Optional Termination Date.

“Certificateholder” or “Holder”: The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or a Non-United States Person shall not be a Holder of a Residual Certificate for any purposes hereof and, solely for the purposes of giving any consent pursuant to this Agreement, any Certificate registered in the name of the Depositor, a Servicer or the Master Servicer or any Affiliate thereof shall be deemed not to be outstanding and the Voting Rights to which it is entitled shall not be taken into account in determining whether the requisite percentage of Voting Rights necessary to effect any such consent has been obtained, except as otherwise provided in Section 11.01. The Trust Administrator and the Trustee and the NIMS Insurer may conclusively rely upon a certificate of the Depositor, the Servicer or the Master Servicer in determining whether a Certificate is held by an Affiliate thereof. All references herein to “Holders” or “Certificateholders” shall reflect the rights of Certificate Owners as they may indirectly exercise such rights through the Depository and participating members thereof, except as otherwise specified herein; provided, however, that the Trust Administrator, the Trustee and the NIMS Insurer shall be required to recognize as a “Holder” or “Certificateholder” only the Person in whose name a Certificate is registered in the Certificate Register.
 
“Certificate Owner”: With respect to a Book-Entry Certificate, the Person who is the beneficial owner of such Certificate as reflected on the books of the Depository or on the books of a Depository Participant or on the books of an indirect participating brokerage firm for which a Depository Participant acts as agent.
 
“Certificate Principal Balance”: With respect to each Class A Certificate, Mezzanine Certificate or Class P Certificate as of any date of determination, the Certificate Principal Balance of such Certificate on the Distribution Date immediately prior to such date of determination plus any Subsequent Recoveries added to the Certificate Principal Balance of such Certificate pursuant to Section 4.01, minus all distributions allocable to principal made thereon and Realized Losses allocated thereto on such immediately prior Distribution Date (or, in the case of any date of determination up to and including the first Distribution Date, the initial Certificate Principal Balance of such Certificate, as stated on the face thereof). With respect to each Class CE Certificate as of any date of determination, an amount equal to the Percentage Interest evidenced by such Certificate times the excess, if any, of (A) the then aggregate Uncertificated Balance of the REMIC II Regular Interests over (B) the then aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates then outstanding.
 
“Certificate Register”: The register maintained pursuant to Section 5.02.
 
“Certifying Person”: The meaning set forth in Section 4.06(a)(iv).
 
“Class”: Collectively, all of the Certificates bearing the same class designation.
 
“Class A Certificates”: Any of the Class A-1 Certificates, Class A-2 Certificates, Class A-3 Certificates or Class A-4 Certificates.
 
“Class A-1 Certificate”: Any one of the Class A-1 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-1 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class A-2 Certificate”: Any one of the Class A-2 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-2 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class A-3 Certificate”: Any one of the Class A-3 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-3 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class A-4 Certificate”: Any one of the Class A-4 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-4 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class CE Certificate”: Any one of the Class CE Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-16 and evidencing (i) a Regular Interest in REMIC IV, (ii) the obligation to pay Net WAC Rate Carryover Amounts and Swap Termination Payments and (iii) the right to receive the Class IO Distribution Amount.
 
“Class CE Interest”: An uncertificated interest in the Trust Fund held by the Trustee on behalf of the Holders of the Class CE Certificates, evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
 
“Class IO Distribution Amount”: As defined in Section 4.08 hereof. For purposes of clarity, the Class IO Distribution Amount for any Distribution Date shall equal the amount payable to the Trust Administrator on such Distribution Date in excess of the amount payable on the Class SWAP-IO-1 Interest and the Class SWAP-IO-2 Interest on such Distribution Date, all as further provided in Section 4.08 hereof.
 
“Class M-1 Certificate”: Any one of the Class M-1 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-5 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-2 Certificate”: Any one of the Class M-2 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-6 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-3 Certificate”: Any one of the Class M-3 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-7 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-4 Certificate”: Any one of the Class M-4 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-8 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-4 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date) and (iii) the Certificate Principal Balance of the Class M-4 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 80.00% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-5 Certificate”: Any one of the Class M-5 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-9 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-5 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date) and (iv) the Certificate Principal Balance of the Class M-5 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 83.40% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-6 Certificate”: Any one of the Class M-6 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-10 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-6 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date) and (v) the Certificate Principal Balance of the Class M-6 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 86.40% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-7 Certificate”: Any one of the Class M-7 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-11 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-7 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date) and (vi) the Certificate Principal Balance of the Class M-7 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 89.30% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-8 Certificate”: Any one of the Class M-8 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-12 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-8 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the di stribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date) and (vii) the Certificate Principal Balance of the Class M-8 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 91.90% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-9 Certificate”: Any one of the Class M-9 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-13 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-9 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date) and (viii) the Certificate Principal Balance of the Class M-9 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 93.90% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-10 Certificate”: Any one of the Class M-10 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-14 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-10 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date) and (ix) the Certificate Principal Balance of the Class M-10 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 95.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class M-11 Certificate”: Any one of the Class M-11 Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-15 and evidencing (i) a Regular Interest in REMIC III, (ii) the right to receive the Net WAC Rate Carryover Amount and (iii) the obligation to pay the Class IO Distribution Amount.
 
“Class M-11 Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date), (iii) the Certificate Principal Balance of the Class M-4 Certificates (after taking into account the distribution of the Class M-4 Principal Distribution Amount on such Distribution Date), (iv) the Certificate Principal Balance of the Class M-5 Certificates (after taking into account the distribution of the Class M-5 Principal Distribution Amount on such Distribution Date), (v) the Certificate Principal Balance of the Class M-6 Certificates (after taking into account the distribution of the Class M-6 Principal Distribution Amount on such Distribution Date), (vi) the Certificate Principal Balance of the Class M-7 Certificates (after taking into account the distribution of the Class M-7 Principal Distribution Amount on such Distribution Date), (vii) the Certificate Principal Balance of the Class M-8 Certificates (after taking into account the distribution of the Class M-8 Principal Distribution Amount on such Distribution Date), (viii) the Certificate Principal Balance of the Class M-9 Certificates (after taking into account the distribution of the Class M-9 Principal Distribution Amount on such Distribution Date), (ix) the Certificate Principal Balance of the Class M-10 Certificates (after taking into account the distribution of the Class M-10 Principal Distribution Amount on such Distribution Date) and (x) the Certificate Principal Balance of the Class M-11 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 97.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Class P Certificate”: Any one of the Class P Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-17 and evidencing a Regular Interest in REMIC V for purposes of the REMIC Provisions.
 
“Class P Interest”: An uncertificated interest in the Trust Fund held by the Trustee on behalf of the Holders of the Class P Certificates, evidencing a Regular Interest in REMIC III for purposes of the REMIC Provisions.
 
“Class R Certificate”: Any one of the Class R Certificates executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-18 and evidencing the ownership of the Class R-I Interest, the Class R-II Interest and the Class R-III Interest.
 
“Class R-X Certificate”: The Class R-X Certificate executed, authenticated and delivered by the Trust Administrator, substantially in the form annexed hereto as Exhibit A-19 and evidencing the ownership of the Class R-IV Interest, the Class R-V Interest, the Class R-VI Interest and the Class R-VII Interest.
 
“Class R-I Interest”: The uncertificated Residual Interest in REMIC I.
 
“Class R-II Interest”: The uncertificated Residual Interest in REMIC II.
 
“Class R-III Interest”: The uncertificated Residual Interest in REMIC III.
 
“Class R-IV Interest”: The uncertificated Residual Interest in REMIC IV.
 
“Class R-V Interest”: The uncertificated Residual Interest in REMIC V.
 
“Class R-VI Interest”: The uncertificated Residual Interest in REMIC VI.
 
“Class SWAP-IO Interest”: An uncertificated interest in the Trust Fund evidencing a Regular Interest in REMIC III.
 
“Closing Date”: June 29, 2006.
 
“Code”: The Internal Revenue Code of 1986, as amended.
 
“Collection Account”: The account or accounts created and maintained, or caused to be created and maintained, by the Servicer pursuant to Section 3.10(a), which shall be entitled “Wells Fargo Bank, N.A., as Servicer for U.S. Bank National Association, as Trustee, in trust for the registered holders of MASTR Asset Backed Securities Trust 2006-HE2, Mortgage Pass-Through Certificates.” The Collection Account must be an Eligible Account
 
“Commission”: The U.S. Securities and Exchange Commission.
 
“Compensating Interest”: With respect to the Servicer and any Principal Prepayment, the amount in respect of Prepayment Interest Shortfalls required to be paid by the Servicer pursuant to Section 3.24 from its own funds without right of reimbursement and with respect to the Master Servicer, the amount in respect of Prepayment Interest Shortfalls required to be paid by the Master Servicer pursuant to Section 3A.10 from its own funds without right of reimbursement except as provided in Section 3A.10, in each case, up to the aggregate compensation payable to the Servicer or the Master Servicer, as applicable, for the related collection period under this Agreement.
 
“Compensating Interest Payment”: As defined in Section 3.24.
 
“Corporate Trust Office”: The principal corporate trust office of the Trustee or the Trust Administrator, as the case may be, at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at (i) with respect to the Trustee, U.S. Bank National Association, 60 Livingston Avenue, EP-MN-WS3D, St. Paul, Minnesota 55107, Attention: Structured Finance/MASTR 2006-HE2, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Master Servicer, the Originators, and the Trust Administrator, or (ii) with respect to the Trust Administrator, (A) for Certificate transfer and surrender purposes, Wells Fargo Bank, N.A., Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust Services—MASTR 2006-HE2 and (B) for all other purposes, Wells Fargo Bank, N.A., 9062 Old Annapolis Road, Columbia, Maryland 21045, Attention: Corporate Trust Services—MASTR 2006-HE2, or in each case at such other address as the Trust Administrator may designate from time to time by notice to the Certificateholders, the Depositor, the Servicer, the Master Servicer, the Originators and the Trustee.
 
“Corresponding Certificate”: With respect to each REMIC II Regular Interest set forth below, the corresponding Regular Certificate set forth in the table below:
 
REMIC II Regular Interest
Regular Certificate
II-LTA1
Class A-1
II-LTA2
Class A-2
II-LTA3
Class A-3
II-LTA4
Class A-4
II-LTM1
Class M-1
II-LTM2
Class M-2
II-LTM3
Class M-3
II-LTM4
Class M-4
II-LTM5
Class M-5
II-LTM6
Class M-6
II-LTM7
Class M-7
II-LTM8
Class M-8
II-LTM9
Class M-9
II-LTM10
Class M-10
II-LTM11
Class M-11
II-LTP
Class P

“Credit Enhancement Percentage”: For any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate Certificate Principal Balance of the Mezzanine Certificates and the Class CE Certificates, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans, calculated prior to taking into account distributions of principal on the Mortgage Loans and distribution of the Principal Distribution Amount to the Certificates then entitled to distributions of principal on such Distribution Date.
 
“Credit Risk Management Agreement”: The respective agreements between the Credit Risk Manager and a Servicer and/or Master Servicer regarding the loss mitigation and advisory services to be provided by the Credit Risk Manager.
 
“Credit Risk Manager”: Clayton Fixed Income Services Inc., a Colorado corporation, formerly known as The Murrayhill Company, and its successors and assigns.
 
“Credit Risk Manager Fee”: The amount payable to the Credit Risk Manager on each Distribution Date as compensation for all services rendered by it in the exercise and performance of any of the powers and duties of the Credit Risk Manager under the respective Credit Risk Management Agreement and any other agreement pursuant to which the Credit Risk Manager is to perform any duties with respect to the related Mortgage Loans, which amount shall equal one twelfth of the product of (i) the Credit Risk Manager Fee Rate (without regard to the words “per annum”) and (ii) the aggregate Stated Principal Balance of the related Mortgage Loans and any related REO Properties as of the first day of the related Due Period.
 
“Credit Risk Manager Fee Rate”: 0.0125% per annum.
 
“Cumulative Loss Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate amount of Realized Losses incurred from the Cut-off Date to the last day of the preceding calendar month and the denominator of which is the sum of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.
 
“Custodian”: The entity acting as custodian of the Mortgage Files on behalf of and for the benefit of the Trustee, which as of the Closing Date shall be Wells Fargo Bank, N.A. with respect to the Mortgage Loans originated by People’s Choice Home Loan, Inc., Mandalay Mortgage, First Street Financial, Inc., American Lending Group and Option One Mortgage Corporation or U.S. Bank National Association with respect to the Mortgage Loans originated by Fremont Investment & Loan or Deutsche Bank National Trust Company with respect to the Mortgage Loans originated by New Century Mortgage Corporation. Unless otherwise specified, all references to actions to be taken by the “Custodian” under this Agreement shall be to actions to be taken or previously taken by the related Custodian. Furthermore, the parties hereto acknowledge that any duties or actions of Deutsche Bank National Trust Company as Custodian are subject to the terms and provisions of the Custodial Agreement.
 
“Custodial Agreement”: The Custodial Agreement, dated as of June 1, 2006, between the Trustee and Deutsche Bank National Trust Company.
 
“Cut-off Date”: With respect to each Original Mortgage Loan, June 1, 2006. With respect to all Qualified Substitute Mortgage Loans, their respective dates of substitution. References herein to the “Cut-off Date,” when used with respect to more than one Mortgage Loan, shall be to the respective Cut-off Dates for such Mortgage Loans.
 
“Cut-off Date Principal Balance”: With respect to any Mortgage Loan, the unpaid Stated Principal Balance thereof as of the Cut-off Date of such Mortgage Loan (or as of the applicable date of substitution with respect to a Qualified Substitute Mortgage Loan), after giving effect to scheduled payments due on or before the Cut-off Date, whether or not received.
 
“Debt Service Reduction”: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction resulting from a Deficient Valuation.
 
“Deficient Valuation”: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.
 
“Definitive Certificates”: As defined in Section 5.01(b).
 
“Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced by a Qualified Substitute Mortgage Loan.
 
“Delinquency Percentage”: The percentage equivalent of a fraction, the numerator of which is the aggregate Stated Principal Balance of all Mortgage Loans (not including Liquidated Mortgage Loans as of the end of the Prepayment Period) that, as of the last day of the previous calendar month, are 60 or more days delinquent, are in foreclosure, have been converted to REO Properties or are in bankruptcy and are 60 or more days delinquent, and the denominator of which is the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties as of the last day of the previous calendar month (in each case, not including any Mortgage Loans that have prepaid in full as of the end of the related Prepayment Period).
 
“Depositor”: Mortgage Asset Securitization Transactions, Inc., a Delaware corporation, or its successor in interest.
 
“Depository”: The Depository Trust Company, or any successor Depository hereafter named. The nominee of the initial Depository, for purposes of registering those Certificates that are to be Book-Entry Certificates, is Cede & Co. The Depository shall at all times be a “clearing corporation” as defined in Section 8-102(3) of the Uniform Commercial Code of the State of New York and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
 
“Depository Participant”: A broker, dealer, bank or other financial institution or other Person for whom from time to time a Depository effects book-entry transfers and pledges of securities deposited with the Depository.
 
“Determination Date”: With respect to any Distribution Date, the 15th day of the calendar month in which such Distribution Date occurs or, if such 15th day is not a Business Day, the Business Day immediately preceding such 15th day.
 
“Directly Operate”: With respect to any REO Property, the furnishing or rendering of services to the tenants thereof, the management or operation of such REO Property, the holding of such REO Property primarily for sale to customers, the performance of any construction work thereon or any use of such REO Property in a trade or business conducted by REMIC I other than through an Independent Contractor; provided, however, that the Trustee (or the Servicer or the Master Servicer on behalf of the Trustee) shall not be considered to Directly Operate an REO Property solely because the Trustee (or the Servicer or the Master Servicer on behalf of the Trustee) establishes rental terms, chooses tenants, enters into or renews leases, deals with taxes and insurance, or makes decisions as to repairs or capital expenditures with respect to such REO Property.
 
“Discount Factor”: With respect to each Distribution Date, the product of each Projected Zero Factor for each preceding Distribution Date, including such Distribution Date, with the Projected Zero Factor for the Significance Percentage Calculation Date equal to 1.
 
“Disqualified Organization”: Any of the following: (i) the United States, any State or political subdivision thereof, any possession of the United States, or any agency or instrumentality of any of the foregoing (other than an instrumentality which is a corporation if all of its activities are subject to tax and, except for Freddie Mac, a majority of its board of directors is not selected by such governmental unit), (ii) any foreign government, any international organization, or any agency or instrumentality of any of the foregoing, (iii) any organization (other than certain farmers’ cooperatives described in Section 521 of the Code) which is exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of the Code on unrelated business taxable income), (iv) rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of the Code, (v) an “electing large partnership” and (vi) any other Person so designated by the Trustee or the Trust Administrator based upon an Opinion of Counsel that the holding of an Ownership Interest in a Residual Certificate by such Person may cause any Trust REMIC or any Person having an Ownership Interest in any Class of Certificates (other than such Person) to incur a liability for any federal tax imposed under the Code that would not otherwise be imposed but for the Transfer of an Ownership Interest in a Residual Certificate to such Person. The terms “United States,” “State” and “international organization” shall have the meanings set forth in Section 7701 of the Code or successor provisions.
 
“Distribution Account”: The trust account or accounts created and maintained by the Trust Administrator pursuant to Section 3A.11 which shall be entitled “Wells Fargo Bank, N.A. as Trust Administrator, in trust for the registered holders of MASTR Asset Backed Securities Trust 2006-HE2, Mortgage Pass-Through Certificates, Series 2006-HE2—Distribution Account.” The Distribution Account must be an Eligible Account.
 
“Distribution Date”: The 25th day of any month, or if such 25th day is not a Business Day, the Business Day immediately following such 25th day, commencing in July 2006.
 
“Due Date”: With respect to each Distribution Date, the first day of the calendar month in which such Distribution Date occurs, which is generally the day of the month on which the Monthly Payment is due on a Mortgage Loan, exclusive of any days of grace.
 
“Due Period”: With respect to any Distribution Date, the period commencing on the second day of the month immediately preceding the month in which such Distribution Date occurs and ending on the related Due Date.
 
“Eligible Account”: Any of (i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated P-1 by Moody’s or A-1+ by S&P (or comparable ratings if Moody’s and S&P are not the Rating Agencies) at the time any amounts are held on deposit therein, (ii) with respect to any escrow account, an account or accounts the deposits in which are fully insured by the FDIC (to the limits established by such corporation), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the NIMS Insurer, the Trust Administrator, the Trustee and to each Rating Agency, the Certificateholders will have a claim with respect to the funds in such account or a perfected first priority security interest against such collateral (which shall be limited to Permitted Investments) securing such funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained, (iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity or (iv) an account otherwise acceptable to the NIMS Insurer and to each Rating Agency without reduction or withdrawal of their then current ratings of the Certificates as evidenced by a letter from each Rating Agency to the Trust Administrator, the Trustee and the NIMS Insurer. Eligible Accounts may bear interest.
 
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.
 
“Estate in Real Property”: A fee simple estate in a parcel of land.
 
“Excess Overcollateralized Amount”: With respect to the Class A Certificates and the Mezzanine Certificates and any Distribution Date, the excess, if any, of (i) the Overcollateralized Amount for such Distribution Date, assuming that 100% of the Principal Remittance Amount is applied as a principal distribution on such Distribution Date over (ii) the Overcollateralization Target Amount for such Distribution Date.
 
“Exchange Act”: The Securities Exchange Act of 1934, as amended, and the rules and regulations thereunder.
 
“Extra Principal Distribution Amount”: With respect to any Distribution Date, the lesser of (x) the sum of (i) Monthly Interest Distributable Amount payable on the Class CE Certificates on such Distribution Date as reduced by Realized Losses allocated thereto with respect to such Distribution Date pursuant to Section 4.04 and (ii) any amounts received under the Interest Rate Swap Agreement or the Cap Contract for this purpose and (y) the Overcollateralization Deficiency Amount for such Distribution Date.
 
“Extraordinary Trust Fund Expense”: Any amounts reimbursable to the Master Servicer pursuant to Section 3A.03 or Section 6.03, to the Trustee pursuant to Section 3.06 or Section 7.02, to the Servicer, the Trustee or the Trust Administrator, or any director, officer, employee or agent of the Trustee or the Trust Administrator from the Trust Fund pursuant to Section 6.03, Section 8.05 or Section 10.01(c) and any amounts payable from the Distribution Account in respect of taxes pursuant to Section 10.01(g)(iii).
 
“Fannie Mae”: Fannie Mae, formally known as the Federal National Mortgage Association, or any successor thereto.
 
“FDIC”: Federal Deposit Insurance Corporation or any successor thereto.
 
“Final Recovery Determination”: With respect to any defaulted Mortgage Loan or any REO Property (other than a Mortgage Loan or REO Property purchased or repurchased by an Originator, the Seller, the Depositor, the Servicer or the NIMS Insurer pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01), a determination made by the Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which such Servicer, in its reasonable good faith judgment, expects to be finally recoverable in respect thereof have been so recovered. The Servicer shall maintain records, prepared by a Servicing Officer, of each Final Recovery Determination made thereby.
 
“Fixed-Rate Mortgage Loans”: Each of the Mortgage Loans identified in the Mortgage Loan Schedule whose Mortgage Rates remain fixed for the life of the Mortgage Loan.
 
“Fixed Swap Payment”: With respect to any Distribution Date, a fixed amount equal to the related amount set forth in the Interest Rate Swap Agreement.
 
“Floating Swap Payment”: With respect to any Distribution Date, a floating amount equal to the product of (i) one-month LIBOR (as determined pursuant to the Interest Rate Swap Agreement for such Distribution Date), (ii) the related Base Calculation Amount (as defined in the Interest Rate Swap Agreement), (iii) 250 and (iv) a fraction, the numerator of which is the actual number of days elapsed from and including the previous Distribution Date to but excluding the current Distribution Date (or, for the first Distribution Date, the actual number of days elapsed from the Closing Date to but excluding the first Distribution Date), and the denominator of which is 360.
 
“Form 8-K Disclosure Information”: The meaning set forth in Section 4.06(a)(iii).
 
“Formula Rate”: For any Distribution Date and the Class A Certificates and the Mezzanine Certificates, the lesser of (i) One-Month LIBOR plus the related Certificate Margin and (ii) the Maximum Cap Rate.
 
“Freddie Mac”: Freddie Mac, formally known as the Federal Home Loan Mortgage Corporation, or any successor thereto.
 
“Gross Margin”: With respect to each Adjustable-Rate Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Mortgage Rate for such Adjustable-Rate Mortgage Loan.
 
“Highest Priority”: As of any date of determination, the Class of Mezzanine Certificates then outstanding with a Certificate Principal Balance greater than zero, with the highest priority for payments pursuant to Section 4.01, in the following order: Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class M-10 and Class M-11 Certificates.
 
“Indenture”: An indenture relating to the issuance of notes secured by the Class CE Certificates, the Class P Certificates, the Class R Certificates and/or the Class R-X Certificates (or any portion thereof) which may or may not be guaranteed by the NIMS Insurer.
 
“Independent”: When used with respect to any accountants, a Person who is “independent” within the meaning of Rule 2-01(B) of the Securities and Exchange Commission’s Regulation S-X. Independent means, when used with respect to any other Person, a Person who (A) is in fact independent of another specified Person and any affiliate of such other Person, (B) does not have any material direct or indirect financial interest in such other Person or any affiliate of such other Person, (C) is not connected with such other Person or any affiliate of such other Person as an officer, employee, promoter, underwriter, trustee, partner, director or Person performing similar functions and (D) is not a member of the immediate family of a Person defined in clause (B) or (C) above.
 
“Independent Contractor”: Either (i) any Person (other than a Servicer or the Master Servicer) that would be an “independent contractor” with respect to REMIC I within the meaning of Section 856(d)(3) of the Code if REMIC I were a real estate investment trust (except that the ownership tests set forth in that section shall be considered to be met by any Person that owns, directly or indirectly, 35% or more of any Class of Certificates), so long as REMIC I does not receive or derive any income from such Person and provided that the relationship between such Person and REMIC I is at arm’s length, all within the meaning of Treasury Regulation Section 1.856-4(b)(5), or (ii) any other Person (including the Servicer and the Master Servicer) if the Trust Administrator has received an Opinion of Counsel for the benefit of the Trustee and the Trust Administrator to the effect that the taking of any action in respect of any REO Property by such Person, subject to any conditions therein specified, that is otherwise herein contemplated to be taken by an Independent Contractor will not cause such REO Property to cease to qualify as “foreclosure property” within the meaning of Section 860G(a)(8) of the Code (determined without regard to the exception applicable for purposes of Section 860D(a) of the Code), or cause any income realized in respect of such REO Property to fail to qualify as Rents from Real Property.
 
“Index”: With respect to each Adjustable Rate Mortgage Loan and with respect to each related Adjustment Date, the index as specified in the related Mortgage Note.
 
“Insurance Proceeds”: Proceeds of any title policy, hazard policy or other insurance policy, covering a Mortgage Loan to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the Mortgagor in accordance with the procedures that the Servicer would follow in servicing mortgage loans held for its own account, subject to the terms and conditions of the related Mortgage Note and Mortgage.
 
“Interest Determination Date”: With respect to the Class A Certificates, the Mezzanine Certificates, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTM11 and any Accrual Period therefor, the second London Business Day preceding the commencement of such Accrual Period.
 
“Interest Rate Swap Agreement”: The 1992 ISDA Master Agreement (Multicurrency-Cross Border) dated as of June 21, 2006 (together with the confirmation, the credit support annex and the schedule thereto, the Master Agreement) between UBS AG and the Trust Administrator (in its capacity as Supplemental Interest Trust Trustee) and a confirmation of the same date, which supplements and forms part of the Master Agreement.
 
“Interest Remittance Amount”: With respect to any Distribution Date, that portion of the Available Funds for such Distribution Date attributable to interest received or advanced with respect to the Mortgage Loans.
 
“Late Collections”: With respect to any Mortgage Loan and any Due Period, all amounts received by the Servicer subsequent to the Determination Date immediately following such Due Period, whether as late payments of Monthly Payments or as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late payments or collections of principal and/or interest due (without regard to any acceleration of payments under the related Mortgage and Mortgage Note) but delinquent for such Due Period and not previously recovered.
 
“Liquidated Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of which the Servicer has determined, in its reasonable judgment, as of the end of the related Prepayment Period, that all Liquidation Proceeds which it expects to recover with respect to the liquidation of the Mortgage Loan or disposition of the related REO Property have been recovered.
 
“Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is removed from REMIC I by reason of its being purchased, repurchased or replaced pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01. With respect to any REO Property, either of the following events: (i) a Final Recovery Determination is made as to such REO Property; or (ii) such REO Property is removed from REMIC I by reason of its being purchased pursuant to Section 9.01.
 
“Liquidation Proceeds”: The amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the Servicer in connection with (i) the taking of all or a part of a Mortgaged Property by exercise of the power of eminent domain or condemnation, (ii) the liquidation of a defaulted Mortgage Loan through a trustee’s sale, foreclosure sale or otherwise, or (iii) the purchase, repurchase or substitution of a Mortgage Loan or an REO Property pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01.
 
“Loan-to-Value Ratio”: As of any date of determination, the fraction, expressed as a percentage, the numerator of which is the principal balance of the related Mortgage Loan at such date and the denominator of which is the Value of the related Mortgaged Property.
 
“London Business Day”: Any day on which banks in the City of London and New York are open and conducting transactions in United States dollars.
 
“Loss Severity Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the amount of Realized Losses incurred on a Mortgage Loan and the denominator of which is the principal balance of such Mortgage Loan immediately prior to the liquidation of such Mortgage Loan.
 
“Marker Rate”: With respect to the Class CE Interest and any Distribution Date, a per annum rate equal to two (2) times the weighted average of the REMIC II Remittance Rate for each of REMIC II Regular Interests II-LTA1, II-LTA2, II-LTA3, II-LTA4, II-LTM1, II-LTM2, II-LTM3, II-LTM4, II-LTM5, II-LTM6, II-LTM7, II-LTM8, II-LTM9, II-LTM10, II-LTM11 and II-LTZZ, with the rate on each such REMIC II Regular Interest (other than REMIC II Regular Interest II-LTZZ) subject to a cap equal to the lesser of (a) One-Month LIBOR plus the related Certificate Margin and (b) the Net WAC Rate for the purpose of this calculation and with the rate on REMIC II Regular Interest II-LTZZ subject to a cap of zero for the purpose of this calculation; provided, however, that solely for this purpose, calculations of the REMIC II Remittance Rate and the related caps with respect to such REMIC II Regular Interests (other than REMIC II Regular Interest II-LTZZ) shall be multiplied by a fraction, the numerator of which is the actual number of days elapsed in the related Accrual Period and the denominator of which is 30.
 
“Master Servicer”: As of the Closing Date, Wells Fargo Bank, N.A. and thereafter, its respective successors in interest who meet the qualifications of the Master Servicer under this Agreement. The Master Servicer and the Trust Administrator shall at all times be the same Person.
 
“Master Servicer Event of Default”: One or more of the events described in Section 7.01(b).
 
“Master Servicing Compensation”: The meaning specified in Section 3A.09.
 
“Master Servicing Fee”: With respect to each Mortgage Loan, the amount of the annual fee paid to the Master Servicer, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the Master Servicing Fee Rate (without regard to the words “per annum”) and (b) the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is received. The obligation for payment of the Master Servicing Fee is limited to, and the Master Servicing Fee is payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds) of such Monthly Payment collected by the Servicer.
 
“Master Servicing Fee Rate”: With respect to each Mortgage Loan, the rate of 0.005% per annum.
 
“Master Servicing Transfer Costs”: Shall mean all reasonable out-of-pocket costs and expenses incurred by the Trustee in connection with the transfer of master servicing from a predecessor master servicer, including, without limitation, any reasonable costs or expenses associated with the complete transfer of all servicing data and master servicing data and the completion, correction or manipulation of such servicing data as may be required by the Trustee to correct any errors or insufficiencies in the servicing data or otherwise to enable the Trustee to master service the Mortgage Loans properly and effectively.
 
“Maximum Cap Rate”: For any Distribution Date with respect to the Class A Certificates and the Mezzanine Certificates, a per annum rate equal to the sum of (i) the product of (x) the weighted average of the Adjusted Net Maximum Mortgage Rates of the Mortgage Loans, weighted based on their outstanding Stated Principal Balances as of the first day of the calendar month preceding the month in which the Distribution Date occurs and (y) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Accrual Period and (ii) an amount, expressed as a percentage, equal to a fraction, the numerator of which is equal to the Net Swap Payment made by the Swap Provider and the denominator of which is equal to the aggregate Stated Principal Balance of the Mortgage Loans, multiplied by 12 minus (a) an amount, expressed as a percentage, equal to the product of (i) the Net Swap Payment, if any, paid by the Trust for such Distribution Date divided by the aggregate Stated Principal Balance of the Mortgage Loans and (ii) 12 and (b) an amount, expressed as a percentage, equal to the product of (i) a Swap Termination Payment, if any, due from the Trust (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) for such Distribution Date, divided by the aggregate Stated Principal Balance of the Mortgage Loans and (ii) 12.
 
“Maximum II-LTZZ Uncertificated Interest Deferral Amount”: With respect to any Distribution Date, the excess of (i) accrued interest at the REMIC II Remittance Rate applicable to REMIC II Regular Interest II-LTZZ for such Distribution Date on a balance equal to the Uncertificated Balance of REMIC II Regular Interest II-LTZZ minus the REMIC II Overcollateralization Amount, in each case for such Distribution Date, over (ii) Uncertificated Interest on REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTM11 for such Distribution Date, with the rate on each such REMIC II Regular Interest subject to a cap equal to the lesser of (a) One-Month LIBOR plus the related Certificate Margin and (b) the Net WAC Rate; provided, however, each cap shall be multiplied by a fraction, the numerator of which is the actual number of days elapsed in the related Accrual Period and the denominator of which is 30.
 
“Maximum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Mortgage Rate thereunder.
 
“MERS”: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
 
“MERS® System”: The system of recording transfers of Mortgages electronically maintained by MERS.
 
“Mezzanine Certificate”: Any Class M-1 Certificate, Class M-2 Certificate, Class M-3 Certificate, Class M-4 Certificate, Class M-5 Certificate, Class M-6 Certificate, Class M-7 Certificate, Class M-8 Certificate, Class M-9 Certificate, Class M-10 Certificate or Class M-11 Certificate.
 
“MIN”: The Mortgage Identification Number for Mortgage Loans registered with MERS on the MERS® System.
 
“Minimum Mortgage Rate”: With respect to each Adjustable-Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the minimum Mortgage Rate thereunder.
 
“MOM Loan”: With respect to any Mortgage Loan, MERS acting as the mortgagee of such Mortgage Loan, solely as nominee for the originator of such Mortgage Loan and its successors and assigns, at the origination thereof.
 
“Monthly Interest Distributable Amount”: With respect to the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates and any Distribution Date, the amount of interest accrued during the related Accrual Period at the related Pass-Through Rate on the Certificate Principal Balance (or Notional Amount in the case of the Class CE Certificates) of such Class immediately prior to such Distribution Date, reduced (to not less than zero) by any Prepayment Interest Shortfalls (to the extent not covered by payments made by the Servicer or the Master Servicer) and Relief Act Interest Shortfalls (allocated to each such Certificate based on its respective entitlements to interest irrespective of any Prepayment Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution Date).
 
“Monthly Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of principal and interest on such Mortgage Loan which is payable by the related Mortgagor from time to time under the related Mortgage Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the Servicer pursuant to Section 3.07 and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.
 
“Monthly Statement”: The statement prepared by the Trust Administrator pursuant to Section 4.02.
 
“Moody’s”: Moody’s Investors Service, Inc. or its successor in interest.
 
“Mortgage”: The mortgage, deed of trust or other instrument creating a first or second lien on, or first or second priority security interest in, a Mortgaged Property securing a Mortgage Note.
 
“Mortgage File”: The mortgage documents listed in Section 2.01 pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
 
“Mortgage Loan”: Any Adjustable-Rate Mortgage Loan or Fixed-Rate Mortgage Loan transferred and assigned to the Trustee and delivered to the Trustee pursuant to Section 2.01 or Section 2.03(b) of this Agreement as held from time to time as a part of the Trust, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.
 
“Mortgage Loan Schedule”: As of any date, the list of Mortgage Loans included in REMIC I on such date, attached hereto as Schedule 1. The Mortgage Loan Schedule shall set forth the following information with respect to each Mortgage Loan:
 
(i) the Mortgage Loan identifying number;
 
(ii) [reserved];
 
(iii) the state and zip code of the Mortgaged Property;
 
(iv) a code indicating whether the Mortgaged Property was represented by the borrower, at the time of origination, as being owner-occupied;
 
(v) the type of Residential Dwelling constituting the Mortgaged Property;
 
(vi) the original months to maturity;
 
(vii) the stated remaining months to maturity from the Cut-off Date based on the original amortization schedule;
 
(viii) the Loan-to-Value Ratio at origination;
 
(ix) the Mortgage Rate in effect immediately following the Cut-off Date;
 
(x) the date on which the first Monthly Payment was due on the Mortgage Loan;
 
(xi) the stated maturity date;
 
(xii) the amount of the Monthly Payment at origination;
 
(xiii) the amount of the Monthly Payment due on the first Due Date after the Cut-off Date;
 
(xiv) the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;
 
(xv) the original principal amount of the Mortgage Loan;
 
(xvi) the Stated Principal Balance of the Mortgage Loan as of the close of business on the Cut-off Date;
 
(xvii) a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing, cash-out refinancing);
 
(xviii) the Mortgage Rate at origination;
 
(xix) a code indicating the documentation program (i.e., full documentation, limited documentation, stated income documentation);
 
(xx) the risk grade assigned by the related Originator;
 
(xxi) the Value of the Mortgaged Property;
 
(xxii) the sale price of the Mortgaged Property, if applicable;
 
(xxiii) the actual unpaid principal balance of the Mortgage Loan as of the Cut-off Date;
 
(xxiv) the type and term of the related Prepayment Charge;
 
(xxv) the rounding code;
 
(xxvi) the program code;
 
(xxvii) a code indicating the lien priority for Mortgage Loans;
 
(xxviii)  with respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate, the Maximum Mortgage Rate, the Gross Margin, the next Adjustment Date and the Periodic Rate Cap;
 
(xxix) the credit score (“FICO”) of such Mortgage Loan; and
 
(xxx) the total amount of points and fees charged such Mortgage Loan.
 
The Mortgage Loan Schedule shall set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans (separately identifying the number of Fixed-Rate Mortgage Loans and the number of Adjustable-Rate Mortgage Loans); (2) the current Stated Principal Balance of the Mortgage Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans and (4) the weighted average maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by the Depositor in accordance with the provisions of this Agreement. With respect to any Qualified Substitute Mortgage Loan, the Cut-off Date shall refer to the related Cut-off Date for such Mortgage Loan, determined in accordance with the definition of Cut-off Date herein.
 
“Mortgage Note”: The original executed note or other evidence of the indebtedness of a Mortgagor under a Mortgage Loan.
 
“Mortgage Pool”: The pool of Mortgage Loans, identified on the Mortgage Loan Schedule and existing from time to time thereafter, and any REO Properties acquired in respect thereof.
 
“Mortgage Rate”: With respect to each Mortgage Loan, the annual rate at which interest accrues on such Mortgage Loan from time to time in accordance with the provisions of the related Mortgage Note, which rate with respect to the Adjustable-Rate Mortgage Loans, (A) as of any date of determination until the first Adjustment Date following the Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the Mortgage Rate in effect immediately following the Cut-off Date and (B) as of any date of determination thereafter shall be the rate as adjusted on the most recent Adjustment Date equal to the sum, rounded to the nearest or next highest 0.125% as provided in the Mortgage Note, of the Index, as most recently available as of a date prior to the Adjustment Date as set forth in the related Mortgage Note, plus the related Gross Margin; provided that the Mortgage Rate on such Adjustable-Rate Mortgage Loan on any Adjustment Date shall never be more than the lesser of (i) the sum of the Mortgage Rate in effect immediately prior to the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the related Maximum Mortgage Rate, and shall never be less than the greater of (i) the Mortgage Rate in effect immediately prior to the Adjustment Date less the Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With respect to each Mortgage Loan that becomes an REO Property, as of any date of determination, the annual rate determined in accordance with the immediately preceding sentence as of the date such Mortgage Loan became an REO Property.
 
“Mortgaged Property”: The underlying property securing a Mortgage Loan, including any REO Property, consisting of an Estate in Real Property improved by a Residential Dwelling.
 
“Mortgagor”: The obligor on a Mortgage Note.
 
“Net Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan or any other disposition of the related Mortgaged Property (including REO Property) the related Liquidation Proceeds and Insurance Proceeds net of Advances, Servicing Advances, Servicing Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or related Mortgaged Property and any amounts due on such Mortgage Loans on or prior to the Cut-off Date.
 
“Net Monthly Excess Cashflow”: With respect to each Distribution Date, the sum of (a) any Overcollateralization Release Amount for such Distribution Date and (b) the excess of (x) Available Funds for such Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly Interest Distributable Amounts for the Class A Certificates and the Mezzanine Certificates, (B) the Unpaid Interest Shortfall Amounts for the Class A Certificates and (C) the Principal Remittance Amount.
 
“Net Mortgage Rate”: With respect to any Mortgage Loan (or the related REO Property) as of any date of determination, a per annum rate of interest equal to the then applicable Mortgage Rate for such Mortgage Loan minus the Servicing Fee Rate and the Master Servicing Fee Rate.
 
“Net Swap Payment”: In the case of payments made by the Trust, the excess, if any, of (x) the Fixed Swap Payment over (y) the Floating Swap Payment and in the case of payments made by the Swap Provider, the excess, if any, of (x) the Floating Swap Payment over (y) the Fixed Swap Payment. In each case, the Net Swap Payment shall not be less than zero.
 
“Net WAC Rate”: For any Distribution Date with respect to the Class A Certificates and the Mezzanine Certificates, a per annum rate equal to the product of (a)(i) the weighted average of the Adjusted Net Mortgage Rates of the Mortgage Loans, weighted based on their outstanding Stated Principal Balances as of the first day of the calendar month preceding the month in which the Distribution Date occurs minus (ii) an amount, expressed as a percentage, equal to the product of (x) each Net Swap Payment, if any, paid by the Trust for such Distribution Date divided by the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the calendar month preceding the month in which the Distribution Date occurs and (y) 12 and (iii) an amount, expressed as a percentage, equal to the product of (x) a Swap Termination Payment, if any, due from the Trust (other than any Swap Termination Payment resulting from a Swap Provider Trigger Event) for such Distribution Date divided by the aggregate Stated Principal Balance of the Mortgage Loans as of the first day of the calendar month preceding the month in which the Distribution Date occurs and (y) 12 and (b) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Accrual Period. For federal income tax purposes, for any Distribution Date with respect to the REMIC III Regular Interests the ownership of which is represented by the Regular Certificates (other than the Class CE Certificates or Class P Certificates), the equivalent of the foregoing shall be expressed as the product of (a) weighted average of the REMIC II Remittance Rate on the REMIC II Regular Interests (other than REMIC II Regular Interest II-LTIO), weighted on the basis of the Uncertificated Balance of each such REMIC II Regular Interest and (b) a fraction, the numerator of which is 30 and the denominator of which is the actual number of days elapsed in the related Accrual Period.
 
“Net WAC Rate Carryover Amount”: With respect to the Class A Certificates and the Mezzanine Certificates and any Distribution Date, the sum of (A) the positive excess of (i) the amount of interest accrued on such Class of Certificates on such Distribution Date calculated at the related Formula Rate, over (ii) the amount of interest accrued on such Class of Certificates at the Net WAC Rate for such Distribution Date and (B) the Net WAC Rate Carryover Amount for the previous Distribution Date not previously paid, together with interest thereon at a rate equal to the Formula Rate for such Class of Certificates for such Distribution Date and for such Accrual Period.
 
“Net WAC Rate Carryover Reserve Account”: The account established and maintained pursuant to Section 4.07.
 
“New Lease”: Any lease of REO Property entered into on behalf of REMIC I, including any lease renewed or extended on behalf of REMIC I, if REMIC I has the right to renegotiate the terms of such lease.
 
“NIMS Insurer”: Any insurer that is guaranteeing certain payments under notes secured by collateral which includes all or a portion of the Class CE Certificates, the Class P Certificates, the Class R Certificates and/or the Class R-X Certificates.
 
“Nonrecoverable Advance”: Any Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer or the Master Servicer, as applicable, will not or, in the case of a proposed Advance, would not be ultimately recoverable from related Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
 
“Nonrecoverable Servicing Advance”: Any Servicing Advance previously made or proposed to be made in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer, will not or, in the case of a proposed Servicing Advance, would not be ultimately recoverable from related Late Collections, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein.
 
“Non-United States Person”: Any Person other than a United States Person.
 
“Notional Amount”: With respect to the Class CE Interest and any Distribution Date, the aggregate Uncertificated Balance of the REMIC II Regular Interests (other than REMIC II Regular Interest II-LTP) for such Distribution Date.
 
“Officer’s Certificate”: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), and by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of a Servicer, the Master Servicer, an Originator, the Seller or the Depositor, as applicable.
 
“One-Month LIBOR”: With respect to the Class A Certificates, the Mezzanine Certificates, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTM11 and any Accrual Period therefor, the rate determined by the Trust Administrator on the related Interest Determination Date on the basis of the offered rate for one-month U.S. dollar deposits, as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London time) on such Interest Determination Date; provided that if such rate does not appear on Telerate Page 3750, the rate for such date will be determined on the basis of the offered rates of the Reference Banks for one-month U.S. dollar deposits, as of 11:00 a.m. (London time) on such Interest Determination Date. In such event, the Trust Administrator will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If on such Interest Determination Date, two or more Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the arithmetic mean of such offered quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%). If on such Interest Determination Date, fewer than two Reference Banks provide such offered quotations, One-Month LIBOR for the related Accrual Period shall be the higher of (i) One-Month LIBOR as determined on the previous Interest Determination Date and (ii) the Reserve Interest Rate. Notwithstanding the foregoing, if, under the priorities described above, One-Month LIBOR for an Interest Determination Date would be based on One-Month LIBOR for the previous Interest Determination Date for the third consecutive Interest Determination Date, the Trust Administrator shall select, after consultation with the NIMS Insurer, an alternative comparable index (over which the Trust Administrator has no control), used for determining one-month Eurodollar lending rates that is calculated and published (or otherwise made available) by an independent party.
 
“Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be salaried counsel for the Depositor, the Seller, the Servicer or the Master Servicer, acceptable to the Trustee, if such opinion is delivered to the Trustee, or acceptable to the Trust Administrator, if such opinion is delivered to the Trust Administrator, except that any opinion of counsel relating to (a) the qualification of any Trust REMIC as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.
 
“Original Mortgage Loan”: Any of the Mortgage Loans included in REMIC I as of the Closing Date.
 
“Originator”: New Century Mortgage Corporation, People’s Choice Home Loan, Inc., Mandalay Mortgage, First Street Financial, Inc., Fremont Investment & Loan, American Lending Group and Option One Mortgage Corporation.
 
“Originator Master Agreements”: With respect to (i) Fremont Investment & Loan, the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of March 1, 2004, between the Seller and Fremont Investment & Loan, as amended; (ii) New Century Mortgage Corporation; the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of March 1, 2006, between the Seller and New Century Mortgage Corporation, as amended; (iii) People’s Choice Home Loan, Inc.; the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of March 1, 2006, between the Seller and People’s Choice Home Loan, Inc., as amended; (iv) Mandalay Mortgage, the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of March 1, 2006, between the Seller and Mandalay Mortgage, as amended; (v) First Street Financial, Inc., the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of August 1, 2004, between the Seller and First Street Financial, Inc., as amended; (vi) American Lending Group, the Master Mortgage Loan Sale Agreement, dated as of February 23, 2006, between the Seller and American Lending Group, as amended and (vii) Option One Mortgage Corporation, the Master Seller’s Purchase, Warranties and Interim Servicing Agreement, dated as of November 1, 2005, between the Seller and Option One Mortgage Corporation, as amended.
 
“Originator Prepayment Charge Payment Amount”: The amounts payable by the Originator in respect of any waived Prepayment Charges pursuant to Section 3.01.
 
“Overcollateralization Deficiency Amount”: With respect to any Distribution Date, the amount, if any, by which the Overcollateralization Target Amount exceeds the Overcollateralized Amount on such Distribution Date (after giving effect to distributions in respect of the Principal Remittance Amount on such Distribution Date).
 
“Overcollateralization Release Amount”: With respect to any Distribution Date, the lesser of (x) the Principal Remittance Amount for such Distribution Date and (y) the Excess Overcollateralized Amount. 
 
“Overcollateralization Target Amount”: With respect to any Distribution Date, (i) 1.40% of the Cut-off Date Principal Balance of the Mortgage Loans, (ii) on or after the Stepdown Date provided that a Trigger Event is not in effect, the greater of (x) 2.80% of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (y) an amount equal to approximately 0.50% of the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, or (iii) on or after the Stepdown Date if a Trigger Event is in effect, the Overcollateralization Target Amount for the immediately preceding Distribution Date. On and after any Distribution Date following the reduction of the aggregate Certificate Principal Balance of the Class A Certificates and the Mezzanine Certificates to zero, the Overcollateralization Target Amount shall be zero.
 
“Overcollateralized Amount”: For any Distribution Date, the amount equal to (i) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) as of the related Determination Date minus (ii) the aggregate Certificate Principal Balance of the Class A Certificates, the Mezzanine Certificates and the Class P Certificates as of such Distribution Date after giving effect to distributions to be made on such Distribution Date.
 
“Ownership Interest”: As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.
 
“Pass-Through Rate”: With respect to the Class A Certificates and the Mezzanine Certificates and any Distribution Date, a rate per annum equal to the lesser of (i) the related Formula Rate for such Distribution Date and (ii) the Net WAC Rate for such Distribution Date.
 
With respect to the Class CE Interest and any Distribution Date, a rate per annum equal to the percentage equivalent of a fraction, the numerator of which is (x) the sum of (i) 100% of the interest on REMIC II Regular Interest II-LTP and (ii) interest on the Uncertificated Balance of each REMIC II Regular Interest listed in clause (y) at a rate equal to the related REMIC II Remittance Rate minus the Marker Rate and the denominator of which is (y) the aggregate Uncertificated Balance of REMIC II Regular Interests II-LTAA, II-LTA1, II-LTA2, II-LTA3, II-LTA4, II-LTM1, II-LTM2, II-LTM3, II-LTM4, II-LTM5, II-LTM6, II-LTM7, II-LTM8, II-LTM9, II-LTM10, II-LTM11 and II-LTZZ.
 
With respect to the Class CE Certificates, 100% of the interest distributable to the Class CE Interest, expressed as a per annum rate.
 
With respect to the Class SWAP-IO Interest, the Class SWAP-IO Interest shall not have a Pass-Through Rate, but interest for such Regular Interest and each Distribution Date shall be an amount equal to 100% of the amounts distributable to REMIC II Regular Interest II-LTIO for such Distribution Date.
 
“Percentage Interest”: With respect to any Class of Certificates (other than the Residual Certificates), the undivided percentage ownership in such Class evidenced by such Certificate, expressed as a percentage, the numerator of which is the initial Certificate Principal Balance or Notional Amount represented by such Certificate and the denominator of which is the aggregate initial Certificate Principal Balance or Notional Amount of all of the Certificates of such Class. The Class A Certificates and the Mezzanine Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Certificate Principal Balances of $25,000 and integral multiples of $1.00 in excess thereof. The Class P Certificates are issuable only in Percentage Interests corresponding to initial Certificate Principal Balances of $20 and integral multiples thereof. The Class CE Certificates are issuable only in minimum Percentage Interests corresponding to minimum initial Certificate Principal Balances of $10,000 and integral multiples of $1.00 in excess thereof; provided, however, that a single Certificate of each such Class of Certificates may be issued having a Percentage Interest corresponding to the remainder of the aggregate initial Certificate Principal Balance or Notional Amount of such Class or to an otherwise authorized denomination for such Class plus such remainder. With respect to any Residual Certificate, the undivided percentage ownership in such Class evidenced by such Certificate, as set forth on the face of such Certificate. The Residual Certificates are issuable in Percentage Interests of 20% and multiples thereof.
 
“Periodic Rate Cap”: With respect to each Adjustable-Rate Mortgage Loan and any Adjustment Date therefor, the fixed percentage set forth in the related Mortgage Note, which is the maximum amount by which the Mortgage Rate for such Mortgage Loan may increase or decrease (without regard to the Maximum Mortgage Rate or the Minimum Mortgage Rate) on such Adjustment Date (other than the first Adjustment Date) from the Mortgage Rate in effect immediately prior to such Adjustment Date.
 
“Permitted Investments”: Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by the Depositor, the Servicer, the Master Servicer, the NIMS Insurer, the Trustee, the Trust Administrator or any of their respective Affiliates or for which an Affiliate of the NIMS Insurer, the Trustee or the Trust Administrator serves as an advisor:
 
(i)direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States;
 
(ii) (A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee or its agent acting in their respective commercial capacities) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company (or, if the only Rating Agency is S&P, in the case of the principal depository institution in a depository institution holding company, debt obligations of the depository institution holding company) or its ultimate parent has a short-term uninsured debt rating in the highest available rating category of Moody’s and S&P and provided that each such investment has an original maturity of no more than 365 days; and provided further that, if the only Rating Agency is S&P and if the depository or trust company is a principal subsidiary of a bank holding company and the debt obligations of such subsidiary are not separately rated, the applicable rating shall be that of the bank holding company; and, provided further that, if the original maturity of such short-term obligations of a domestic branch of a foreign depository institution or trust company shall exceed 30 days, the short-term rating of such institution shall be A-1+ in the case of S&P if S&P is the Rating Agency; and (B) any other demand or time deposit or deposit which is fully insured by the FDIC;
 
(iii) repurchase obligations with a term not to exceed 30 days with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated A-1+ or higher by S&P and A2 or higher by Moody’s, provided, however, that collateral transferred pursuant to such repurchase obligation must be of the type described in clause (i) above and must (A) be valued daily at current market prices plus accrued interest, (B) pursuant to such valuation, be equal, at all times, to 105% of the cash transferred by the Trustee in exchange for such collateral and (C) be delivered to the Trustee or, if the Trustee is supplying the collateral, an agent for the Trustee, in such a manner as to accomplish perfection of a security interest in the collateral by possession of certificated securities;
 
(iv) securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America or any State thereof and that are rated by a Rating Agency in its highest long-term unsecured rating category at the time of such investment or contractual commitment providing for such investment;
 
(v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations payable on demand or on a specified date not more than 30 days after the date of acquisition thereof) that is rated by a Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;
 
(vi) units of money market funds, including those managed or advised by the Trust Administrator or its Affiliates, that have been rated “AAA” by S&P and “Aaa” by Moody’s; and
 
(vii) if previously confirmed in writing to the Trustee and the Trust Administrator and consented to by the NIMS Insurer, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to the Rating Agencies in writing as a permitted investment of funds backing securities having ratings equivalent to its highest initial rating of the Class A Certificates;
 
provided, that no instrument described hereunder shall evidence either the right to receive (a) only interest with respect to the obligations underlying such instrument or (b) both principal and interest payments derived from obligations underlying such instrument and the interest and principal payments with respect to such instrument provide a yield to maturity at par greater than 120% of the yield to maturity at par of the underlying obligations.
 
“Permitted Transferee”: Any Transferee of a Residual Certificate other than a Disqualified Organization or Non-United States Person.
 
“Person”: Any individual, corporation, partnership, limited liability company, joint venture, association, joint-stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
 
“Plan”: Any employee benefit plan or certain other retirement plans and arrangements, including individual retirement accounts and annuities, Keogh plans and bank collective investment funds and insurance company general or separate accounts in which such plans, accounts or arrangements are invested, that are subject to ERISA or Section 4975 of the Code.
 
“Prepayment Assumption”: As defined in the Prospectus Supplement.
 
“Prepayment Charge”: With respect to any Mortgage and Prepayment Period, any prepayment premium, fee, penalty or charge payable by a Mortgagor in connection with any full or partial Principal Prepayment on a Mortgage Loan pursuant to the terms of the related Mortgage Note and any Originator Prepayment Charge Payment Amount (other than any Servicer Prepayment Charge Payment Amount).
 
“Prepayment Charge Schedule”: As of any date, the list of Prepayment Charges on the Mortgage Loans provided by the Depositor included in REMIC I on such date, attached hereto as Schedule 2 (including the Prepayment Charge Summary attached thereto). The Prepayment Charge Schedule shall set forth the following information with respect to each related Mortgage Loan:
 
(viii)the Mortgage Loan identifying number;
 
(ix) a code indicating the type of Prepayment Charge;
 
(x) the state of origination of the related Mortgage Loan;
 
(xi) the date on which the first monthly payment was due on the related Mortgage Loan;
 
(xii) the term of the related Mortgage Loan; and
 
(xiii) the Stated Principal Balance of the related Mortgage Loan as of the Cut-off Date.
 
The Prepayment Charge Schedule shall be amended from time to time by the Depositor in accordance with the provisions of this Agreement and a copy of such amended Prepayment Charge Schedule shall be furnished by the Depositor to the NIMS Insurer and the Servicer.
 
“Prepayment Interest Excess”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a Principal Prepayment in full during the portion of the related Prepayment Period commencing on the first day of the calendar month in which the Distribution Date occurs and ending on the last day of the related Prepayment Period, an amount equal to interest (to the extent received) at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of days commencing on the first day of the calendar month in which such Distribution Date occurs and ending on the date on which such prepayment is so applied.
 
“Prepayment Interest Shortfall”: With respect to any Distribution Date, for each Mortgage Loan that was the subject of a voluntary Principal Prepayment during the portion of the related Prepayment Period commencing on the first day of the related Prepayment Period and ending on the last day of the calendar month preceding the month in which such Distribution Date occurs, an amount equal to interest on the Mortgage Loan at the applicable Net Mortgage Rate on the amount of such Principal Prepayment for the number of days commencing on the date such Principal Prepayment was applied and ending on the last day of the calendar month preceding the month in which such Distribution Date occurs.
 
“Prepayment Period”: With respect to each Distribution Date and any Principal Prepayment in full, the period commencing on the 14th day of the calendar month preceding the related Distribution Date (and in the case of the first Distribution Date, commencing on June 1, 2006) and ending on the 13th day of the calendar month in which such Distribution Date occurs and for any Distribution Date and any Principal Prepayment in part, the calendar month preceding the calendar month in which such Distribution Date occurs.
 
“Present Value Maximum Probable Exposure”: With respect to each Distribution Date, the sum of each Present Value Probable Cash Flow from, and including, such Distribution Date to, and including, the Termination Date in such derivative confirmation.
 
“Present Value Probable Cash Flow”: With respect to each Distribution Date, the product of (i) the Probable Cash Flow and (ii) the Discount Factor applicable for such Distribution Date.
 
“Principal Balance”: As to any Mortgage Loan other than a Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus all collections credited against the Cut-off Date Principal Balance of any such Mortgage Loan. For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property minus any REO Principal Amortization received with respect thereto on or prior to such day.
 
“Principal Distribution Amount”: For any Distribution Date will be the sum of (i) the principal portion of all scheduled monthly payments on the Mortgage Loans due during the related Due Period, whether or not received on or prior to the related Determination Date; (ii) the principal portion of all proceeds received in respect of the repurchase of a Mortgage Loan (or, in the case of a substitution, certain amounts representing a principal adjustment) during the related Prepayment Period; (iii) the principal portion of all related Net Liquidation Proceeds, Insurance Proceeds, Subsequent Recoveries and all full and partial principal prepayments, received during the related Prepayment Period, to the extent applied as recoveries of principal on the Mortgage Loans and (iv) any Extra Principal Distribution Amount for such Distribution Date minus (v) any Overcollateralization Release Amount for such Distribution Date. In no event will the Principal Distribution Amount with respect to any Distribution Date be (x) less than zero or (y) greater than the then outstanding aggregate Certificate Principal Balance of the Class A and Mezzanine Certificates.
 
“Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due Date and which is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment.
 
“Principal Remittance Amount”: With respect to any Distribution Date, the sum of the amounts set forth in clauses (i) through (iii) of the definition of Principal Distribution Amount.
 
“Private Mezzanine Certificates”: The Class M-10 Certificates and the Class M-11 Certificates.
 
“Probable Cash Flow”: With respect to each Distribution Date, the product of (i) the Notional Balance in such derivative confirmation for such Distribution Date, divided by 12, and (ii) the excess, if any, of (a) the Projected Forward Rate over (b) the cap rate, as defined in the derivative confirmation attached hereto as Exhibit K or the fixed rate, as defined in the derivative confirmation attached hereto as Exhibit M, as applicable. The Probable Cash Flow for each Distribution Date that precedes the Significance Percentage Calculation Date shall equal zero.
 
“Projected Forward Rate”: With respect to each Distribution Date, the product of (i) One Month LIBOR (expressed as a percentage) for the related Accrual Period made available at Bloomberg Financial Markets, L.P. ("Bloomberg") by typing in the following keystrokes: FWCV <go>US<go>3<go> and inputting “1” as Forwards and Intervals, and (ii) the sum of 1 and the product of (a) a percentage volatility level, linearly interpolated based on "Mid USD Cap" volatility levels as obtained from Bloomberg within 15 calendar days of such Distribution Date by typing the keystrokes: TTCF <go>, 1 <go>, whose maturity date corresponds to the Termination Date in such derivative confirmation, (b) a factor of 1.3, and (c) the square root of the number of days from the Significance Percentage Calculation Date to the first day of the Accrual Period for each related Distribution Date divided by 360.
 
“Projected Zero Factor”: With respect to each Distribution Date, a fraction, the numerator of which is 1 and the denominator of which is the sum of (i) 1 and (ii) the Projected Forward Rate divided by 12.
 
“Prospectus Supplement”: That certain Prospectus Supplement dated June 8, 2006 relating to the public offering of the Class A Certificates and the Mezzanine Certificates.
 
“Purchase Price”: With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03, Section 3.16(c) or Section 9.01, and as confirmed by an Officer’s Certificate from the Servicer to the Trustee an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase (or such other price as provided in Section 9.01), (ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the applicable Net Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance, which payment or Advance had as of the date of purchase been distributed pursuant to Section 4.01, through the end of the calendar month in which the purchase is to be effected and (y) an REO Property, the sum of (1) accrued interest on such Stated Principal Balance at the applicable Net Mortgage Rate in effect from time to time from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance by the Servicer through the end of the calendar month immediately preceding the calendar month in which such REO Property was acquired, plus (2) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had been distributed as or to cover REO Imputed Interest pursuant to Section 4.01, (iii) any unreimbursed Advances and Servicing Advances (including Nonrecoverable Advances and Nonrecoverable Servicing Advances) and any unpaid Servicing Fees and Master Servicing Fee allocable to such Mortgage Loan or REO Property, (iv) any amounts previously withdrawn from the Collection Account pursuant to Section 3.11(a)(ix) and Section 3.16(b) or the Distribution Account in respect of such Mortgage Loan or REO Property, and (v) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03, expenses reasonably incurred or to be incurred by the Servicer, the Master Servicer, the NIMS Insurer, the Trust Administrator or the Trustee in respect of the breach or defect giving rise to the purchase obligation including any costs and damages incurred by the Trust in connection with any violation with respect to such loan of any predatory or abusive lending law. With respect to each Originator and any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03 or 10.01, and as confirmed by an Officer’s Certificate from the Servicer to the Trust Administrator and Trustee, an amount equal to the amount set forth pursuant to the terms of the related Originator Master Agreement.
 
“Qualified Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage Loan by the Seller or the Originator, as applicable, pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding Stated Principal Balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of, and not more than 5% less than, the Stated Principal Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a Mortgage Rate not less than (and not more than one percentage point in excess of) the Mortgage Rate of the Deleted Mortgage Loan, (iii) with respect to any Adjustable-Rate Mortgage Loan, have a Maximum Mortgage Rate not less than the Maximum Mortgage Rate of the Deleted Mortgage Loan, (iv) with respect to any Adjustable-Rate Mortgage Loan, have a Minimum Mortgage Rate not less than the Minimum Mortgage Rate of the Deleted Mortgage Loan, (v) with respect to any Adjustable-Rate Mortgage Loan, have a Gross Margin equal to or greater than the Gross Margin of the Deleted Mortgage Loan, (vi) with respect to any Adjustable-Rate Mortgage Loan, have a next Adjustment Date not more than two months later than the next Adjustment Date on the Deleted Mortgage Loan, (vii) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (viii) have the same Due Date as the Due Date on the Deleted Mortgage Loan, (ix) have a Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (x) have a risk grading determined by the Originator at least equal to the risk grading assigned on the Deleted Mortgage Loan, (xi) have a Prepayment Charge provision at least equal to the Prepayment Charge provision in the Deleted Mortgage Loan, (xii) [reserved] and (xiii) conform to each representation and warranty set forth in the related Originator Master Agreement and related Assignment Agreement applicable to the Deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate principal balances, the Mortgage Rates described in clause (ii) hereof shall be determined on the basis of weighted average Mortgage Rates, the terms described in clause (vii) hereof shall be determined on the basis of weighted average remaining term to maturity, the Loan-to-Value Ratios described in clause (ix) hereof shall be satisfied as to each such mortgage loan, the risk gradings described in clause (x) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (xiii) hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.
 
“Rating Agency” or “Rating Agencies”: Moody’s and S&P or their successors. If such agencies or their successors are no longer in existence, “Rating Agencies” shall be such nationally recognized statistical rating agencies, or other comparable Persons, designated by the Depositor, notice of which designation shall be given to the Trustee and the Master Servicer.
 
“Realized Loss”: With respect to any Liquidated Mortgage Loan or any Mortgage Loan charged off by the Servicer pursuant to this Agreement, the amount of loss realized equal to the portion of the Stated Principal Balance remaining unpaid after application of all Net Liquidation Proceeds in respect of such Mortgage Loan. If the Servicer receives Subsequent Recoveries with respect to any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage Loan will be reduced to the extent such recoveries are applied to principal distributions on any Distribution Date.
 
“Record Date”: With respect to each Distribution Date and any Book-Entry Certificate, the Business Day immediately preceding such Distribution Date. With respect to each Distribution Date and any other Certificates, including any Definitive Certificates, the last Business Day of the month immediately preceding the month in which such Distribution Date occurs.
 
“Reference Banks”: Deutsche Bank AG, Barclay’s Bank PLC, The Tokyo Mitsubishi Bank and National Westminster Bank PLC and their successors in interest; provided, however, that if any of the foregoing banks are not suitable to serve as a Reference Bank, then any leading banks selected by the Trust Administrator (after consultation with the NIMS Insurer) which are engaged in transactions in Eurodollar deposits in the international Eurocurrency market (i) with an established place of business in London, (ii) not controlling, under the control of or under common control with the Depositor or any Affiliate thereof and (iii) which have been designated as such by the Trust Administrator.
 
“Refinanced Mortgage Loan”: A Mortgage Loan the proceeds of which were not used to purchase the related Mortgaged Property.
 
“Regular Certificate”: Any Class A Certificate, Mezzanine Certificate, Class CE Certificate or Class P Certificate.
 
“Regular Interest”: A “regular interest” in a REMIC within the meaning of Section 860G(a)(1) of the Code.
 
“Regulation AB”: Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R. §§229.1100 - 229.1123, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the Commission in the adopting release (Asset-Backed Securities, Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the Commission, or as may be provided by the Commission or its staff from time to time.
 
“Relevant Servicing Criteria”: The Servicing Criteria applicable to the various parties, as set forth on Exhibit O attached hereto. For clarification purposes, multiple parties can have responsibility for the same Relevant Servicing Criteria.
 
“Relief Act”: The Servicemembers Civil Relief Act and any similar state laws.
 
“Relief Act Interest Shortfall”: With respect to any Distribution Date and any Mortgage Loan, any reduction in the amount of interest collectible on such Mortgage Loan for the most recently ended calendar month as a result of the application of the Relief Act or any similar state or local law.
 
“REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
 
“REMIC I”: The segregated pool of assets subject hereto, constituting the primary trust created hereby and to be administered hereunder, with respect to which a REMIC election is to be made, consisting of: (i) such Mortgage Loans and Prepayment Charges as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all collections thereon and proceeds thereof; (ii) any REO Property, together with all collections thereon and proceeds thereof; (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies, required to be maintained pursuant to this Agreement and any proceeds thereof; (iv) the Depositor’s rights under the Originator Master Agreements (including any security interest created thereby); and (v) the Collection Account, the Distribution Account (other than any amounts representing any Servicer Prepayment Charge Payment Amount or any Originator Prepayment Charge Payment Amount) and any REO Account, and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto. Notwithstanding the foregoing, however, REMIC I specifically excludes the Net WAC Rate Carryover Reserve Account, the Interest Rate Swap Agreement, the Swap Account, the Cap Account, the Cap Contract, the Supplemental Interest Trust, any Servicer Prepayment Charge Payment Amounts or any Originator Prepayment Charge Payment Amounts, all payments and other collections of principal and interest due on the Mortgage Loans on or before the Cut-off Date and all Prepayment Charges payable in connection with Principal Prepayments made before the Cut-off Date.
 
“REMIC I Regular Interest”: Any of the separate non-certificated beneficial ownership interests in REMIC I issued hereunder and designated as a “regular interest” in REMIC I. Each REMIC I Regular Interest shall accrue interest at the related REMIC I Remittance Rate in effect from time to time, and shall be entitled to distributions of principal, subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Principal Balance as set forth in the Preliminary Statement hereto. The designations for the respective REMIC I Regular Interests are set forth in the Preliminary Statement hereto.
 
“REMIC I Remittance Rate”: With respect to REMIC I Regular Interest I and REMIC I Regular Interest I-LTP, a per annum rate equal to the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans. With respect to each REMIC I Regular Interest ending with the designation “A”, a per annum rate equal to the weighted average Adjusted Net Mortgage Rate of the Mortgage Loans multiplied by 2, subject to a maximum rate of 10.940%. With respect to each REMIC I Regular Interest ending with the designation “B”, the greater of (x) a per annum rate equal to the excess, if any, of (i) 2 multiplied by the weighted average Net Mortgage Rate of the Mortgage Loans over (ii) 10.940% and (y) 0.00%.
 
“REMIC II”: The segregated pool of assets consisting of all of the REMIC I Regular Interests conveyed in trust to the Trustee, for the benefit of the REMIC II Certificateholders pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC II Interest Loss Allocation Amount”: With respect to any Distribution Date, an amount (subject to adjustment based on the actual number of days elapsed in the respective Accrual Periods for the indicated Regular Interests for such Distribution Date) equal to (a) the product of the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) the REMIC II Remittance Rate for REMIC II Regular Interest II-LTAA minus the Marker Rate, divided by (b) 12.
 
“REMIC II Overcollateralized Amount”: With respect to any date of determination, (i) 1% of the aggregate Uncertificated Balance of the REMIC II Regular Interests (other than REMIC II Regular Interest II-LTP and REMIC II Regular Interest II-LTIO) minus (ii) the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10 and REMIC II Regular Interest II-LTM11, in each case as of such date of determination.
 
“REMIC II Principal Loss Allocation Amount”: With respect to any Distribution Date, an amount equal to the product of (i) the aggregate Stated Principal Balance of the Mortgage Loans and REO Properties then outstanding and (ii) 1 minus a fraction, the numerator of which is two times the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTM11 and the denominator of which is the aggregate Uncertificated Balance of REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTM11 and REMIC II Regular Interest II-LTZZ.
 
“REMIC II Regular Interest”: Any of the separate non-certificated beneficial ownership interests in REMIC II issued hereunder and designated as a “regular interest” in REMIC II. Each REMIC II Regular Interest shall accrue interest at the related REMIC II Remittance Rate in effect from time to time, and shall be entitled to distributions of principal (other than REMIC II Regular Interest II-LTIO-1 and REMIC II Regular Interest II-LTIO-2), subject to the terms and conditions hereof, in an aggregate amount equal to its initial Uncertificated Balance as set forth in the Preliminary Statement hereto. The REMIC II Regular Interests are as follows: REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTM11, REMIC II Regular Interest II-LTP, REMIC II Regular Interest I-TLZZ and REMIC II Regular Interest II-LTIO. REMIC II Regular Interest II-LTP shall also be entitled to any Prepayment Charges received by the Trust Fund.
 
“REMIC II Remittance Rate”: With respect to REMIC II Regular Interest II-LTAA, REMIC II Regular Interest II-LTA1, REMIC II Regular Interest II-LTA2, REMIC II Regular Interest II-LTA3, REMIC II Regular Interest II-LTA4, REMIC II Regular Interest II-LTM1, REMIC II Regular Interest II-LTM2, REMIC II Regular Interest II-LTM3, REMIC II Regular Interest II-LTM4, REMIC II Regular Interest II-LTM5, REMIC II Regular Interest II-LTM6, REMIC II Regular Interest II-LTM7, REMIC II Regular Interest II-LTM8, REMIC II Regular Interest II-LTM9, REMIC II Regular Interest II-LTM10, REMIC II Regular Interest II-LTM11, REMIC II Regular Interest II-LTZZ and REMIC II Regular Interest II-LTP, a per annum rate (but not less than zero) equal to the weighted average of (v) with respect to REMIC I Regular Interest I, and REMIC I Regular Interest I-LTP, the REMIC I Remittance Rate for such REMIC I Regular Interest for each such Distribution Date, (w) with respect to REMIC I Regular Interests ending with the designation “B”, the weighted average of the REMIC I Remittance Rates for such REMIC I Regular Interests, weighted on the basis of the Uncertificated Principal Balance of such REMIC I Regular Interests for each such Distribution Date and (x) with respect to REMIC I Regular Interests ending with the designation “A”, for each Distribution Date listed below, the weighted average of the rates listed below for each such REMIC I Regular Interest listed below, weighted on the basis of the Uncertificated Principal Balance of each such REMIC I Regular Interest for each such Distribution Date:
 
Distribution Date
REMIC 1 Regular Interest
Rate
1
I-1-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
2
I-2-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A
Uncertificated REMIC 1 Pass-Through Rate
3
I-3-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A and I-2-A
Uncertificated REMIC 1 Pass-Through Rate
4
I-4-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-3-A
Uncertificated REMIC 1 Pass-Through Rate
5
I-5-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-4-A
Uncertificated REMIC 1 Pass-Through Rate
6
I-6-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-5-A
Uncertificated REMIC 1 Pass-Through Rate
7
I-7-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-6-A
Uncertificated REMIC 1 Pass-Through Rate
8
I-8-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-7-A
Uncertificated REMIC 1 Pass-Through Rate
9
I-9-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-8-A
Uncertificated REMIC 1 Pass-Through Rate
10
I-10-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-9-A
Uncertificated REMIC 1 Pass-Through Rate
11
I-11-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-10-A
Uncertificated REMIC 1 Pass-Through Rate
12
I-12-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-11-A
Uncertificated REMIC 1 Pass-Through Rate
13
I-13-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-12-A
Uncertificated REMIC 1 Pass-Through Rate
14
I-14-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-13-A
Uncertificated REMIC 1 Pass-Through Rate
15
I-15-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-14-A
Uncertificated REMIC 1 Pass-Through Rate
16
I-16-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-15-A
Uncertificated REMIC 1 Pass-Through Rate
17
I-17-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-16-A
Uncertificated REMIC 1 Pass-Through Rate
18
I-18-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-17-A
Uncertificated REMIC 1 Pass-Through Rate
19
I-19-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-18-A
Uncertificated REMIC 1 Pass-Through Rate
20
I-20-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-19-A
Uncertificated REMIC 1 Pass-Through Rate
21
I-21-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-20-A
Uncertificated REMIC 1 Pass-Through Rate
22
I-22-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-21-A
Uncertificated REMIC 1 Pass-Through Rate
23
I-23-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-22-A
Uncertificated REMIC 1 Pass-Through Rate
24
I-24-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-23-A
Uncertificated REMIC 1 Pass-Through Rate
25
I-25-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-24-A
Uncertificated REMIC 1 Pass-Through Rate
26
I-26-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-25-A
Uncertificated REMIC 1 Pass-Through Rate
27
I-27-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-26-A
Uncertificated REMIC 1 Pass-Through Rate
28
I-28-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-27-A
Uncertificated REMIC 1 Pass-Through Rate
29
I-29-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-28-A
Uncertificated REMIC 1 Pass-Through Rate
30
I-30-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-29-A
Uncertificated REMIC 1 Pass-Through Rate
31
I-31-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-30-A
Uncertificated REMIC 1 Pass-Through Rate
32
I-32-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-31-A
Uncertificated REMIC 1 Pass-Through Rate
33
I-33-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-32-A
Uncertificated REMIC 1 Pass-Through Rate
34
I-34-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-33-A
Uncertificated REMIC 1 Pass-Through Rate
35
I-35-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-34-A
Uncertificated REMIC 1 Pass-Through Rate
36
I-36-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-35-A
Uncertificated REMIC 1 Pass-Through Rate
37
I-37-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-36-A
Uncertificated REMIC 1 Pass-Through Rate
38
I-38-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-37-A
Uncertificated REMIC 1 Pass-Through Rate
39
I-39-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-38-A
Uncertificated REMIC 1 Pass-Through Rate
40
I-40-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-39-A
Uncertificated REMIC 1 Pass-Through Rate
41
I-41-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-40-A
Uncertificated REMIC 1 Pass-Through Rate
42
I-42-A and I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-41-A
Uncertificated REMIC 1 Pass-Through Rate
43
I-43-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-42-A
Uncertificated REMIC 1 Pass-Through Rate
44
I-44-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-43-A
Uncertificated REMIC 1 Pass-Through Rate
45
I-45-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-44-A
Uncertificated REMIC 1 Pass-Through Rate
46
I-46-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-45-A
Uncertificated REMIC 1 Pass-Through Rate
47
I-47-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-46-A
Uncertificated REMIC 1 Pass-Through Rate
48
I-48-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-47-A
Uncertificated REMIC 1 Pass-Through Rate
49
I-49-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-48-A
Uncertificated REMIC 1 Pass-Through Rate
50
I-50-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-49-A
Uncertificated REMIC 1 Pass-Through Rate
51
I-51-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-50-A
Uncertificated REMIC 1 Pass-Through Rate
52
I-52-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-51-A
Uncertificated REMIC 1 Pass-Through Rate
53
I-53-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-52-A
Uncertificated REMIC 1 Pass-Through Rate
54
I-54-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-53-A
Uncertificated REMIC 1 Pass-Through Rate
55
I-55-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-54-A
Uncertificated REMIC 1 Pass-Through Rate
56
I-56-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-55-A
Uncertificated REMIC 1 Pass-Through Rate
57
I-57-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-56-A
Uncertificated REMIC 1 Pass-Through Rate
58
I-58-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-57-A
Uncertificated REMIC 1 Pass-Through Rate
59
I-59-A through I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-58-A
Uncertificated REMIC 1 Pass-Through Rate
60
I-60-A
2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated REMIC 1 Pass-Through Rate
 
I-1-A through I-59-A
Uncertificated REMIC 1 Pass-Through Rate
thereafter
I-1-A through I-60-A
Uncertificated REMIC 1 Pass-Through Rate

 
With respect to REMIC II Regular Interest II-LTIO, and (a) the first 60 Distribution Dates, the excess of (i) the weighted average of the REMIC I Remittance Rates for REMIC I Regular Interests ending with the designation “A”, over (ii) 2 multiplied by Swap LIBOR, and (b) thereafter, 0.00%.
 
“REMIC II Required Overcollateralized Amount”: 1.00% of the Overcollateralization Target Amount.
 
“REMIC III”: The segregated pool of assets consisting of all of the REMIC II Regular Interests conveyed in trust to the Trustee, for the benefit of the REMIC III Certificateholders pursuant to Section 2.07, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC III Certificate”: Any Regular Certificate (other than a Class CE Certificate or Class P Certificate) or Class R Certificate.
 
“REMIC III Certificateholder”: The Holder of any REMIC III Certificate.
 
“REMIC III Regular Interest”: Any Class A Certificate, Mezzanine Certificate, the Class CE Interest, the Class P Interest or the Class Swap-IO Interest.
 
“REMIC IV”: The segregated pool of assets consisting of all of the Class CE Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class CE Certificates and the Class R-X Certificate (in respect of the Class R-IV Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC V”: The segregated pool of assets consisting of all of the Class P Interest conveyed in trust to the Trustee, for the benefit of the Holders of the Class P Certificates and the Class R-X Certificate (in respect of the Class R-V Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC VI”: The segregated pool of assets consisting of all of the Class Swap-IO Interest conveyed in trust to the Trustee, for the benefit of the Holders of the REMIC VI Regular Interest SWAP-IO and the Class R-X Certificate (in respect of the Class R-VI Interest), pursuant to Article II hereunder, and all amounts deposited therein, with respect to which a separate REMIC election is to be made.
 
“REMIC Provisions”: Provisions of the federal income tax law relating to REMICs, which appear at Section 860A through 860G of the Code, and related provisions, and proposed, temporary and final regulations and published rulings, notices and announcements promulgated thereunder, as the foregoing may be in effect from time to time.
 
“REMIC Regular Interest”: Any REMIC I Regular Interest, REMIC II Regular Interest, REMIC III Regular Interest or REMIC VI Regular Interest SWAP-IO.
 
“REMIC Remittance Rate”: The REMIC I Remittance Rate or the REMIC II Remittance Rate.
 
“Remittance Report”: A report prepared by the Servicer and delivered to the Trust Administrator and the NIMS Insurer pursuant to Section 4.03.
 
“Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code as being included in the term “rents from real property.”
 
“REO Account”: The account or accounts maintained, or caused to be maintained, by the Servicer in respect of an REO Property pursuant to Section 3.23.
 
“REO Disposition”: The sale or other disposition of an REO Property on behalf of REMIC I.
 
“REO Imputed Interest”: As to any REO Property, for any calendar month during which such REO Property was at any time part of REMIC I, one month’s interest at the applicable Net Mortgage Rate on the Stated Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan, if appropriate) as of the close of business on the Distribution Date in such calendar month.
 
“REO Principal Amortization”: With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 9.01 that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to Section 3.23(c) in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the Servicer pursuant to Section 3.23(d) for unpaid Servicing Fees or Master Servicing Fees in respect of the related Mortgage Loan and unreimbursed Advances and Servicing Advances in respect of such REO Property or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property for such calendar month.
 
“REO Property”: A Mortgaged Property acquired by the Servicer on behalf of REMIC I through foreclosure or deed-in-lieu of foreclosure, as described in Section 3.23.
 
“Reportable Event”: The meaning set forth in Section 4.06(a)(iii).
 
“Request for Release”: A request for release in such electronic or other format as shall be mutually agreed to by the Custodian and the Servicer, in substantially the form of Exhibit E attached hereto.
 
“Reserve Interest Rate”: With respect to any Interest Determination Date, the rate per annum that the Trust Administrator determines to be either (i) the arithmetic mean (rounded upwards if necessary to the nearest whole multiple of 1/16%) of the one-month U.S. dollar lending rates which New York City banks selected by the Trust Administrator are quoting on the relevant Interest Determination Date to the principal London offices of leading banks in the London interbank market or (ii) in the event that the Trust Administrator can determine no such arithmetic mean, the lowest one-month U.S. dollar lending rate which New York City banks selected by the Trust Administrator are quoting on such Interest Determination Date to leading European banks.
 
“Residential Dwelling”: Any one of the following: (i) a detached one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a Fannie Mae eligible condominium project, (iv) a manufactured home, or (v) a detached one-family dwelling in a planned unit development, none of which is a co-operative or mobile home.
 
“Residual Certificate”: Any one of the Class R Certificates and the Class R-X Certificates.
 
“Residual Interest”: The sole class of “residual interests” in a REMIC within the meaning of Section 860G(a)(2) of the Code.
 
“Responsible Officer”: When used with respect to the Trustee or the Trust Administrator, the Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or Vice Chairman of the Executive or Standing Committee of the Board of Directors or Trustees, the President, the Chairman of the Committee on Trust Matters, any vice president, any assistant vice president, the Secretary, any assistant secretary, the Treasurer, any assistant treasurer, the Cashier, any assistant cashier, any trust officer or assistant trust officer, the Controller and any assistant controller or any other officer of the Trustee or the Trust Administrator, as applicable, customarily performing functions similar to those performed by any of the above designated officers, in each case, having direct responsibility for the administration of this Agreement, and, with respect to a particular matter relating to this Agreement, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
 
“S&P”: Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc., or its successor in interest.
 
“Sarbanes-Oxley Act”: The Sarbanes-Oxley Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).
 
“Sarbanes-Oxley Certification”: The meaning set forth in Section 4.06(a)(iv).
 
“Securities Act”: The Securities Act of 1933, as amended, and the rules and regulations thereunder.
 
“Seller”: UBS Real Estate Securities Inc. or its successor in interest, in its capacity as Seller under the Assignment Agreements.
 
“Senior Principal Distribution Amount”: The excess of (x) the aggregate Certificate Principal Balance of the Class A Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 58.20% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Sequential Class M Certificates”: the Class M-1 Certificates, the Class M-2 Certificates and the Class M-3 Certificates.
 
“Sequential Class M Principal Distribution Amount”: With respect to any Distribution Date, the excess of (x) the sum of (i) the aggregate Certificate Principal Balance of the Class A Certificates (after taking into account the distribution of the Senior Principal Distribution Amount on such Distribution Date), (ii) the aggregate Certificate Principal Balance of the Sequential Class M Certificates (after taking into account the distribution of the Sequential Class M Principal Distribution Amount on such Distribution Date) and (iii) the Certificate Principal Balance of the Class M-3 Certificates immediately prior to such Distribution Date over (y) the lesser of (A) the product of (i) 71.57% and (ii) the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) and (B) the excess of the aggregate Stated Principal Balance of the Mortgage Loans as of the last day of the related Due Period (after giving effect to scheduled payments of principal due during the related Due Period, to the extent received or advanced, and unscheduled collections of principal received during the related Prepayment Period) over $2,950,134.53.
 
“Servicer”: New Century Mortgage Corporation, with respect to the Mortgage Loans originated by New Century Mortgage Corporation (but only until June 30, 2006) or Wells Fargo, with respect to the Mortgage Loans (other than the Mortgage Loans originated by New Century Mortgage Corporation) and with respect to the Mortgage Loans originated by New Century Mortgage Corporation, effective July 1, 2006, or any successor Servicer appointed as herein provided, each in its capacity as a Servicer hereunder.
 
“Servicer Event of Default”: One or more of the events described in Section 7.01(a).
 
“Servicer Prepayment Charge Payment Amount”: The amounts payable by the Servicer in respect of any waived Prepayment Charges pursuant to Section 3.01.
 
“Servicer Remittance Date”: With respect to any Distribution Date, the 18th day of the calendar month in which such Distribution Date occurs or, if such 18th day is not a Business Day, the Business Day immediately following.
 
“Servicing Account”: The account or accounts created and maintained pursuant to Section 3.09.
 
“Servicing Advances”: The reasonable “out-of-pocket” costs and expenses incurred by the Servicer in connection with a default, delinquency or other unanticipated event by the Servicer in the performance of its servicing obligations, including, but not limited to, the cost of (i) the preservation, restoration, inspection and protection of a Mortgaged Property, (ii) any enforcement, administration or judicial proceedings, including foreclosures, in respect of a particular Mortgage Loan, including any expenses incurred in relation to any such proceedings that result from the Mortgage Loan being registered on the MERS System, (iii) the management (including reasonable fees in connection therewith) and liquidation of any REO Property, (iv) taxes, assessments, water rates, sewer rents and other charges which are or may become a lien upon the Mortgage Propety and (v) the performance of its obligations under Section 3.01, Section 3.09, Section 3.13, Section 3.14, Section 3.16 and Section 3.23. Servicing Advances shall also include any reasonable “out-of-pocket” costs and expenses (including legal fees) incurred by the Servicer in connection with executing and recording instruments of satisfaction, deeds of reconveyance or Assignments of Mortgage in connection with any foreclosure in respect of any Mortgage Loan to the extent not recovered from the related Mortgagor or otherwise payable under this Agreement. The Servicer shall not be required to make any Servicing Advance in respect of a Mortgage Loan or REO Property that, in the good faith business judgment of the Servicer would not be ultimately recoverable from related Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property as provided herein. The Servicer shall not be required to make any Servicing Advance that would be a Nonrecoverable Advance.
 
“Servicing Criteria” means the criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time.
 
“Servicing Fee”: With respect to each Mortgage Loan, the amount of the annual fee paid to the Servicer, which shall, for a period of one full month, be equal to one-twelfth of the product of (a) the Servicing Fee Rate (without regard to the words “per annum”) and (b) the Stated Principal Balance of such Mortgage Loan as of the first day of the related Due Period. Such fee shall be payable monthly, computed on the basis of the same principal amount and period respecting which any related interest payment on a Mortgage Loan is received. The obligation for payment of the Servicing Fee is limited to, and the Servicing Fee is payable solely from, the interest portion (including recoveries with respect to interest from Liquidation Proceeds) of such Monthly Payment collected by the Servicer, or as otherwise provided under Section 3.11.
 
“Servicing Fee Rate”: With respect to each Mortgage Loan, the rate of 0.50% per annum.
 
“Servicing Function Participant” means any Sub-Servicer or Subcontractor of a Servicer, the Master Servicer, the Custodian or the Trust Administrator, respectively. For the avoidance of doubt, the Custodian shall be considered a Servicing Function Participant without regard to the threshold percentage set forth in instruction 2 of Item 1122 of Regulation AB.
 
“Servicing Officer”: Any employee of the Servicer involved in, or responsible for, the administration and servicing of the Mortgage Loans, whose name appear on a list of Servicing Officers furnished by the Servicer to the Master Servicer, the Trust Administrator, the Trustee and the Depositor, upon request, as such list may from time to time be amended. With respect to the Master Servicer, any officer of the Master Servicer involved in or responsible for, the administration and master servicing of the Mortgage Loans whose name appears on a list of master Servicing Officers furnished by the Master Servicer to the Trustee, the Trust Administrator and the Depositor upon request, as such list may from time to time be amended.
 
“Servicing Transfer Costs”: Shall mean all reasonable out-of-pocket costs and expenses incurred by the Trustee or the Master Servicer in connection with the transfer of servicing from a predecessor servicer, including, without limitation, any reasonable costs or expenses associated with the complete transfer of all servicing data and the completion, correction or manipulation of such servicing data as may be required by the Trustee, the Master Servicer to correct any errors or insufficiencies in the servicing data or otherwise to enable the Trustee or the Master Servicer to service the Mortgage Loans properly and effectively.
 
“Significance Percentage”: The percentage equivalent of a fraction, the numerator of which is the highest of each Present Value Maximum Probable Exposure and the denominator of which is the aggregate Certificate Principal Balance of the Class A and Mezzanine Certificates that are supported by the derivatives (after giving effect to all distributions on such Distribution Date in such derivative confirmation).
 
“Significance Percentage Calculation Date”: Shall mean no later than the respective Distribution Date.
 
“Single Certificate”: With respect to any Class of Certificates (other than the Class P Certificates and the Residual Certificates), a hypothetical Certificate of such Class evidencing a Percentage Interest for such Class corresponding to an initial Certificate Principal Balance of $1,000. With respect to the Class P Certificates and the Residual Certificates, a hypothetical Certificate of such Class evidencing a 100% Percentage Interest in such Class.
 
“Startup Day”: With respect to each Trust REMIC, the day designated as such pursuant to Section 10.01(b) hereof.
 
“Stated Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, the Cut-off Date Principal Balance of such Mortgage Loan, as shown in the Mortgage Loan Schedule, minus the sum of (i) the principal portion of each Monthly Payment due on a Due Date subsequent to the Cut-off Date, to the extent received from the Mortgagor or advanced by the Servicer and distributed pursuant to Section 4.01 on or before such date of determination, (ii) all Principal Prepayments received after the Cut-off Date, to the extent distributed pursuant to Section 4.01 on or before such date of determination, (iii) all Liquidation Proceeds and Insurance Proceeds applied by the Servicer as recoveries of principal in accordance with the provisions of Section 3.16, to the extent distributed pursuant to Section 4.01 on or before such date of determination, and (iv) any Realized Loss incurred with respect thereto as a result of a Deficient Valuation made during or prior to the Prepayment Period for the most recent Distribution Date coinciding with or preceding such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, zero. With respect to any REO Property: (a) as of any date of determination up to but not including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, an amount (not less than zero) equal to the Stated Principal Balance of the related Mortgage Loan as of the date on which such REO Property was acquired on behalf of REMIC I, minus the sum of (i) if such REO Property was acquired before the Distribution Date in any calendar month, the principal portion of the Monthly Payment due on the Due Date in the calendar month of acquisition, to the extent advanced by the Servicer and distributed pursuant to Section 4.01 on or before such date of determination, and (ii) the aggregate amount of REO Principal Amortization in respect of such REO Property for all previously ended calendar months, to the extent distributed pursuant to Section 4.01 on or before such date of determination; and (b) as of any date of determination coinciding with or subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, zero.
 
“Stepdown Date”: The earlier to occur of (i) the Distribution Date on which the aggregate Certificate Principal Balance of the Class A Certificates has been reduced to zero and (ii) the later to occur of (x) the Distribution Date occurring in July 2009 and (y) the first Distribution Date on which the Credit Enhancement Percentage (calculated for this purpose only after taking into account payments of principal on the Mortgage Loans) for the Class A Certificates is equal to or greater than 41.80%.
 
“Subcontractor” means any vendor, subcontractor or other Person that is not responsible for the overall servicing of Mortgage Loans but performs one or more discrete functions identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans under the direction or authority of any Servicer (or a Sub-Servicer of any Servicer), the Master Servicer, the Custodian or the Trust Administrator.
 
“Subordinate Certificates”: The Mezzanine Certificates and the Class CE Certificates.
 
“Sub-Servicer” means any Person that services Mortgage Loans on behalf of a Servicer, and is responsible for the performance (whether directly or through sub-servicers or Subcontractors) of servicing functions required to be performed under this Agreement, any related Servicing Agreement or any sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
 
“Sub-Servicing Account”: An account established by a Sub-Servicer which meets the requirements set forth in Section 3.08 and is otherwise acceptable to the Servicer.
 
“Sub-Servicing Agreement”: The written contract between the Servicer and a Sub-Servicer, relating to servicing and administration of certain Mortgage Loans, which meets the requirements set forth in Section 3.02.
 
“Subsequent Recoveries”: As of any Distribution Date, unexpected amounts received by the Servicer (net of any related expenses permitted to be reimbursed to the Servicer or the Master Servicer) specifically related to a Mortgage Loan that was the subject of a liquidation or an REO Disposition prior to the related Prepayment Period that resulted in a Realized Loss.
 
“Substitution Adjustment Amount”: As defined in Section 2.03(b).
 
“Supplemental Interest Trust”: As defined in Section 4.08(a).
 
“Supplemental Interest Trust Trustee”: Wells Fargo Bank, N. A., a national banking association, not in its individual capacity but solely in its capacity as supplemental interest trust trustee, and any successor thereto.
 
“Swap Account”: The account or accounts created and maintained pursuant to Section 4.08. The Swap Account must be an Eligible Account.
 
“Swap Administration Agreement”: As defined in Section 4.08(b).
 
“Swap Administrator”: Wells Fargo Bank, N.A., a national banking association, or any successor in interest not in its individual capacity but solely as swap administrator under the Swap Administration Agreement, or any successor swap administrator appointed pursuant to the Swap Administration Agreement.
 
“Swap Interest Shortfall Amount”: Any shortfall of interest with respect to any Class of Certificates resulting from the application of the Net WAC Rate due to a discrepancy between the Uncertificated Notional Amounts of the Class SWAP-IO Interest and the scheduled notional amount pursuant to the Swap Administration Agreement.
 
“Swap LIBOR”: A per annum rate equal to the floating rate payable by either Swap Provider under the Interest Rate Swap Agreement. 
 
“Swap Provider”: UBS AG.
 
“Swap Provider Trigger Event”: A Swap Termination Payment that is triggered upon: (i) an Event of Default under the Interest Rate Swap Agreement with respect to which the Swap Provider is a Defaulting Party (as defined in the Interest Rate Swap Agreement), (ii) a Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Interest Rate Swap Agreement) or (iii) an Additional Termination Event under the Interest Rate Swap Agreement with respect to which the Swap Provider is the sole Affected Party (as defined in the Interest Rate Swap Agreement).
 
“Swap Termination Payment”: The payment due under the Interest Rate Swap Agreement upon the early termination of the Interest Rate Swap Agreement.
 
“Tax Returns”: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of the Trust Fund due to the classification of portions thereof as REMICs under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.
 
“Telerate Page 3750”: The display designated as page “3750” on the Dow Jones Telerate Capital Markets Report (or such other page as may replace page 3750 on that report for the purpose of displaying London interbank offered rates of major banks).
 
“Termination Price”: As defined in Section 9.01.
 
“Terminator”: As defined in Section 9.01.
 
“Transfer”: Any direct or indirect transfer, sale, pledge, hypothecation, or other form of assignment of any Ownership Interest in a Certificate.
 
“Transferee”: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
 
“Transferor”: Any Person who is disposing by Transfer of any Ownership Interest in a Certificate.
 
“Trigger Event”: A Trigger Event is in effect with respect to any Distribution Date on or after the Stepdown Date if:
 
(b) the Delinquency Percentage exceeds 38.25% of the Credit Enhancement Percentage; or
 
(c) the aggregate amount of Realized Losses incurred since the Cut-off Date through the last day of the related Due Period (reduced by the aggregate amount of Subsequent Recoveries received since the Cut-off Date through the last day of the related Due Period) divided by the aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds the applicable percentages set forth below with respect to such Distribution Date:
 
Distribution Date Occurring In
Percentage
July 2008 through June 2009
1.40% for the first month, plus an additional 1/12th of 1.70% for each month thereafter
July 2009 through June 2010
3.10% for the first month, plus an additional 1/12th of 1.75% for each month thereafter
July 2010 through June 2011
4.85% for the first month, plus an additional 1/12th of 1.40% for each month thereafter
July 2011 through June 2012
6.25% for the first month, plus an additional 1/12th of 0.75% for each month thereafter
July 2012 and thereafter
7.00%

“Trust Administrator”: Wells Fargo Bank, N.A., or any successor in interest, or any successor trust administrator appointed as herein provided.
 
“Trust Fund”: Collectively, all of the asse