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 assets of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V and REMIC VI, the Net WAC Rate Carryover Reserve Account, distributions made to the Trust Administrator by the Swap Administrator under the Swap Administration Agreement and the Swap Account and the other assets conveyed by the Depositor to the Trustee pursuant to Section 2.01.
 
“Trust REMIC”: Any of REMIC I, REMIC II, REMIC III, REMIC IV, REMIC V and REMIC VI.
 
“Trustee”: U.S. Bank National Association, a national banking association, or its successor in interest, or any successor trustee appointed as herein provided.
 
“Uncertificated Balance”: The amount of any REMIC Regular Interest (other than REMIC II Regular Interest II-LTIO) outstanding as of any date of determination. As of the Closing Date, the Uncertificated Balance of each REMIC Regular Interest (other than REMIC II Regular Interest II-LTIO) shall equal the amount set forth in the Preliminary Statement hereto as its initial uncertificated balance. On each Distribution Date, the Uncertificated Balance of each REMIC Regular Interest (other than REMIC II Regular Interest II-LTIO) shall be reduced by all distributions of principal made on such REMIC Regular Interest on such Distribution Date pursuant to Section 4.01 and, if and to the extent necessary and appropriate, shall be further reduced on such Distribution Date by Realized Losses as provided in Section 4.04. The Uncertificated Balance of REMIC II Regular Interest II-LTZZ shall be increased by interest deferrals as provided in Section 4.01(a)(1). The Uncertificated Balance of each REMIC Regular Interest (other than REMIC II Regular Interest II-LTIO) shall never be less than zero. With respect to the Class CE Interest as of any date of determination, an amount equal to the excess, if any, of (A) the then aggregate Uncertificated Principal Balance of the REMIC II Regular Interests over (B) the then aggregate Certificate Principal Balances of the Class A Certificates, Mezzanine Certificates and the Class P Interest then outstanding.
 
“Uncertificated Interest”: With respect to any REMIC Regular Interest for any Distribution Date, one month’s interest at the REMIC Remittance Rate applicable to such REMIC Regular Interest for such Distribution Date, accrued on the Uncertificated Balance or Uncertificated Notional Amount thereof immediately prior to such Distribution Date. Uncertificated Interest in respect of any REMIC I Regular Interest shall accrue on the basis of a 360-day year consisting of twelve 30-day months. Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest, shall be reduced by an amount equal to the sum of (a) the aggregate Prepayment Interest Shortfall, if any, for such Distribution Date to the extent not covered by Compensating Interest and (b) the aggregate amount of any Relief Act Interest Shortfall, if any allocated, in each case, to such REMIC Regular Interest pursuant to Section 1.02. In addition, Uncertificated Interest with respect to each Distribution Date, as to any REMIC Regular Interest shall be reduced by Realized Losses, if any, allocated to such REMIC Regular Interest pursuant to Section 1.02 and Section 4.04.
 
“Uncertificated Notional Amount”: With respect to REMIC II Regular Interest II-LTIO and each Distribution Date listed below, the aggregate Uncertificated Principal Balance of the REMIC I Regular Interests ending with the designation “A” listed below:
 

Distribution Date
REMIC I Regular Interests
1
I-1-A through I-60-A
2
I-2-A through I-60-A
3
I-3-A through I-60-A
4
I-4-A through I-60-A
5
I-5-A through I-60-A
6
I-6-A through I-60-A
7
I-7-A through I-60-A
8
I-8-A through I-60-A
9
I-9-A through I-60-A
10
I-10-A through I-60-A
11
I-11-A through I-60-A
12
I-12-A through I-60-A
13
I-13-A through I-60-A
14
I-14-A through I-60-A
15
I-15-A through I-60-A
16
I-16-A through I-60-A
17
I-17-A through I-60-A
18
I-18-A through I-60-A
19
I-19-A through I-60-A
20
I-20-A through I-60-A
21
I-21-A through I-60-A
22
I-22-A through I-60-A
23
I-23-A through I-60-A
24
I-24-A through I-60-A
25
I-25-A through I-60-A
26
I-26-A through I-60-A
27
I-27-A through I-60-A
28
I-28-A through I-60-A
29
I-29-A through I-60-A
30
I-30-A through I-60-A
31
I-31-A through I-60-A
32
I-32-A through I-60-A
33
I-33-A through I-60-A
34
I-34-A through I-60-A
35
I-35-A through I-60-A
36
I-36-A through I-60-A
37
I-37-A through I-60-A
38
I-38-A through I-60-A
39
I-39-A through I-60-A
40
I-40-A through I-60-A
41
I-41-A through I-60-A
42
I-42-A through I-60-A
43
I-43-A through I-60-A
44
I-44-A through I-60-A
45
I-45-A through I-60-A
46
I-46-A through I-60-A
47
I-47-A through I-60-A
48
I-48-A through I-60-A
49
I-49-A through I-60-A
50
I-50-A through I-60-A
51
I-51-A through I-60-A
52
I-52-A through I-60-A
53
I-53-A through I-60-A
54
I-54-A through I-60-A
55
I-55-A through I-60-A
56
I-56-A through I-60-A
57
I-57-A through I-60-A
58
I-58-A through I-60-A
59
I-59-A and I-60-A
60
I-60-A
thereafter
$0.00

With respect to the Class Swap-IO Interest and any Distribution Date, an amount equal to the Uncertificated Notional Amount of the REMIC II Regular Interest II-LTIO.
 
“Uninsured Cause”: Any cause of damage to a Mortgaged Property such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies required to be maintained pursuant to Section 3.14.
 
“United States Person”: A citizen or resident of the United States, a corporation, partnership or other entity created or organized in, or under the laws of, the United States, any state thereof or, the District of Columbia (except, in the case of a partnership, to the extent provided in regulations) provided that, for purposes solely of the restrictions on the transfer of Class R Certificates and Class R-X Certificates, no partnership or other entity treated as a partnership for United States federal income tax purposes shall be treated as a United States Person unless all persons that own an interest in such partnership either directly or through any entity that is not a corporation for United States federal income tax purposes are required by the applicable operative agreement to be United States Persons or an estate whose income is subject to United States federal income tax regardless of its source, or a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more United States persons have the authority to control all substantial decisions of the trust. To the extent prescribed in regulations by the Secretary of the Treasury, a trust which was in existence on August 20, 1996 (other than a trust treated as owned by the grantor under subpart E of part I of subchapter J of chapter 1 of the Code), and which was treated as a United States person on August 20, 1996 may elect to continue to be treated as a United States person notwithstanding the previous sentence. The term “United States” shall have the meaning set forth in Section 7701 of the Code.
 
“Unpaid Interest Shortfall Amount”: With respect to the Class A Certificates and the Mezzanine Certificates and (i) the first Distribution Date, zero, and (ii) any Distribution Date after the first Distribution Date, the amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable Amount for such Class for the immediately preceding Distribution Date and (2) the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for such preceding Distribution Date exceeds (b) the aggregate amount distributed on such Class in respect of interest pursuant to clause (a) of this definition on such preceding Distribution Date, plus interest on the amount of interest due but not paid on the Certificates of such Class on such preceding Distribution Date, to the extent permitted by law, at the Pass-Through Rate for such Class for the related Accrual Period.
 
“Value”: With respect to any Mortgage Loan, and the related Mortgaged Property, the lesser of:
 
(i) the lesser of (a) the value thereof as determined by an appraisal made for the Originator at the time of origination of the Mortgage Loan by an appraiser who met the minimum requirements of Fannie Mae and Freddie Mac, and (b) the value thereof as determined by a review appraisal conducted by the Originator in the event any such review appraisal determines an appraised value more than 10% lower than the value thereof, in the case of a Mortgage Loan with a Loan-to-Value Ratio less than or equal to 80%, or more than 5% lower than the value thereof, in the case of a Mortgage Loan with a Loan-to-Value Ratio greater than 80%, as determined by the appraisal referred to in clause (i)(a) above; and
 
(ii) the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan; provided, however, that in the case of a Refinanced Mortgage Loan or a Mortgage Loan originated in connection with a “lease option purchase” if the “lease option purchase price” was set 12 months or more prior to origination, such value of the Mortgaged Property is based solely upon clause (i) above.
 
“Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. With respect to any date of determination, 98% of all Voting Rights will be allocated among the holders of the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates in proportion to the then outstanding Certificate Principal Balances of their respective Certificates, 1% of all Voting Rights will be allocated to the holders of the Class P Certificates and 1% of all Voting Rights will be allocated among the holders of the Residual Certificates. The Voting Rights allocated to each Class of Certificate shall be allocated among Holders of each such Class in accordance with their respective Percentage Interests as of the most recent Record Date.
 
“Wells Fargo”: Wells Fargo Bank, N.A.
 
SECTION 1.02. Allocation of Certain Interest Shortfalls.
 
For purposes of calculating the amount of the Monthly Interest Distributable Amount for the Class A Certificates, the Mezzanine Certificates and the Class CE Certificates for any Distribution Date, (1) the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by Compensating Interest Payments by the Servicer or the Master Servicer) and any Relief Act Interest Shortfall incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated first, to the Class CE Certificates based on, and to the extent of, one month’s interest at the then applicable respective Pass-Through Rate on the respective Notional Amount of each such Certificate and, thereafter, among the Class A Certificates and the Mezzanine Certificates on a pro rata basis based on, and to the extent of, one month’s interest at the then applicable respective Pass-Through Rate on the respective Certificate Principal Balance of each such Certificate and (2) the aggregate amount of any Realized Losses and Net WAC Rate Carryover Amounts incurred for any Distribution Date shall be allocated to the Class CE Certificates based on, and to the extent of, one month’s interest at the then applicable respective Pass-Through Rate on the respective Notional Amount of each such Certificate.
 
For purposes of calculating the amount of Uncertificated Interest for the REMIC I Regular Interests for any Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls (to the extent not covered by payments by the Servicer pursuant to Section 3.24) and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans shall be allocated first, to REMIC I Regular Interest I and to the REMIC I Regular Interests ending with the designation “B”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Balances of each such REMIC I Regular Interest, and then, to REMIC I Regular Interests ending with the designation “A”, pro rata based on, and to the extent of, one month’s interest at the then applicable respective REMIC I Remittance Rates on the respective Uncertificated Balances of each such REMIC I Regular Interest.
 
For purposes of calculating the amount of Uncertificated Interest for the REMIC II Regular Interests for any Distribution Date, the aggregate amount of any Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any Distribution Date shall be allocated among 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 and REMIC II Regular Interest II-LTZZ, pro rata, based on, and to the extent of, one month’s interest at the then applicable respective REMIC II Remittance Rates on the respective Uncertificated Balances of each such REMIC II Regular Interest.
 
SECTION 1.03. Rights of the NIMS Insurer.
 
Each of the rights of the NIMS Insurer set forth in this Agreement shall exist so long as (i) the NIMS Insurer has undertaken to guarantee certain payments of notes issued pursuant to the Indenture and (ii) the notes issued pursuant to the Indenture remain outstanding or the NIMS Insurer is owed amounts in respect of its guarantee of payment on such notes; provided, however, the NIMS Insurer shall not have any rights hereunder (except pursuant to Section 11.01 and any rights to indemnification hereunder in the case of clause (ii) below) so long as (i) the NIMS Insurer has not undertaken to guarantee certain payments of notes issued pursuant to the Indenture or (ii) any default has occurred and is continuing under the insurance policy issued by the NIMS Insurer with respect to such notes.
 
 

 
ARTICLE II
 
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
 
SECTION 2.01. Conveyance of the Mortgage Loans.
 
The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse, for the benefit of the Certificateholders, all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to the Mortgage Loans identified on the Mortgage Loan Schedule, the rights of the Depositor under the Assignment Agreements, payments made to the Trust Administrator by the Swap Administrator under the Swap Administration Agreement and the Swap Account and all other assets included or to be included in REMIC I. Such assignment includes all interest and principal received by the Depositor or the Servicer on or with respect to the Mortgage Loans (other than payments of principal and interest due on such Mortgage Loans on or before the Cut-off Date). Any payments received on the Mortgage Loans after the Cut-off Date, whether in the form of Monthly Payments, Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries or any other amounts collected on such Mortgage Loan, shall be used first to satisfy any amounts due on such Mortgage Loan on or prior to the Cut-off Date, to the Person and in the amount certified by the Servicer to the Depositor on the Closing Date. The Depositor herewith delivers to the Trustee executed originals of each Assignment Agreement.
 
In connection with such transfer and assignment, the Depositor does hereby deliver to, and deposit with, to the Custodian (on behalf of the Trustee), with respect the Mortgage Loans, the following documents or instruments with respect to each Mortgage Loan so transferred and assigned (a “Mortgage File”):
 
(i) the original Mortgage Note, endorsed in blank or in the following form: “Pay to the order of U.S. Bank National Association, as Trustee under the applicable agreement, without recourse,” with all prior and intervening endorsements showing a complete chain of endorsement from the related Originator to the Person so endorsing to the Trustee;
 
(ii) the original Mortgage, noting the presence of the MIN of the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon;
 
(iii) unless the Mortgage Loan is registered on the MERS® System, an original Assignment in blank;
 
(iv) the original recorded Assignment or Assignments showing a complete chain of assignment from the related Originator to the Person assigning the Mortgage to the Trustee (or to MERS, if the Mortgage Loan is registered on the MERS® System and noting the presence of the MIN) as contemplated by the immediately preceding clause (iii);
 
(v) the original or copies of each assumption, modification, written assurance or substitution agreement, if any; and
 
(vi) the original lender’s title insurance policy, together with all endorsements or riders that were issued with or subsequent to the issuance of such policy, insuring the priority of the Mortgage as a first or second lien on the Mortgaged Property represented therein as a fee interest vested in the Mortgagor, or in the event such original title policy is unavailable, a written commitment or uniform binder or preliminary report of title issued by the title insurance or escrow company.
 
With respect to a maximum of 1.0% of the Mortgage Loans, by outstanding Stated Principal Balance of the Mortgage Loans as of the Cut-off Date, if any original Mortgage Note referred to in Section 2.01(i) above cannot be located, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon delivery to the Trustee (or the Custodian on behalf of the Trustee) of a photocopy of such Mortgage Note, if available, with a lost note affidavit substantially in the form of Exhibit I attached hereto. If any of the original Mortgage Notes for which a lost note affidavit was delivered to the Trustee (or the Custodian on behalf of the Trustee) with respect to the related Mortgage Files, is subsequently located, such original Mortgage Note shall be delivered to the Trustee (or the Custodian on behalf of the Trustee) within three Business Days.
 
Except with respect to any Mortgage Loan for which MERS is identified on the Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee of record, the Trustee (upon receipt of notice from the Custodian) shall promptly (within sixty Business Days following the later of the Closing Date and the date of receipt by the Trustee or the Custodian on behalf of the Trustee of the recording information for a Mortgage, but in no event later than ninety days following the Closing Date) enforce the obligations of the related Originator pursuant to the terms of the related Originator Master Agreement to submit or cause to be submitted for recording, at no expense to the Trust Fund, the Trustee, the Trust Administrator, the Custodian, the Servicer, the Master Servicer or the Depositor, in the appropriate public office for real property records, each Assignment referred to in Sections 2.01(iii) and (iv) above and in connection therewith, the Trustee (upon receipt of notice from the Custodian) shall enforce the obligation of each Originator pursuant to the terms of the related Originator Master Agreement to execute each original Assignment in the following form: “U.S. Bank National Association, as Trustee under the applicable agreement.” In the event that any such Assignment is lost or returned unrecorded because of a defect therein, the Trustee (upon receipt of notice from the Custodian) shall enforce the obligation of each Originator pursuant to the related Originator Master Agreement to promptly prepare or cause to be prepared a substitute Assignment or cure or cause to be cured such defect, as the case may be, and thereafter cause each such Assignment to be duly recorded.
 
In connection with the assignment of any Mortgage Loan registered on the MERS® System, the Depositor further agrees that it will cause, within 30 Business Days after the Closing Date, the MERS® System to indicate that such Mortgage Loans have been assigned by the Depositor to the Trustee in accordance with this Agreement for the benefit of the Certificateholders by including (or deleting, in the case of Mortgage Loans which are repurchased in accordance with this Agreement) in such computer files (a) the code in the field which identifies the specific Trustee and (b) the code in the field “Pool Field” which identifies the series of the Certificates issued in connection with such Mortgage Loans. The Depositor further agrees that it will not, and will not permit the Servicer to, and the Servicer agrees that it will not, alter the codes referenced in this paragraph with respect to any Mortgage Loan during the term of this Agreement unless and until such Mortgage Loan is repurchased in accordance with the terms of this Agreement.
 
If any of the documents referred to in Sections 2.01(ii), (iii) or (iv) has, as of the Closing Date, been submitted for recording but either (x) has not been returned from the applicable public recording office or (y) has been lost or such public recording office has retained the original of such document, the obligations of the Depositor to deliver such documents shall be deemed to be satisfied upon (1) delivery to the Trustee (or the Custodian on behalf of the Trustee) of a copy of each such document certified by the related Originator in the case of (x) above or the applicable public recording office in the case of (y) above to be a true and complete copy of the original that was submitted for recording and (2) if such copy is certified by the related Originator, delivery to the Trustee (or the Custodian on behalf of the Trustee) promptly upon receipt thereof of either the original or a copy of such document certified by the applicable public recording office to be a true and complete copy of the original.
 
If the original lender’s title insurance policy was not delivered pursuant to Section 2.01(vi) above, the Depositor shall deliver or cause to be delivered to the Custodian on behalf of the Trustee, promptly after receipt thereof, the original lender’s title insurance policy with a copy thereof to the Servicer. The Depositor shall deliver or cause to be delivered to the Custodian on behalf of the Trustee promptly upon receipt thereof any other original documents constituting a part of a Mortgage File received with respect to any Mortgage Loan, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan with a copy thereof to the Servicer.
 
The Depositor shall deliver or cause each Originator, the Trustee or the Custodian on behalf of the Trustee to deliver to the Servicer copies of all trailing documents required to be included in the servicing file at the same time the originals or certified copies thereof are delivered to the Trustee or the Custodian, such documents including but not limited to the mortgagee policy of title insurance and any mortgage loan documents upon return from the recording office. The Servicer shall not be responsible for any custodian fees or other costs incurring in obtaining such documents and the Depositor shall cause the Servicer to be reimbursed for any such costs it may incur in connection with performing its obligations under this Agreement. Subject to Section 6.03(a), the Servicer shall have no liability as a result of an inability to service any Mortgage Loan due to its failure to receive any documents missing from the Mortgage File or servicing file.
 
All original documents relating to the Mortgage Loans that are not delivered to the Trustee (or the Custodian on behalf of the Trustee) are and shall be held by or on behalf of the related Originator, the Seller, the Depositor or the Servicer, as the case may be, in trust for the benefit of the Trustee on behalf of the Certificateholders. In the event that any such original document is required pursuant to the terms of this Section 2.01 to be a part of a Mortgage File, such document shall be delivered promptly to the Trustee (or the Custodian on behalf of the Trustee). Any such original document delivered to or held by the Depositor that is not required pursuant to the terms of this Section to be a part of a Mortgage File, shall be delivered promptly to the Servicer.
 
The Depositor and the Trustee hereto understand and agree that it is not intended that any Mortgage Loan be included in the Trust that is a “High-Cost Home Loan” as defined by the Homeownership and Equity Protection Act of 1994 or any other applicable predatory or abusive lending laws.
 
The Depositor hereby directs the Trust Administrator to execute, deliver and perform its obligations under the Cap Contract, the Interest Rate Swap Agreement (in its capacity as Supplemental Interest Trust Trustee) and to assign any rights to receive payments from a Swap Provider to the Swap Administrator pursuant to the Swap Administration Agreement and the Depositor further directs the Trust Administrator to execute, deliver and perform its obligations under the Swap Administration Agreement. The Seller, the Depositor, the Servicer and the Holders of the Class A Certificates and the Mezzanine Certificates by their acceptance of such Certificates acknowledge and agree that the Trust Administrator shall execute, deliver and perform its obligations under the Cap Contract, the Interest Rate Swap Agreement and the Swap Administration Agreement and shall do so solely in its capacity as Trust Administrator or as Swap Administrator, as the case may be, and not in its individual capacity. Every provision of this Agreement relating to the conduct or affecting the liability of or affording protection to the Trust Administrator shall apply to the Trust Administrator’s execution of the execution of the Cap Contract, the Interest Rate Swap Agreement and the Swap Administration Agreement, and the performance of its duties and satisfaction of its obligations thereunder.
 
SECTION 2.02. Acceptance of REMIC I by Trustee.
 
The Trustee acknowledges receipt (or receipt by the Custodian on behalf of the Trustee), subject to the provisions of Section 2.01 and subject to any exceptions noted on the exception report described in the next paragraph below, of the documents referred to in Section 2.01 (other than such documents described in Section 2.01(v)) above and all other assets included in the definition of “REMIC I” under clauses (i), (iii), (iv) and (v) (to the extent of amounts deposited into the Distribution Account) and declares that it holds and will hold such documents and the other documents delivered to it constituting a Mortgage File, and that it holds or will hold all such assets and such other assets included in the definition of “REMIC I” in trust for the exclusive use and benefit of all present and future Certificateholders.
 
The Custodian on behalf of the Trustee agrees to execute and deliver to the Depositor and the NIMS Insurer on or prior to the Closing Date an acknowledgment of receipt of the original Mortgage Note (with any exceptions noted), substantially in the form attached as Exhibit C-3 hereto.
 
The Trustee (or the Custodian on behalf of the Trustee) agrees, for the benefit of the Certificateholders and the NIMS Insurer, to review each Mortgage File and, within 45 days of the Closing Date, to certify in substantially the form attached hereto as Exhibit C-1 that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents constituting part of such Mortgage File (other than such documents described in Section 2.01(v)) required to be delivered to it pursuant to this Agreement are in its possession, (ii) such documents have been reviewed by it and appear regular on their face and relate to such Mortgage Loan and (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (1), (3), (12), (15) and (18) of the definition of “Mortgage Loan Schedule” accurately reflects information set forth in the Mortgage File. It is herein acknowledged that, in conducting such review, the Trustee (or the Custodian on behalf of the Trustee) is under no duty or obligation (i) to inspect, review or examine any such documents, instruments, certificates or other papers to determine whether they are genuine, enforceable, or appropriate for the represented purpose or whether they have actually been recorded or that they are other than what they purport to be on their face or (ii) to determine whether any Mortgage File should include any of the documents specified in clause (v) of Section 2.01.
 
Prior to the first anniversary date of this Agreement, the Custodian on behalf of the Trustee shall deliver to the Depositor, the NIMS Insurer, the Trustee, the Servicer and the Master Servicer a final certification in the form annexed hereto as Exhibit C-2 evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon, and the Servicer shall forward a copy thereof to any Sub-Servicer.
 
If in the process of reviewing the Mortgage Files and making or preparing, as the case may be, the certifications referred to above, the Trustee (or the Custodian on behalf of the Trustee) finds any document or documents constituting a part of a Mortgage File to be missing or defective in any material respect, at the conclusion of its review the Trustee (or the Custodian on behalf of the Trustee) shall so notify the Depositor, the NIMS Insurer, the Trustee, the Servicer and the Master Servicer. In addition, upon the discovery by the Depositor, the NIMS Insurer, the Servicer or the Master Servicer of a breach of any of the representations and warranties made by an Originator under the related Originator Master Agreement or the Seller in an Assignment Agreement in respect of any Mortgage Loan which materially adversely affects such Mortgage Loan or the interests of the related Certificateholders in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties.
 
The Trustee (or the Custodian on behalf of the Trustee) shall provide, at the written request and expense of any Certificateholder, provide a written report to the Trust Administrator for forwarding to such Certificateholder of all related Mortgage Files released to the Servicer for servicing purposes.
 
The Depositor and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the related documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Trustee in trust for the benefit of the Certificateholders and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor. In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Trustee a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage Notes and the related documents, and that this Agreement shall constitute a security agreement under applicable law.
 
Notwithstanding anything to the contrary contained herein, the parties hereto acknowledge that the functions of the Trustee with respect to the custody, acceptance, inspection, receipt and release of the Mortgage Files pursuant to Section 2.01, 2.02 and 2.03 and preparation and delivery of the acknowledgements of receipt and the certifications required under such sections shall be performed by the Custodian pursuant to the terms and conditions of this Agreement.
 
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by an Originator or the Seller.
 
(a) Upon receipt of written notice from the Custodian of any materially defective document in, or that a document is missing from, a Mortgage File or from the Depositor, a Servicer, the Master Servicer, the Trust Administrator or the Custodian of the breach by an Originator or the Seller of any representation, warranty or covenant under the related Originator Master Agreement or Assignment Agreement, as applicable (including any representation, warranty or covenant regarding the Prepayment Charge Schedule), in respect of any Mortgage Loan that materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders, the Trustee shall promptly notify such Originator, the Trust Administrator, the NIMS Insurer, the Seller, the Servicer and the Master Servicer of such defect, missing document or breach and request that the related Originator or the Seller, as applicable, deliver such missing document or cure such defect or breach within 90 days from the date such Originator or the Seller, as applicable, was notified of such missing document, defect or breach, and if the Trustee receives written notice from the Depositor, a Servicer, the Master Servicer, the Trust Administrator or the Custodian, that the related Originator or the Seller, as applicable, has not delivered such missing document or cured such defect or breach in all material respects during such period, the Trustee shall enforce the obligations of such Originator or the Seller, as applicable, under the related Mater Agreement or Assignment Agreement to repurchase such Mortgage Loan from REMIC I at the Purchase Price. The Purchase Price for the repurchased Mortgage Loan shall be remitted to the Servicer for deposit in the Collection Account and the Custodian on behalf of the Trustee, upon receipt of written certification from the Servicer of such deposit, shall release to the related Originator or the Seller, as applicable, the related Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the related Originator or the Seller, as applicable, shall furnish to it and as shall be necessary to vest in such Originator or the Seller, as applicable, any Mortgage Loan released pursuant hereto. In furtherance of the foregoing, if an Originator or the Seller, as applicable, is not a member of MERS and repurchases a Mortgage Loan which is registered on the MERS® System, the related Originator or the Seller, as applicable, at its own expense and without any right of reimbursement, shall cause MERS to execute and deliver an assignment of the Mortgage in recordable form to transfer the Mortgage from MERS to the related Originator or the Seller, as applicable, and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’ rules and regulations. Neither the Trustee nor the Custodian shall have any further responsibility with regard to such Mortgage File. In lieu of repurchasing any such Mortgage Loan as provided above, if so provided in the related Originator Master Agreement or Assignment Agreement, an Originator or the Seller, as applicable, may cause such Mortgage Loan to be removed from REMIC I (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(b); provided, however, the related Originator or the Seller, as applicable, may not substitute a Qualified Substitute Mortgage Loan for any Deleted Mortgage Loan that violates any predatory or abusive lending law. It is understood and agreed that the obligation of the Originators or the Seller, as applicable, to cure or to repurchase (or to substitute for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy respecting such omission, defect or breach available to the Trustee and the Certificateholders.
 
(b) Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.03(a) must be effected prior to the date which is two years after the Startup Day for REMIC I.
 
As to any Deleted Mortgage Loan for which an Originator or the Seller, as applicable, substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected by such Originator or the Seller, as applicable, delivering to the Trustee (or the Custodian on behalf of the Trustee), for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment in blank or to the Custodian on behalf of the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01, together with an Officers’ Certificate providing that each such Qualified Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment Amount (as described below), if any, in connection with such substitution. The Custodian on behalf of the Trustee shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and, within ten Business Days thereafter, review such documents as specified in Section 2.02 and deliver to the Depositor, the NIMS Insurer and the Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit C-1, with any applicable exceptions noted thereon. Within one year of the date of substitution, the Custodian on behalf of the Trustee shall deliver to the Depositor, the NIMS Insurer and the Servicer a certification substantially in the form of Exhibit C-2 hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with any applicable exceptions noted thereon. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution are not part of REMIC I and will be retained by the related Originator or the Seller, as applicable. For the month of substitution, distributions to Certificateholders will reflect the Monthly Payment due on such Deleted Mortgage Loan on or before the Due Date in the month of substitution, and the related Originator or the Seller, as applicable, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Depositor shall give or cause to be given written notice to the Certificateholders and the NIMS Insurer that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Master Servicer, the Trust Administrator, the Trustee, the Custodian, the Servicer and the NIMS Insurer. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and shall be subject in all respects to the terms of this Agreement and the related Originator Master Agreement or Assignment Agreement, as applicable, including, all applicable representations and warranties thereof included therein.
 
For any month in which an Originator or the Seller, as applicable, substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer will determine the amount (the “Substitution Adjustment Amount”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate of, as to each such Qualified Substitute Mortgage Loan, the Stated Principal Balance thereof as of the date of substitution, together with one month’s interest on such Stated Principal Balance at the applicable Net Mortgage Rate, plus all outstanding Advances and Servicing Advances (including Nonrecoverable Advances and Nonrecoverable Servicing Advances) related thereto. On the date of such substitution, the related Originator or the Seller, as applicable, will deliver or cause to be delivered to the Servicer for deposit in the Collection Account an amount equal to the Substitution Adjustment Amount, if any, and the Custodian on behalf of the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans and written notice by the Servicer of such deposit, shall release to the related Originator or the Seller, as applicable, the related Mortgage File or Files and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, the related Originator or the Seller, as applicable, shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.
 
In addition, the related Originator or the Seller, as applicable, shall obtain at its own expense and deliver to the Trustee, the Trust Administrator and the NIMS Insurer an Opinion of Counsel to the effect that such substitution will not cause (a) any federal tax to be imposed on any Trust REMIC, including without limitation, any federal tax imposed on “prohibited transactions” under Section 860F(a)(1) of the Code or on “contributions after the startup date” under Section 860G(d)(1) of the Code, or (b) any Trust REMIC to fail to qualify as a REMIC at any time that any Certificate is outstanding.
 
(c) Upon discovery by the Depositor, the Servicer, the NIMS Insurer, any Originator, the Seller, the Master Servicer or the Trust Administrator that any Mortgage Loan does not constitute a “qualified mortgage” within the meaning of Section 860G(a)(3) of the Code, the party discovering such fact shall within two Business Days give written notice thereof to the other parties hereto and the Trustee shall give written notice to the related Originator and the Seller. In connection therewith, the related Originator, the Seller or the Depositor shall repurchase or, subject to the limitations set forth in Section 2.03(b), substitute one or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Such repurchase or substitution shall be made by (i) the related Originator or the Seller, as the case may be, if the affected Mortgage Loan’s status as a non-qualified mortgage is or results from a breach of any representation, warranty or covenant made by such Originator or the Seller, as the case may be, under the related Originator Master Agreement or Assignment Agreement, or (ii) the Depositor, if the affected Mortgage Loan’s status as a non-qualified mortgage is a breach of no representation or warranty. Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(a). The Trustee shall reconvey to the Depositor, the related Originator or the Seller, as the case may be, the Mortgage Loan to be released pursuant hereto in the same manner, and on the same terms and conditions, as it would a Mortgage Loan repurchased for breach of a representation or warranty.
 
SECTION 2.04. Reserved.
 
SECTION 2.05. Representations, Warranties and Covenants of the Servicer and the Master Servicer.
 
(a) The Servicer hereby represents, warrants and covenants to the Trust Administrator and the Trustee, for the benefit of each of the Trustee, the Trust Administrator, the Certificateholders and to the Depositor that as of the Closing Date or as of such date specifically provided herein:
 
(i) The Servicer is a national banking association duly formed, validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Servicer;
 
(ii) The Servicer has the full power and authority to conduct its business as presently conducted by it and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Servicer has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming the due authorization, execution and delivery thereof by the Trustee, the Depositor, the Master Servicer and the Trust Administrator, constitutes a legal, valid and binding obligation of the Servicer, enforceable against the Servicer in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors' rights generally, laws affecting the contract obligations of insured banks and by general principles of equity;
 
(iii) The execution and delivery of this Agreement by the Servicer, the servicing of the related Mortgage Loans by the Servicer hereunder, the consummation by the Servicer of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Servicer and will not (A) result in a breach of any term or provision of the charter of by-laws of the Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Servicer; and the Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Servicer's knowledge, would in the future materially and adversely affect, (x) the ability of the Servicer to perform its obligations under this Agreement, (y) the business, operations, financial condition, properties or assets of the Servicer taken as a whole or (z) the legality, validity or enforceability of this Agreement;
 
(iv) The Servicer is a HUD approved mortgagee pursuant to Section 203 and Section 211 of the National Housing Act and is an approved seller/servicer for Fannie Mae or Freddie Mac in good standing. No event has occurred, including but not limited to a change in insurance coverage, that would make the Servicer unable to comply with HUD eligibility requirements or that would require notification to HUD;
 
(v) The Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every covenant made by it and contained in this Agreement;
 
(vi) No litigation is pending against the Servicer that would materially and adversely affect the execution, delivery or enforceability of this Agreement or the ability of the Servicer to service the Mortgage Loans serviced by it or to perform any of its other obligations hereunder in accordance with the terms hereof
 
(vii) There are no actions or proceedings against, or investigations known to it of, the Servicer before any court, administrative or other tribunal (A) that might prohibit its entering into this Agreement, (B) seeking to prevent the consummation of the transactions contemplated by this Agreement or (C) that might prohibit or materially and adversely affect the performance by the Servicer of its obligations under, or the validity or enforceability of, this Agreement;
 
(viii) No consent, approval, authorization or order of any court or governmental agency or body is required for the execution, delivery and performance by the Servicer of, or compliance by the Servicer with, this Agreement or the consummation by it of the transactions contemplated by this Agreement, except for such consents, approvals, authorizations or orders, if any, that have been obtained prior to the Closing Date;
 
(ix) The Servicer has fully furnished and will continue to fully furnish, in accordance with the Fair Credit Reporting Act and its implementing regulations, accurate and complete information (e.g., favorable and unfavorable) on its borrower credit files to Equifax, Experian and Trans Union Credit Information Company or their successors (the “Credit Repositories”) in a timely manner; and
 
(x) The Servicer is a member of MERS in good standing, and will comply in all material respects with the rules and procedures of MERS in connection with the servicing of the Mortgage Loans that are registered with MERS.
 
It is understood and agreed that the representations, warranties and covenants set forth in this Section 2.05 shall survive delivery of the Mortgage Files to the Custodian on behalf of the Trustee and shall inure to the benefit of the Trustee, the Trust Administrator, the Depositor and the Certificateholders. Upon discovery by any of the Depositor, the Servicer, the Trust Administrator or the Trustee of a breach of any of the foregoing representations, warranties and covenants which materially and adversely affects the value of any Mortgage Loan or the interests therein of the Certificateholders, the party discovering such breach shall give prompt written notice (but in no event later than two Business Days following such discovery) to the Trustee and the Trust Administrator. Subject to Section 7.01(a), the obligation of the Servicer set forth in Section 2.03(c) to cure breaches shall constitute the sole remedies against the Servicer available to the Certificateholders, the Depositor, the Trust Administrator or the Trustee on behalf of the Certificateholders respecting a breach of the representations, warranties and covenants contained in this Section 2.05.
 
(b) The Master Servicer hereby represents, warrants and covenants to the Trustee, for the benefit of each of the Trustee and the Certificateholders, and to the Servicer and the Depositor that as of the Closing Date or as of such date specifically provided herein:
 
(i) The Master Servicer is a national banking association duly formed, validly existing and in good standing under the laws of the United States of America and is duly authorized and qualified to transact any and all business contemplated by this Agreement to be conducted by the Master Servicer;
 
(ii) The Master Servicer has the full power and authority to conduct its business as presently conducted by it and to execute, deliver and perform, and to enter into and consummate, all transactions contemplated by this Agreement. The Master Servicer has duly authorized the execution, delivery and performance of this Agreement, has duly executed and delivered this Agreement, and this Agreement, assuming due authorization, execution and delivery by the Depositor and the Trustee, constitutes a legal, valid and binding obligation of the Master Servicer, enforceable against it in accordance with its terms except as the enforceability thereof may be limited by bankruptcy, insolvency, reorganization or similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity;
 
(iii) The execution and delivery of this Agreement by the Master Servicer, the consummation by the Master Servicer of any other of the transactions herein contemplated, and the fulfillment of or compliance with the terms hereof are in the ordinary course of business of the Master Servicer and will not (A) result in a breach of any term or provision of charter and by-laws of the Master Servicer or (B) conflict with, result in a breach, violation or acceleration of, or result in a default under, the terms of any other material agreement or instrument to which the Master Servicer is a party or by which it may be bound, or any statute, order or regulation applicable to the Master Servicer of any court, regulatory body, administrative agency or governmental body having jurisdiction over the Master Servicer; and the Master Servicer is not a party to, bound by, or in breach or violation of any indenture or other agreement or instrument, or subject to or in violation of any statute, order or regulation of any court, regulatory body, administrative agency or governmental body having jurisdiction over it, which materially and adversely affects or, to the Master Servicer’s knowledge, would in the future materially and adversely affect, the ability of the Master Servicer to perform its obligations under this Agreement;
 
(iv) The Master Servicer or an Affiliate thereof is an approved seller/servicer for Fannie Mae or Freddie Mac in good standing and is a HUD approved mortgagee pursuant to Section 203 of the National Housing Act;
 
(v) The Master Servicer does not believe, nor does it have any reason or cause to believe, that it cannot perform each and every coven