MORTGAGE LOAN PURCHASE AGREEMENT

MORTGAGE LOAN PURCHASE AGREEMENT, dated as of February 1, 2007 (the “Agreement”), between MORGAN STANLEY MORTGAGE CAPITAL INC. (the “Seller” or “MSMCI”) and MORGAN STANLEY CAPITAL I INC. (the “Purchaser”).

WHEREAS, the Seller is the owner of either the notes or other evidence of indebtedness (the “Mortgage Notes”) or other evidence of ownership so indicated on Schedule I hereto referred to below, and the other documents or instruments constituting the Mortgage File (collectively, the “Mortgage Loans”); and

WHEREAS, the Seller, as of the date hereof, owns the mortgages (the “Mortgages”) on the properties (the “Mortgaged Properties”) securing such Mortgage Loans, including rights to (a) any property acquired by foreclosure or deed in lieu of foreclosure or otherwise and (b) the proceeds of any insurance policies covering the Mortgage Loans or the Mortgaged Properties or the obligors on the Mortgage Loans; and

WHEREAS, the parties hereto desire that the Seller sell the Mortgage Loans to the Purchaser and the Purchaser purchase the Mortgage Loans from the Seller pursuant to the terms of this Agreement; and

WHEREAS, pursuant to the terms of a Pooling and Servicing Agreement dated as of February 1, 2007 (the “Pooling and Servicing Agreement”) among the Purchaser, as depositor, Wells Fargo Bank, National Association, as master servicer and securities administrator, and LaSalle Bank National Association, as trustee (the “Trustee”), the Purchaser will convey the Mortgage Loans to Morgan Stanley Mortgage Loan Trust 2007-5AX (the “Trust”).

NOW, THEREFORE, in consideration of the mutual covenants herein contained, the parties hereto agree as follows:

Section 1.01   Definitions .  All capitalized terms used but not defined herein and below shall have the meanings assigned thereto in the Pooling and Servicing Agreement.

“ Seller Information ”: The information set forth in the Prospectus Supplement or the Free Writing Prospectus under the caption: “Description of the Mortgage Loans—Loan Purchasing Guidelines and Underwriting Standards”, “—Loan Purchasing Guidelines—Morgan Stanley Mortgage Capital Inc.”

Section 2.01   Sale and Assignment of Mortgage Loans .  

(a)   On and of the date hereof, MSMCI hereby sells, assigns and transfers to the Depositor all of its right, title and interest in the Mortgage Loans and all rights and obligations related thereto as provided under the Agreement to the extent relating to the Mortgage Loans, the Depositor hereby accepts such assignment from MSMCI (the “First Assignment and Assumption”), and the Seller hereby acknowledges the First Assignment and Assumption.

(b)   On and of the date hereof, immediately after giving effect to the First Assignment and Assumption, the Depositor hereby sells, assigns and transfers to the Trustee, on behalf of the Trust, all of its right, title and interest in the Mortgage Loans and all rights and obligations related thereto, and the Trustee, on behalf of the Trust, hereby accepts such assignment from the Depositor (the “Second Assignment and Assumption”), and the Seller hereby acknowledges the Second Assignment and Assumption.

(c)   On and as of the date hereof, MSMCI represents and warrants to the Depositor and the Trustee that MSMCI has not taken any action that would serve to impair or encumber the respective ownership interests of the Depositor and the Trustee in the Mortgage Loans since the date of MSMCI’s acquisition of the Mortgage Loans.

Section 2.02   Recognition of Trustee

(a)   From and after the date hereof, both MSMCI and the Depositor shall note the transfer of the Mortgage Loans to the Trustee, in their respective books and records and shall recognize the Trustee, on behalf of the Trust, as of the date hereof, as the owner of the Mortgage Loans, and Servicer shall service the Mortgage Loans for the benefit of the Trust pursuant to the Agreement, the terms of which are incorporated herein by reference. It is the intention of the Servicer, the Depositor, the Trustee and MSMCI that this Assignment shall be binding upon and inure to the benefit of the Depositor, the Trustee and MSMCI and their respective successors and assigns.

(b)   Without in any way limiting the foregoing, the parties confirm that this Assignment includes the rights relating to amendments or waivers under the Agreement. Accordingly, the right of MSMCI to consent to any amendment of the Agreement and its rights concerning waivers as set forth in Section 12.02 of the Agreement shall be exercisable, to the extent any such amendment or waiver affects the Mortgage Loans or any of the rights under the Agreement with respect thereto (other than the servicing of the Mortgage Loans, which shall be enforced by the Master Servicer) by the Trustee as assignee of MSMCI.

Section 2.03   Obligations of Seller Upon Sale .

(a) In connection with any transfer pursuant to Section 2.01 hereof, the Seller further agrees, at its own expense, on or prior to the Closing Date, (x) to indicate in its books and records that the Mortgage Loans have been sold to the Purchaser pursuant to this Agreement and (y) to deliver to the Purchaser and the Trustee a computer file containing a true and complete list of all such Mortgage Loans specifying for each such Mortgage Loan, as of the Cut-off Date, its account number and Cut-off Date Principal Balance. Such file, which forms a part of Schedule A to the Pooling and Servicing Agreement, shall also be marked as Schedule I to this Agreement and is hereby incorporated into and made a part of this Agreement.

In connection with such transfer and assignment of the Mortgage Loans, the Seller shall, on behalf of the Purchaser, deliver to and deposit with, the Custodian, as the agent of the Trustee, the documents or instruments set forth in Section 2.01(a) of the Pooling and Servicing Agreement with respect to each Mortgage Loan so transferred and assigned.

If any of the documents referred to above 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 Seller to deliver such documents shall be deemed to be satisfied upon (1) delivery to the Custodian no later than the Closing Date, of a copy of each such document certified by the Seller 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 Seller, delivery to the Custodian, 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 on a Mortgage Loan was not delivered as required by this Section 2.01, the Seller shall deliver or cause to be delivered to the Custodian, a written commitment or interim binder or preliminary report of title issued by the title insurance or escrow company, with the original to be delivered to the Custodian, promptly upon receipt thereof. The Seller shall deliver or cause to be delivered to the Custodian 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.

Upon discovery or receipt of notice of any materially defective document in, or that a document is missing from, a Mortgage File, the Seller shall have 90 days to cure such defect or deliver such missing document to the Trustee. If the Seller does not cure such defect or deliver such missing document within such time period, the Seller shall either repurchase or substitute for such Mortgage Loan in accordance with Section 2.05 of the Pooling and Servicing Agreement.

The Purchaser hereby acknowledges its acceptance of all right, title and interest to the Mortgage Loans and other property, now existing and hereafter created, conveyed to it pursuant to Section 2.01.

The parties hereto intend that the transaction set forth herein be a sale by the Seller to the Purchaser of all the Seller’s right, title and interest in and to the Mortgage Loans and other property described above. In the event the transaction set forth herein is deemed not to be a sale, the Seller hereby grants to the Purchaser a security interest in all of the Seller’s right, title and interest in, to and under the Mortgage Loans and other property described above, whether now existing or hereafter created, to secure all of the Seller’s obligations hereunder; and this Agreement shall constitute a security agreement under applicable law. The Seller and the Purchaser shall, to the extent consistent with this Agreement, take such actions as may be necessary to ensure that, if this Agreement were deemed to create a security interest in the Mortgage Loans, such security interest would be deemed to be a perfected security interest of first priority under applicable law and will be maintained as such throughout the term of the Pooling and Servicing Agreement.

Section 2.04   Payment of Purchase Price for the Mortgage Loans . In consideration of the sale of the Mortgage Loans from the Seller to the Purchaser on the Closing Date, the Purchaser agrees to pay to the Seller on the Closing Date by transfer of immediately available funds, as directed by the Seller, an amount equal to $645,441,100 in respect of the Mortgage Loans (the “Purchase Price”).

Section 3.01   Seller Representations and Warranties Relating to the Mortgage Loans . The Seller hereby represents and warrants to the Purchaser, with respect to the Mortgage Loans, that as of the Closing Date or as of such date specifically provided herein:

(a)   The information set forth in the Mortgage Loan Schedule is complete, true and correct in all material respects as of the Cut-off Date.

(b)   Seller is the sole owner and holder of the Mortgage Loans free and clear of any liens, pledges, except for the pledge of the Mortgage note by Seller with a warehouse lender disclosed to Purchaser, charges or security interest of any nature, and has full right and authority to sell and assign the same.

(c)   With respect to each Mortgage Loan that is not a Co-op Loan, the Mortgage is a valid, existing and enforceable first (or, if indicated by Seller, second) lien on the Mortgaged Property, including all improvements on the Mortgaged Property subject only to (i) the lien of current real property taxes and assessments not yet due and payable, (ii) covenants, conditions and restrictions, rights of way, easements and other matters of the public record as of the date of recording being acceptable to Mortgage lending institutions generally and specifically referred to in the owner’s title insurance policy delivered to the originator of the Mortgage Loan and (x) specifically referred to or otherwise considered in the appraisal made for the originator of the Mortgage Loan or (y) which do not adversely affect the appraised value of the Mortgaged Property (or underlying Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan), (iii) other matters to which like properties are commonly subject which do not materially interfere with the benefits of the security intended to be provided by the Mortgage or the use, enjoyment, value or marketability of the related Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan) (iv) with respect to a second lien only, the lien of the first mortgage on the related mortgaged property. Any security agreement, chattel Mortgage or equivalent document related to and delivered in connection with the Mortgage loan establishes and creates a valid, existing and enforceable first (or, if indicated by Seller, second) lien and first (or if indicated by Seller, second) priority security interest on the property described therein and the Seller has the full right to sell and assign the same to Purchaser. With respect to each Co-op Loan, the related Mortgage is a valid, subsisting and enforceable first priority security interest on the related cooperative shares securing the Mortgage note, subject only to (i) liens of the related residential cooperative housing corporation for unpaid assessments representing the borrower’s pro rata share of the related residential cooperative housing corporation’s payment for its blanket Mortgage, current and future real property taxes, insurance premiums, maintenance fees and other assessments to which like collateral is commonly subject and (ii) other matters to which like collateral is commonly subject to which do not materially interfere with the benefits of the security interest intended to be provided by the related security agreement.

(d)   The Mortgage Loan is not in default and all monthly payments due prior to the transaction have been paid and all taxes, assessments and insurance premiums, water, sewer and municipal charges, leasehold payments or ground rents relating to the property secured by the Mortgage Loan have been paid. Seller has not advanced funds or induced or solicited any advances or funds by a party other than a borrower directly or indirectly, for the payment of any amounts required by the Mortgage loans.

(e)   With respect to escrow deposits and escrow payments, all such payments are in the possession of Seller and there exist no deficiencies in connection therewith for which customary arrangements for repayment thereof have not been made.

(f)   The terms of the Mortgage Note and Mortgage have not been impaired, waived, altered or modified in any respect from the date of origination, except by a written instrument which has been recorded, if necessary to protect the interest of Purchaser, and which has been delivered to Purchaser or to such other person as Purchaser shall designate in writing. The substance of any such waiver, alteration or modification has been approved by the issuer of any related private mortgage insurance policy and the title insurer, if any, to the extent required by the policy. No borrower has been released, in whole or in part, except in connection with an assumption agreement, approved by the issuer of any related private mortgage insurance policy and the title insurer, to the extent required by the policy, and which assumption agreement is part of the mortgage file delivered to Purchaser or to such other person as Purchaser shall designate in writing.

(g)   The Mortgage Loan is not subject to any right of rescission, set-off, counter claim or defense and is not unenforceable under any terms. The Mortgage note, the Mortgage and any other agreement executed and delivered by a borrower or guarantor, if applicable, are genuine, legal, valid, binding and enforceable obligations of the maker thereof. All parties to the Mortgage note and any other agreement executed and delivered by a borrower or guarantor, if applicable, had legal capacity to execute such documents and all such documents have, in fact, been properly executed by such parties.

(h)   The Mortgage Loan has not been satisfied, cancelled, subordinated or rescinded, in whole or in part (other than as to principal prepayments in full which may have been received prior to the transaction date), and the Mortgaged Property has not been released from the lien of the Mortgage, in whole or in part, nor has any instrument been executed that would effect any such satisfaction, cancellation, subordination, rescission or release.

(i)   The Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan) and all improvements thereon are insured against loss by fire and other such hazards as are customary in the area where the Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan) is located. Such coverage shall contain fire and hazard insurance policy with extended coverage as called for under the Seller’s guide. Such insurance policy and any other insurance policy related to the Mortgage Loan or the Mortgaged Property (or underlying Mortgaged Property, in the case of a Co-op Loan) contains a standard Mortgagee clause naming Seller and its successors and assigns as Mortgagee and loss payee. Each Mortgage obligates the borrower there under to maintain such insurance at their costs and expense and allows the Mortgagee to obtain and maintain such insurance at borrower’s costs and expense, and to seek reimbursement from the borrower should there be any failure by the borrower to maintain such policy. If any flood insurance is required by applicable law or pursuant to the Mortgage Loan documents or any other applicable requirement, then it has been obtained and in full force and effect. Any statements made by the borrower or the Seller in applications for such policies were true, complete and correct at the time the application was made and there are no events that have occurred since that policy was issued that would affect the stated coverage of the policy.

(j)   Any and all requirements of any federal, state or local law which include, but are not limited to usury, truth-in-lending, real estate settlement procedures, disclosure laws, consumer credit protection and equal credit opportunity have been complied with.

(k)   The proceeds of the Mortgage Loan have been fully disbursed and there is no requirement or anticipation of future advances there under (other than any escrow holdbacks retained pursuant to the terms of a related construction loan). All costs, fees and expenses incurred in making, closing or recording the Mortgage Loan have been paid.

(l)   Each Mortgage Loan that is not a Co-op Loan is covered by an ALTA lender’s title insurance policy or other generally acceptable form of policy, or with respect to any mortgage loan for which the related mortgaged property is located in California, a CLTA lender’s title insurance policy, or insurance acceptable to Fannie Mae or Freddie Mac, issued by a title insurer acceptable to Fannie Mae or Freddie Mac and qualified to do business in the jurisdiction where the Mortgaged Property is located, insuring (subject to the exceptions contained in paragraph (c) above) the Seller, its successors and assigns, as to the first (or, if indicated by Seller, second) priority lien of the Mortgage in the original principal amount of the Mortgage Loan, subject only to the exceptions contained in clauses (i), (ii), (iii) and (iv) of paragraph (c) of this Section 3.01, and in this case of adjustable rate mortgage loans, against any loss by reason of the invalidity or unenforcability of the lien resulting from the provisions of the mortgage providing for adjustment to the mortgage interest rate and monthly payment. Where required by applicable state law or regulation, the Mortgagor has been given the opportunity to choose the carrier of the required mortgage title insurance. The Seller, its successors and assigns, are the sole insureds of such lender’s title insurance policy and such lender’s title insurance policy is in full force and effect and will be in full force and effect upon the consummation of the transactions contemplated by this Agreement. No claims have been made under such lender’s title insurance policy, and no prior holder of the related Mortgage, including the Seller, has done, by act or omission, anything which would impair the coverage of such lender’s title insurance policy.

(m)   There is no default, breach, violation, anticipated breach or event of acceleration existing under the Mortgage or the related Mortgage Note and no existing or known event which, with the passage of time, (or with notice and the expiration of any grace or cure period) would constitute a default, breach, violation or event of acceleration under such Mortgage or the related Mortgage Note.

(n)   At settlement of the Mortgage Loan, and, to the Seller’s knowledge as of the transaction date, there were no mechanic’s liens or claims for work, labor or material affecting the Mortgaged Property (or the related residential dwelling unit at the underlying mortgaged property, in the case of a Co-op Loan) which are or may be a lien prior to the lien of such Mortgage except those which are insured against by the title insurance policy.

(o)   With respect to each mortgage loan, which is not a Co-op Loan, all improvements subject to the Mortgage which were considered in determining the appraised value of the Mortgaged Property lie wholly within the boundaries and building restriction lines of the Mortgaged Property except for de minimis encroachments permitted by the Fannie Mae Guide and which have been noted on the appraisal or the title policy affirmatively insures against loss or damage by reason of any violation, variation or encroachment or adverse circumstance which is either disclosed or would have been disclosed by an accurate survey, and no improvements on adjoining properties encroach upon the Mortgaged Property except those which are insured against by the title insurance policy referred to in clause (m) above or are acceptable under Fannie Mae or Freddie Mac guidelines and all improvements on the property comply with all applicable zoning and subdivision laws and ordinances.

(p)   Except for approximately 0.04% of the Mortgage Loans, by aggregate stated principal balance as of the Cut-off Date, each Mortgage Loan substantially complies with all the terms, conditions and requirements of Seller’s standards in effect at the time of origination of such Mortgage Loan. With respect to the remaining Mortgage Loans, each such Mortgage Loan complies with all the terms, conditions and requirements of the related originator’s standards in effect at the time of origination of such Mortgage Loan. The Mortgage Notes and Mortgages (exclusive of any riders) are on forms generally acceptable to Fannie Mae or Freddie Mac.

(q)   The Mortgaged Property is not subject to any material damage by waste, fire, earthquake, windstorm, flood or other casualty. At origination of the Mortgage Loan there was, and there currently is, no procee