Exhibit 4
MORGAN STANLEY ABS CAPITAL I INC.,
Depositor,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Servicer and Custodian,
COUNTRYWIDE HOME LOANS SERVICING LP,
Servicer,
FIRST NLC FINANCIAL SERVICES, LLC,
Responsible Party,
and
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
--------------------------------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of February 1, 2007
--------------------------------------------------------------
MORGAN STANLEY HOME EQUITY LOAN TRUST 2007-1
MORTGAGE PASS THROUGH CERTIFICATES,
SERIES 2007-1
<PAGE>
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01
Conveyance of Mortgage Loans.................................
Section 2.02
Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03
Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the
Mortgage Loans..............................................
Section 2.04 Execution
and Delivery of Certificates.......................
Section 2.05 REMIC
Matters................................................
Section 2.06
Representations and Warranties of the Depositor..............
Section 2.07
Enforcement of Obligations for Breach of Mortgage Loan
Representations.............................................
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers
to Service Mortgage Loans..........................
Section 3.02
Subservicing Agreements between a Servicer and
Subservicers................................................
Section 3.03 Successor
Subservicers.......................................
Section 3.04 Liability
of the Servicers...................................
Section 3.05 No
Contractual Relationship between Subservicers and the
Trustee.....................................................
Section 3.06
Assumption or Termination of Subservicing Agreements by
Trustee.....................................................
Section 3.07
Collection of Certain Mortgage Loan Payments.................
Section 3.08
Subservicing Accounts........................................
Section 3.09
Collection of Taxes, Assessments and Similar Items;
Escrow Accounts.............................................
Section 3.10
Collection Accounts..........................................
Section 3.11
Withdrawals from the Collection Accounts.....................
Section 3.12
Investment of Funds in the Collection Accounts and the
Distribution Account........................................
Section 3.13
Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.......................................
Section 3.14
Enforcement of "Due-on-Sale" Clauses; Assumption
Agreements..................................................
Section 3.15
Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release
of Mortgage Files....................................
Section 3.17 Title,
Conservation and Disposition of REO Property..........
Section 3.18
Notification of Adjustments..................................
Section 3.19 Access to
Certain Documentation and Information Regarding
the Mortgage Loans..........................................
Section 3.20
Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee........................
Section 3.21 Servicing
Compensation.......................................
Section 3.22 Annual
Statement as to Compliance............................
Section 3.23 Annual
Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants'
Attestation Report..........................................
Section 3.24 Trustee
to Act as Servicer...................................
Section 3.25
Compensating Interest........................................
Section 3.26 Credit
Reporting; Gramm-Leach-Bliley Act.....................
Section 3.27 Optional
Purchase of Delinquent Mortgage Loans...............
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01
Advances.....................................................
Section 4.02
Priorities of Distribution...................................
Section 4.03 Monthly
Statements to Certificateholders.....................
Section 4.04 Certain
Matters Relating to the Determination of LIBOR.......
Section 4.05
Allocation of Applied Realized Loss Amounts..................
Section 4.06 Swap
Account.................................................
ARTICLE
V
THE CERTIFICATES
Section 5.01 The
Certificates.............................................
Section 5.02
Certificate Register; 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 Access to
List of Certificateholders' Names and Addresses....
Section 5.06
Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01
Respective Liabilities of the Depositor and the Servicers....
Section 6.02 Merger or
Consolidation of the Depositor or a Servicer.......
Section 6.03
Limitation on Liability of the Depositor, the Servicers
and Others..................................................
Section 6.04
Limitation on Resignation of a Servicer......................
Section 6.05
Additional Indemnification by the Servicers; Third Party
Claims......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of
Default............................................
Section 7.02 Trustee
to Act; Appointment of Successor.....................
Section 7.03
Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of
the Trustee........................................
Section 8.02 Certain
Matters Affecting the Trustee and the Custodian......
Section 8.03 Trustee
Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee
May Own Certificates.................................
Section 8.05 Trustee's
Fees and Expenses..................................
Section 8.06
Eligibility Requirements for the Trustee.....................
Section 8.07
Resignation and Removal of the Trustee.......................
Section 8.08 Successor
Trustee............................................
Section 8.09 Merger or
Consolidation of the Trustee.......................
Section 8.10
Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax
Matters..................................................
Section 8.12 Periodic
Filings.............................................
Section 8.13 Tax
Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement................
Section 8.14 Custodial
Responsibilities...................................
ARTICLE IX
TERMINATION
Section 9.01
Termination upon Liquidation or Purchase of the Mortgage
Loans.......................................................
Section 9.02 Final
Distribution on the Certificates.......................
Section 9.03
Additional Termination Requirements..........................
ARTICLE X
MISCELLANEOUS PROVISIONS
Section 10.01
Amendment....................................................
Section 10.02 Recordation of Agreement;
Counterparts.......................
Section 10.03 Governing
Law................................................
Section 10.04 Intention of
Parties.........................................
Section 10.05
Notices......................................................
Section 10.06 Severability of
Provisions...................................
Section 10.07 Assignment; Sales; Advance
Facilities........................
Section 10.08 Limitation on Rights of
Certificateholders...................
Section 10.09 Inspection and Audit
Rights..................................
Section 10.10 Certificates Nonassessable and Fully
Paid....................
Section 10.11 Rule of
Construction.........................................
Section 10.12 Waiver of Jury
Trial.........................................
Section 10.13 Rights of the Third
Parties..................................
Section 10.14 Regulation AB Compliance; Intent of the Parties;
Reasonableness..............................................
SCHEDULES
Schedule I Mortgage
Loan Schedule
Schedule II Representations
and Warranties of Saxon Mortgage Services,
Inc., as Servicer
Schedule II-A
Further Representations and Warranties of Saxon
Schedule III Representations and
Warranties of Morgan Stanley ABS
Capital I Inc. as to the Mortgage Loans
Schedule IV Representations
and Warranties of First NLC as to the First
NLC Mortgage Loans
Schedule V
Representations and Warranties of Wells Fargo Bank,
National Association, as Servicer
Schedule VI Representations
and Warranties of Countrywide Home Loans
Servicing LP, as Servicer
EXHIBITS
Exhibit A Form
of Class A, Class M and Class B Certificate
Exhibit B Form of Class P
Certificate
Exhibit C-1 Form of Class R
Certificate
Exhibit C-2 Form of Class RX
Certificate
Exhibit D Form
of Class X Certificate
Exhibit E Form
of Initial Certification of [Custodian][Trustee]
Exhibit F Form
of Document Certification and Exception Report of
[Custodian][Trustee]
Exhibit G Form
of Residual Transfer Affidavit
Exhibit H Form
of Transferor Certificate
Exhibit I Form
of Rule 144A Letter
Exhibit J Form
of Request for Release
Exhibit K Form
of Contents for Each Mortgage File
Exhibit L Form
of Certification to be provided with Form 10-K
Exhibit M Form
of Certification to be provided by the Trustee to
Depositor
Exhibit N Form
of Certification to be provided by the Servicer to
Depositor
Exhibit O
First NLC Purchase Agreement
Exhibit P
[Reserved]
Exhibit Q
Accredited Agreements
Exhibit R
Wilmington Agreements
Exhibit S
Fremont Agreements
Exhibit T Form
of Servicer Power of Attorney
Exhibit U
Servicing Criteria - To Be Addressed in Assessment of
Compliance
Exhibit V
Additional Form 10-D Disclosure
Exhibit W
Additional Form 10-K Disclosure
Exhibit X Form
8-K Disclosure Information
Exhibit Y
Interest Rate Swap Agreement
Exhibit Z Form
of Additional Disclosure Notification
Exhibit AA-1 Form of Saxon and
Wells Fargo Servicer Reports
Exhibit AA-2
Form of Countrywide
Servicer Reports
Exhibit BB
Countrywide Amendment Regulation AB
Exhibit CC
Representations and Warranties Agreement
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of February 1,
2007,
among MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as
depositor
(the "Depositor"), SAXON MORTGAGE SERVICES, INC., a Delaware
corporation, as a
servicer ("Saxon"), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking
association, as a servicer and as custodian ("Wells Fargo" and in
its capacity
as custodian, the "Custodian"), COUNTRYWIDE HOME LOANS SERVICING
LP, a Texas
limited partnership, as a servicer ("Countrywide Servicing" and
together with
Saxon and Wells Fargo, as a servicer, the "Servicers"), FIRST NLC
FINANCIAL
SERVICES, LLC, a Florida limited liability company, as the
responsible party
("First NLC" or the "Responsible Party") and DEUTSCHE BANK NATIONAL
TRUST
COMPANY, a national banking association, as trustee (the
"Trustee").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
PRELIMINARY STATEMENT
The Trustee shall elect that five segregated asset pools within
the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap
Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the
Offered
Certificates to receive Basis Risk CarryForward Amounts and,
without
duplication, Upper-Tier CarryForward Amounts and the obligation to
pay Class IO
Shortfalls) be treated for federal income tax purposes as
comprising five REMICs
(Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC,
the
Upper-Tier REMIC and the Class X REMIC, respectively, and each, a
"Trust
REMIC"). The Class X Interest, the Class IO Interest and each Class
of Offered
Certificates (other than the right of each Class of Offered
Certificates to
receive Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier
CarryForward Amounts and the obligation to pay Class IO Shortfalls)
represents
ownership of a regular interest in a REMIC for purposes of the
REMIC Provisions.
The Class R Certificates represent ownership of the sole class of
residual
interest in each of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier
REMIC and the Upper-Tier REMIC for purposes of the REMIC
Provisions. The Class
RX Certificates represent ownership of the sole class of residual
interest in
the Class X REMIC for purposes of the REMIC provisions. The Startup
Day for each
Trust REMIC described herein is the date referenced in Section
2.05. The latest
possible maturity date for each regular interest is the latest date
referenced
in Section 2.05. The Class X REMIC shall hold as assets the Class
UT-X Interest
and the Class UT-IO Interest as set out below. The Upper-Tier REMIC
shall hold
as assets the several classes of uncertificated Lower-Tier Regular
Interests,
set out below. The Lower-Tier REMIC shall hold as assets the
several classes of
uncertificated Pooling-Tier REMIC-2 Regular Interests. Pooling-Tier
REMIC-2
shall hold as assets the several classes of uncertificated
Pooling-Tier REMIC-1
Regular Interests. Pooling-Tier REMIC-1 shall hold as assets the
assets of the
Trust Fund (exclusive of (i) the Prepayment Premiums, (ii) the Swap
Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the
Offered
Certificates to receive Basis Risk CarryForward Amounts and,
without
duplication, Upper-Tier CarryForward Amounts and the obligation to
pay Class IO
Shortfalls).
For federal income tax purposes, each Class of Offered
Certificates
represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC,
the right to receive Basis Risk CarryForward Amounts and without
duplication,
Upper-Tier CarryForward Amounts, and the obligation to pay Class IO
Shortfalls;
the Class X Certificates represent beneficial ownership of the
Class X Interest,
the Class IO Interest, the Interest Rate Swap Agreement, the Swap
Account, the
Excess Reserve Fund Account and the right to receive Class IO
Shortfalls,
subject to the obligation to pay Basis Risk CarryForward Amounts
and, without
duplication, Upper-Tier CarryForward Amounts; and the Class P
Certificates
represent beneficial ownership of the Prepayment Premiums, which
portions of the
Trust Fund shall be treated as a grantor trust under subpart E,
Part I of
subchapter J of the Code (the "Grantor Trust").
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class
PT1-R
Interest is hereby designated as a regular interest in the
Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 shall also issue the Class PT1-R Interest,
which is hereby
designated as the sole class of residual interest in Pooling-Tier
REMIC-1. The
Class PT1-R Interest shall be represented by the Class R
Certificates, shall not
have a principal balance and shall have no interest rate.
Pooling-Tier Initial
Pooling
Pooling-Tier
REMIC-1
Tier REMIC-1
REMIC-1 Interest
Interest Rate Principal Amount
----------------
------------- ----------------
Class PT1-1
(1)
$56,421,787.40
Class PT1-2A
(2)
$11,825,350.04
Class PT1-2B
(3)
$11,825,350.04
Class PT1-3A
(2)
$11,455,741.75
Class PT1-3B
(3)
$11,455,741.75
Class PT1-4A
(2)
$11,105,282.95
Class PT1-4B
(3)
$11,105,282.95
Class PT1-5A
(2)
$10,772,389.63
Class PT1-5B
(3)
$10,772,389.63
Class PT1-6A
(2)
$10,455,526.02
Class PT1-6B
(3)
$10,455,526.02
Class PT1-7A
(2)
$10,153,207.81
Class PT1-7B
(3)
$10,153,207.81
Class PT1-8A
(2)
$ 9,864,005.48
Class PT1-8B
(3)
$ 9,864,005.48
Class PT1-9A
(2)
$
9,586,410.58
Class PT1-9B
(3)
$ 9,586,410.58
Class PT1-10A
(2)
$ 9,318,824.10
Class PT1-10B
(3)
$ 9,318,824.10
Class PT1-11A
(2)
$ 9,060,477.38
Class PT1-11B
(3)
$ 9,060,477.38
Class PT1-12A
(2)
$ 8,810,196.82
Class PT1-12B
(3)
$ 8,810,196.82
Class PT1-13A
(2)
$ 8,554,540.97
Class PT1-13B
(3)
$ 8,554,540.97
Class PT1-14A
(2)
$ 8,202,227.64
Class PT1-14B
(3)
$ 8,202,227.64
Class PT1-15A (2)
$ 7,853,996.37
Class PT1-15B
(3)
$ 7,853,996.37
Class PT1-16A
(2)
$ 7,520,664.85
Class PT1-16B
(3)
$ 7,520,664.85
Class PT1-17A
(2)
$ 7,201,591.24
Class PT1-17B
(3)
$ 7,201,591.24
Class PT1-18A
(2)
$ 6,896,161.46
Class PT1-18B
(3)
$ 6,896,161.46
Class PT1-19A
(2)
$ 6,939,739.92
Class PT1-19B
(3)
$ 6,939,739.92
Class PT1-20A
(2)
$ 9,224,866.32
Class PT1-20B
(3)
$ 9,224,866.32
Class PT1-21A
(2)
$21,664,970.13
Class PT1-21B
(3)
$21,664,970.13
Class PT1-22A
(2)
$ 6,011,549.61
Class PT1-22B
(3)
$ 6,011,549.61
Class PT1-23A
(2)
$ 4,695,573.83
Class PT1-23B
(3)
$ 4,695,573.83
Class PT1-24A
(2)
$ 4,499,109.00
Class PT1-24B
(3)
$ 4,499,109.00
Class PT1-25A
(2)
$ 4,651,660.58
Class PT1-25B
(3)
$ 4,651,660.58
Class PT1-26A
(2)
$ 7,075,124.46
Class PT1-26B
(3)
$ 7,075,124.46
Class PT1-27A
(2)
$19,787,361.97
Class PT1-27B
(3)
$19,787,361.97
Class PT1-28A
(2)
$ 4,014,654.42
Class PT1-28B
(3)
$ 4,014,654.42
Class PT1-29A
(2)
$ 2,771,924.51
Class PT1-29B
(3)
$ 2,771,924.51
Class PT1-30A
(2)
$ 2,658,668.55
Class PT1-30B
(3)
$ 2,658,668.55
Class PT1-31A
(2)
$ 2,754,263.37
Class PT1-31B
(3)
$ 2,754,263.37
Class PT1-32A
(2)
$ 4,783,503.16
Class PT1-32B
(3)
$ 4,783,503.16
Class PT1-33A
(2)
$17,093,435.58
Class PT1-33B
(3)
$17,093,435.58
Class PT1-34A
(2)
$ 2,314,672.96
Class PT1-34B
(3)
$ 2,314,672.96
Class PT1-35A
(2)
$ 1,381,714.99
Class PT1-35B
(3)
$ 1,381,714.99
Class PT1-36A
(2)
$ 1,328,519.58
Class PT1-36B
(3)
$ 1,328,519.58
Class PT1-37A
(2)
$ 1,287,283.22
Class PT1-37B
(3)
$ 1,287,283.22
Class PT1-38A
(2)
$ 1,894,218.62
Class PT1-38B
(3)
$ 1,894,218.62
Class PT1-39A
(2)
$ 6,976,231.74
Class PT1-39B
(3)
$ 6,976,231.74
Class PT1-40A
(2)
$ 1,075,398.07
Class PT1-40B
(3)
$
1,075,398.07
Class PT1-41A
(2)
$ 805,507.42
Class PT1-41B
(3)
$ 805,507.42
Class PT1-42A
(2)
$ 776,371.02
Class PT1-42B
(3)
$ 776,371.02
Class PT1-43A
(2)
$ 753,937.98
Class PT1-43B
(3)
$ 753,937.98
Class PT1-44A
(2)
$ 1,101,402.11
Class PT1-44B
(3)
$ 1,101,402.11
Class PT1-45A
(2)
$ 3,999,810.80
Class PT1-45B
(3)
$ 3,999,810.80
Class PT1-46A
(2)
$ 635,749.77
Class PT1-46B
(3)
$ 635,749.77
Class PT1-47A
(2)
$ 482,592.55
Class PT1-47B
(3)
$ 482,592.55
Class PT1-48A
(2)
$ 466,528.06
Class PT1-48B
(3)
$ 466,528.06
Class PT1-49A
(2)
$ 450,985.79
Class PT1-49B
(3)
$ 450,985.79
Class PT1-50A
(2)
$ 435,949.30
Class PT1-50B
(3)
$ 435,949.30
Class PT1-51A
(2)
$ 421,402.65
Class PT1-51B
(3)
$ 421,402.65
Class PT1-52A
(2)
$ 407,330.42
Class PT1-52B
(3)
$ 407,330.42
Class PT1-53A
(2)
$ 393,717.58
Class PT1-53B
(3)
$ 393,717.58
Class PT1-54A
(2)
$ 380,549.62
Class PT1-54B
(3)
$ 380,549.62
Class PT1-55A
(2)
$ 379,125.01
Class PT1-55B
(3)
$ 379,125.01
Class PT1-56A
(2)
$ 354,991.03
Class PT1-56B
(3)
$ 354,991.03
Class PT1-57A
(2)
$ 389,829.34
Class PT1-57B
(3)
$ 389,829.34
Class PT1-58A
(2)
$ 376,470.56
Class
PT1-58B
(3)
$ 376,470.56
Class PT1-59A
(2)
$ 317,065.27
Class PT1-59B
(3)
$ 317,065.27
Class PT1-60A
(2)
$ 306,445.27
Class PT1-60B
(3)
$ 306,445.27
Class PT1-61A
(2)
$ 307,625.63
Class PT1-61B
(3)
$ 307,625.63
Class PT1-62A
(2)
$ 285,722.36
Class PT1-62B
(3)
$ 285,722.36
Class PT1-63A
(2)
$ 323,370.02
Class PT1-63B
(3)
$ 323,370.02
Class PT1-64A
(2)
$ 311,485.85
Class PT1-64B
(3)
$ 311,485.85
Class PT1-65A
(2)
$ 253,761.64
Class PT1-65B
(3)
$ 253,761.64
Class PT1-66A
(2)
$ 245,273.97
Class PT1-66B
(3)
$ 245,273.97
Class PT1-67A
(2)
$ 243,589.38
Class PT1-67B
(3)
$ 243,589.38
Class PT1-68A
(2)
$ 228,829.00
Class PT1-68B
(3)
$ 228,829.00
Class PT1-69A
(2)
$ 248,050.64
Class PT1-69B
(3)
$ 248,050.64
Class PT1-70A
(2)
$ 239,139.60
Class PT1-70B
(3)
$ 239,139.60
Class PT1-71A
(2)
$ 204,215.74
Class PT1-71B
(3)
$ 204,215.74
Class PT1-72A
(2)
$
197,381.06
Class PT1-72B
(3)
$ 197,381.06
Class PT1-73A
(2)
$ 5,579,149.27
Class PT1-73B
(3)
$ 5,579,149.27
Class PT1-R
(4)
(4)
---------
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-1 Interest Rate") equal to the
Pooling-Tier
REMIC-1 WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of
(i)
2
and (ii) the Pooling-Tier REMIC-1 WAC Rate, subject to a maximum
rate of
10.64%.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess,
if
any,
of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC
Rate
over
(B) 10.64%.
(4) The Class PT1-R
Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be deemed to be
distributed
to the Pooling-Tier REMIC-1 Regular Interests at the rates shown
above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans
(including, for the
first Distribution Date only, the Closing Date Deposit Amount)
shall be
allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest
with the
lowest numerical denomination until the Pooling-Tier REMIC-1
Principal Amount of
such interest is reduced to zero, provided that, with respect to
Pooling-Tier
REMIC-1 Regular Interests with the same numerical denomination,
such Realized
Losses, Subsequent Recoveries and payments of principal shall be
allocated pro
rata between such Pooling-Tier REMIC-1 Regular Interests, until the
Pooling-Tier
REMIC-1 Principal Amount of such interests is reduced to zero.
Pooling-Tier REMIC-2
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class
PT2-R
Interest, is hereby designated as a regular interest in
Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of
residual
interest in Pooling-Tier REMIC-2 and shall be represented by the
Class R
Certificates.
<TABLE>
<CAPTION>
Corresponding
Pooling-Tier
Pooling-Tier
Corresponding Corresponding
Scheduled
REMIC-2
REMIC-2 Initial
Pooling-Tier
Pooling-Tier
Crossover
Pooling-Tier
Interest
Principal
REMIC-2 IO
REMIC-1
Distribution
REMIC-2 Interest
Rate
Amount
Interest
Regular Interest
Date
-----------------
------------
------------------
-------------- ----------------
-------------
<S>
<C>
<C>
<C>
<C>
<C>
Class PT2-1
(1)
$
56,421,787.40
N/A
N/A
N/A
Class PT2-2A
(2)
$
11,825,350.04
Class PT2-IO-2
N/A
N/A
Class PT2-2B
(3)
$
11,825,350.04
N/A
N/A
N/A
Class PT2-3A
(2)
$
11,455,741.75
Class
PT2-IO-3
N/A
N/A
Class PT2-3B
(3)
$
11,455,741.75
N/A
N/A
N/A
Class PT2-4A
(2)
$
11,105,282.95
Class PT2-IO-4
N/A
N/A
Class PT2-4B
(3)
$
11,105,282.95
N/A
N/A
N/A
Class PT2-5A
(2)
$
10,772,389.63
Class PT2-IO-5
N/A
N/A
Class PT2-5B
(3)
$
10,772,389.63
N/A
N/A
N/A
Class PT2-6A
(2)
$
10,455,526.02
Class PT2-IO-6
N/A
N/A
Class PT2-6B
(3)
$
10,455,526.02
N/A
N/A
N/A
Class PT2-7A
(2)
$
10,153,207.81
Class PT2-IO-7
N/A
N/A
Class PT2-7B
(3)
$
10,153,207.81
N/A
N/A
N/A
Class PT2-8A
(2)
$
9,864,005.48
Class PT2-IO-8
N/A
N/A
Class PT2-8B
(3)
$
9,864,005.48
N/A
N/A
N/A
Class PT2-9A
(2)
$
9,586,410.58
Class PT2-IO-9
N/A
N/A
Class PT2-9B
(3)
$
9,586,410.58
N/A
N/A
N/A
Class PT2-10A
(2)
$
9,318,824.10
Class PT2-IO-10
N/A
N/A
Class PT2-10B
(3)
$
9,318,824.10
N/A
N/A
N/A
Class PT2-11A
(2)
$
9,060,477.38
Class PT2-IO-11
N/A
N/A
Class PT2-11B
(3)
$
9,060,477.38
N/A
N/A
N/A
Class PT2-12A
(2)
$
8,810,196.82
Class PT2-IO-12
N/A
N/A
Class PT2-12B
(3)
$
8,810,196.82
N/A
N/A
N/A
Class PT2-13A
(2)
$
8,554,540.97
Class PT2-IO-13
N/A
N/A
Class PT2-13B
(3)
$
8,554,540.97
N/A
N/A
N/A
Class PT2-14A
(2)
$
8,202,227.64
Class PT2-IO-14
N/A
N/A
Class PT2-14B
(3)
$
8,202,227.64
N/A
N/A
N/A
Class PT2-15A
(2)
$
7,853,996.37
Class PT2-IO-15
N/A
N/A
Class PT2-15B
(3)
$
7,853,996.37
N/A
N/A
N/A
Class PT2-16A
(2)
$
7,520,664.85
Class PT2-IO-16
N/A
N/A
Class PT2-16B
(3)
$
7,520,664.85
N/A
N/A
N/A
Class PT2-17A
(2)
$
7,201,591.24
Class PT2-IO-17
N/A
N/A
Class PT2-17B
(3)
$
7,201,591.24
N/A
N/A
N/A
Class PT2-18A
(2)
$
6,896,161.46
Class PT2-IO-18
N/A
N/A
Class PT2-18B
(3)
$
6,896,161.46
N/A
N/A
N/A
Class PT2-19A
(2)
$
6,939,739.92
Class PT2-IO-19
N/A
N/A
Class PT2-19B
(3)
$
6,939,739.92
N/A
N/A
N/A
Class PT2-20A
(2)
$
9,224,866.32
Class PT2-IO-20
N/A
N/A
Class PT2-20B
(3)
$
9,224,866.32
N/A
N/A
N/A
Class PT2-21A
(2)
$
21,664,970.13
Class PT2-IO-21
N/A
N/A
Class PT2-21B
(3)
$
21,664,970.13
N/A
N/A
N/A
Class PT2-22A
(2)
$
6,011,549.61
Class PT2-IO-22
N/A
N/A
Class PT2-22B
(3)
$
6,011,549.61
N/A
N/A
N/A
Class PT2-23A
(2)
$
4,695,573.83
Class PT2-IO-23
N/A
N/A
Class PT2-23B
(3)
$
4,695,573.83
N/A
N/A
N/A
Class PT2-24A
(2)
$
4,499,109.00
Class PT2-IO-24
N/A
N/A
Class PT2-24B
(3)
$
4,499,109.00
N/A
N/A
N/A
Class PT2-25A
(2)
$
4,651,660.58
Class PT2-IO-25
N/A
N/A
Class PT2-25B
(3)
$
4,651,660.58
N/A
N/A
N/A
Class PT2-26A
(2)
$ 7,075,124.46
Class PT2-IO-26
N/A
N/A
Class PT2-26B
(3)
$
7,075,124.46
N/A
N/A
N/A
Class PT2-27A
(2)
$
19,787,361.97
Class PT2-IO-27
N/A
N/A
Class PT2-27B
(3)
$
19,787,361.97
N/A
N/A
N/A
Class PT2-28A
(2)
$
4,014,654.42
Class PT2-IO-28
N/A
N/A
Class PT2-28B
(3)
$
4,014,654.42
N/A
N/A
N/A
Class PT2-29A
(2)
$
2,771,924.51
Class PT2-IO-29
N/A
N/A
Class PT2-29B
(3)
$
2,771,924.51
N/A
N/A
N/A
Class PT2-30A
(2)
$
2,658,668.55
Class PT2-IO-30
N/A
N/A
Class PT2-30B
(3)
$
2,658,668.55
N/A
N/A
N/A
Class PT2-31A
(2)
$
2,754,263.37
Class PT2-IO-31
N/A
N/A
Class PT2-31B
(3)
$
2,754,263.37
N/A
N/A
N/A
Class PT2-32A
(2)
$
4,783,503.16
Class PT2-IO-32
N/A
N/A
Class PT2-32B
(3)
$
4,783,503.16
N/A
N/A
N/A
Class PT2-33A
(2)
$
17,093,435.58
Class PT2-IO-33
N/A
N/A
Class PT2-33B
(3)
$
17,093,435.58
N/A
N/A
N/A
Class PT2-34A
(2)
$
2,314,672.96
Class PT2-IO-34
N/A
N/A
Class PT2-34B
(3)
$
2,314,672.96
N/A
N/A
N/A
Class PT2-35A
(2)
$
1,381,714.99
Class PT2-IO-35
N/A
N/A
Class PT2-35B
(3)
$
1,381,714.99
N/A
N/A
N/A
Class PT2-36A
(2)
$
1,328,519.58
Class PT2-IO-36
N/A
N/A
Class PT2-36B
(3)
$
1,328,519.58
N/A
N/A
N/A
Class PT2-37A
(2)
$
1,287,283.22
Class PT2-IO-37
N/A
N/A
Class PT2-37B
(3)
$
1,287,283.22
N/A
N/A
N/A
Class PT2-38A
(2)
$
1,894,218.62
Class PT2-IO-38
N/A
N/A
Class PT2-38B
(3)
$
1,894,218.62
N/A
N/A
N/A
Class PT2-39A
(2)
$
6,976,231.74
Class PT2-IO-39
N/A
N/A
Class PT2-39B
(3)
$
6,976,231.74
N/A
N/A
N/A
Class PT2-40A
(2)
$
1,075,398.07
Class PT2-IO-40
N/A
N/A
Class PT2-40B
(3)
$
1,075,398.07
N/A
N/A
N/A
Class PT2-41A
(2)
$
805,507.42
Class PT2-IO-41
N/A
N/A
Class PT2-41B
(3)
$
805,507.42
N/A
N/A
N/A
Class PT2-42A
(2)
$
776,371.02
Class PT2-IO-42
N/A
N/A
Class PT2-42B
(3)
$
776,371.02
N/A
N/A
N/A
Class PT2-43A
(2)
$
753,937.98
Class PT2-IO-43
N/A
N/A
Class PT2-43B
(3)
$
753,937.98
N/A
N/A
N/A
Class PT2-44A
(2)
$
1,101,402.11
Class PT2-IO-44
N/A
N/A
Class PT2-44B
(3)
$
1,101,402.11
N/A
N/A
N/A
Class PT2-45A
(2)
$
3,999,810.80
Class PT2-IO-45
N/A
N/A
Class PT2-45B
(3)
$
3,999,810.80
N/A
N/A
N/A
Class PT2-46A
(2)
$
635,749.77
Class PT2-IO-46
N/A
N/A
Class PT2-46B
(3)
$
635,749.77
N/A
N/A
N/A
Class PT2-47A
(2)
$
482,592.55
Class PT2-IO-47
N/A
N/A
Class PT2-47B
(3)
$
482,592.55
N/A
N/A
N/A
Class PT2-48A
(2)
$
466,528.06
Class PT2-IO-48
N/A
N/A
Class PT2-48B
(3)
$
466,528.06
N/A
N/A
N/A
Class PT2-49A
(2)
$
450,985.79
Class PT2-IO-49
N/A
N/A
Class PT2-49B
(3)
$
450,985.79
N/A
N/A
N/A
Class PT2-50A
(2)
$
435,949.30
Class PT2-IO-50
N/A
N/A
Class PT2-50B
(3)
$
435,949.30
N/A
N/A
N/A
Class PT2-51A
(2)
$
421,402.65
Class PT2-IO-51
N/A
N/A
Class PT2-51B
(3)
$
421,402.65
N/A
N/A
N/A
Class PT2-52A
(2)
$ 407,330.42
Class PT2-IO-52
N/A
N/A
Class PT2-52B
(3)
$
407,330.42
N/A
N/A
N/A
Class PT2-53A
(2)
$
393,717.58
Class PT2-IO-53
N/A
N/A
Class PT2-53B
(3)
$
393,717.58
N/A
N/A
N/A
Class PT2-54A
(2)
$
380,549.62 Class
PT2-IO-54
N/A
N/A
Class PT2-54B
(3)
$
380,549.62
N/A
N/A
N/A
Class PT2-55A
(2)
$
379,125.01
Class PT2-IO-55
N/A
N/A
Class PT2-55B
(3)
$
379,125.01
N/A
N/A
N/A
Class PT2-56A
(2)
$
354,991.03
Class PT2-IO-56
N/A
N/A
Class PT2-56B
(3)
$
354,991.03
N/A
N/A
N/A
Class PT2-57A
(2)
$
389,829.34
Class PT2-IO-57
N/A
N/A
Class PT2-57B
(3)
$
389,829.34
N/A
N/A
N/A
Class PT2-58A
(2)
$
376,470.56
Class PT2-IO-58
N/A
N/A
Class PT2-58B
(3)
$
376,470.56
N/A
N/A
N/A
Class PT2-59A
(2)
$
317,065.27
Class PT2-IO-59
N/A
N/A
Class PT2-59B
(3)
$
317,065.27
N/A
N/A
N/A
Class PT2-60A
(2)
$
306,445.27
Class PT2-IO-60
N/A
N/A
Class PT2-60B
(3)
$
306,445.27
N/A
N/A
N/A
Class PT2-61A
(2)
$
307,625.63
Class PT2-IO-61
N/A
N/A
Class PT2-61B
(3)
$
307,625.63
N/A
N/A
N/A
Class PT2-62A
(2)
$
285,722.36
Class PT2-IO-62
N/A
N/A
Class PT2-62B
(3)
$
285,722.36
N/A
N/A
N/A
Class PT2-63A
(2)
$
323,370.02
Class PT2-IO-63
N/A
N/A
Class PT2-63B
(3)
$
323,370.02
N/A
N/A
N/A
Class PT2-64A
(2)
$
311,485.85
Class PT2-IO-64
N/A
N/A
Class PT2-64B
(3)
$
311,485.85
N/A
N/A
N/A
Class PT2-65A
(2)
$
253,761.64
Class PT2-IO-65
N/A
N/A
Class PT2-65B
(3)
$
253,761.64
N/A
N/A
N/A
Class PT2-66A
(2)
$
245,273.97
Class PT2-IO-66
N/A
N/A
Class PT2-66B
(3)
$
245,273.97
N/A
N/A
N/A
Class PT2-67A
(2)
$
243,589.38
Class PT2-IO-67
N/A
N/A
Class PT2-67B
(3)
$
243,589.38
N/A
N/A
N/A
Class PT2-68A
(2)
$
228,829.00
Class PT2-IO-68
N/A
N/A
Class PT2-68B
(3)
$
228,829.00
N/A
N/A
N/A
Class PT2-69A
(2)
$
248,050.64
Class PT2-IO-69
N/A
N/A
Class PT2-69B
(3)
$
248,050.64
N/A
N/A
N/A
Class PT2-70A
(2)
$
239,139.60
Class PT2-IO-70
N/A
N/A
Class PT2-70B
(3)
$
239,139.60
N/A
N/A
N/A
Class PT2-71A
(2)
$
204,215.74
Class PT2-IO-71
N/A
N/A
Class PT2-71B
(3)
$
204,215.74
N/A
N/A
N/A
Class PT2-72A
(2)
$
197,381.06
Class PT2-IO-72
N/A
N/A
Class PT2-72B
(3)
$
197,381.06
N/A
N/A
N/A
Class PT2-73A
(2)
$
5,579,149.27
Class PT2-IO-73
N/A
N/A
Class PT2-73B
(3)
$
5,579,149.27
N/A
N/A
N/A
Class PT2-IO-2
(4)
(4)
N/A
Class PT1-2A
March 2007
Class PT2-IO-3
(4)
(4)
N/A
Class PT1-3A
April 2007
Class PT2-IO-4
(4)
(4)
N/A
Class PT1-4A
May 2007
Class PT2-IO-5
(4)
(4)
N/A
Class PT1-5A
June 2007
Class PT2-IO-6
(4)
(4)
N/A
Class PT1-6A
July 2007
Class PT2-IO-7
(4)
(4)
N/A
Class PT1-7A
August 2007
Class PT2-IO-8
(4)
(4)
N/A
Class PT1-8A September
2007
Class PT2-IO-9
(4)
(4)
N/A
Class PT1-9A
October 2007
Class PT2-IO-10
(4)
(4)
N/A
Class PT1-10A November
2007
Class PT2-IO-11
(4)
(4)
N/A
Class PT1-11A December
2007
Class PT2-IO-12
(4)
(4)
N/A
Class PT1-12A
January 2008
Class PT2-IO-13
(4)
(4)
N/A
Class PT1-13A February
2008
Class PT2-IO-14
(4)
(4)
N/A
Class PT1-14A
March 2008
Class PT2-IO-15
(4)
(4)
N/A
Class PT1-15A
April 2008
Class PT2-IO-16
(4)
(4)
N/A
Class PT1-16A
May 2008
Class PT2-IO-17
(4)
(4)
N/A
Class PT1-17A
June 2008
Class PT2-IO-18
(4)
(4)
N/A
Class PT1-18A
July 2008
Class PT2-IO-19
(4)
(4)
N/A
Class PT1-19A
August 2008
Class PT2-IO-20
(4)
(4)
N/A
Class PT1-20A September
2008
Class PT2-IO-21
(4)
(4)
N/A
Class PT1-21A
October 2008
Class PT2-IO-22
(4)
(4)
N/A
Class PT1-22A November
2008
Class PT2-IO-23
(4)
(4)
N/A
Class PT1-23A December
2008
Class PT2-IO-24
(4)
(4)
N/A
Class PT1-24A
January 2009
Class PT2-IO-25
(4)
(4)
N/A
Class PT1-25A February
2009
Class PT2-IO-26
(4)
(4)
N/A
Class PT1-26A
March 2009
Class PT2-IO-27
(4)
(4)
N/A
Class PT1-27A
April 2009
Class PT2-IO-28
(4)
(4)
N/A
Class PT1-28A
May 2009
Class PT2-IO-29
(4)
(4)
N/A
Class PT1-29A
June 2009
Class PT2-IO-30
(4)
(4)
N/A
Class PT1-30A
July 2009
Class PT2-IO-31
(4)
(4)
N/A
Class PT1-31A
August 2009
Class PT2-IO-32
(4)
(4)
N/A
Class PT1-32A September
2009
Class PT2-IO-33
(4)
(4)
N/A
Class PT1-33A
October 2009
Class PT2-IO-34
(4)
(4)
N/A
Class PT1-34A November
2009
Class PT2-IO-35
(4)
(4)
N/A
Class PT1-35A December
2009
Class PT2-IO-36
(4)
(4)
N/A
Class PT1-36A
January 2010
Class PT2-IO-37
(4)
(4)
N/A
Class PT1-37A February
2010
Class PT2-IO-38
(4)
(4)
N/A
Class PT1-38A
March 2010
Class PT2-IO-39
(4)
(4)
N/A
Class PT1-39A
April 2010
Class PT2-IO-40
(4)
(4)
N/A
Class PT1-40A
May 2010
Class PT2-IO-41
(4)
(4)
N/A
Class PT1-41A
June 2010
Class PT2-IO-42
(4)
(4)
N/A
Class PT1-42A
July 2010
Class PT2-IO-43
(4)
(4)
N/A
Class PT1-43A
August 2010
Class PT2-IO-44
(4)
(4)
N/A
Class PT1-44A September
2010
Class PT2-IO-45
(4)
(4)
N/A
Class PT1-45A
October 2010
Class PT2-IO-46
(4)
(4)
N/A
Class PT1-46A November
2010
Class PT2-IO-47
(4)
(4)
N/A
Class PT1-47A December
2010
Class PT2-IO-48
(4)
(4)
N/A
Class PT1-48A
January 2011
Class PT2-IO-49
(4)
(4)
N/A
Class PT1-49A February
2011
Class PT2-IO-50
(4)
(4)
N/A
Class PT1-50A
March 2011
Class PT2-IO-51
(4)
(4)
N/A
Class PT1-51A
April 2011
Class PT2-IO-52
(4)
(4)
N/A
Class PT1-52A
May 2011
Class PT2-IO-53
(4)
(4)
N/A
Class PT1-53A
June 2011
Class PT2-IO-54
(4)
(4)
N/A
Class PT1-54A
July 2011
Class PT2-IO-55
(4)
(4)
N/A
Class PT1-55A
August 2011
Class PT2-IO-56
(4)
(4)
N/A
Class PT1-56A September
2011
Class PT2-IO-57
(4)
(4)
N/A
Class PT1-57A
October 2011
Class PT2-IO-58
(4)
(4)
N/A
Class PT1-58A November
2011
Class PT2-IO-59
(4)
(4)
N/A
Class PT1-59A December
2011
Class PT2-IO-60
(4)
(4)
N/A
Class PT1-60A
January 2012
Class PT2-IO-61
(4)
(4)
N/A
Class PT1-61A February
2012
Class PT2-IO-62
(4)
(4)
N/A
Class PT1-62A
March 2012
Class PT2-IO-63
(4)
(4)
N/A
Class PT1-63A
April 2012
Class PT2-IO-64
(4)
(4)
N/A
Class PT1-64A
May 2012
Class PT2-IO-65
(4)
(4)
N/A
Class PT1-65A
June 2012
Class PT2-IO-66
(4)
(4)
N/A
Class PT1-66A
July 2012
Class PT2-IO-67
(4)
(4)
N/A
Class PT1-67A
August 2012
Class PT2-IO-68
(4)
(4)
N/A
Class PT1-68A September
2012
Class PT2-IO-69
(4)
(4)
N/A
Class PT1-69A
October 2012
Class PT2-IO-70
(4)
(4)
N/A
Class PT1-70A November
2012
Class PT2-IO-71
(4)
(4)
N/A
Class PT1-71A December
2012
Class PT2-IO-72
(4)
(4)
N/A
Class PT1-72A
January 2013
Class PT2-IO-73
(4)
(4)
N/A
Class PT1-73A February
2013
Class PT2-R
(5)
(5)
N/A
N/A
N/A
---------
</TABLE>
(1) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-2 Interest Rate") equal to the
Pooling-Tier
REMIC-1 WAC Rate.
(2) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-2 Interest Rate") equal to the
weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier
REMIC-1 Regular Interests and having an "A" in their class
designation,
provided that, on each Distribution Date on which interest is
distributable
on
the Corresponding Pooling-Tier REMIC-2 IO Interest, this
Pooling-Tier
REMIC-2 Regular Interest shall bear interest at a per-annum rate
equal to
Swap
LIBOR subject to a maximum rate equal to the weighted average of
the
Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier REMIC-1
Regular
Interests and having an "A" in their class designation.
(3) For any
Distribution Date (and the related Interest Accrual Period),
this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a
per-annum
rate
(its "Pooling-Tier REMIC-2 Interest Rate") equal to the
weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the
Pooling-Tier
REMIC-1 Regular Interests and having a "B" in their class
designation.
(4) Each Pooling-Tier
REMIC-2 IO is an interest only interest and does not have
a
principal balance but has a notional balance ("Pooling-Tier REMIC-2
IO
Notional Balance") equal to the Pooling-Tier REMIC-2 Principal
Amount of
the
Corresponding Pooling-Tier REMIC-1 Regular Interest. From the
Closing
Date
through and including the Corresponding Actual Crossover
Distribution
Date, this Pooling-Tier REMIC-2 IO Interest shall be entitled to
receive
interest that accrues on the Corresponding Pooling-Tier REMIC-1
Regular
Interest at a rate equal to the excess, if any, of (i) the
Pooling-Tier
REMIC-1 Interest Rate for the Corresponding Pooling-Tier REMIC-1
Regular
Interest over (ii) Swap LIBOR. After the Corresponding Actual
Crossover
Distribution Date, this Pooling-Tier REMIC-2 IO Interest shall not
accrue
interest.
(5) The Class PT2-R
Interest shall not have a principal balance and shall not
bear
interest.
On each Distribution Date, the interest distributable in respect
of
the Mortgage Loans for such Distribution Date shall be distributed
to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2
Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent
Recoveries
and payments of principal in respect of the Mortgage Loans
(including, for the
first Distribution Date only, the Closing Date Deposit Amount)
shall be
allocated to the then outstanding Pooling-Tier REMIC-2 Regular
Interests (other
than the Pooling-Tier REMIC-2 IO Interests) with the lowest
numerical
denomination until the Pooling-Tier REMIC-2 Principal Amount of
such interest is
reduced to zero, provided that, for Pooling-Tier REMIC-2 Regular
Interests
Mortgage Loans with the same numerical denomination, such Realized
Losses,
Subsequent Recoveries and payments of principal shall be allocated
pro rata
between such Pooling-Tier REMIC-2 Regular Interests, until the
Pooling-Tier
REMIC-2 Principal Amount of such interests is reduced to zero.
Lower-Tier REMIC
The Lower-Tier REMIC shall issue the following interests, and
each
such interest, other than the Class LT-R Interest, is hereby
designated as a
regular interest in the Lower-Tier REMIC. The Class LT-R Interest
is hereby
designated as the sole class of residual interest in the Lower-Tier
REMIC and
shall be represented by the Class R Certificates.
<TABLE>
<CAPTION>
Corresponding
Upper-Tier
Lower-Tier
Lower-Tier
Initial Lower-Tier
REMIC Regular
REMIC Interest Interest Rate
Principal Amount
Interest
-------------- -------------
------------------------------------------
--------------
<S>
<C>
<C>
<C>
Class LT-A-1
(1) 1/2
initial Class Certificate Balance of
A-1
Corresponding Upper-Tier Regular Interest
Class LT-A-2
(1) 1/2
initial Class Certificate Balance of
A-2
Corresponding Upper-Tier Regular Interest
Class LT-A-3
(1) 1/2
initial Class Certificate Balance of
A-3
Corresponding Upper-Tier Regular Interest
Class LT-A-4
(1) 1/2
initial Class Certificate Balance of
A-4
Corresponding Upper-Tier Regular Interest
Class LT-M-1
(1) 1/2
initial Class Certificate Balance of
M-1
Corresponding Upper-Tier Regular Interest
Class LT-M-2
(1) 1/2
initial Class Certificate Balance of
M-2
Corresponding Upper-Tier Regular Interest
Class LT-M-3
(1) 1/2
initial Class Certificate Balance of
M-3
Corresponding Upper-Tier Regular Interest
Class LT-M-4
(1) 1/2
initial Class Certificate Balance of
M-4
Corresponding Upper-Tier Regular Interest
Class LT-M-5
(1) 1/2
initial Class Certificate Balance of
M-5
Corresponding Upper-Tier Regular Interest
Class LT-M-6
(1) 1/2
initial Class Certificate Balance of
M-6
Corresponding Upper-Tier Regular Interest
Class LT-B-1
(1)
1/2 initial
Class Certificate Balance of
B-1
Corresponding Upper-Tier Regular Interest
Class LT-B-2
(1) 1/2
initial Class Certificate Balance of
B-2
Corresponding
Upper-Tier Regular Interest
Class LT-B-3
(1) 1/2
initial Class Certificate Balance of
B-3
Corresponding Upper-Tier Regular Interest
Class LT-Accrual (1)
1/2
Pool Stated Principal Balance plus 1/2
N/A
Subordinated Amount
Class LT-IO
(2)
(2)
N/A
Class LT-R
(3)
(3)
N/A
</TABLE>
---------
(1) The interest rate
with respect to any Distribution Date for these interests
is a
per-annum variable rate equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2
Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) This Lower-Tier
Regular Interest is an interest only interest and does not
have
a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all
interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
(3) The Class LT-R
Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an
interest
rate.
Each Lower-Tier Regular Interest is hereby designated as a
regular
interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2,
Class LT-A-3,
Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class
LT-M-4, Class
LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2 and Class LT-B-3
Interests are
hereby designated the LT Accretion Directed Classes (the "LT
Accretion Directed
Classes").
On each Distribution Date, 50% of the increase in the
Subordinated
Amount shall be payable as a reduction of the Lower-Tier Principal
Amount of the
LT Accretion Directed Classes (each such Class will be reduced by
an amount
equal to 50% of any increase in the Subordinated Amount that is
attributable to
a reduction in the Class Certificate Balance of its Corresponding
Class) and
shall be accrued and added to the Lower-Tier Principal Amount of
the Class
LT-Accrual Interest. On each Distribution Date, the increase in the
Lower-Tier
Principal Amount of the Class LT-Accrual Interest shall not exceed
interest
accruals for such Distribution Date for the Class LT-Accrual
Interest. In the
event that: (i) 50% of the increase in the Subordinated Amount
exceeds (ii)
interest accruals on the Class LT-Accrual Interest for such
Distribution Date,
the excess for such Distribution Date (accumulated with all such
excesses for
all prior Distribution Dates) will be added to any increase in the
Subordinated
Amount for purposes of determining the amount of interest accrual
on the Class
LT-Accrual Interest payable as principal on the LT Accretion
Directed Classes on
the next Distribution Date pursuant to the first sentence of this
paragraph. All
payments of scheduled principal and prepayments of principal
generated by the
Mortgage Loans (including, for the first Distribution Date only,
the Closing
Date Deposit Amount) and all Subsequent Recoveries allocable to
principal shall
be allocated (i) 50% to the Class LT-Accrual Interest and (ii) 50%
to the LT
Accretion Directed Classes (such principal payments and Subsequent
Recoveries
shall be allocated among such LT Accretion Directed Classes in an
amount equal
to 50% of the principal amounts and Subsequent Recoveries allocated
to their
respective Corresponding Classes), until paid in full.
Notwithstanding the
above, principal payments allocated to the Class X Interest that
result in the
reduction in the Subordinated Amount shall be allocated to the
Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so
that after
all distributions have been made on each Distribution Date (i) the
Lower-Tier
Principal Amount of each LT Accretion Directed Class is equal to
50% of the
Class Certificate Balance of its Corresponding Class, and (ii) the
Class
LT-Accrual Interest is equal to 50% of the aggregate Stated
Principal Balance of
the Mortgage Loans plus 50% of the Subordinated Amount. Any
increase in the
Class Certificate Balance of a Class of Offered Certificates as a
result of a
Subsequent Recovery shall increase the Lower-Tier Principal Amount
of the
Corresponding Lower-Tier Regular Interest by 50% of such increase,
and the
remaining 50% of such increase shall increase the Lower-Tier
Principal Amount of
the Class LT-Accrual Interest.
Upper-Tier REMIC
The Upper-Tier
REMIC shall issue the following interests, and each
such interest, other than the Class UT-R Interest, is hereby
designated as a
regular interest in the Upper-Tier REMIC. The Class UT-R Interest
is hereby
designated as the sole class of residual interests in the
Upper-Tier REMIC and
shall be represented by the Class R Certificates.
Upper-Tier
Upper-Tier
Initial Principal
Corresponding
REMIC Interest Interest Rate
Upper-Tier Amount Class of
Certificates
-------------- -------------
-----------------
---------------------
Class A-1
(1)
$
271,920,000
Class A-1
Class A-2
(1)
$
79,750,000
Class A-2
Class A-3
(1)
$
113,500,000
Class A-3
Class A-4
(1)
$
68,770,000
Class A-4
Class M-1
(1)
$
29,587,000
Class M-1
Class M-2
(1)
$
25,459,000
Class M-2
Class M-3
(1)
$
12,729,000
Class M-3
Class M-4
(1)
$
11,353,000
Class M-4
Class M-5
(1)
$
11,353,000
Class M-5
Class M-6
(1)
$
10,321,000
Class M-6
Class B-1
(1)
$ 9,977,000
Class B-1
Class B-2
(1)
$ 8,601,000
Class B-2
Class B-3
(1)
$ 7,569,000
Class B-3
Class IO
(2)
(2)
N/A
Class X
(3)
(3)
Class X
Class UT-X
(5)
(5)
N/A
Class UT-R
(6)
(6)
Class R
---------
(1) For any
Distribution Date (and the related Interest Accrual Period)
this
interest shall bear interest at the lesser of (i) the Pass-Through
Rate
(determined without regard to the WAC Cap) for the Corresponding
Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(2) This interest is
an interest only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall
be
entitled to receive all interest distributable on the Class LT-IO
Interest.
This
interest shall be beneficially owned by the holders of the Class
X
Certificates and shall be held as an asset of the Swap Account.
(3) The Class UT-X
Interest has an initial principal balance of $27,181,577.99
but
will not accrue interest on such balance but will accrue interest
on a
notional principal balance. As of any Distribution Date, the Class
UT-X
Interest shall have a notional principal balance equal to the
aggregate of
the
Lower-Tier Principal Amounts of the Lower-Tier Regular Interests
(other
than
the Class LT-IO Interest) as of the first day of the related
Interest
Accrual Period. With respect to any Interest Accrual Period, the
Class X
Interest shall bear interest at a rate equal to the excess, if any,
of the
Upper-Tier REMIC WAC Rate over the product of (i) 2 and (ii) the
weighted
average of the Lower-Tier Interest Rates of the Lower-Tier REMIC
Interests
(other than the Class LT-IO Interest), where the Lower-Tier
Interest Rate
on
each of the Class LT-Accrual Interest is subject to a cap equal to
zero
and
each LT Accretion Directed Class is subject to a cap equal to
the
Upper-Tier Interest Rate on its Corresponding Class of Upper-Tier
Regular
Interest. With respect to any Distribution Date, interest that so
accrues
on the notional
principal balance of the Class UT-X Interest shall be
deferred in an amount equal to any increase in the Subordinated
Amount on
such
Distribution Date. Such deferred interest shall not itself bear
interest.
(4) The Class UT-R
Interest does not have an interest rate or a principal
balance.
On each Distribution Date, interest distributable in respect of
the
Lower-Tier Interests for such Distribution Date shall be deemed to
be
distributed on the interests in the Upper-Tier REMIC at the rates
shown above,
provided that the Class IO Interest shall be entitled to receive
interest before
any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the
Upper-Tier
Interests until the outstanding principal balance of each such
interest equals
the outstanding Class Certificate Balance of the Corresponding
Class of
Certificates as of such Distribution Date.
Class X REMIC
The Class X REMIC shall issue the following classes of
interests.
The Class X Interest and the Class IO Interest shall each represent
a regular
interest in the Class X REMIC and the Class RX Certificates shall
represent the
sole class of residual interest in the Class X REMIC.
Class X REMIC
Class X REMIC Designation Interest Rate
Principal Amount
------------------------- -------------
----------------
Class X Interest
(1)
(1)
Class IO Interest
(2)
(2)
Class RX Certificates
(3)
(3)
---------
(1) The Class X
Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to
100% of the
interest and principal on the Class UT-X Interest on each
Distribution
Date.
(2) This interest is
an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be
entitled
to
receive 100% of the interest distributable on the Class UT-IO
Interest.
(3) The Class RX
Certificates do not have a principal balance or an interest
rate.
The Certificates
Class Pass-Through
Class
Class Designation
Rate
Certificate Balance
-----------------
------------------
-------------------
Class A-1(11)
(1)
$
271,920,000
Class A-2(6)
(1)
$
79,750,000
Class A-3(6)
(1)
$
113,500,000
Class A-4(6)
(1)
$
68,770,000
Class M-1(6)
(2)
$
29,587,000
Class M-2(6)
(2)
$
25,459,000
Class M-3(6)
(2)
$
12,729,000
Class M-4(6)
(2)
$
11,353,000
Class M-5(6)
(2)
$
11,353,000
Class M-6(6)
(2)
$
10,321,000
Class B-1(6)
(2)
$
9,977,000
Class B-2(6)
(2)
$
8,601,000
Class B-3(6)
(2)
$
7,569,000
Class X
(3)
$
0(3)
Class R
(4)
$
0(4)
Class RX
(5)
$
0(5)
---------
(1) The Class A-1,
Class A-2, Class A-3, Class A-4 Interest will bear interest
during each Interest Accrual Period at a per-annum rate equal to
the lesser
of
(i) LIBOR plus the applicable Pass-Through Margin and (ii) the WAC
Cap.
(2) The Class M-1,
Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1,
Class B-2 and Class B-3 Certificates will bear interest during
each
Interest Accrual Period at a per annum rate equal to the lesser of
(i)
LIBOR plus the applicable Pass-Through Margin, and (ii) the WAC
Cap.
(3) The Class X
Certificates will represent beneficial ownership of the Class X
Interest, the Class IO Interest, the Interest Rate Swap Agreement,
the
right to receive Class IO Shortfalls and amounts in the Excess
Reserve Fund
Account and the Swap Account, subject to the obligation to make
payments
from
the Excess Reserve Fund Account in respect of Basis Risk
CarryForward
Amounts and amounts in the Swap Account subject to the obligation
to make
Net
Swap Payments, Swap Termination Payments, Basis Risk
CarryForward
Amounts and, without duplication, Upper-Tier CarryForward Amounts.
For
federal income tax purposes, the Trustee will treat a Class X
Certificateholder's obligation to make payments from the Excess
Reserve
Fund
Account or the Swap Account as payments made under a notional
principal contract between the Class X Certificateholders and the
holder of
each
Class of Offered Certificates. Such rights of the Class X
Certificateholders and Offered Certificateholders shall be treated
as held
in
the Grantor Trust.
(4) The Class R
Certificates do not have an interest rate or a principal
balance.
(5) The Class RX
Certificates do not have an interest rate or a principal
balance.
(6) Each of these
Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the
right to
receive payments from the Excess Reserve Fund Account and the Swap
Account
in
respect of any Basis Risk CarryForward Amounts and, without
duplication,
Upper-Tier CarryForward Amounts. Each of these Certificates will
also be
subject to the obligation to pay Class IO Shortfalls as described
in
Section 8.13. For federal income tax purposes, any amount
distributed on
the
Offered Certificates on any such Distribution Date in excess of
the
amount distributable on their Corresponding Class of Upper-Tier
Regular
Interest on such Distribution Date shall be treated as having been
paid
from
the Excess Reserve Fund Account or the Swap Account, as
applicable,
and
any amount distributable on such Corresponding Class of
Upper-Tier
Regular Interest on such Distribution Date in excess of the
amount
distributable on the Offered Certificates on such Distribution Date
shall
be
treated as having been paid to the Swap Account, all pursuant to,
and as
further provided in, Section 8.13. For federal income tax purposes,
the
Trustee will treat an Offered Certificateholder's right to receive
payments
from
the Excess Reserve Fund Account or the Swap Account, subject to
the
obligation to pay Class IO Shortfalls, as rights and obligations
under a
notional principal contract between the Class X Certificateholders
and the
Offered Certificateholders.
The minimum denomination for each Class of Certificates, other
than
the Class P, Class R, Class RX and the Class X Certificates, will
be $25,000
with integral multiples of $1 in excess thereof. The minimum
denomination for
the Class P and the Class X Certificates will each be a 1%
Percentage Interest
in such Class. The Class R Certificate and the Class RX Certificate
will each
represent a 100% Percentage Interest in the related Class.
It
is expected that each Class of Certificates will receive its
final distribution of principal and interest on or prior to the
Final Scheduled
Distribution Date.
Set forth below are designations of Classes of Certificates to
the
categories used herein:
Book-Entry Certificates................ All Classes of Certificates other
than
the Physical Certificates.
Class A Certificates................... Class A-1, Class A-2, Class A-3
and
Class A-4 Certificates.
Class B Certificates................... Class B-1, Class B-2 and Class
B-3
Certificates.
Class M Certificates................... Class M-1, Class M-2, Class M-3,
Class
M-4, Class M-5 and Class M-6
Certificates.
Delay Certificates..................... None.
ERISA-Restricted Certificates.......... Residual, Class P and Class X
Certificates; any certificate with a
rating below the lowest applicable
permitted rating under the Underwriters
Exemption.
Non-Delay Certificates................. Class A, Class X and
Subordinated
Certificates.
Offered Certificates................... All Classes of Certificates other
than
the Private Certificates.
Physical Certificates.................. Class P, Class X and Residual
Certificates.
Private Certificates................... Class P, Class X and Residual
Certificates.
Rating Agencies........................ Moody's and Standard &
Poor's.
Regular Certificates................... All Classes of Certificates other
than
the Class P and Residual Certificates.
Residual Certificates.................. Class R and Class RX
Certificates.
Subordinated Certificates.............. Class M and Class B
Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and
phrases,
unless the context otherwise requires, shall have the following
meanings:
Accepted Servicing Practices: With respect to any Mortgage
Loan,
those mortgage servicing practices set forth in Section 3.01(a) of
this
Agreement.
Account: Any of the Collection Accounts, the Distribution
Account,
any Escrow Account, the Excess Reserve Fund Account or the Swap
Account. Each
Account shall be an Eligible Account and shall be non-interest
bearing.
Accredited: Accredited Home Lenders, Inc., a California
corporation,
and its successors in interest.
Accredited Agreements: The Accredited Purchase Agreement and
the
Accredited Assignment Agreement, each of which are attached hereto
as Exhibit Q.
Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of the Closing Date, among the Sponsor, the
Depositor and
Accredited.
Accredited Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Accredited Purchase Agreement for which
Accredited is
identified as Originator on the Mortgage Loan Schedule.
Accredited Purchase Agreement: With respect to Accredited
Mortgage
Loans purchased by Sponsor prior to August 1, 2006 (as set forth on
the Mortgage
Loan Schedule), the Fifth Amended and Restated Mortgage Loan
Purchase and
Warranties Agreement, dated as of December 1, 2005, among
Accredited and the
Sponsor, and with respect to Accredited Mortgage Loans purchased by
Sponsor on
or after August 1, 2006 (as set forth on the Mortgage Loan
Schedule), the Eighth
Amended and Restated Mortgage Loan Purchase and Warranties
Agreement, dated as
of August 1, 2006, by and between Accredited and the Sponsor.
Accrued Certificate Interest Distribution Amount: With respect
to
any Distribution Date for each Class of Offered Certificates, the
amount of
interest accrued during the related Interest Accrual Period at the
applicable
Pass-Through Rate on the related Class Certificate Balance
immediately prior to
such Distribution Date, as reduced by such Class's share of Net
Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such
Distribution
Date allocated to such Class pursuant to Section 4.02.
Additional Disclosure Notification: A notification in the form
of
Exhibit Z.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage
Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per-annum rate equal to the Mortgage Rate less the
Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first
Due Date on which the related Mortgage Rate adjusts as set forth in
the related
Mortgage Note and each Due Date thereafter on which the Mortgage
Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 10.07.
Advancing Person: The Person to whom any Servicer's rights
under
this Agreement to be reimbursed for any P&I Advances or
Servicing Advances have
been assigned pursuant to Section 10.07.
Affiliate: With respect to any Person, any other Person
controlling,
controlled by or under common control with such first Person. For
the purposes
of this definition, "control" 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.
Agent: With respect to the Sponsor, the Depositor or any
Affiliate
of either of them, a Person that acts for and on behalf of such
Person.
Agreement: This Pooling and Servicing Agreement and all
amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on
any
Distribution Date, the aggregate amount held in each Collection
Account at the
close of business on the related Determination Date on account of
(i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and
Liquidation Proceeds
on the Mortgage Loans received after the end of the related
Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the
end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Trustee by the
Depositor.
Applied Realized Loss Amount: With respect to any Distribution
Date,
the amount, if any, by which the aggregate Class Certificate
Balance of the
Offered Certificates after distributions of principal on such
Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage
Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the
value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice
of
transfer or equivalent instrument in recordable form (other than
the assignee's
name and recording information not yet returned from the recording
office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Trustee (x) the sum of
(i) all
scheduled installments of interest (net of the related Expense
Fees) and
principal due on the Due Date on such Mortgage Loans in the related
Due Period
and received by the Servicers on or prior to the related
Determination Date,
together with any P&I Advances in respect thereof; (ii) all
Condemnation
Proceeds, Insurance Proceeds and Liquidation Proceeds received by
the Servicers
during the related Prepayment Period (in each case, net of
unreimbursed expenses
incurred in connection with a liquidation or foreclosure and
unreimbursed
Advances, if any); (iii) all partial or full prepayments on the
Mortgage Loans
received by the Servicers during the related Prepayment Period
together with all
Compensating Interest, if applicable, thereon (excluding any
Prepayment
Charges); (iv) all Substitution Adjustment Amounts with respect to
the
substitutions of Mortgage Loans that occur with respect to such
Distribution
Date; (v) amounts received with respect to such Distribution Date
as the
Repurchase Price in respect of a Mortgage Loan repurchased with
respect to such
Distribution Date; (vi) the proceeds received with respect to the
termination of
the Trust Fund pursuant to clause (a) of Section 9.01; and (vii)
the Closing
Date Deposit Amount; reduced by (y) amounts in reimbursement for
Advances
previously made with respect to the Mortgage Loans and other
amounts as to which
the Servicers, the Depositor, the Custodian or the Trustee are
entitled to be
paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or
Scheduled
Payments of principal which (not including the payment due on its
stated
maturity date) are based on an amortization schedule that would be
insufficient
to fully amortize the principal thereof by the stated maturity date
of the
Mortgage Loan.
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 Excess Subordinated Amount, if any,
for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A)
if on such
Distribution Date the Pass-Through Rate for any Class of Offered
Certificates is
based upon the WAC Cap, the excess of (i) the Accrued Certificate
Interest
Distribution Amount such Class of Certificates would otherwise be
entitled to
receive on such Distribution Date had such Pass-Through Rate not
been subject to
the WAC Cap (that is, had such rate been calculated as the sum of
LIBOR and the
applicable Pass-Through Margin on such Class of Certificates for
such
Distribution Date and the resulting amount being reduced by
allocated Net
Prepayment Interest Shortfalls and Relief Act Interest Shortfalls)
over (ii) the
Accrued Certificate Interest Distribution Amount received on such
Distribution
Date on such Class of Certificates at the WAC Cap for such
Distribution Date and
(B) the Basis Risk CarryForward Amount for such Class of
Certificates for all
previous Distribution Dates not previously paid, together with
interest thereon
at a rate equal to the sum of LIBOR and the applicable Pass-Through
Margin for
such Class of Certificates for such Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal
to
the lesser of (i) the aggregate of the Basis Risk CarryForward
Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior
to any
reduction for (x) amounts paid from the Excess Reserve Fund Account
to pay any
Basis Risk CarryForward Amount or (y) any Defaulted Swap
Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended
from
time to time.
Book-Entry Certificates: As specified in the Preliminary
Statement.
Bulk Mortgage Loans: The Mortgage Loans purchased by the
Sponsor
pursuant to the Bulk Purchase Agreement for which Meritage is
identified as
Originator on the Mortgage Loan Schedule.
Bulk Purchase Agreement: The Third Amended and Restated
Mortgage
Loan Purchase and Warranties Agreement, dated as of February 1,
2006, by and
between Meritage and the Sponsor, solely insofar as such agreement
relates to
the Bulk Mortgage Loans.
Business Day: Any day other than (i) Saturday or Sunday, or (ii)
a
day on which banking and savings and loan institutions, in (a) the
States of
Arizona, New York, California, Texas, Minnesota, New Jersey,
Delaware or Iowa,
(b) a State in which any Servicer's servicing operations are
located, or (c) the
State in which the Trustee's operations are located, are authorized
or obligated
by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Trustee
in
substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P, Class R or Class RX Certificates,
at any date,
the maximum dollar amount of principal to which the Holder thereof
is then
entitled hereunder, such amount being equal to the Denomination
thereof minus
all distributions of principal previously made with respect thereto
and in the
case of any Certificates, reduced by any Applied Realized Loss
Amounts allocated
to such Class of Certificates pursuant to Section 4.05; provided,
however, that
immediately following the Distribution Date on which a Subsequent
Recovery is
distributed, the Class Certificate Balances of any Class or Classes
of
Certificates that have been previously reduced by Applied Realized
Loss Amounts
will be increased, in order of seniority, by the amount of the
Subsequent
Recovery distributed on such Distribution Date (up to the amount of
the Unpaid
Realized Loss Amount for such Class or Classes for such
Distribution Date). The
Class X, Class P, Class R and Class RX Certificates have no
Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate,
the
Person who is the beneficial owner of such Book-Entry
Certificate.
Certificate Register: The register maintained pursuant to
Section
5.02.
Certificateholder or Holder: The Person in whose name a
Certificate
is registered in the Certificate Register, except that, solely for
the purpose
of giving any consent pursuant to this Agreement, any Certificate
registered in
the name of the Sponsor, the Depositor or any Affiliate or Agent of
any of them
shall be deemed not to be Outstanding and the Percentage Interest
evidenced
thereby shall not be taken into account in determining whether the
requisite
amount of Percentage Interests necessary to effect such consent has
been
obtained; provided, however, that if the Sponsor (together with its
Affiliates
and Agents) or the Depositor (together with its Affiliates and
Agents) owns 100%
of the Percentage Interests evidenced by a Class of Certificates,
such
Certificates shall be deemed to be Outstanding for purposes of any
provision
hereof that requires the consent of the Holders of Certificates of
a particular
Class as a condition to the taking of any action hereunder. The
Trustee is
entitled to rely conclusively on a certification of the Sponsor,
the Depositor
or any such Agent or Affiliate in determining which Certificates
are registered
in the name of an Agent or Affiliate of the Sponsor or the
Depositor.
Class: All Certificates bearing the same class designation as
set
forth in the Preliminary Statement.
Class A Certificates: As specified in the Preliminary
Statement.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class
Certificate Balances of
the Class A Certificates immediately prior to such Distribution
Date over (ii)
the lesser of (A) 55.20% of the aggregate Stated Principal Balance
of the
Mortgage Loans for such Distribution Date and (B) the excess, if
any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date over $3,440,353.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2 Certificates: All Certificates bearing the class
designation of "Class A-2".
Class A-3 Certificates: All Certificates bearing the class
designation of "Class A-3".
Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4".
Class B Certificates: As specified in the Preliminary
Statement.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date) and (H)
the Class
Certificate Balance of the Class B-1 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 87.40% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $3,440,353.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date), and (I) the Class Certificate Balance of the
Class B-2
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 89.90% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$3,440,353.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date), (G) the Class Certificate Balance of the Class
M-6
Certificates (after taking into account the distribution of the
Class M-6
Principal Distribution Amount for such Distribution Date), (H) the
Class
Certificate Balance of the Class B-1 Certificates (after taking
into account the
distribution of the Class B-1 Principal Distribution Amount for
such
Distribution Date), (I) the Class Certificate Balance of the Class
B-2
Certificates (after taking into account the distribution of the
Class B-2
Principal Distribution Amount for such Distribution Date) and (J)
the Class
Certificate Balance of the Class B-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 92.10% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $3,440,353.
Class Certificate Balance: With respect to any Class and as to
any
date of determination, the aggregate of the Certificate Balances of
all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the
avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall
equal the
amount payable to the Class X Certificates in respect of amounts
due to the Swap
Provider on such Distribution Date (other than Defaulted Swap
Termination
Payments) in excess of the amount payable on the Class X Interest
(prior to any
reduction for Basis Risk Payments or Defaulted Swap Termination
Payments) from
Available Funds on such Distribution Date, all as further provided
in Section
8.13.
Class LT-R Interest: The residual interest in the Lower-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class M Certificates: As specified in the Preliminary
Statement.
Class M-1 Enhancement Percentage: With respect to any
Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balances of the Class M and Class B Certificates (other
than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each
case after
taking into account the distributions of the related Principal
Distribution
Amount and any principal payments on those Classes of Certificates
from the Swap
Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance
of the Mortgage Loans for such Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1
Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), and (B) the Class Certificate Balance of the Class M-1
Certificates
immediately prior to such Distribution Date over (ii) the lesser of
(A) 63.80%
of the aggregate Stated Principal Balance of the Mortgage Loans for
such
Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal
Balance of the Mortgage Loans for such Distribution Date over
$3,440,353.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date) and (C) the Class Certificate
Balance of the
Class M-2 Certificates immediately prior to such Distribution Date
over (ii) the
lesser of (A) 71.20% of the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the
aggregate
Stated Principal Balance of the Mortgage Loans for such
Distribution Date over
$3,440,353.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date) and
(D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 74.90% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $3,440,353.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), and (E) the Class Certificate Balance of the
Class M-4
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 78.20% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$3,440,353.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date) and (F)
the Class
Certificate Balance of the Class M-5 Certificates immediately prior
to such
Distribution Date over (ii) the lesser of (A) 81.50% of the
aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date
and (B) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans
for such Distribution Date over $3,440,353.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate
Class
Certificate Balances of the Class A Certificates (after taking into
account the
distribution of the Class A Principal Distribution Amount for such
Distribution
Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after
taking into account the distribution of the Class M-1 Principal
Distribution
Amount for such Distribution Date), (C) the Class Certificate
Balance of the
Class M-2 Certificates (after taking into account the distribution
of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D)
the Class
Certificate Balance of the Class M-3 Certificates (after taking
into account the
distribution of the Class M-3 Principal Distribution Amount for
such
Distribution Date), (E) the Class Certificate Balance of the Class
M-4
Certificates (after taking into account the distribution of the
Class M-4
Principal Distribution Amount for such Distribution Date), (F) the
Class
Certificate Balance of the Class M-5 Certificates (after taking
into account the
distribution of the Class M-5 Principal Distribution Amount for
such
Distribution Date) and (G) the Class Certificate Balance of the
Class M-6
Certificates immediately prior to such Distribution Date over (ii)
the lesser of
(A) 84.50% of the aggregate Stated Principal Balance of the
Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans for such Distribution Date
over
$3,440,353.
Class P Certificates: All Certificates bearing the class
designation
of "Class P".
Class PT1-R Interest: The residual interest in Pooling-Tier
REMIC-1
as described in the Preliminary Statement and the related footnote
thereto.
Class PT2-R Interest: The residual interest in Pooling-Tier
REMIC-2
as described in the Preliminary Statement and the related footnote
thereto.
Class R Certificates: All Certificates bearing the class
designation
of "Class R".
Class RX Certificates: All Certificates bearing the class
designation of "Class RX".
Class UT-IO Interest: A regular interest in the Upper-Tier REMIC
as
described in the Preliminary Statement and the related footnote
thereto.
Class UT-R Interest: The residual interest in the Upper-Tier
REMIC
as described in the Preliminary Statement and the related footnote
thereto.
Class UT-X Interest: A regular interest in the Upper-Tier REMIC
as
described in the Preliminary Statement and the related footnote
thereto.
Class X Certificates: All Certificates bearing the class
designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum
of
(i) as a distribution in respect of interest, the amount of
interest that has
accrued on the Class UT-X Interest and not applied as an Extra
Principal
Distribution Amount on such Distribution Date, plus any such
accrued interest
remaining undistributed from prior Distribution Dates, plus,
without
duplication, (ii) as a distribution in respect of principal, any
portion of the
principal balance of the Class UT-X Interest which is distributable
as a
Subordination Reduction Amount, minus (iii) any amounts paid from
the Excess
Reserve Fund Account to pay Basis Risk CarryForward Amounts, and
any Defaulted
Swap Termination Payment payable from Available Funds to the Swap
Provider.
Class X Interest: The regular interest in the Class X REMIC
represented by the Class X Certificates as specified and described
in the
Preliminary Statement and the related footnote thereto.
Class X REMIC: As defined in the Preliminary Statement.
Class X REMIC Regular Interest: Each of the Class X Interest
and
Class IO Interest issued by the Class X REMIC.
Closing Date: February 28, 2007.
Closing Date Deposit Amount: $789.50 (all of which is allocable
to
principal) deposited by the Depositor into the Distribution Account
on the
Closing Date.
Code: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan-to-Value Ratio or CLTV: As of any date and as to
any
Second-Lien Mortgage Loan, the ratio, expressed as a percentage, of
the (a) sum
of (i) the outstanding principal balance of the Second-Lien
Mortgage Loan and
(ii) the outstanding principal balance as of such date of any
mortgage loan or
mortgage loans that are senior or equal in priority to the
Second-Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b)
the Appraised
Value as determined pursuant to the Underwriting Guidelines of the
related
Mortgaged Property as of the origination of the Second-Lien
Mortgage Loan.
Commission: The United States Securities and Exchange
Commission.
Compensating Interest: For any Distribution Date and each
Servicer,
the lesser of (a) the amount by which the Prepayment Interest
Shortfall
resulting from Principal Prepayments in Full exceeds all Prepayment
Interest
Excesses for such Distribution Date on the Mortgage Loans serviced
by the
applicable Servicer and (b) the amount of the aggregate Servicing
Fee paid to or
retained by the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of
a
Mortgaged Property, whether permanent or temporary, partial or
entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate
Mortgage
Loan which contains a provision whereby the Mortgagor is permitted
to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in
accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: The designated office of the Trustee in
the
State of California at which at any particular time its corporate
trust business
with respect to this Agreement is administered, which office at the
date of the
execution of this Agreement is located at 1761 East St. Andrew
Place, Santa Ana,
California 92705, Attn: Trust Administration-MS07X1, facsimile no.
(714)
247-6285, and which is the address to which notices to and
correspondence with
the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding
Scheduled Crossover
Distribution Date, unless on such date two times the aggregate
Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then
outstanding is less than the scheduled swap notional amount (taking
into account
the use of the multiplier, if applicable) of the Interest Rate Swap
Agreement
applicable for such Distribution Date, in which case the
Corresponding Actual
Crossover Distribution Date for such Pooling-Tier REMIC-2 IO
Interest shall be
the first Distribution Date thereafter on which two times the
aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier
REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled
swap
notional amount (taking into account the use of the multiplier) of
the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier
REMIC
or Upper-Tier REMIC that corresponds to the class of interests in
the other such
REMIC or to a Class of Certificates in the manner set out
below:
Corresponding Lower-Tier
Corresponding Upper-Tier
Corresponding Class
Class
Designation
Regular Interest
of Certificates
------------------------
--------------------------- ---------------------
Class
LT-A-1
Class A-1
Class A-1
Class
LT-A-2
Class A-2
Class A-2
Class
LT-A-3
Class A-3
Class A-3
Class
LT-A-4
Class A-4
Class A-4
Class
LT-M-1
Class M-1
Class M-1
Class
LT-M-2
Class M-2
Class M-2
Class
LT-M-3
Class M-3
Class M-3
Class
LT-M-4
Class M-4
Class M-4
Class
LT-M-5
Class M-5
Class M-5
Class
LT-M-6
Class M-6
Class M-6
Class
LT-B-1
Class B-1
Class B-1
Class
LT-B-2
Class B-2
Class B-2
Class
LT-B-3
Class B-3
Class B-3
N/A
Class X
Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described
in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in
the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the
Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Countrywide Amendment Regulation AB: The Amendment Regulation
AB,
dated as of January 26, 2006, by and among Countrywide Servicing,
Countrywide
Home Loans, Inc. and the Sponsor, a copy of which is attached
hereto as Exhibit
BB.
Countrywide Serviced Mortgage Loans: The Accredited Mortgage
Loans
purchased by the Sponsor pursuant to the Accredited Purchase
Agreement for which
Countrywide Servicing is identified as the Servicer on the Mortgage
Loan
Schedule.
Countrywide Servicing: Countrywide Home Loans Servicing LP, a
Texas
limited partnership, and its successors in interest.
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 through
the last day of
the related Prepayment Period and the denominator of which is the
Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient
(expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred
since the
Cut-off Date through the last day of the related Prepayment Period
divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable
cumulative
loss percentages set forth below with respect to such Distribution
Date:
Distribution Date
Occurring In
Cumulative Loss Percentage
---------------------------------
-------------------------------------------
March 2009 through
February 2010 1.550% for the first
month, plus an
additional 1/12th of 1.850% for each month
thereafter (e.g., 2.475% in September 2009)
March 2010 through
February 2011 3.400% for the first
month, plus an
additional 1/12th of 1.900% for each month
thereafter (e.g., 4.350% in September 2010)
March 2011 through
February 2012 5.300% for the first
month, plus an
additional 1/12th of 1.550% for each month
thereafter (e.g., 6.075% in September 2011)
March 2012 through
February 2013 6.850% for the first
month, plus an
additional 1/12th of 0.850% for each month
thereafter (e.g., 7.275% in September 2012)
March 2013 through
February 2014 7.700% for the first
month, plus an
additional 1/12th of 0.050% for each month
thereafter (e.g., 7.725% in September 2013)
March 2014 and
thereafter
7.750%
Custodial File: With respect to each Mortgage Loan, the file
retained by the Trustee consisting - of items (a) - (h) as listed
on Exhibit K
hereto.
Custodian: With respect to the Fremont Mortgage Loans, Wells
Fargo.
Custodian Fee: With respect to each Distribution Date, the
aggregate
amount of fees and expenses that the Custodian is entitled to
receive, pursuant
to the fee schedule related to the Fremont Mortgage Loans to which
the Depositor
and the Custodian have previously agreed, for custodial services
rendered with
respect to the Fremont Mortgage Loans, as during the related Due
Period. The
Custodian shall inform the Trustee of its Custodian Fee on or prior
to the
related Determination Date pursuant to Section 3.07(h).
Custodian Fee Rate: As to any Distribution Date, the Custodian
Fee
for such Distribution Date, converted to a per annum rate on (i)
the aggregate
Stated Principal Balance of the Mortgage Loans as of the close of
business on
the day immediately preceding the first day of the related Due
Period and (ii)
with respect to the Determination Date in March 2007 only, the
portion of the
Closing Date Deposit Amount allocable to principal (calculated on
an actual/360
basis).
Custodian's Weighted Average Percentage: As defined in Section
8.14(e).
Cut-off Date: February 1, 2007.
Cut-off Date Pool Principal Balance: The aggregate of the
Cut-off
Date Principal Balances of all Mortgage Loans, plus the portion of
the Closing
Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated
Principal Balance thereof as of the close of business on the
Cut-off Date (after
giving effect to payments of principal due on or prior to that
date, whether or
not received).
Data Tape Information: The information provided by the
Originators
as of the Cut-off Date to the Depositor or the Sponsor setting
forth the
following information with respect to each Mortgage Loan: (1) the
Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance
as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code
indicating
whether the Mortgaged Property is owner occupied; (6) the type of
Mortgaged
Property; (7) the first date on which the Scheduled Payment was due
on the
Mortgage Loan and, if such date is not consistent with the Due Date
currently in
effect, such Due Date; (8) the "paid through date" based on
payments received
from the related Mortgagor; (9) the original principal amount of
the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the
Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or
Adjustable Rate
Mortgage Loan, First-Lien Mortgage Loan or Second-Lien Mortgage
Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and
term
refinance, equity take out refinance); (13) a code indicating the
documentation
style (i.e., full, asset verification, income verification and
no
documentation); (14) the credit risk score (FICO score); (15) the
loan credit
grade classification (as described in the underwriting guidelines);
(16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage
Rate; (17)
the Mortgage Rate at origination; (18) with respect to each
Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the
Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating
the type of
Prepayment Charges applicable to such Mortgage Loan (including any
prepayment
penalty term), if any; (21) with respect to each Adjustable Rate
Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Originator of
such Mortgage
Loan; (23) with respect to each First-Lien Mortgage Loan, the LTV
at
origination, and with respect to each Second-Lien Mortgage Loan,
the CLTV at
origination; and (24) if such Mortgage Loan is covered by a primary
mortgage
insurance policy or a lender-paid primary mortgage insurance
policy, the primary
mortgage insurance rate. With respect to the Mortgage Loans in the
aggregate,
the Data Tape Information shall set forth the following
information, as of the
Cut-off Date: (1) the number of Mortgage Loans; (2) the current
aggregate
outstanding 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.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding
under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage
Loan which
became final and non-appealable, except such a reduction resulting
from a
Deficient Valuation or any reduction that results in a permanent
forgiveness of
principal.
Defaulted Swap Termination Payment: Any Swap Termination
Payment
required to be paid by the Trust to the Swap Provider pursuant to
the Interest
Rate Swap Agreement as a result of an Event of Default (as defined
in the
Interest Rate Swap Agreement) with respect to which the Swap
Provider is the
Defaulting Party (as defined in the Interest Rate Swap Agreement)
or a
Termination Event (as defined in the Interest Rate Swap Agreement)
(other than
Illegality or a Tax Event that is not a Tax Event Upon Merger (each
as defined
in 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).
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
United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a
Physical
Certificate and any Certificate issued in lieu of a Book-Entry
Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Loss Trigger Event: With respect to any
Distribution
Date, the circumstances in which the quotient (expressed as a
percentage) of (x)
the rolling three month average of the aggregate unpaid principal
balance of 60+
Day Delinquent Mortgage Loans (including Mortgage Loans in
foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the
aggregate Class
Certificate Balance of the Class A Certificates have been reduced
to zero, the
aggregate unpaid principal balance of the Mortgage Loans for such
Distribution
Date equals or exceeds 35.71% of the prior period's Senior
Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of
the Class A
Certificates have been reduced to zero, the aggregate unpaid
principal balance
of the Mortgage Loans for such Distribution Date equals or exceeds
44.19% of the
prior period's Class M-1 Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set
forth
on the face thereof as the "Initial Certificate Balance of this
Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Morgan Stanley ABS Capital I Inc., a Delaware
corporation, and its successors in interest.
Depository: The initial Depository shall be The Depository
Trust
Company, the nominee of which is CEDE & Co., as the registered
Holder of the
Book-Entry Certificates. The Depository shall at all times be a
"clearing
corporation" as defined in Section 8 102(a)(5) of the Uniform
Commercial Code of
the State of New York.
Depository Institution: Any depository institution or trust
company,
including the Trustee, that (a) is incorporated under the laws of
the United
States of America or any State thereof, (b) is subject to
supervision and
examination by federal or state banking authorities and (c) has
outstanding
unsecured commercial paper or other short-term unsecured debt
obligations that
are rated "P-1" by Moody's, "F1+" by Fitch and "A-1" by Standard
& Poor's (to
the extent they are Rating Agencies hereunder).
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 each Distribution Date, the
18th
day (or if such day is not a Business Day, the immediately
preceding Business
Day) in the case of Wells Fargo and Countrywide Servicing, and the
15th day (or
if such day is not a Business Day, the immediately preceding
Business Day) in
the case of Saxon, of the calendar month in which such Distribution
Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name
of the Trustee
for the benefit of the Certificateholders and designated "Deutsche
Bank National
Trust Company in trust for registered Holders of Morgan Stanley
Home Equity Loan
Trust 2007-1 Mortgage Pass-Through Certificates, Series 2007-1."
Funds in the
Distribution Account shall be held in trust for the
Certificateholders for the
uses and purposes set forth in this Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day
immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if
such
day is not a Business Day, the next succeeding Business Day,
commencing in March
2007.
Document Certification and Exception Report: The report attached
to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled 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 calendar month preceding the
month in which
such Distribution Date occurs and ending on the first day of the
calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal
or
state chartered depository institution or trust company that
complies with the
definition of Eligible Institution, (ii) an account maintained with
the
corporate trust department of a federal depository institution or
state
chartered depository institution subject to regulations regarding
fiduciary
funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation
Section 9.10(b), which, in either case, has corporate trust powers
and is acting
in its fiduciary capacity or (iii) any other account acceptable to
each Rating
Agency. Eligible Accounts may bear interest, and may include, if
otherwise
qualified under this definition, accounts maintained with the
Trustee. Each
Eligible Account shall be a separate account.
Eligible Institution: A federal or state chartered depository
institution or trust company the commercial paper, short-term debt
obligations,
or other short-term deposits of which are rated "A-1+" by Standard
& Poor's if
the amounts on deposit are to be held in the account for no more
than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on
deposit are to be held
in the account for no more than 30-days), or the long-term
unsecured debt
obligations of which are rated at least "AA-" by Standard &
Poor's if the
amounts on deposit are to be held in the account for no more than
365 days, and
the commercial paper, short-term debt obligations or other
short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or
a comparable
rating if another Rating Agency is specified by the Depositor by
written notice
to the Servicers and the Trustee) (in each case, to the extent they
are
designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA-Qualifying Underwriting: A best efforts or firm
commitment
underwriting or private placement that meets the requirements of
Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002)
(or any
successor thereto), or any substantially similar administrative
exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established
and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account
created
and maintained by the Trustee pursuant to Sections 3.07(b) and
3.07(c) in the
name of the Trustee for the benefit of the Regular
Certificateholders and
designated "Deutsche Bank National Trust Company in trust for
registered Holders
of Morgan Stanley Home Equity Loan Trust 2007-1, Mortgage
Pass-Through
Certificates, Series 2007-1." Funds in the Excess Reserve Fund
Account shall be
held in trust for the Regular Certificateholders for the uses and
purposes set
forth in this Agreement. Amounts on deposit in the Excess Reserve
Fund Account
shall not be invested.
Excess Subordinated Amount: With respect to any Distribution
Date,
the excess, if any, of (a) the Subordinated Amount on such
Distribution Date
over (b) the Specified Subordinated Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate
equal
to the sum of the Servicing Fee Rate, the Trustee Fee Rate and the
Custodian Fee
Rate.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing
Fee, the Trustee Fee, the Custodian Fee and any lender-paid primary
mortgage
insurance fee, if applicable.
Extra Principal Distribution Amount: As of any Distribution
Date,
the lesser of (x) the related Total Monthly Excess Spread for such
Distribution
Date and (y) the related Subordination Deficiency for such
Distribution Date.
Fannie Mae: The Federal National Mortgage Association, or any
successor thereto.
Fannie Mae Guides: The Fannie Mae Sellers' Guide and the Fannie
Mae
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
Final Recovery Determination: With respect to any defaulted
Mortgage
Loan or any REO Property (other than any Mortgage Loan or REO
Property purchased
by the applicable Originator or the Depositor, as applicable, as
contemplated by
this Agreement, the Accredited Agreements, the Fremont Agreements,
the Bulk
Purchase Agreement or the Wilmington Agreements, as applicable), a
determination
made by the applicable Servicer that all Insurance Proceeds,
Condemnation
Proceeds, Liquidation Proceeds and other payments or recoveries
which the
applicable Servicer, in its reasonable good faith judgment, expects
to be
finally recoverable in respect thereof have been so recovered. Each
Servicer
shall maintain records, prepared by a Servicing Officer, of each
Final Recovery
Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled
Distribution
Date for each Class of Certificates is the Distribution Date in
December 2036.
First-Lien Mortgage Loan: A Mortgage Loan secured by a first
lien
Mortgage on the related Mortgaged Property.
First NLC: First NLC Financial Services, LLC, a Florida limited
liability company, and its successors in interest.
First NLC Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the First NLC Purchase Agreement for which
First NLC is
identified as Originator on the Mortgage Loan Schedule.
First NLC Purchase Agreement: The Second Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of March
1, 2006, by
and between First NLC and the Sponsor, which is attached hereto as
Exhibit O.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for
purposes of
Section 10.05(b) the address for notices to Fitch shall be Fitch,
Inc., One
State Street Plaza, New York, New York 10004, Attention: MBS
Monitoring - Morgan
Stanley Home Equity Loan Trust 2007-1, or such other address as
Fitch may
hereafter furnish to the Depositor, the Trustee and the
Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a
corporate
instrumentality of the United States created and existing under
Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Fremont: Fremont Investment & Loan, a California industrial
bank,
and its successors in interest.
Fremont Agreements: The Fremont Purchase Agreement, the Fremont
Interim Servicing Agreement and the Fremont Assignment Agreement,
each of which
are attached hereto as Exhibit S.
Fremont Assignment Agreement: The Assignment, Assumption and
Recognition Agreement, dated as of the Closing Date, among the
Sponsor, the
Depositor and Fremont.
Fremont Interim Servicing Agreement: The Second Amended and
Restated
Interim Servicing Agreement, dated as of November 1, 2006 between
the Sponsor
and Fremont.
Fremont Mortgage Loans: The Mortgage Loans purchased by the
Sponsor
pursuant to the Fremont Purchase Agreement for which Fremont is
identified as
Originator on the Mortgage Loan Schedule.
Fremont Purchase Agreement: The Second Amended and Restated
Mortgage
Loan Purchase and Warranties Agreement, dated as of November 1,
2006, by and
between Fremont and the Sponsor, solely insofar as such agreement
relates to the
Fremont Mortgage Loans.
Grantor Trust: As described in the Preliminary Statement.
Gross Margin: With respect to each Adjustable Rate Mortgage
Loan,
the fixed percentage amount set forth in the related Mortgage Note
to be added
to the applicable Index to determine the Mortgage Rate.
Index: As to each Adjustable Rate Mortgage Loan, the index from
time
to time in effect for the adjustment of the Mortgage Rate set forth
as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy, including all riders and
endorsements thereto
in effect, including any replacement policy or policies for any
Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds
of
insurance policies insuring the Mortgage Loan or the related
Mortgaged Property.
Interest Accrual Period: With respect to each Class of
Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular
Interests and any
Distribution Date, the period commencing on the Distribution Date
occurring in
the month preceding the month in which the current Distribution
Date occurs (or,
in the case of the first Distribution Date, the period from and
including the
Closing Date to but excluding such first Distribution Date) and
ending on the
day immediately preceding the current Distribution Date. With
respect to the
Class LT-Accrual, Class LT-IO, Class UT-X, Class UT-IO, Class X and
Class IO
Interests and each Pooling-Tier REMIC-1 Regular Interest and
Pooling-Tier
REMIC-2 Regular Interest and any Distribution Date, the calendar
month preceding
such Distribution Date. For purposes of computing interest accruals
on each
Class of Non-Delay Certificates, each Interest Accrual Period has
the actual
number of days in such month and each year is assumed to have 360
days.
Interest Rate Adjustment Date: With respect to each Adjustable
Rate
Mortgage Loan, the date, specified in the related Mortgage Note and
the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between the Swap Provider and the
Trustee, a copy
of which is attached hereto as Exhibit Y.
Interest Remittance Amount: With respect to any Distribution
Date
and the Mortgage Loans, that portion of Available Funds
attributable to interest
received or advanced on such Mortgage Loans, net of the fees
payable to the
Servicers, the Custodian and the Trustee, and net of any Net Swap
Payments and
any Swap Termination Payments, other than Defaulted Swap
Termination Payments,
payable to the Swap Provider from Available Funds with respect to
that
Distribution Date.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan,
the
Person named on the MERS(R) System as the investor pursuant to the
MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent
"qualified
professional asset managers"), PTCE 90 1 (for transactions by
insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank
collective
investment funds), PTCE 95-60 (for transactions by insurance
company general
accounts) or PTCE 96-23 (for transactions effected by "in house
asset
managers"), or any comparable exemption available under Similar
Law.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date
immediately following
such Due Period, whether as late payments of Scheduled Payments or
as Insurance
Proceeds, Condemnation 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.
LIBOR: With respect to any Interest Accrual Period for the
Offered
Certificates, the rate determined by the Trustee on the related
LIBOR
Determination Date on the basis of the offered rate for one-month
U.S. dollar
deposits as such rate appears on Reuters Page LIBOR01 as of 11:00
a.m. (London
time) on such date; provided that if such rate does not appear on
Reuters Page
LIBOR01, the rate for such date will be determined on the basis of
the rates at
which one-month U.S. dollar deposits are offered by the Reference
Banks at
approximately 11:00 a.m. (London time) on such date to prime banks
in the London
interbank market. In such event, the Trustee shall request the
principal London
office of each of the Reference Banks to provide a quotation of its
rate. If at
least two such quotations are provided, the rate for that date will
be the
arithmetic mean of the quotations (rounded upwards if necessary to
the nearest
whole multiple of 1/16%). If fewer than two quotations are provided
as
requested, the rate for that date will be the arithmetic mean of
the rates
quoted by major banks in New York City, selected by the Trustee
(after
consultation with the Depositor), at approximately 11:00 a.m. (New
York City
time) on such date for one-month U.S. dollar loans to leading
European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day
preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date,
a
defaulted Mortgage Loan (including any REO Property) which either
(a) was
liquidated in the calendar month preceding the month of such
Distribution Date
and as to which the applicable Servicer has certified to the
Trustee that it has
received all amounts it expects to receive in connection with the
liquidation of
such Mortgage Loan including the final disposition of an REO
Property, or (b) is
a Second-Lien Mortgage Loan (1) that is delinquent 180 days or
longer, (2) for
which the related first lien mortgage loan is not a Mortgage Loan,
and (3) as to
which the applicable Servicer has certified to the Trustee that it
does not
believe there is a reasonable likelihood that any further net
proceeds will be
received or recovered with respect to such Second-Lien Mortgage
Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a
trustee's sale,
foreclosure sale or otherwise, including any Subsequent
Recoveries.
Loan-to-Value Ratio or LTV: With respect to any First-Lien
Mortgage
Loan, the ratio (expressed as a percentage) of the original
outstanding
principal amount of the First-Lien Mortgage Loan as of the Cut-off
Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of
the Mortgaged
Property at origination, and (b) if the First-Lien Mortgage Loan
was made to
finance the acquisition of the related Mortgaged Property, the
purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of
United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary
Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2,
Class LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class
LT-M-3, Class
LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-B-1, Class LT-B-2,
Class LT-B-3,
Class LT-IO and Class LT-Accrual Interests as described in the
Preliminary
Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the maximum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
increased during the
lifetime of such Adjustable Rate Mortgage Loan.
Meritage: Meritage Mortgage Corporation, a Florida corporation,
and
its successors in interest.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have
taken or will
take such action as is necessary to cause MERS to be, the mortgagee
of record,
as nominee for the Originators, in accordance with MERS Procedure
Manual and (b)
the Originators have designated or will designate the Trustee as
the Investor on
the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may
be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as
more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and
in the
related Mortgage Note and (ii) is the minimum interest rate to
which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be
decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the
Certificateholders
pursuant to Section 4.03.
Moody's: Moody's Investors Service, Inc., and its successors in
interest. If Moody's is designated as a Rating Agency in the
Preliminary
Statement, for purposes of Section 10.05(b), the address for
notices to Moody's
shall be Moody's Investors Service, Inc., 99 Church Street, New
York, New York
10007, Attention: Residential Mortgage Pass-Through Group, or such
other address
as Moody's may hereafter furnish to the Depositor, the Trustee and
the
Servicers.
Morgan Stanley: Morgan Stanley, a Delaware corporation.
Mortgage: The mortgage, deed of trust or other instrument
identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage
Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject
of
this Agreement, each Mortgage Loan originally sold and subject to
this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan
includes,
without limitation, the Mortgage File, the Scheduled Payments,
Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance
Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights,
benefits,
proceeds and obligations arising from or in connection with such
Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered
to
the Trustee and the Custodian and referred to on Schedule I, such
schedule
setting forth the following information with respect to each
Mortgage Loan: (1)
the Mortgage Loan number; (2) the city, state and zip code of the
Mortgaged
Property; (3) the number and type of residential units constituting
the
Mortgaged Property; (4) the current Mortgage Rate; (5) the current
net Mortgage
Rate; (6) the current Scheduled Payment; (7) with respect to each
Adjustable
Rate Mortgage Loan, the Gross Margin; (8) the original term to
maturity; (9) the
scheduled maturity date; (10) the principal balance of the Mortgage
Loan as of
the Cut-off Date after deduction of payments of principal due on or
before the
Cut-off Date whether or not collected; (11) with respect to each
Adjustable Rate
Mortgage Loan, the next Interest Rate Adjustment Date; (12) with
respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate
Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing
Fee; (15)
the applicable Originator's name; (16) the date such Mortgage Loan
was sold by
the applicable Originator to the Sponsor; (17) whether such
Mortgage Loan
provides for a Prepayment Charge as well as the term and amount of
such
Prepayment Charge, if any; (18) with respect to each First-Lien
Mortgage Loan,
the LTV at origination, and with respect to each Second-Lien
Mortgage Loan, the
CLTV at origination; (19) the applicable Servicer's name; and (20)
the date on
which servicing of the Mortgage Loan was transferred to the
applicable Servicer.
Mortgage Note: The note or other evidence of the indebtedness of
a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage
Note,
which shall be adjusted from time to time in the case of an
Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate,
and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the
real
property (or leasehold estate, if applicable) identified on the
Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related
Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the
portion
of Available Funds remaining for distribution pursuant to
subsection
4.02(a)(iii) (before giving effect to distributions pursuant to
such
subsection).
Net Prepayment Interest Shortfall: For any Distribution Date,
the
amount by which the sum of the Prepayment Interest Shortfalls for
such
Distribution Date exceeds the sum of (i) all Prepayment Interest
Excesses for
such Distribution Date and (ii) Compensating Interest payments made
with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) payable by the
Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any
net
payment (other than a Swap Termination Payment) made by the Swap
Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined
in the
Interest Rate Swap Agreement).
NIM
Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed
by
some or all of the Class X and Class P Certificates that are rated
by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
90+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Schedule Payment is, as of the
last day of the
prior Due Period, three months or more delinquent, including,
without
limitation, such Mortgage Loans that are subject to bankruptcy
proceedings, and
(ii) each REO Property.
Non-Delay Certificates: As specified in the Preliminary
Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I 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 applicable Servicer, will not
or, in the
case of a proposed P&I Advance, would not be ultimately
recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or
Liquidation
Proceeds on such Mortgage Loan or REO Property as provided
herein.
Nonrecoverable Servicing Advance: Any Servicing Advances
previously
made or proposed to be made in respect of a Mortgage Loan or REO
Property,
which, in accordance with Accepted Servicing Practices, will not
or, in the case
of a proposed Servicing Advance, would not be ultimately
recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation
Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant
to
Section 9.02 to the effect that final distribution on any of the
Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary
Statement.
Officer's Certificate: A certificate signed by an officer of
any
Servicer or Subservicer with responsibility for the servicing of
the Mortgage
Loans required to be serviced by such Servicer or Subservicer and
listed on a
list delivered to the Trustee pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably
acceptable to the
Trustee (and/or such other Persons as may be set forth herein),
provided that
any Opinion of Counsel relating to (a) qualification of any Trust
REMIC or (b)
compliance with the REMIC Provisions, must be (unless otherwise
stated in such
Opinion of Counsel) an opinion of counsel who (i) is in fact
independent of such
Servicer of the Mortgage Loans, (ii) does not have any material
direct or
indirect financial interest in such Servicer of the Mortgage Loans
or in an
Affiliate thereof and (iii) is not connected with such Servicer of
the Mortgage
Loans as an officer, employee, director or person performing
similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the
last day of
the related Due Period, is equal to 10% or less of the Cut-off Date
Pool
Principal Balance.
Originators: The Responsible Party, Accredited, Wilmington,
Fremont
and Meritage.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Trustee or delivered
to
the
Trustee for cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other
Certificates have been executed and delivered by the Trustee
pursuant to
this
Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan
with
a Stated Principal Balance greater than zero which was not the
subject of a
Principal Prepayment in Full prior to such Due Date and which did
not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any
ownership
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.
P&I Advance: As to any Mortgage Loan or REO Property, any
advance
made by the applicable Servicer in respect of any Remittance Date
representing
the aggregate of all payments of principal and interest, net of the
Servicing
Fee, that were due during the related Due Period on the Mortgage
Loans and that
were delinquent on the related Determination Date, plus certain
amounts
representing assumed payments not covered by any current net income
on the
Mortgaged Properties acquired by foreclosure or deed-in-lieu of
foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Offered
Certificates (except as set forth in the following sentence), the
following
percentages: Class A-1, 0.0500%; Class A-2, 0.1000%; Class A-3,
0.1400%; Class
A-4, 0.2200%; Class M-1, 0.2600%; Class M-2, 0.2800%; Class M-3,
0.3500%; Class
M-4, 0.3800%; Class M-5, 0.4200%; Class M-6, 0.5000%; Class B-1,
1.6000%; Class
B-2, 2.0000%; and Class B-3, 2.0000%. On the first Distribution
Date after the
Optional Termination Date, the Pass-Through Margins shall increase
to: Class
A-1, 0.1000%; Class A-2, 0.2000%; Class A-3, 0.2800%; Class A-4,
0.4400%; Class
M-1, 0.3900%; Class M-2, 0.4200%; Class M-3, 0.5250%; Class M-4,
0.5700%; Class
M-5, 0.6300%; Class M-6, 0.7500%; Class B-1, 2.4000%; Class B-2,
3.0000%; and
Class B-3, 3.0000%.
Pass-Through Rate: For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2
Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular
Interest and
each Class X REMIC Regular Interest, the per-annum rate set forth
or calculated
in the manner described in the Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage
interest
evidenced thereby in distributions required to be made on the
related Class,
such percentage interest being set forth on the face thereof or
equal to the
percentage obtained by dividing the Denomination of such
Certificate by the
aggregate of the Denominations of all Certificates of the same
Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment
as set forth
in the related Mortgage Note.
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 by any Servicer, the Trustee or any of their
respective
Affiliates:
(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) demand and time deposits in, certificates of deposit of,
or bankers' acceptances (which shall each have an original
maturity
of not more than 90-days and, in the case of bankers'
acceptances,
shall in no event have an original maturity of more than 365 days
or
a remaining maturity of more than 30-days) denominated in
United
States dollars and issued by, any Depository Institution and
rated
"P-1" by Moody's, "F1+" by Fitch and "A-1+" by Standard &
Poor's (to
the extent they are Rating Agencies hereunder and are so rated
by
such Rating Agency);
(iii) repurchase obligations with respect to any security
described in clause (i) above entered into with a Depository
Institution (acting as principal);
(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
each Rating Agency that rates such securities in its highest
long-term unsecured rating categories 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 each Rating Agency
that
rates such securities in its highest short-term unsecured debt
rating available at the time of such investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Trustee or an Affiliate thereof,
that
have been rated "Aaa" by Moody's, "AAAm" by Standard & Poor's
and at
least "AA" by Fitch (to the extent they are Rating Agencies
hereunder and such funds are so rated by such Rating Agency);
and
(vii) if previously confirmed in writing to the Trustee, any
other demand, money market or time deposit, or any other
obligation,
security or investment, as may be acceptable to the Rating
Agencies
as a permitted investment of funds backing "Aaa" or "AAA" rated
securities;
provided, however, 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 Person other than (i) the United
States,
any State or political subdivision thereof, or any agency or
instrumentality of
any of the foregoing, (ii) a foreign government, international
organization or
any agency or instrumentality of either of the foregoing, (iii) an
organization
(except certain farmers' cooperatives described in Section 521 of
the Code)
which is exempt from tax imposed by Chapter 1 of the Code
(including the tax
imposed by Section 511 of the Code on unrelated business taxable
income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code)
with respect to
any Residual Certificate, (iv) rural electric and telephone
cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that
is not a U.S.
Person or a U.S. Person with respect to whom income from a Residual
Certificate
is attributable to a foreign permanent establishment or fixed base,
within the
meaning of an applicable income tax treaty of such Person or any
other U.S.
Person, or a U.S. Person treated as a partnership for U.S. federal
income tax
purposes, any direct or indirect beneficial owner of which (other
than through a
U.S. corporation) is (or is permitted to be under the related
partnership
agreement) not a U.S. Person, (vi) an "electing large partnership"
within the
meaning of Section 775 of the Code and (vii) any other Person so
designated by
the Depositor based upon an Opinion of Counsel that the Transfer of
an Ownership
Interest in a Residual Certificate to such Person may cause any
Trust REMIC to
fail to qualify as a REMIC at any time that the Certificates are
outstanding.
The terms "United States", "State" and "international organization"
shall have
the meanings set forth in Section 7701 of the Code or successor
provisions. A
corporation will not be treated as an instrumentality of the United
States or of
any State or political subdivision thereof for these purposes if
all of its
activities are subject to tax and, with the exception of Freddie
Mac, a majority
of its board of directors is not selected by such government
unit.
Person: Any individual, corporation, partnership, joint
venture,
association, limited liability company, joint-stock company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
Physical Certificates: As specified in the Preliminary
Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans
for such
Distribution Date that were Outstanding Mortgage Loans on the Due
Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
Pooling-Tier REMIC-1: As described in the Preliminary
Statement.
Pooling-Tier REMIC-1 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier REMIC-1
Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 Regular Interest: As described in the
Preliminary Statement.
Pooling-Tier REMIC-1 WAC Rate: With respect to the Mortgage Loans
as
of any Distribution Date, a per-annum rate equal to (a) the
weighted average of
the Adjusted Net Mortgage Rates for each such Mortgage Loan then in
effect on
the beginning of the related Due Period on the Mortgage Loans,
adjusted in each
case to accrue on the basis of a 360-day year and the actual number
of days in
the related Interest Accrual Period. With respect to the first Due
Period and
the first Distribution Date, the Pooling-Tier REMIC-1 Net WAC Rate
should be
reduced by a fraction, the numerator of which is the Closing Date
Deposit Amount
and the denominator of which is the Cut-off Date Pool Principal
Balance.
Pooling-Tier REMIC-2: As described in the Preliminary
Statement.
Pooling-Tier REMIC-2 Interest Rate: As described in the
Preliminary
Statement.
Pooling-Tier REMIC-2 IO Interest: Any of the Pooling-Tier
REMIC-2
Regular Interests with the designation "IO" in its name.
Pooling-Tier REMIC-2 IO Notional Balance: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Principal Amount: As described in the
Preliminary Statement.
Pooling-Tier REMIC-2 Regular Interest: As described in the
Preliminary Statement.
Prepayment Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a
Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the
terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution
Date,
any interest collected by a Servicer with respect to any Mortgage
Loan serviced
by such Servicer as to which a Principal Prepayment in Full occurs
from the 1st
day of the month through the 15th day of the month in which such
Distribution
Date occurs and that represents interest that accrues from the 1st
day of such
month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was, during the
portion of the
Prepayment Period from and including the 16th day of the month
preceding the
month in which such Distribution Date occurs (or from the day
following the
Cut-off Date, in the case of the first Distribution Date) through
the last day
of such month, the subject of a Principal Prepayment which is not
accompanied by
an amount equal to one-month of interest that would have been due
on such
Mortgage Loan on the Due Date in the following month and which was
applied by
the applicable Servicer to reduce the outstanding principal balance
of such
Mortgage Loan on a date preceding such Due Date an amount equal to
the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such
Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan,
(c) 1/360 and
(d) the number of days commencing on the date on which such
Principal Prepayment
was applied and ending on the last day of the calendar month in
which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date and
any
Servicer either (i) the period commencing on the 16th day of the
month preceding
the month in which such Distribution Date occurs (or, in the case
of the first
Distribution Date, from and including the Cut-off Date) to and
including the
15th day of the month in which such Distribution Date occurs or
(ii) the
calendar month prior to that Distribution Date, with respect to any
partial
Principal Prepayments or any involuntary Principal Prepayments in
the case of
Wells Fargo.
Principal Distribution Amount: For any Distribution Date, the sum
of
(i) the Basic Principal Distribution Amount for such Distribution
Date and (ii)
the Extra Principal Distribution Amount for such Distribution
Date.
Principal Prepayment: Any full or partial payment or other
recovery
of principal on a Mortgage Loan (including upon liquidation of a
Mortgage Loan)
which is received by the applicable Servicer in advance of its
scheduled Due
Date, excluding any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution
Date,
the amount equal to the sum of the following amounts (without
duplication) with
respect to the related Due Period: (i) each scheduled payment of
principal on a
Mortgage Loan due during such Due Period and received by the
applicable Servicer
on or prior to the related Determination Date or advanced by the
applicable
Servicer for the related Remittance Date, and all Principal
Prepayments received
during the related Prepayment Period; (ii) all Liquidation
Proceeds,
Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans
allocable to
principal actually collected by the applicable Servicer during the
related
Prepayment Period; (iii) the portion of the Repurchase Price
allocable to
principal with respect to each Mortgage Loan repurchased with
respect to such
Distribution Date; (iv) all Substitution Adjustment Amounts
allocable to
principal received in connection with the substitutions of Mortgage
Loans with
respect to such Distribution Date; (v) with respect to the
Distribution Date in
March 2007 only, the portion of the Closing Date Deposit Amount
allocable to
principal; and (vi) the allocable portion of the proceeds received
with respect
to the termination of the Trust Fund pursuant to clause (a) of
Section 9.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement: The Prospectus Supplement, dated February
27,
2007, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the Accredited Purchase
Agreement, the First NLC Purchase Agreement, the Fremont Purchase
Agreement, the
Bulk Purchase Agreement and the Wilmington Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no
longer in
existence, "Rating Agency" shall be such nationally recognized
statistical
rating organization, or other comparable Person, as is designated
by the
Depositor, notice of which designation shall be given to the
Trustee. References
herein to a given rating or rating category of a Rating Agency
shall mean such
rating category without giving effect to any modifiers. For
purposes of Section
10.05(b), the addresses for notices to each Rating Agency shall be
the address
specified therefor in the definition corresponding to the name of
such Rating
Agency, or such other address as either such Rating Agency may
hereafter furnish
to the Depositor, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and
any
Liquidated Mortgage Loan, the amount, if any, by which (a) the
unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and
unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect
thereto net
of the expenses incurred by the applicable Servicer in connection
with the
liquidation of such Liquidated Mortgage Loan and net of the amount
of
unreimbursed Servicing Advances with respect to such Liquidated
Mortgage Loan.
Record Date: With respect to any Distribution Date, the close
of
business on the Business Day immediately preceding such
Distribution Date;
provided, however, that for any Definitive Certificate, the Record
Date shall be
the close of business on the last Business Day of the month
preceding the month
in which the applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary
Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.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. 1,506-1,631
(January 7, 2005))
or by the staff of the Commission, or as may be provided by the
Commission or
its staff from time to time.
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 Due Period as a
result of the
application of the Servicemembers Civil Relief Act or any similar
state
statutes.
REMIC: A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
REMIC Provisions: Provisions of the federal income tax law
relating
to real estate mortgage investment conduits, which appear at
Sections 860A
through 860G of Subchapter M- of Chapter 1 of the Code, and related
provisions,
and regulations promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the
second
Business Day immediately preceding such Distribution Date with
respect to
Countrywide Servicing, the third Business Day immediately preceding
such
Distribution Date with respect to Wells Fargo and the 21st day (or
if such day
is a Saturday, then the first Business Day immediately preceding
that day, or if
such day is a Sunday or otherwise not a Business Day, then the
immediately
following Business Day) of the month of each related Distribution
Date with
respect to Saxon.
REO Disposition: The final sale by the applicable Servicer of
any
REO Property.
REO Imputed Interest: As to any REO Property, for any period,
an
amount equivalent to interest (at the Mortgage Rate net of the
Servicing Fee
Rate that would have been applicable to the related Mortgage Loan
had it been
outstanding) on the unpaid principal balance of the Mortgage Loan
as of the date
of acquisition thereof (as such balance is reduced pursuant to
Section 3.17 by
any income from the REO Property treated as a recovery of
principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in
the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection
with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement
interest rate
swap agreement.
Reportable Event: As defined in Section 8.12(g).
Representations and Warranties Agreement: The Representations
and
Warranties Agreement, dated as of February 28, 2007, between the
Depositor and
the Sponsor, a copy of which is attached hereto as Exhibit CC.
Repurchase Price: With respect to any Mortgage Loan repurchased
by
(a) the Depositor or the Responsible Party, an amount equal to the
sum of (i)
the unpaid principal balance of such Mortgage Loan as of the date
of repurchase,
(ii) interest on such unpaid principal balance of such Mortgage
Loan at the
Mortgage Rate from the last date through which interest has been
paid and
distributed to the Trustee to the date of repurchase, (iii) all
unreimbursed
Servicing Advances, (iv) all costs and expenses incurred by the
Trustee arising
out of or based upon such breach, including without limitation,
costs and
expenses relating to the Trustee's enforcement of the repurchase
obligation of
the Depositor or the Responsible Party hereunder and (v) any costs
and damages
incurred by the Trust in connection with any violation by such
Mortgage Loan of
any predatory lending law or abusive lending law and (b)
Accredited, Fremont or
Wilmington, the repurchase price specified in the Accredited
Agreements, the
Fremont Agreements or the Wilmington Agreements, as applicable. In
addition to
the Repurchase Price, the Responsible Party is obligated to make
certain
payments for material breaches of representations and warranties as
further set
forth in Section 2.03(p) in this Agreement, and each of Accredited,
Fremont and
Wilmington is obligated to make certain payments for material
breaches of
representations and warranties as further set forth in the
Accredited
Agreements, the Fremont Agreements and the Wilmington Agreements,
as applicable.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee or the Custodian, as
applicable,
substantially in the form of Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee, any
managing director, any vice president, any assistant vice
president, any
assistant secretary, any assistant treasurer, any associate, or any
other
officer of the Trustee, customarily performing functions similar to
those
performed by any of the above designated officers who at such time
shall be
officers to whom, with respect to a particular matter, such matter
is referred
because of such officer's knowledge of and familiarity with the
particular
subject and who shall have direct responsibility for the
administration of this
Agreement.
Responsible Party: First NLC.
Reuters Page LIBOR01: The display page currently so designated
on
the Reuters Xtra 3000 Service (or such other page as may replace
that page on
that service or any successor service for displaying comparable
rates or
prices).
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Saxon: Saxon Mortgage Services, Inc., a Texas corporation, and
its
successors in interest.
Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan
due on any Due Date allocable to principal and/or interest on such
Mortgage Loan
which, unless otherwise specified herein, shall give effect to any
related Debt
Service Reduction and any Deficient Valuation that affects the
amount of the
monthly payment due on such Mortgage Loan.
Second-Lien Mortgage Loan: A Mortgage Loan secured by a
second-lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the
aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the
Subordinated
Amount, in each case after taking into account the distribution of
the Principal
Distribution Amount, including any principal payments on those
Classes of
Certificates from the Swap Account on that Distribution Date, by
(y) the
aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution
Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 44.80%.
Servicer: Wells Fargo, Countrywide Servicing or Saxon, as
applicable, and if a successor is appointed hereunder, such
successor. When the
term "Servicer" is used in this Agreement in connection with the
administration
of servicing obligations with respect to any Mortgage Loan,
Mortgaged Property,
REO Property or Mortgage File, "Servicer" shall mean the Person
identified as
the Servicer of such Mortgage Loan on the Mortgage Loan
Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer
in the
performance of its servicing obligations in connection with a
default,
delinquency or other unanticipated event, including, but not
limited to, the
cost of (i) the preservation, restoration, inspection and
protection of a
Mortgaged Property, (ii) any enforcement, administrative or
judicial
proceedings, including foreclosures and litigation, in respect of a
particular
Mortgage Loan, (iii) the management (including reasonable fees in
connection
therewith) and liquidation of any REO Property and (iv) the
performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing
Advances
shall also include any reasonable "out-of-pocket" costs and
expenses (including
legal fees) incurred by the applicable 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 Mortgagor or otherwise payable
under this
Agreement. No Servicer shall be required to make any Nonrecoverable
Servicing
Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed
on Exhibit U
hereto. With respect to Countrywide Servicing, "servicing criteria"
shall have
the meaning set forth in the Countrywide Amendment Regulation
AB.
Servicing Fee: With respect to each Servicer, each Mortgage
Loan
serviced by such Servicer and for any calendar month, an amount
equal to one
month's interest at the Servicing Fee Rate on the applicable Stated
Principal
Balance of such Mortgage Loan as of the close of business on the
day immediately
preceding the first day of the related Due Period. Such fee shall
be payable
monthly, solely from the interest portion (including recoveries
with respect to
interest from Liquidation Proceeds, Insurance Proceeds,
Condemnation Proceeds
and proceeds received with respect to REO Properties, to the extent
permitted by
Section 3.11) of such Scheduled Payment collected by such Servicer,
or as
otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50%
per annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or
copies of all
documents in the Mortgage File which are not delivered to the
Custodian in the
Custodial File and copies of the Mortgage Loan Documents set forth
in Exhibit K
hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage
Loans whose
name and facsimile signature appear on a list of servicing officers
furnished to
the Trustee by any Servicer on the Closing Date pursuant to this
Agreement, as
such list may from time to time be amended.
Significant Change to a Permitted Activity: With respect to any
amendment or other instrument entered into pursuant to Section
10.01, a change
to the activities of the Trust that would significantly change its
permitted
activities and thus cause the Trust to cease to be a "qualifying
special purpose
entity" under accounting principles generally accepted in the
United States.
This definition shall be interpreted in a manner consistent with
the
requirements of Statement of Financial Accounting Standards No.
140, Accounting
for Transfers and Servicing of Financial Assets and Extinguishments
of
Liabilities, or any successor to that accounting standard, and any
other
relevant authoritative accounting literature, as such requirements
are
applicable from time to time.
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the
last day of
the prior Due Period, two months or more delinquent, including,
without
limitation, such Mortgage Loans that are subject to bankruptcy
proceedings, (ii)
each Mortgage Loan in foreclosure and (iii) each REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an
amount
equal to 3.95% of the Cut-off Date Pool Principal Balance. On and
after the
Stepdown Date, an amount equal to 7.90% of the aggregate Stated
Principal
Balance of the Mortgage Loans for such Distribution Date, subject,
until the
Class Certificate Balance of each Class of Offered Certificates has
been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date
Pool Principal
Balance; provided, however, that if, on any Distribution Date, a
Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to
the applicable
percentage of the then aggregate Stated Principal Balance of the
Mortgage Loans
but will instead remain the same as the prior period's Specified
Subordinated
Amount until the Distribution Date on which a Trigger Event is no
longer in
effect. When the Class Certificate Balance of each Class of Offered
Certificates
has been reduced to zero, the Specified Subordinated Amount will
thereafter
equal zero.
Sponsor: Morgan Stanley Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the
Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a
division of
The McGraw Hill Companies, Inc., and its successors in interest. If
Standard &
Poor's is designated as a Rating Agency in the Preliminary
Statement, for
purposes of Section 10.05(b) the address for notices to Standard
& Poor's shall
be Standard & Poor's, 55 Water Street, New York, New York
10041, Attention:
Residential Mortgage Surveillance Group - Morgan Stanley Home
Equity Loan Trust
2007-1, or such other address as Standard & Poor's may
hereafter furnish to the
Depositor, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's
LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: As defined in Section 2.05.
Stated Principal Balance: As to each Mortgage Loan and as of
any
date of determination, (i) the principal balance of the Mortgage
Loan at the
Cut-off Date after giving effect to payments of principal due on or
before such
date (whether or not received), minus (ii) all amounts previously
remitted to
the Trustee with respect to the related Mortgage Loan representing
payments or
recoveries of principal including advances in respect of scheduled
payments of
principal. For purposes of any Distribution Date, the Stated
Principal Balance
of any Mortgage Loan will give effect to any scheduled payments of
principal
received by the related Servicer on or prior to the related
Determination Date
or advanced by the related Servicer for the related Remittance Date
and any
unscheduled principal payments and other unscheduled principal
collections
received during the related Prepayment Period, and the Stated
Principal Balance
of any Mortgage Loan that has prepaid in full or has become a
Liquidated
Mortgage Loan during the related Prepayment Period shall be
zero.
Stepdown Date:
The later to occur of (i) the earlier to occur of (a)
the Distribution Date in March 2010 and (b) the Distribution Date
following the
Distribution Date on which the aggregate Class Certificate Balances
of the Class
A Certificates have been reduced to zero and (ii) the first
Distribution Date on
which the Senior Enhancement Percentage (calculated for this
purpose only after
taking into account payments of principal on the Mortgage Loans
applied to
reduce the Stated Principal Balances of the Mortgage Loans for the
applicable
Distribution Date but prior to any allocation of the Principal
Distribution
Amount and principal payments from the Swap Account to the
Certificates on such
Distribution Date) is greater than or equal to the Senior Specified
Enhancement
Percentage.
Subcontractor: Any third-party or Affiliated vendor,
subcontractor
or other Person utilized by a Servicer, a Subservicer, the Trustee
or the
Custodian, as applicable, that is not responsible for the overall
servicing (as
"servicing" is commonly understood by participants in the
mortgage-backed
securities market) of Mortgage Loans but performs one or more
discrete functions
identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans. With
respect to Countrywide Servicing, "Subcontractor" shall have the
meaning set
forth in the Countrywide Amendment Regulation AB.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of
the Mortgage
Loans for such Distribution Date over (b) the aggregate of the
Class Certificate
Balances of the Offered Certificates as of such Distribution Date
(after giving
effect to the payment of the Principal Remittance Amount on such
Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date,
the
excess, if any, of (a) the Specified Subordinated Amount applicable
to such
Distribution Date over (b) the Subordinated Amount applicable to
such
Distribution Date.
Subordination Reduction Amount: With respect to any
Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated
Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or
related
Mortgaged Property that became a Liquidated Mortgage Loan or was
otherwise
disposed of, all amounts received in respect of such Liquidated
Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan
or Mortgaged
Property is allocated to reduce the Class Certificate Balance of
any Class of
Subordinated Certificates. Any Subsequent Recovery that is received
during a
Prepayment Period will be treated as Liquidation Proceeds and
included as part
of the Principal Remittance Amount for the related Distribution
Date.
Subservicer: Any Person that services Mortgage Loans on behalf of
a
Servicer or any Subservicer and is responsible for the performance
(whether
directly or through Subservicers or Subcontractors) of a
substantial portion of
the material servicing functions required to be performed by a
Servicer under
this Agreement with respect to some or all of the Mortgage Loans,
that are
identified in Item 1122(d) of Regulation AB. With respect to
Countrywide
Servicing, "Subservicer" shall have the meaning set forth in the
Countrywide
Amendment Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by
the
Responsible Party, Accredited, Fremont or Wilmington for a Deleted
Mortgage Loan
that satisfies the criteria set forth in the definition of
"Qualified Substitute
Mortgage Loan" in the applicable Purchase Agreement or (ii)
substituted by the
Depositor for a Deleted Mortgage Loan, which, if substituted by the
Depositor,
must, on the date of such substitution, as confirmed in a Request
for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal
Balance,
after deduction of the principal portion of the Scheduled Payment
due in the
month of substitution, not in excess of, and not more than 10% less
than, the
Stated Principal Balance of the Deleted Mortgage Loan; (b) be
accruing interest
at a rate no lower than and not more than 1% per-annum higher than,
that of the
Deleted Mortgage Loan; (c) have a Loan-to-Value Ratio or a
Combined
Loan-to-Value Ratio, as applicable, no higher than that of the
Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and
not more than
one year less than that of) the Deleted Mortgage Loan; and (e)
comply with each
applicable representation and warranty set forth in Section 2.03
and in the
Representations and Warranties Agreement.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, the Interest Rate
Swap
Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls,
subject to the obligation to pay amounts specified in Section
4.06.
Swap LIBOR: With respect to any Distribution Date (and the
related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used
in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a)
the actual
number of days in the Interest Accrual Period for the Offered
Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap
Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances
of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination
Payment (other
than a Defaulted Swap Termination Payment) payable from Available
Funds to the
Swap Provider for such Distribution Date and the denominator of
which is the
aggregate Stated Principal Balance of the Mortgage Loans at the
beginning of the
related Due Period, multiplied by 12.
Swap Provider: Morgan Stanley Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or
the
Swap Provider upon termination of the Interest Rate Swap Agreement
as a result
of an Event of Default (as defined in the Interest Rate Swap
Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement);
provided
that a Swap Termination Payment shall not be paid from Available
Funds to the
extent already paid by a replacement swap provider as a Replacement
Swap
Provider Payment.
Tax Matters Person: The Holder of the (i) Class R and (ii) Class
RX
Certificates designated as "tax matters person" of (i) Pooling-Tier
REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC and the Upper-Tier
REMIC, and (ii)
the Class X REMIC respectively, in the manner provided under
Treasury
Regulations Section 1.860F-4(d) and Treasury Regulations
Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Total Monthly Excess Spread: As to any Distribution Date, an
amount
equal to the excess if any, of (i) the interest on the Mortgage
Loans received
by the Servicers on or prior to the related Determination Date
(other than
Prepayment Interest Excesses) or advanced by the Servicers for the
related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the
amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such
Distribution
Date, (B) any Net Swap Payments to the Swap Provider and (C) any
Swap
Termination Payment (other than a Defaulted Swap Termination
Payment) payable to
the Swap Provider from Available Funds.
Transfer: Any direct or indirect transfer or sale of any
Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Loss Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting
of
(i) the Mortgage Loans and all principal outstanding as the close
of business on
the Cut-off Date (after giving effect to payments of principal due
on or prior
to the Cut-off Date, whether or not received) and interest due and
accrued on
the Mortgage Loan after the Cut-off Date (or, if the Due Date for
any Mortgage
Loan is other than on the first day of the month, after the Due
Date immediately
preceding the Cut-off Date); (ii) the Collection Accounts, the
Excess Reserve
Fund Account, the Distribution Account, and all amounts deposited
therein
pursuant to the applicable provisions of this Agreement; (iii)
property that
secured a Mortgage Loan and has been acquired by foreclosure,
deed-in-lieu of
foreclosure or otherwise; (iv) the Closing Date Deposit Amount; (v)
the Swap
Assets; (vi) the Depositor's rights under the Accredited
Agreements, the Fremont
Agreements and the Wilmington
