EXHIBIT 4
MORGAN STANLEY ABS CAPITAL I INC.,
Depositor,
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer, Securities Administrator and Servicer,
SAXON MORTGAGE SERVICES, INC.,
Servicer,
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 March 1, 2007
----------------------
MORGAN
STANLEY HOME EQUITY LOAN TRUST 2007-2
MORTGAGE PASS THROUGH CERTIFICATES,
SERIES 2007-2
<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, the
Master Servicer and the Trustee.............................
Section 3.06 Assumption or
Termination of Subservicing Agreements by
Master Servicer.............................................
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 Master Servicer 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 Master Servicer 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........................
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
ADMINISTRATION OF THE MORTGAGE LOANS BY THE MASTER SERVICER
Section 9.01 Duties of the Master
Servicer; Enforcement of Servicer's
Obligations.................................................
Section 9.02 Maintenance of
Fidelity Bond and Errors and Omissions
Insurance...................................................
Section 9.03 Representations and
Warranties of the Master Servicer........
Section 9.04 Master Servicer Events
of Default............................
Section 9.05 Waiver of
Default............................................
Section 9.06 Successor to the
Master Servicer.............................
Section 9.07 Compensation of the
Master Servicer..........................
Section 9.08 Merger or
Consolidation......................................
Section 9.09 Resignation of the
Master Servicer...........................
Section 9.10 Assignment or
Delegation of Duties by the Master Servicer....
Section 9.11 Limitation on
Liability of the Master Servicer...............
Section 9.12 Indemnification; Third
Party Claims..........................
ARTICLE X
CONCERNING THE SECURITIES ADMINISTRATOR
Section 10.01
Duties of Securities Administrator...........................
Section 10.02
Certain Matters Affecting the Securities Administrator.......
Section 10.03
Securities Administrator Not Liable for Certificates or
Mortgage
Loans..............................................
Section 10.04
Securities Administrator May Own Certificates................
Section 10.05
Securities Administrator's Fees and Expenses.................
Section 10.06
Eligibility Requirements for Securities Administrator........
Section 10.07
Resignation and Removal of Securities Administrator..........
Section 10.08
Successor Securities Administrator...........................
Section 10.09
Merger or Consolidation of Securities Administrator..........
Section 10.10
Assignment or Delegation of Duties by the Securities
Administrator...............................................
ARTICLE XI
TERMINATION
Section 11.01
Termination upon Liquidation or Purchase of the Mortgage
Loans.......................................................
Section 11.02
Final Distribution on the Certificates.......................
Section 11.03
Additional Termination Requirements..........................
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01
Amendment....................................................
Section 12.02
Recordation of Agreement; Counterparts.......................
Section 12.03
Governing Law................................................
Section 12.04
Intention of Parties.........................................
Section 12.05
Notices......................................................
Section 12.06
Severability of Provisions...................................
Section 12.07
Assignment; Sales; Advance Facilities........................
Section 12.08
Limitation on Rights of Certificateholders...................
Section 12.09
Inspection and Audit Rights..................................
Section 12.10
Certificates Nonassessable and Fully Paid....................
Section 12.11
Rule of Construction.........................................
Section 12.12
Waiver of Jury Trial.........................................
Section 12.13
Rights of the Third Parties..................................
Section 12.14
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 Trustee
Exhibit F
Form of Document Certification and Exception Report of 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 Annual Certification to be provided to the Master
Servicer
Exhibit N
[Reserved]
Exhibit O
First NLC Purchase Agreement
Exhibit P
[Reserved]
Exhibit Q
Accredited Agreements
Exhibit R
Wilmington Agreements
Exhibit S
[Reserved]
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 Servicer Reports
Exhibit AA-2 Form of
Countrywide Servicing Servicer Reports
Exhibit AA-3 Form of
Wells Fargo Servicer Reports
Exhibit BB-1 Saxon
Standard File Layout - Delinquency Reporting
Exhibit BB-2 Wells
Fargo Standard File Layout - Delinquency Reporting
Exhibit BB-3
Countrywide Servicing Standard File Layout - Delinquency
Reporting
Exhibit CC
Countrywide Amendment Regulation AB
Exhibit DD
Representations and Warranties Agreement
Exhibit EE
Interest Rate Cap Agreement
<PAGE>
THIS POOLING AND SERVICING AGREEMENT, dated as of March 1,
2007,
among MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as
depositor
(the "Depositor"), SAXON MORTGAGE SERVICES, INC., a Texas
corporation, as a
servicer ("Saxon"), WELLS FARGO BANK, NATIONAL ASSOCIATION, a
national banking
association, as a servicer ("Wells Fargo"), as master servicer (in
such
capacity, the "Master Servicer") and securities administrator (in
such capacity,
the "Securities Administrator"), 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 Securities Administrator, on behalf of the Trustee, shall
elect
that five segregated asset pools within the Trust Fund (exclusive
of (i) the
Prepayment Premiums, (ii) the Swap Assets and the Interest Rate Cap
Agreement,
(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 and
the Interest Rate Cap Agreement, (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
Interest Rate Cap Agreement, 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)
$363,828,487.98
Class PT1-2A
(2)
$10,636,089.31
Class PT1-2B
(3)
$10,636,089.31
Class PT1-3A
(2)
$10,370,230.57
Class PT1-3B
(3)
$10,370,230.57
Class PT1-4A
(2)
$10,045,338.60
Class PT1-4B
(3)
$10,045,338.60
Class PT1-5A
(2)
$9,626,916.35
Class PT1-5B
(3)
$9,626,916.35
Class PT1-6A
(2)
$9,221,536.42
Class PT1-6B
(3)
$9,221,536.42
Class PT1-7A
(2)
$8,833,376.55
Class PT1-7B
(3)
$8,833,376.55
Class PT1-8A
(2)
$8,472,833.99
Class PT1-8B
(3)
$8,472,833.99
Class PT1-9A
(2)
$8,225,280.13
Class PT1-9B
(3)
$8,225,280.13
Class PT1-10A
(2)
$7,825,282.71
Class PT1-10B
(3)
$7,825,282.71
Class PT1-11A
(2)
$16,395,113.27
Class PT1-11B
(3)
$16,395,113.27
Class PT1-12A
(2)
$11,494,275.80
Class PT1-12B
(3)
$11,494,275.80
Class PT1-13A
(2)
$6,389,374.50
Class PT1-13B
(3)
$6,389,374.50
Class PT1-14A
(2)
$5,963,235.21
Class PT1-14B
(3)
$5,963,235.21
Class PT1-15A
(2)
$5,825,256.06
Class PT1-15B
(3)
$5,825,256.06
Class PT1-16A
(2)
$5,527,424.08
Class PT1-16B
(3)
$5,527,424.08
Class PT1-17A
(2)
$14,319,164.13
Class PT1-17B
(3)
$14,319,164.13
Class PT1-18A
(2)
$9,458,300.50
Class PT1-18B
(3)
$9,458,300.50
Class PT1-19A
(2)
$4,373,527.13
Class PT1-19B
(3)
$4,373,527.13
Class PT1-20A
(2)
$4,026,258.31
Class PT1-20B
(3)
$4,026,258.31
Class PT1-21A
(2)
$3,945,210.54
Class PT1-21B
(3)
$3,945,210.54
Class PT1-22A
(2) $4,061,299.49
Class PT1-22B
(3)
$4,061,299.49
Class PT1-23A
(2)
$17,907,760.49
Class PT1-23B
(3)
$17,907,760.49
Class PT1-24A
(2)
$8,797,265.18
Class PT1-24B
(3)
$8,797,265.18
Class PT1-25A
(2)
$2,637,884.04
Class PT1-25B
(3)
$2,637,884.04
Class PT1-26A
(2)
$2,251,990.64
Class PT1-26B
(3)
$2,251,990.64
Class PT1-27A
(2)
$2,178,587.48
Class PT1-27B
(3)
$2,178,587.48
Class PT1-28A
(2)
$2,406,627.05
Class PT1-28B
(3)
$2,406,627.05
Class PT1-29A
(2)
$11,296,605.50
Class PT1-29B
(3)
$11,296,605.50
Class PT1-30A
(2)
$4,823,991.21
Class PT1-30B
(3)
$4,823,991.21
Class PT1-31A
(2)
$1,464,355.13
Class PT1-31B
(3)
$1,464,355.13
Class PT1-32A
(2)
$1,224,658.22
Class PT1-32B
(3)
$1,224,658.22
Class PT1-33A
(2)
$1,185,435.43
Class PT1-33B
(3)
$1,185,435.43
Class PT1-34A
(2)
$1,320,602.13
Class PT1-34B
(3)
$1,320,602.13
Class PT1-35A
(2)
$6,393,735.71
Class PT1-35B
(3)
$6,393,735.71
Class PT1-36A
(2)
$2,711,178.64
Class PT1-36B
(3)
$2,711,178.64
Class PT1-37A
(2)
$797,192.38
Class PT1-37B
(3)
$797,192.38
Class PT1-38A
(2)
$664,262.20
Class PT1-38B
(3)
$664,262.20
Class PT1-39A
(2)
$638,484.18
Class PT1-39B
(3)
$638,484.18
Class PT1-40A
(2)
$617,117.24
Class PT1-40B
(3)
$617,117.24
Class PT1-41A
(2)
$596,449.77
Class PT1-41B
(3)
$596,449.77
Class PT1-42A
(2)
$576,459.58
Class PT1-42B
(3)
$576,459.58
Class PT1-43A
(2)
$563,869.31
Class PT1-43B
(3)
$563,869.31
Class PT1-44A
(2)
$538,116.22
Class PT1-44B
(3)
$538,116.22
Class PT1-45A
(2)
$523,350.84
Class PT1-45B
(3)
$523,350.84
Class PT1-46A
(2)
$527,921.98
Class PT1-46B
(3)
$527,921.98
Class PT1-47A
(2)
$631,450.48
Class PT1-47B
(3)
$631,450.48
Class PT1-48A
(2)
$473,024.76
Class PT1-48B
(3)
$473,024.76
Class PT1-49A
(2)
$453,255.02
Class PT1-49B
(3)
$453,255.02
Class PT1-50A
(2)
$431,151.04
Class PT1-50B
(3)
$431,151.04
Class PT1-51A
(2)
$420,024.22
Class PT1-51B
(3)
$420,024.22
Class PT1-52A
(2)
$428,316.01
Class PT1-52B
(3)
$428,316.01
Class PT1-53A
(2)
$536,403.39
Class PT1-53B
(3)
$536,403.39
Class PT1-54A
(2)
$378,781.62
Class PT1-54B
(3)
$378,781.62
Class PT1-55A
(2)
$359,164.06
Class PT1-55B
(3)
$359,164.06
Class PT1-56A
(2)
$343,232.08
Class PT1-56B
(3)
$343,232.08
Class PT1-57A
(2)
$333,654.43
Class PT1-57B
(3)
$333,654.43
Class PT1-58A
(2)
$335,222.10
Class PT1-58B
(3)
$335,222.10
Class PT1-59A
(2)
$393,648.49
Class PT1-59B
(3)
$393,648.49
Class PT1-60A
(2)
$301,066.75
Class PT1-60B
(3)
$301,066.75
Class PT1-61A
(2)
$284,838.71
Class PT1-61B
(3)
$284,838.71
Class PT1-62A
(2)
$8,062,991.30
Class PT1-62B
(3)
$8,062,991.30
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
9.50%.
(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) 9.50%.
(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
Corresponding
Pooling-Tier
Pooling-Tier
Pooling-Tier
Corresponding
Pooling-Tier
Scheduled
REMIC-2
REMIC-2
REMIC-2 Initial
Pooling-Tier
REMIC-1 Regular
Crossover
Interest
Interest Rate Principal Amount
REMIC-2 IO
Interest Interest
Distribution Date
---------------
------------- ----------------
------------------- --------------- -----------------
<S>
<C>
<C>
<C>
<C>
<C>
Class PT2-1
(1)
$363,828,487.98
N/A
N/A
N/A
Class PT2-2A
(2)
$10,636,089.31 Class
PT2-IO-2
N/A
N/A
Class PT2-2B
(3)
$10,636,089.31
N/A
N/A
N/A
Class PT2-3A
(2)
$10,370,230.57 Class
PT2-IO-3
N/A
N/A
Class PT2-3B
(3)
$10,370,230.57
N/A
N/A
N/A
Class PT2-4A
(2)
$10,045,338.60 Class
PT2-IO-4
N/A
N/A
Class PT2-4B
(3)
$10,045,338.60
N/A
N/A
N/A
Class PT2-5A
(2)
$9,626,916.35 Class
PT2-IO-5
N/A
N/A
Class PT2-5B
(3)
$9,626,916.35
N/A
N/A
N/A
Class PT2-6A
(2)
$9,221,536.42 Class
PT2-IO-6
N/A
N/A
Class PT2-6B
(3)
$9,221,536.42
N/A
N/A
N/A
Class PT2-7A
(2)
$8,833,376.55 Class
PT2-IO-7
N/A
N/A
Class PT2-7B
(3)
$8,833,376.55
N/A
N/A
N/A
Class PT2-8A
(2)
$8,472,833.99 Class
PT2-IO-8
N/A
N/A
Class PT2-8B
(3)
$8,472,833.99
N/A
N/A
N/A
Class PT2-9A
(2)
$8,225,280.13 Class
PT2-IO-9
N/A
N/A
Class PT2-9B
(3)
$8,225,280.13
N/A
N/A
N/A
Class PT2-10A
(2)
$7,825,282.71 Class
PT2-IO-10
N/A
N/A
Class PT2-10B
(3)
$7,825,282.71
N/A
N/A
N/A
Class PT2-11A
(2)
$16,395,113.27 Class PT2-IO-11
N/A
N/A
Class PT2-11B
(3)
$16,395,113.27
N/A
N/A
N/A
Class PT2-12A
(2)
$11,494,275.80 Class
PT2-IO-12
N/A
N/A
Class PT2-12B
(3)
$11,494,275.80
N/A
N/A
N/A
Class PT2-13A
(2)
$6,389,374.50 Class
PT2-IO-13
N/A
N/A
Class PT2-13B
(3)
$6,389,374.50
N/A
N/A
N/A
Class PT2-14A
(2)
$5,963,235.21 Class
PT2-IO-14
N/A
N/A
Class PT2-14B
(3)
$5,963,235.21
N/A
N/A
N/A
Class PT2-15A
(2)
$5,825,256.06 Class
PT2-IO-15
N/A
N/A
Class PT2-15B
(3)
$5,825,256.06
N/A
N/A
N/A
Class PT2-16A
(2)
$5,527,424.08 Class
PT2-IO-16
N/A
N/A
Class PT2-16B
(3)
$5,527,424.08
N/A
N/A
N/A
Class PT2-17A
(2)
$14,319,164.13 Class
PT2-IO-17
N/A
N/A
Class PT2-17B
(3)
$14,319,164.13
N/A
N/A
N/A
Class PT2-18A
(2)
$9,458,300.50 Class
PT2-IO-18
N/A
N/A
Class PT2-18B
(3)
$9,458,300.50
N/A
N/A
N/A
Class PT2-19A
(2)
$4,373,527.13 Class
PT2-IO-19
N/A
N/A
Class PT2-19B
(3)
$4,373,527.13
N/A
N/A
N/A
Class PT2-20A
(2)
$4,026,258.31 Class
PT2-IO-20
N/A
N/A
Class PT2-20B
(3)
$4,026,258.31
N/A
N/A
N/A
Class PT2-21A
(2)
$3,945,210.54 Class
PT2-IO-21
N/A
N/A
Class PT2-21B
(3)
$3,945,210.54
N/A
N/A
N/A
Class PT2-22A
(2)
$4,061,299.49 Class
PT2-IO-22
N/A
N/A
Class PT2-22B
(3)
$4,061,299.49
N/A
N/A
N/A
Class PT2-23A
(2)
$17,907,760.49 Class
PT2-IO-23
N/A
N/A
Class PT2-23B
(3)
$17,907,760.49
N/A
N/A
N/A
Class PT2-24A
(2)
$8,797,265.18 Class
PT2-IO-24
N/A
N/A
Class PT2-24B
(3)
$8,797,265.18
N/A
N/A
N/A
Class PT2-25A
(2)
$2,637,884.04 Class
PT2-IO-25
N/A
N/A
Class PT2-25B
(3)
$2,637,884.04
N/A
N/A
N/A
Class PT2-26A
(2)
$2,251,990.64 Class
PT2-IO-26
N/A
N/A
Class PT2-26B
(3)
$2,251,990.64
N/A
N/A
N/A
Class PT2-27A
(2)
$2,178,587.48 Class
PT2-IO-27
N/A
N/A
Class PT2-27B
(3)
$2,178,587.48
N/A
N/A
N/A
Class PT2-28A
(2)
$2,406,627.05 Class
PT2-IO-28
N/A
N/A
Class PT2-28B
(3)
$2,406,627.05
N/A
N/A
N/A
Class PT2-29A
(2)
$11,296,605.50 Class
PT2-IO-29
N/A
N/A
Class PT2-29B
(3)
$11,296,605.50
N/A
N/A
N/A
Class PT2-30A
(2)
$4,823,991.21 Class
PT2-IO-30
N/A
N/A
Class PT2-30B
(3) $4,823,991.21
N/A
N/A
N/A
Class PT2-31A
(2)
$1,464,355.13 Class
PT2-IO-31
N/A
N/A
Class PT2-31B
(3)
$1,464,355.13
N/A
N/A
N/A
Class PT2-32A
(2)
$1,224,658.22 Class
PT2-IO-32
N/A
N/A
Class PT2-32B
(3)
$1,224,658.22
N/A
N/A
N/A
Class PT2-33A
(2)
$1,185,435.43 Class
PT2-IO-33
N/A
N/A
Class PT2-33B
(3)
$1,185,435.43
N/A
N/A
N/A
Class PT2-34A
(2)
$1,320,602.13 Class
PT2-IO-34
N/A
N/A
Class PT2-34B
(3)
$1,320,602.13
N/A
N/A
N/A
Class PT2-35A
(2)
$6,393,735.71 Class
PT2-IO-35
N/A
N/A
Class PT2-35B
(3)
$6,393,735.71
N/A
N/A
N/A
Class PT2-36A
(2)
$2,711,178.64 Class
PT2-IO-36
N/A
N/A
Class PT2-36B
(3)
$2,711,178.64
N/A
N/A
N/A
Class PT2-37A
(2)
$797,192.38 Class
PT2-IO-37
N/A
N/A
Class PT2-37B
(3)
$797,192.38
N/A
N/A
N/A
Class PT2-38A
(2)
$664,262.20 Class
PT2-IO-38
N/A
N/A
Class PT2-38B
(3)
$664,262.20
N/A
N/A
N/A
Class PT2-39A
(2)
$638,484.18 Class
PT2-IO-39
N/A
N/A
Class PT2-39B
(3)
$638,484.18
N/A
N/A
N/A
Class PT2-40A
(2)
$617,117.24 Class
PT2-IO-40
N/A
N/A
Class PT2-40B
(3)
$617,117.24
N/A
N/A
N/A
Class PT2-41A
(2)
$596,449.77 Class
PT2-IO-41
N/A
N/A
Class PT2-41B
(3)
$596,449.77
N/A
N/A
N/A
Class PT2-42A
(2)
$576,459.58 Class
PT2-IO-42
N/A
N/A
Class PT2-42B
(3)
$576,459.58
N/A
N/A
N/A
Class PT2-43A
(2)
$563,869.31 Class
PT2-IO-43
N/A
N/A
Class PT2-43B
(3)
$563,869.31
N/A
N/A
N/A
Class PT2-44A
(2)
$538,116.22 Class
PT2-IO-44
N/A
N/A
Class PT2-44B
(3)
$538,116.22
N/A
N/A
N/A
Class PT2-45A
(2)
$523,350.84 Class
PT2-IO-45
N/A
N/A
Class PT2-45B
(3)
$523,350.84
N/A
N/A
N/A
Class PT2-46A
(2)
$527,921.98 Class
PT2-IO-46
N/A
N/A
Class PT2-46B
(3)
$527,921.98
N/A
N/A
N/A
Class PT2-47A
(2)
$631,450.48 Class
PT2-IO-47
N/A
N/A
Class PT2-47B
(3)
$631,450.48
N/A
N/A
N/A
Class PT2-48A
(2)
$473,024.76 Class
PT2-IO-48
N/A
N/A
Class PT2-48B
(3)
$473,024.76
N/A
N/A
N/A
Class PT2-49A
(2)
$453,255.02 Class
PT2-IO-49
N/A
N/A
Class PT2-49B
(3)
$453,255.02
N/A
N/A
N/A
Class PT2-50A
(2)
$431,151.04 Class
PT2-IO-50
N/A
N/A
Class PT2-50B
(3)
$431,151.04
N/A
N/A
N/A
Class PT2-51A
(2)
$420,024.22 Class
PT2-IO-51
N/A
N/A
Class PT2-51B
(3)
$420,024.22
N/A
N/A
N/A
Class PT2-52A
(2)
$428,316.01 Class
PT2-IO-52
N/A
N/A
Class PT2-52B
(3)
$428,316.01
N/A
N/A
N/A
Class PT2-53A
(2)
$536,403.39 Class
PT2-IO-53
N/A
N/A
Class PT2-53B
(3)
$536,403.39
N/A
N/A
N/A
Class PT2-54A
(2)
$378,781.62 Class
PT2-IO-54
N/A
N/A
Class PT2-54B
(3)
$378,781.62
N/A
N/A
N/A
Class PT2-55A
(2)
$359,164.06 Class
PT2-IO-55
N/A
N/A
Class PT2-55B
(3)
$359,164.06
N/A
N/A
N/A
Class PT2-56A
(2)
$343,232.08 Class
PT2-IO-56
N/A
N/A
Class PT2-56B
(3)
$343,232.08
N/A
N/A
N/A
Class PT2-57A
(2)
$333,654.43 Class
PT2-IO-57
N/A
N/A
Class PT2-57B
(3)
$333,654.43
N/A
N/A
N/A
Class PT2-58A
(2)
$335,222.10 Class
PT2-IO-58
N/A
N/A
Class PT2-58B
(3)
$335,222.10
N/A
N/A
N/A
Class PT2-59A
(2)
$393,648.49 Class
PT2-IO-59
N/A
N/A
Class PT2-59B
(3)
$393,648.49
N/A
N/A
N/A
Class PT2-60A
(2)
$301,066.75 Class
PT2-IO-60
N/A
N/A
Class PT2-60B
(3)
$301,066.75
N/A
N/A
N/A
Class PT2-61A
(2)
$284,838.71 Class
PT2-IO-61
N/A
N/A
Class PT2-61B
(3)
$284,838.71
N/A
N/A
N/A
Class PT2-62A
(2)
$8,062,991.30 Class
PT2-IO-62
N/A
N/A
Class PT2-62B
(3)
$8,062,991.30
N/A
N/A
N/A
Class PT2-IO-2
(4)
(4)
N/A
Class PT1-2A March 2008
Class PT2-IO-3
(4)
(4)
N/A
Class PT1-3A April 2008
Class PT2-IO-4
(4)
(4)
N/A
Class PT1-4A May 2008
Class PT2-IO-5
(4)
(4)
N/A
Class PT1-5A June 2008
Class PT2-IO-6
(4)
(4)
N/A
Class PT1-6A July 2008
Class PT2-IO-7
(4)
(4)
N/A
Class PT1-7A August 2008
Class PT2-IO-8
(4)
(4)
N/A
Class PT1-8A September
2008
Class PT2-IO-9
(4)
(4)
N/A
Class PT1-9A October 2008
Class PT2-IO-10
(4)
(4)
N/A
Class PT1-10A November 2008
Class PT2-IO-11
(4)
(4)
N/A
Class PT1-11A December 2008
Class PT2-IO-12
(4)
(4)
N/A
Class PT1-12A January 2009
Class PT2-IO-13
(4)
(4)
N/A
Class PT1-13A February 2009
Class PT2-IO-14
(4)
(4)
N/A
Class PT1-14A March 2009
Class PT2-IO-15
(4)
(4)
N/A
Class PT1-15A April 2009
Class PT2-IO-16
(4)
(4)
N/A
Class PT1-16A May 2009
Class PT2-IO-17
(4)
(4)
N/A
Class PT1-17A June 2009
Class PT2-IO-18
(4)
(4)
N/A
Class PT1-18A July 2009
Class PT2-IO-19
(4)
(4)
N/A
Class PT1-19A August 2009
Class PT2-IO-20
(4)
(4)
N/A
Class PT1-20A September 2009
Class PT2-IO-21
(4)
(4)
N/A
Class PT1-21A October 2009
Class PT2-IO-22
(4)
(4)
N/A
Class PT1-22A November 2009
Class PT2-IO-23
(4)
(4)
N/A
Class PT1-23A December 2009
Class PT2-IO-24
(4)
(4)
N/A
Class PT1-24A January 2010
Class PT2-IO-25
(4)
(4)
N/A
Class PT1-25A February 2010
Class PT2-IO-26
(4)
(4)
N/A
Class PT1-26A March 2010
Class PT2-IO-27
(4)
(4)
N/A
Class PT1-27A April 2010
Class PT2-IO-28
(4)
(4)
N/A
Class PT1-28A May 2010
Class PT2-IO-29
(4)
(4)
N/A
Class PT1-29A June 2010
Class PT2-IO-30
(4)
(4)
N/A
Class PT1-30A July 2010
Class PT2-IO-31
(4)
(4)
N/A
Class PT1-31A August 2010
Class PT2-IO-32
(4)
(4)
N/A
Class PT1-32A September 2010
Class PT2-IO-33
(4)
(4)
N/A
Class PT1-33A October 2010
Class PT2-IO-34
(4)
(4)
N/A
Class PT1-34A November 2010
Class PT2-IO-35
(4)
(4)
N/A
Class PT1-35A December 2010
Class PT2-IO-36
(4)
(4)
N/A
Class PT1-36A January 2011
Class PT2-IO-37
(4)
(4)
N/A
Class PT1-37A February 2011
Class PT2-IO-38
(4)
(4)
N/A
Class PT1-38A March 2011
Class PT2-IO-39
(4)
(4)
N/A
Class PT1-39A April 2011
Class PT2-IO-40
(4)
(4)
N/A
Class PT1-40A May 2011
Class PT2-IO-41
(4)
(4)
N/A
Class PT1-41A June 2011
Class PT2-IO-42
(4)
(4)
N/A
Class PT1-42A July 2011
Class PT2-IO-43
(4)
(4)
N/A
Class PT1-43A August 2011
Class PT2-IO-44
(4)
(4)
N/A
Class PT1-44A September 2011
Class PT2-IO-45
(4)
(4)
N/A
Class PT1-45A October 2011
Class PT2-IO-46
(4)
(4)
N/A
Class PT1-46A November 2011
Class PT2-IO-47
(4)
(4)
N/A
Class PT1-47A December 2011
Class PT2-IO-48
(4)
(4)
N/A
Class PT1-48A January 2012
Class PT2-IO-49
(4)
(4)
N/A
Class PT1-49A February 2012
Class PT2-IO-50
(4)
(4)
N/A
Class PT1-50A March 2012
Class PT2-IO-51
(4)
(4)
N/A
Class PT1-51A April 2012
Class PT2-IO-52
(4)
(4)
N/A
Class PT1-52A May 2012
Class PT2-IO-53
(4)
(4)
N/A
Class PT1-53A June 2012
Class PT2-IO-54
(4)
(4)
N/A
Class PT1-54A July 2012
Class PT2-IO-55
(4)
(4)
N/A
Class PT1-55A August 2012
Class PT2-IO-56
(4)
(4)
N/A
Class PT1-56A September 2012
Class PT2-IO-57
(4)
(4)
N/A
Class PT1-57A October 2012
Class PT2-IO-58
(4)
(4)
N/A
Class PT1-58A November 2012
Class PT2-IO-59
(4)
(4)
N/A
Class PT1-59A December 2012
Class PT2-IO-60
(4)
(4)
N/A
Class PT1-60A January 2013
Class PT2-IO-61
(4)
(4)
N/A
Class PT1-61A 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
(which,
for the avoidance of doubts shall not include any Distribution
Date prior
to the Distribution Date in March 2008), 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 Interest 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 Distribution
Date in
February 2008, through and including the Corresponding
Scheduled
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. From
and
including
the Distribution Date in March 2008, 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)
the
Pooling-Tier REMIC-1 Interest Rate for the Corresponding
Pooling-Tier
REMIC-1
Regular Interest.
After the Corresponding Scheduled 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.
Corresponding
Lower-Tier
Upper-Tier
Lower-Tier
Interest
Initial Lower-Tier
REMIC Regular
REMIC Interest
Rate
Principal Amount
Interest
----------------- ------------- --------------------------------
---------------
Class LT-A-1
(1) 1/2
initial Class Certificate
A-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-2
(1) 1/2
initial Class Certificate
A-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-3
(1) 1/2
initial Class Certificate
A-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-A-4
(1) 1/2
initial Class Certificate
A-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-1
(1) 1/2
initial Class Certificate
M-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-2
(1) 1/2
initial Class Certificate
M-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-3
(1) 1/2
initial Class Certificate
M-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-4
(1) 1/2
initial Class Certificate
M-4
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-5
(1) 1/2
initial Class Certificate
M-5
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-M-6
(1) 1/2
initial Class Certificate
M-6
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-1
(1) 1/2
initial Class Certificate
B-1
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-2
(1) 1/2
initial Class Certificate
B-2
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-B-3
(1) 1/2
initial Class Certificate
B-3
Balance of Corresponding
Upper-Tier Regular Interest
Class LT-Accrual (1)
1/2 Pool
Stated Principal
N/A
Balance plus 1/2 Subordinated
Amount
Class LT-IO
(2)
(2)
N/A
Class LT-R
(3)
(3)
N/A
----------------
(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.
Corresponding
Upper-Tier
Upper-Tier
Initial Principal
Class of
REMIC Interest
Interest Rate Upper-Tier
Amount Certificates
---------------------- ---------------- ----------------------
----------------
Class A-1
(1)
$344,180,000
Class A-1
Class A-2
(1)
$105,880,000
Class A-2
Class A-3
(1)
$146,430,000
Class A-3
Class A-4
(1)
$ 90,890,000
Class A-4
Class M-1
(1)
$ 31,507,000
Class M-1
Class M-2
(1)
$ 28,844,000
Class M-2
Class M-3
(1)
$ 18,194,000
Class M-3
Class M-4
(1)
$ 15,088,000
Class M-4
Class M-5
(1)
$ 15,088,000
Class M-5
Class M-6
(1)
$ 13,757,000
Class M-6
Class B-1
(1)
$ 13,313,000
Class B-1
Class B-2
(1)
$ 11,982,000
Class B-2
Class B-3
(1)
$ 11,094,000
Class B-3
Class UT-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
$41,272,385.12
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)
$344,180,000
Class A-2(6)
(1)
$105,880,000
Class A-3(6)
(1)
$146,430,000
Class A-4(6)
(1)
$90,890,000
Class M-1(6)
(2)
$31,507,000
Class M-2(6)
(2)
$28,844,000
Class M-3(6)
(2)
$18,194,000
Class M-4(6)
(2)
$15,088,000
Class M-5(6)
(2)
$15,088,000
Class M-6(6)
(2)
$13,575,000
Class B-1(6)
(2)
$13,313,000
Class B-2(6)
(2)
$11,982,000
Class B-3(6)
(2)
$11,094,000
Class X
(3)
(3)
Class R
(4)
(4)
Class RX
(5)
(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
Interest
Rate Cap 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
Securities
Administrator 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 in favor 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
Securities Administrator 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:
Aames: Aames Capital Corporation, a California corporation, and
its
successors in interest
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,
Accredited and Aames.
Accredited Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Accredited Purchase Agreement for which
Accredited or
Aames is identified as Originator on the Mortgage Loan
Schedule.
Accredited Purchase Agreement: With respect to Accredited
Mortgage
Loans, the Eighth Amended and Restated Mortgage Loan Purchase and
Warranties
Agreement, dated as of August 1, 2006, by and between Accredited
and the Sponsor
as amended by the Amendment and Joinder to the Eighth Amended and
Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of
December 21, 2006
among Accredited, Aames and the Sponsor, solely insofar as such
agreement
relates to the Accredited Mortgage Loans.
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 12.07.
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 12.07.
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 Securities
Administrator 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 Securities
Administrator (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 11.01; 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 Master Servicer, the Securities
Administrator
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.
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, California, Delaware, Iowa, Maryland, Minnesota, New
Jersey, New York
or Texas (b) a State in which any Servicer's servicing operations
are located,
or (c) the State in which the Securities Administrator's operations
are located,
are authorized or obligated by law or executive order to be
closed.
Cap Provider: Morgan Stanley Capital Services Inc., a Delaware
corporation, and its successors in interest.
Certificate: Any one of the Certificates executed by the
Securities
Administrator 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
Securities
Administrator 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) 54.90% 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 $4,437,597.
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) 85.50% 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 $4,437,597.
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) 88.20% 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
$4,437,597.
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) 90.70% 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 $4,437,597.
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) 62.00%
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
$4,437,597.
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) 68.50% 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
$4,437,597.
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) 72.60% 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 $4,437,597.
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) 76.00% 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
$4,437,597.
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) 79.40% 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 $4,437,597.
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) 82.50% 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
$4,437,597.
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: April 3, 2007.
Closing Date Deposit Amount: $3,780.00 (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: With respect to the Securities
Administrator, the principal office of the Securities Administrator
at 9062 Old
Annapolis Road, Columbia, Maryland 21045-1951, Attention: Client
Manager MSHEL
2007-2 (or, for the purposes of the registration of transfers or
exchanges of
Certificates, as set forth in Section 5.06), or such other address
as the
Securities Administrator may designate from time to time by notice
to the
Certificateholders. 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-MS07X2, facsimile no.
(714)
247-6285, and which is the address to which notices to and
correspondence with
the Trustee should be directed.
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 of
Class Designation
Regular Interest
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
------------------------------
-----------------------------------------------
April 2009 through
March 2010
1.600% for the first month, plus an additional
1/12th of 2.000% for each month thereafter
(e.g., 2.600% in October 2009)
April 2010 through
March 2011
3.600% for the first month, plus an additional
1/12th of 2.050% for each month thereafter
(e.g., 4.625% in October 2010)
April 2011 through
March 2012
5.650% for the first month, plus an additional
1/12th of 1.650% for each month thereafter
(e.g., 6.475% in October 2011)
April 2012 through
March 2013
7.300% for the first month, plus an additional
1/12th of 0.900% for each month thereafter
(e.g., 7.750% in October 2012)
April 2013 through
March 2014
8.200% for the first month, plus an additional
1/12th of 0.050% for each month thereafter
(e.g., 8.225% in October 2013)
April 2014 and thereafter
8.250%
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.
Cut-off Date: March 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 35.47% 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
42.10% 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 Securities Administrator, 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 Securities Administrator pursuant to Section
3.07(d) in the
name of the Securities Administrator for the benefit of the
Certificateholders
and designated "Wells Fargo Bank, National Association, in trust
for registered
Holders of Morgan Stanley Home Equity Loan Trust 2007-2 Mortgage
Pass-Through
Certificates, Series 2007-2." 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 April
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
Securities
Administrator. 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 Securities Administrator) (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 Securities Administrator pursuant to Sections
3.07(b) and
3.07(c) in the name of the Securities Administrator for the benefit
of the
Regular Certificateholders and designated "Wells Fargo Bank,
National
Association, in trust for registered Holders of Morgan Stanley Home
Equity Loan
Trust 2007-2, Mortgage Pass-Through Certificates, Series 2007-2."
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 and the Master Servicer Fee
Rate.
Expense Fees: As to each Mortgage Loan, the sum of the
Servicing
Fee, the Master Servicer 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 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
April 2037.
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 12.05(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 2007-2, or such other address as
Fitch may
hereafter furnish to the Depositor, the Securities Administrator,
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.
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 Cap Agreement: The interest rate cap agreement
relating to the Offered Certificates, dated as of the Closing Date,
between the
Cap Provider and the Securities Administrator, a copy of which is
attached
hereto as Exhibit EE.
Interest Rate Cap Payment: With respect to the Distribution
Date,
the payment, if any, required to be made by the Cap Provider under
the Interest
Rate Cap Agreement with respect to such Distribution Date.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between the Swap Provider and the
Securities
Administrator (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 and the Master Servicer, 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 Securities Administrator
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 Securities
Administrator 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
Securities
Administrator (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
Securities
Administrator 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 Master Servicer 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.
Master Servicer: Wells Fargo, and if a successor master servicer
is
appointed hereunder, such successor.
Master Servicer Event of Default: As defined in Section 9.04.
Master Servicing Fee: As to each Mortgage Loan and any
Distribution
Date, an amount equal to one month's interest at the related Master
Servicing
Fee Rate on the 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 (or as of the Closing Date in the case of the first
Distribution Date)
or, in the event of any payment of interest which accompanies a
Principal
Prepayment in Full made by the Mortgagor, interest at the Master
Servicing Fee
Rate on the Stated Principal Balance of such Mortgage Loan for the
period
covered by such payment of interest.
Master Servicing Fee Rate: With respect to any Mortgage Loan, a
per
annum rate equal to 0.014%.
Master Servicing Officer: Any officer of the Master Servicer
involved in, or responsible for, the administration and master
servicing of the
Mortgage Loans.
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.
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 12.05(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 Securities
Administrator,
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 Master Servicer 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.
The Master Servicer, upon request, shall provide a copy of the
Mortgage Loan
Schedule, and any amendments, supplements or modifications thereto,
to the
Trustee promptly upon receipt of such request.
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 11.02 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 the Securities Administrator, as applicable (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 5% or less of the Cut-off Date
Pool
Principal Balance.
Originators: The Responsible Party, Accredited and Wilmington.
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 Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which
other Certificates have been executed and delivered by the
Securities Administrator 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, 0.1000%; Class A-2, 0.1700%; Class A-3,
0.2300%; Class
A-4, 0.3500%; Class M-1, 0.4000%; Class M-2, 0.4800%; Class M-3,
0.6700%; Class
M-4, 1.3000%; Class M-5, 1.5000%; Class M-6, 1.8000%; Class B-1,
2.0000%; 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, 0.2000%; Class A-2, 0.3400%; Class A-3, 0.4600%; Class A-4,
0.7000%; Class
M-1, 0.6000%; Class M-2, 0.7200%; Class M-3, 1.0050%; Class M-4,
1.9500%; Class
M-5, 2.2500%; Class M-6, 2.7000%; Class B-1, 3.0000%; 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 Securities Administrator 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 Securities Administrator 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 Securities
Administrator, 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.
Prime Rate: The prime rate announced to be in effect from time
to
time, as published as the average rate in The Wall Street Journal
(Northeast
edition).
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
April 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 11.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary
Statement.
Prospectus Supplement:
The Prospectus Supplement, dated April 2,
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 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
Securities
Administrator. 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 12.05(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
Securities
Administrator, 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 April 3, 2007, between the
Depositor and the
Sponsor, a copy of which is attached hereto as Exhibit DD.
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 Securities Administrator to the date of
repurchase, (iii) all
unreimbursed Servicing Advances, (iv) all costs and expenses
incurred by the
Master Servicer or the Trustee, as the case may be, arising out of
or based upon
such breach, including without limitation, costs and expenses
relating to the
Master Servicer's or 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
or
Wilmington, the repurchase price specified in the Accredited
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 and Wilmington is obligated to
make certain
payments for material breaches of representations and warranties as
further set
forth in the Accredited Agreements and the Wilmington Agreements,
as applicable.
Request for Release: The Request for Release submitted by the
applicable Servicer to the Trustee, substantially in the form of
Exhibit J.
Residual Certificates: As specified in the Preliminary
Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator or the Master Servicer, 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, the
Securities
Administrator or the Master Servicer, 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.
Securities Administrator: Wells Fargo Bank, National
Association,
and its successors in interest, if any, and, if a successor
securities
administrator is appointed hereunder, such successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution
Account, the
period commencing on the Business Day immediately preceding such
Distribution
Date and ending on such Distribution Date.
Securities Administrator Information: As defined in Section
8.12(d).
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, 45.10%.
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 and liquidation of any REO
Property
(including, with respect to Saxon, reasonable fees paid to any
independent
contractor in connection therewith) 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
Trustee 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 Master Servicer and 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
12.01, 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 4.65% of the Cut-off Date Pool Principal Balance. On and
after the
Stepdown Date, an amount equal to 9.30% 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 12.05(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
2007-2, or such other address as Standard & Poor's may
hereafter furnish to the
Depositor, the Securities Administrator, 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 Securities Administrator 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 April 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
Securities
Administrator or the Trustee, 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 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
and the
Wilmington Agreements (solely insofar as such agreements relate to
the
Accredited Mortgage Loans or the Wilmington Mortgage Loans, as
applicable) and
the Representations and Warranties Agreement; (vii) the Interest
Rate Cap
Agreement; and (viii) all proceeds of the conversion, voluntary or
involuntary,
of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2,
the
Lower-Tier REMIC, the Upper-Tier REMIC or the Class X REMIC, as
applicable.
Trustee: Deutsche Bank National Trust Company, a national
banking
association, and its successors in interest and, if a successor
trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed under footnote 1
of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed.
Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to
the
Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any Class
of
Certificates, the sum of (a) the portion of the Accrued Certificate
Interest
Distribution Amount from Distribution Dates prior to the current
Distribution
Date remaining unpaid immediately prior to the current Distribution
Date and (b)
interest on the amount in clause (a) above at the applicable
Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the
excess of (i)
the Applied Realized Loss Amounts with respect to such Class over
(ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss
Amounts on
all previous Distribution Dates, and (b) the amount by which the
Class
Certificate Balance of such Class has been increased due to the
distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any
amounts
distributed to a Class of Subordinated Certificates in respect of
any Unpaid
Realized Loss Amount will not be applied to reduce the Class
Certificate Balance
of such Class.
Upper-Tier 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 Upper-Tier Interest Rate for the Class of
Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier
REMIC WAC Rate,
the excess, if any, of (i) the amount of interest such Class of
Upper-Tier
Regular Interest would otherwise be entitled to receive on such
Distribution
Date had such Upper-Tier REMIC Regular Interest not been subject to
the
Upper-Tier REMIC WAC Rate, over (ii) the amount of interest payable
on such
Class of Upper--Tier Regular Interest on such Distribution Date
taking into
account the Upper-Tier REMIC WAC Rate and (B) the Upper-Tier
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
applicable Upper-Tier Interest Rate for such Class of Certificates
for such
Distribution Date, without giving effect to the Upper-Tier REMIC
WAC Rate.
Upper-Tier Interest Rate: As described in the Preliminary
Statement.
Upper-Tier Regular Interest: As described in the Preliminary
Statement.
Upper-Tier REMIC: As described in the Preliminary Statement.
Upper-Tier REMIC WAC Rate: For any Distribution Date, the
weighted
average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests
(other than the Class LT-IO Interest) as of the first day of the
related
Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal
Amounts of such Lower-Tier Regular Interests as of the first day of
the related
Interest Accrual Period.
U.S. Person: (i) A citizen or resident of the United States; (ii)
a
corporation (or entity treated as a corporation for tax purposes)
created or
organized in the United States or under the laws of the United
States or of any
State thereof, including, for this purpose, the District of
Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes)
organized in
the United States or under the laws of the United States or of any
State
thereof, including, for this purpose, the District of Columbia
(unless provided
otherwise by future Treasury regulations); (iv) an estate whose
income is
includible in gross income for United States income tax purposes
regardless of
its source; or (v) a trust, if a court within the United States is
able to
exercise primary supervision over the administration of the trust
and one or
more U.S. Persons have authority to control substantial decisions
of the trust.
Notwithstanding the last clause of the preceding sentence, to the
extent
provided in Treasury regulations, certain trusts in existence on
August 20,
1996, and treated as U.S. Persons prior to such date, may elect to
continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date
of
determination, (a) 1% of all Voting Rights shall be allocated to
the Class X
Certificates, if any (such Voting Rights to be allocated among the
Holders of
Certificates of each such Class in accordance with their respective
Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the
Class P
Certificates, if any, and (c) the remaining Voting Rights shall be
allocated
among Holders of the remaining Classes of Certificates in
proportion to the
Certificate Balances of their respective Certificates on such
date.
WAC Cap: With respect to the Mortgage Loans as of any
Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then
in effect on
the beginning of the related Due Period on the Mortgage Loans minus
the Swap
Payment Rate, 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 only, the
WAC Cap shall
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.
Wells Fargo: Wells Fargo Bank, National Association, a national
banking association, and its successors in interest.
Wilmington: Wilmington Finance, Inc., a Delaware corporation,
and
its successors in interest.
Wilmington Agreements: The Wilmington Purchase Agreement and
the
Wilmington Assignment Agreement, each of which are attached hereto
as Exhibit R.
Wilmington Assignment Agreement: The Assignment and Recognition
Agreement, dated as of the Closing Date, among the Sponsor, the
Depositor and
Wilmington.
Wilmington Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Wilmington Purchase Agreement for which
Wilmington is
identified as Originator on the Mortgage Loan Schedule.
Wilmington Purchase Agreement: With respect to Mortgage Loans
purchased by the Sponsor prior to July 1, 2006 (as set forth in the
Mortgage
Loan Schedule), the Third Amended and Restated Mortgage Loan
Purchase and
Warranties Agreement, dated as of December 1, 2005, by and between
Wilmington,
AIG Federal Savings Bank and the Sponsor, and with respect to
Mortgage Loans
purchased by the Sponsor on or after July 1, 2006 (as set forth in
the Mortgage
Loan Schedule), the Fourth Amended and Restated Mortgage Loan
Purchase and
Warranties Agreement, dated as of July 1, 2006, by and between
Wilmington and
the Sponsor, in each case solely insofar as such agreement relates
to the
Wilmington Mortgage Loans.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells,
transfers,
assigns, sets over and otherwise conveys to the Trustee for the
benefit of the
Certificateholders, without recourse, all the right, title and
interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of
the Trust,
hereby accepts the Trust Fund. On the Closing Date, the Depositor
shall pay,
without any right of reimbursement from the Trust, to the Cap
Provider the
"Fixed Amount" (as defined in the Interest Rate Cap Agreement) due
and payable
to the Cap Provider pursuant to the terms of the Interest Rate Cap
Agreement.
(b) In connection with the transfer and assignment of each
Mortgage
Loan, the Depositor has delivered or caused to be delivered to the
Trustee, for
the benefit of the Certificateholders the following documents or
instruments
with respect to each Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening
endorsements,
endorsed
"Pay to the order of _____________, without recourse" and
signed
(which may
be by facsimile signature) in the name of the last endorsee by
an
authorized officer. To the extent that there is no room on the face
of
the
Mortgage Note for endorsements, the endorsement may be contained on
an
allonge,
unless the Trustee is advised in writing by the applicable
Originator
(if required by the applicable Purchase Agreement) or the
Depositor,
as applicable, that state law does not so allow;
(ii) the original of any guaranty executed in connection with
the
Mortgage
Note if any;
(iii) the original Mortgage with evidence of recording thereon or
a
certified
true copy of such Mortgage submitted for recording. If, in
connection
with any Mortgage Loan, the original Mortgage cannot be
delivered with
evidence of recording thereon on or prior to the Closing
Date
because of a delay caused by the public recording office where
such
Mortgage
has been delivered for recordation or because such Mortgage has
been lost
or because such public recording office retains the original
recorded
Mortgage, the applicable Originator, the Depositor, title
company,
escrow company or attorney, as applicable, shall deliver or
cause
to be
delivered to the Trustee a photocopy of such Mortgage certified
by
the
applicable Originator or the Depositor, title company, escrow
company
or
attorney, as applicable, to be a true and complete copy of such
Mortgage
and shall forward to the Trustee such original recorded
Mortgage
within 14
days following the applicable Originator's or the Depositor's
receipt of
such Mortgage from the applicable public recording office; or
in the
case of a Mortgage where a public recording office retains the
original
recorded Mortgage or in the case where a Mortgage is lost after
recordation in a public recording office, a copy of such
Mortgage
certified
by such public recording office to be a true and complete copy
of the
original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation
or
extension
agreements, with evidence of recording thereon or a certified
true copy
of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed
in blank, which may be included in a blanket assignment or
assignments (except with respect to MERS Designated Mortgage
Loans)
(vi) the originals of all intervening assignments of Mortgage
(if
any)
evidencing a complete chain of assignment from the applicable
originator
(or MERS with respect to each MERS Designated Mortgage Loan) to
the last
endorsee with evidence of recording thereon or a certified true
copy of
such intervening assignments of Mortgage submitted for
recording,
or if any
such intervening assignment has not been returned from the
applicable
recording office or has been lost or if such public recording
office
retains the original recorded assignments of Mortgage, the
Responsible Party or the Depositor, as applicable, shall deliver or
cause
to be
delivered a photocopy of such intervening assignment, certified
by
the
Responsible Party, originator, Depositor, title company, escrow
company or
attorney, as applicable, to be a true and complete copy of such
intervening assignment and shall forward to the Trustee such
original
recorded
intervening assignment within 14 days following the Responsible
Party or
the Depositor's receipt of such from the applicable public
recording
office; or in the case of an intervening assignment where a
public
recording office retains the original recorded intervening
assignment
or in the case where an intervening assignment is lost after
recordation in a public recording office, a copy of such
intervening
assignment
certified by such public recording office to be a true and
complete
copy of the original recorded intervening assignment;
(vii) the original mortgagee title insurance policy, a photocopy
of
the
mortgage title insurance policy, or attorney's opinion of title
and
abstract
of title, or, in the event such title policy is unavailable, a
copy of
the related policy binder or commitment for title from the
title
insurance
company; and
(viii) the original of any security agreement, chattel mortgage
or
equivalent
document executed in connection with the Mortgage (if
provided).
The Depositor will use its reasonable efforts to assist the
Trustee
in enforcing the obligations of the Responsible Party under this
Agreement, the
obligations of Accredited under the Accredited Agreements and the
obligations of
Wilmington under the Wilmington Agreements.
With respect to the Mortgage Loans (other than the First NLC
Mortgage Loans), the Depositor shall cause to be delivered to the
Trustee the
applicable recorded document promptly upon receipt from the
respective recording
office. With respect to the First NLC Mortgage Loans, the
Responsible Party
shall cause to be delivered to the Trustee the applicable recorded
document
promptly upon receipt from the respective recording office.
If any Mortgage has been recorded in the name of Mortgage
Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment
of Mortgage in
favor of the Trustee will be required to be prepared or delivered
and instead,
the applicable Servicer shall take all reasonable actions as are
necessary at
the expense of the applicable Originator to the extent permitted
under the
related Purchase Agreement and otherwise at the expense of the
Depositor to
cause the Trust to be shown as the owner of the related Mortgage
Loan on the
records of MERS for the purpose of the system of recording
transfers of
beneficial ownership of mortgages maintained by MERS.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the Trustee additional original
documents,
additional documents evidencing an assumption, modification,
consolidation or
extension of a Mortgage Loan in accordance with the terms of this
Agreement upon
receipt of such documents. All such mortgage documents held by the
Trustee as to
each Mortgage Loan shall constitute the "Custodial File".
On or prior to the Closing Date, the Depositor shall cause to
be
delivered to the Trustee, Assignments of Mortgages, in blank, for
each Mortgage
Loan (other than a First NLC Mortgage Loan). The Depositor shall
cause such
Assignment of Mortgages and complete recording information with
respect thereto
to be provided to the applicable Servicer in a reasonably
acceptable manner. On
or prior to the Closing Date, the Responsible Party shall deliver
to the Trustee
Assignments of Mortgages, in blank, for each First NLC Mortgage
Loan. The
Responsible Party shall cause such Assignment of Mortgages and
complete
recording information with respect thereto to be provided to the
applicable
Servicer in a reasonably acceptable manner. No later than thirty
(30) Business
Days following the later of the Closing Date and the date of
receipt by the
applicable Servicer of the complete recording information for a
Mortgage and
except as set forth below, such Servicer shall promptly submit or
cause to be
submitted for recording, at the expense of the applicable
Originator as required
pursuant to the related Purchase Agreement and at no expense to the
Trust Fund,
the Trustee, the Servicers, or the Depositor, in the appropriate
public office
for real property records, each Assignment of Mortgage referred to
in Section
2.01(b)(v). Notwithstanding the foregoing, however, for
administrative
convenience and facilitation of servicing and to reduce closing
costs, the
Assignments of Mortgage shall not be required to be completed and
submitted for
recording with respect to any Mortgage Loan (i) if the Trustee and
each Rating
Agency have received an Opinion of Counsel, satisfactory in form
and substance
to the Trustee and each Rating Agency to the effect that the
recordation of such
Assignments of Mortgage in any specific jurisdiction is not
necessary to protect
the Trustee's interest in the related Mortgage Note, (ii) if such
Mortgage Loan
is a MERS Designated Mortgage Loan or (iii) if the Rating Agencies
have each
notified the Depositor in writing that not recording any such
Assignments of
Mortgage would not cause the initial ratings on any Offered
Certificates to be
downgraded or withdrawn; provided, however, that no Servicer shall
be held
responsible or liable for any loss that occurs because an
Assignment of Mortgage
was not recorded, but only to the extent the applicable Servicer
does not have
prior knowledge of the act or omission that causes such loss.
Unless the
Depositor gives the Servicers notice to the contrary, the Depositor
is deemed to
have given the Servicers notice that the condition set forth in
clause (iii)
above is applicable. However, with respect to the Assignments of
Mortgage
referred to in clauses (i) and (ii) above, if foreclosure
proceedings occur
against a Mortgaged Property, the applicable Servicer shall record
such
Assignment of Mortgage at the expense of the related Originator
(and at no
expense to such Servicer) as required pursuant to the related
Purchase
Agreement. If the Assignment of Mortgage is to be recorded, the
Mortgage shall
be assigned to "Deutsche Bank National Trust Company, as trustee
under the
Pooling and Servicing Agreement dated as of March 1, 2007, Morgan
Stanley Home
Equity Loan Trust 2007-2." In the event that any such Assignment of
Mortgage is
lost or returned unrecorded because of a defect therein, the
Depositor (with
respect to the Mortgage Loans (other than the First NLC Mortgage
Loans) or the
Responsible Party (with respect to the First NLC Mortgage Loans)
shall promptly
cause to be delivered a substitute Assignment of Mortgage to cure
such defect
and thereafter cause each such assignment to be duly recorded. If
there is such
a defect with respect to an Accredited Mortgage Loan or a
Wilmington Mortgage
Loan of which the Trustee has received written notice, the Trustee
shall pursue
all legal remedies available to the Trustee to enforce the rights
of the Trust
as "Sponsor" under the Accredited Agreements or the Wilmington
Agreements, as
applicable, if the Trustee has received written notice from the
Depositor to
pursue such remedies.
In the event that such original or copy of any document
submitted
for recordation to the appropriate public recording office is not
so delivered
to the Trustee within one year following the date such Mortgage
Loan was sold by
the applicable Originator to the Sponsor, and in the event that
such Originator
does not cure such failure within 30 days of discovery or receipt
of written
notification of such failure from the Depositor, the Depositor
shall cause the
such Originator (in the case of a Mortgage Loans other than the
First NLC
Mortgage Loan) to repurchase such Mortgage Loan or upon the request
of the
Depositor, the Responsible Party (in the case of a First NLC
Mortgage Loans)
shall repurchase such Mortgage Loan at the price and in the manner
specified in
Section 2.03. The foregoing repurchase obligation shall not apply
in the event
that the applicable Originator cannot deliver such original or copy
of any
document submitted for recordation to the appropriate public
recording office
within the specified period due to a delay caused by the recording
office in the
applicable jurisdiction; provided, that such Originator shall
instead deliver a
recording receipt of such recording office or, if such recording
receipt is not
available, an officer's certificate of an officer of the applicable
Originator
or the Depositor (in the case of a Mortgage Loan other than a First
NLC Mortgage
Loan) or the Responsible Party (in the case of a First NLC Mortgage
Loan),
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this
Section
2.01, in those instances where the public recording office retains
or loses the
original Mortgage or assignment after it has been recorded, the
obligations of
the Depositor or the Responsible Party, as applicable shall be
deemed to have
been satisfied upon delivery by the applicable Originator to the
Trustee prior
to the Closing Date of a copy of such Mortgage or assignment, as
the case may
be, certified (such certification to be an original thereof) by the
public
recording office to be a true and complete copy of the recorded
original
thereof.
On or prior to the Closing Date, the Depositor shall deliver to
the
Trustee a copy of the Data Tape Information in an electronic,
machine readable
medium in a form acceptable to the Depositor or the Trustee.
(c) The Depositor does hereby establish, pursuant to the
further
provisions of this Agreement and the laws of the State of New York,
an express
trust (the "Trust") to be known, for convenience, as "MORGAN
STANLEY HOME EQUITY
LOAN TRUST 2007-2" and Deutsche Bank National Trust Company is
hereby appointed
as Trustee in accordance with the provisions of this Agreement. The
parties
hereto acknowledge and agree that it is the policy and intention of
the Trust to
acquire only Mortgage Loans meeting the requirements set forth in
this
Agreement, including without limitation, the representation and
warranty set
forth in paragraph (aaa) of Schedule IV to this Agreement. The
Trust's fiscal
year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and
the
Trustee on behalf of the Trust is hereby authorized, to accept the
sale,
transfer, assignment, set over and conveyance by the Depositor to
the Trust of
all the right, title and interest of the Depositor in and to the
Trust Fund
(including, without limitation, the Mortgage Loans, the Accredited
Agreements,
the Wilmington Agreements and the Representations and Warranties
Agreement)
pursuant to Section 2.01(a). The Securities Administrator on behalf
of the Trust
is hereby directed to enter into the Interest Rate Swap Agreement
and the
Interest Rate Cap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans.
The
Trustee shall acknowledge, on the Closing Date, receipt of the
documents
identified in the Initial Certification in the form annexed hereto
as Exhibit E,
and declares that it holds and will hold such documents and the
other documents
delivered to it pursuant to Section 2.01, and that it holds or will
hold such
other assets as are included in the Trust Fund, in trust for the
exclusive use
and benefit of all present and future Certificateholders. The
Trustee shall
maintain possession of the related Mortgage Notes in the State of
California
unless otherwise permitted by the Rating Agencies. Furthermore, the
Trustee
solely in its capacity as trustee hereunder, and on behalf of the
Trust, hereby
assumes the obligations of the Depositor under the Representations
and
Warranties Agreement from and after the Closing Date and solely
insofar as they
relate to the Mortgage Loans.
As provided above, in connection with the Closing Date, the
Trustee
shall be required to deliver via facsimile or electronically in
.pdf format
(with original to follow the next Business Day) to the Depositor
and the
Servicers an Initial Certification on the Closing Date, certifying
receipt of a
Mortgage Note and Assignment of Mortgage for each applicable
Mortgage Loan. The
Trustee shall not be responsible to verify the validity,
sufficiency,
genuineness, perfection or priority of any document in any
Custodial File.
Within 90 days after the Closing Date, the Trustee shall, for
the
benefit of the Holders of the Certificates, ascertain that all
documents
identified in the Document Certification and Exception Report in
the form
attached hereto as Exhibit F are in its possession, and shall
deliver to the
Depositor and the Servicers, a Document Certification and Exception
Report, in
the form annexed hereto as Exhibit F, to the effect that, as to
each applicable
Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such
certification
as an exception and not covered by such certification): (i) all
documents
identified in the Document Certification and Exception Report and
required to be
reviewed by it are in its possession; (ii) such documents have been
reviewed by
it and appear regular on their face and relate to such Mortgage
Loan; (iii)
based on its examination and only as to the foregoing documents,
the information
set forth in items (1), (2), (7) and (9) of the Mortgage Loan
Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such
Mortgage Loan
accurately reflects the information set forth in the Custodial
File; and (iv)
each Mortgage Note has been endorsed as provided in Section 2.01 of
this
Agreement. The Trustee shall not be responsible to verify the
validity,
sufficiency or genuineness of any document in any Custodial
File.
Within 90-days after the Closing Date, the applicable Servicer
(for
the benefit of the Holders of the Certificates, based solely on the
list of MERS
Designated Mortgage Loans and screen printouts from the MERS System
provided to
such Servicer by each applicable Originator no later than 45 days
after the
Closing Date) shall confirm, on behalf of the Trust, that the
Trustee is shown
as the Investor with respect to each MERS Designated Mortgage Loan
on such
screen printouts. If the Trustee is not shown as the Investor with
respect to
any MERS Designated Mortgage Loans on such screen printouts, the
applicable
Servicer shall promptly notify the related Originator of such fact,
and such
Person shall then either cure such defect or repurchase such
Mortgage Loan in
accordance with Section 2.03.
The Trustee shall retain possession and custody of each
applicable
Custodial File in accordance with and subject to the terms and
conditions set
forth herein. The applicable Servicer shall promptly deliver to the
Trustee upon
the execution or receipt thereof, the originals of such other
documents or
instruments constituting the Custodial File as come into the
possession of such
Servicer from time to time.
The Responsible Party (with respect to the First NLC Mortgage
Loans)
shall deliver (and the Depositor shall use reasonable efforts to
cause
Accredited and Wilmington to deliver) to the applicable Servicer
copies of all
trailing documents required to be included in the Custodial File at
the same
time the original or certified copies thereof are delivered to the
Trustee,
including but not limited to such documents as the title insurance
policy and
any other Mortgage Loan Documents upon return from the public
recording office.
Such documents shall be delivered by the Responsible Party at the
Responsible
Party's expense (or the Depositor shall use reasonable efforts to
cause
Accredited and Wilmington to deliver such documents at Accredited's
expense or
Wilmington's expense, as applicable, pursuant to the Accredited
Agreements or
the Wilmington Agreements, as applicable) to such Servicer.
Section 2.03 Representations and Warranties; Remedies for
Breaches
of Representations and Warranties with Respect to the Mortgage
Loans. (a) Saxon
hereby makes the representations and warranties set forth in
Schedules II and
II-A hereto to the Depositor, the Master Servicer, the Securities
Administrator
and the Trustee. Wells Fargo in its capacity as Servicer hereby
makes the
representations and warranties set forth in Schedule V hereto to
the Depositor,
the Master Servicer, the Securities Administrator and the Trustee,
as of the
dates set forth in such Schedule. Countrywide Servicing in its
capacity as
Servicer hereby makes the representations and warranties set forth
in Schedule
VI hereto to the Depositor, the Master Servicer, the Securities
Administrator
and the Trustee as of the dates set forth in such Schedule.
(b) First NLC hereby makes the representations and warranties
set
forth in Schedule IV hereto to the Depositor, the Servicers, the
Master
Servicer, the Securities Administrator and the Trustee as of the
dates set forth
in such Schedule.
(c) The Depositor hereby makes the representations and
warranties
set forth in Schedules III hereto to the Master Servicer, the
Securities
Administrator and the Trustee as of the dates set forth in such
Schedule.
(d) [Reserved].
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall
survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and
shall inure
to the benefit of the parties to whom the representations and
warranties were
made notwithstanding any restrictive or qualified endorsement on
any Mortgage
Note or Assignment of Mortgage or the examination or failure to
examine any
Mortgage File. Upon discovery by any of the parties to this
Agreement of a
breach of any of the foregoing representations and warranties that
materially
and adversely affect the value of any Mortgage Loan or the interest
of the
Trustee or the Certificateholders therein, the party discovering
such breach
shall give prompt written notice to the other parties.
(f) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty made by the Depositor or the Responsible
Party, as
applicable, under this Agreement, that materially and adversely
affects the
value of any Mortgage Loan or the interests of the Trustee or
the
Certificateholders therein, the party discovering such breach shall
give prompt
written notice thereof to the other parties. Upon receiving written
notice of a
breach of a representation and warranty or written notice that a
Mortgage Loan
does not constitute a "qualified mortgage" within the meaning of
Section
860G(a)(3) of the Code, the Trustee shall in turn notify the
Responsible Party
or the Depositor, as applicable, in writing to correct or cure, in
accordance
with the this Agreement, any such breach of a representation or
warranty made by
the Responsible Party or the Depositor, as applicable, under this
Agreement
within sixty (60) days from the date of notice from the Trustee or
the discovery
by the Responsible Party or the Depositor, as applicable, of the
breach, and if
the Responsible Party or the Depositor, as applicable, fails or is
unable to
correct or cure the defect or breach within such period, the
Trustee (upon
receiving such notice or having actual knowledge) shall notify the
Depositor of
such failure to correct or cure. Unless otherwise directed by the
Depositor
within five (5) Business Days after notifying the Depositor of such
failure by
the Responsible Party or the Depositor, as applicable, to correct
or cure, the
Trustee shall notify the Responsible Party or the Depositor, as
applicable, to
repurchase the Mortgage Loan (a "Deleted Mortgage Loan") at the
Repurchase Price
or, if permitted hereunder, substitute a Substitute Mortgage Loan
for such
Mortgage Loan, in each case, pursuant to this Agreement.
Notwithstanding the
foregoing, in the event that the Trustee receives notice of a
breach by First
NLC of any of the representations and warranties set forth in
paragraphs (rr),
(zz), (aaa), (ccc), (jjj), (kkk), (lll), (mmm), (nnn), (ooo) and
(ppp) of
Schedule IV, the Trustee shall notify the Responsible Party or the
Depositor, as
applicable, to repurchase the Mortgage Loan at the Repurchase Price
within sixty
(60) days of the Responsible Party's or the Depositor's receipt of
such notice,
as applicable. If, within ten (10) Business Days of receipt of such
notice by
the Responsible Party or the Depositor, as applicable, the
Responsible Party or
the Depositor, as applicable, fails to repurchase such Mortgage
Loan, the
Trustee shall notify the Depositor of such failure. The Trustee
shall pursue all
legal remedies available to the Trustee against the Responsible
Party under this
Agreement, if the Trustee has received written notice from the
Depositor
directing the Trustee to pursue such remedies.
(g) Within 90-days of the earlier of either discovery by or
notice
to the Depositor of any breach of a representation or warranty set
forth on
Schedule III hereto that materially and adversely affects the value
of any
Mortgage Loan or the interest of the Trustee or the
Certificateholders therein,
the Depositor shall use its best efforts to promptly cure such
breach in all
material respects and, if such defect or breach cannot be remedied,
the
Depositor shall purchase such Mortgage Loan at the Repurchase Price
or, if
permitted hereunder, substitute a Substitute Mortgage Loan for such
Mortgage
Loan. Within 90-days of the earlier of discovery by the Depositor
or receipt of
notice by the Depositor of the breach of a representation and
warranty set forth
in Schedule IV to this Agreement (with respect to the First NLC
Mortgage Loans),
the Accredited Assignment Agreement (with respect to the Accredited
Mortgage
Loans), or the Wilmington Assignment Agreement (with respect to the
Wilmington
Mortgage Loans), that (1) materially and adversely affects the
interests of the
Certificateholders in any Mortgage Loan and (2) has not been cured,
repurchased
or substituted for by the applicable Originator in accordance with
the terms of
this Agreement, the Accredited Agreements or the Wilmington
Agreements, as
applicable, (i) the Depositor shall, within the time period
permitted therefor
under such agreement, (A) in the case of a breach by First NLC,
take such action
described in Section 2.03(i) of this Agreement in respect of such
Mortgage Loan,
(B) in the case of Accredited, take such action described in
Section 5 of the
Accredited Assignment Agreement in respect of such Mortgage Loan or
(C) in the
case of Wilmington, take such action described in Section 5 of the
Wilmington
Assignment Agreement in respect of such Mortgage Loan, in each case
of clauses
(A), (B) or (C), as if the Depositor were the applicable
Originator, and (ii)
the Trustee shall promptly deliver to the Depositor or its designee
the related
Mortgage File in accordance with the applicable Servicer's
direction in a
Request for Release and, upon Depositor's request, shall assign to
the Depositor
any and all of its rights with respect to such Originator's breach
under this
Agreement, the Accredited Agreements or the Wilmington Agreements,
as
applicable, which assignment shall be evidenced by a writing
prepared by the
Depositor and executed by the Trustee in favor of the Depositor.
Any obligation
of the Depositor under this subsection shall terminate upon receipt
by the
Trustee of a confirmation from each Rating Agency that such
termination will not
cause a downgrade, qualification or withdrawal of the rating then
assigned to
any Class of Certificates by any Rating Agency.
(h) In the event any Mortgage Loan does not conform to the
requirements as determined in the Trustee's review of the related
Custodial
File, the Trustee shall notify the applicable Originator, the
applicable
Servicer and the Depositor by delivery of the certification of the
Trustee
required by Section 2.02 to such parties, which shall be a request
that such
Originator correct or cure such defect as required under this
Agreement, the
Accredited Agreements or the Wilmington Agreements, as applicable,
and if such
Originator or the Depositor, as applicable, fails or is unable to
correct or
cure the defect within the period set forth in this Agreement, the
Accredited
Agreements or the Wilmington Agreements, as applicable, the Trustee
shall notify
the Depositor of such failure to correct or cure. Unless otherwise
directed by
the Depositor within five (5) Business Days after notifying the
Depositor of
such failure by the applicable Originator or the Depositor, as
applicable, to
correct or cure, the Trustee shall notify the applicable Originator
to
repurchase the Mortgage Loan at the Repurchase Price or, if
permitted hereunder,
substitute a Substitute Mortgage Loan for such Mortgage Loan, in
each case,
pursuant to the terms of this Agreement, as applicable. If, within
ten (10)
Business Days of receipt of such notice by the applicable
Originator or the
Depositor, as applicable, such Originator or the Depositor, as
applicable, fails
to repurchase such Mortgage Loan, the Trustee shall notify the
Depositor of such
failure. The Trustee shall pursue all legal remedies available to
the Trustee
against the applicable Originator or the Depositor, as applicable,
under this
Agreement, the Accredited Agreements, the Wilmington Agreements or
the
Representations and Warranties Agreement, as applicable, if the
Trustee has
received written notice from the Depositor directing the Trustee to
pursue such
remedies.
(i) Within 90-days of the earlier of either discovery by or
notice
to the Responsible Party of any breach of a representation or
warranty set forth
on Schedule IV that materially and adversely affects the value of
any Mortgage
Loan or the interest of the Trustee or the Certificateholders
therein, the
Responsible Party shall use its best efforts to promptly cure such
breach in all
material respects and, if such defect or breach cannot be remedied,
the
Responsible Party shall, at the Depositor's option, purchase such
Mortgage Loan
at the Repurchase Price or, if permitted hereunder, substitute a
Substitute
Mortgage Loan for such Mortgage Loan, if applicable.
(j) Any substitution of a Substitute Mortgage Loan by the
Responsible Party shall be made in accordance with the substitution
procedures
set forth in the First NLC Purchase Agreement, which provisions
shall be as set
forth in such agreements as if they were set forth herein. With
respect to any
Substitute Mortgage Loan or Loans substituted by the Depositor or
the
Responsible Party, the Sponsor, the Depositor or the Responsible
Party, as
applicable, shall deliver to the Trustee for the benefit of the
Certificateholders the Mortgage Note, the Mortgage, the related
Assignment of
Mortgage, and such other documents and agreements as are required
by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as
required by
Section 2.01. With respect to any Substitute Mortgage Loan or Loans
substituted
by Accredited or Wilmington, the Depositor shall use reasonable
efforts to cause
Accredited or Wilmington, as applicable, to deliver to the Trustee
for the
benefit of the Certificateholders the Mortgage Note, the Mortgage,
the related
Assignment of Mortgage, and such other documents and agreements as
are required
by Section 2.01, with the Mortgage Note endorsed and the Mortgage
assigned as
required by Section 2.01. Notwithstanding anything to the contrary
set forth in
this Agreement, no substitution under this Agreement is permitted
to be made (a)
in any calendar month after the Determination Date for such month
or (b) if the
substitution were to be made on or after the second anniversary of
the Closing
Date. Scheduled Payments due with respect to Substitute Mortgage
Loans in the
Due Period of substitution shall not be part of the Trust Fund and
will be
retained by the Depositor or the Responsible Party on the next
succeeding
Distribution Date. For the Due Period of substitution,
distributions to
Certificateholders will include the Scheduled Payment due on any
Deleted
Mortgage Loan for such Due Period and thereafter the Depositor or
the
Responsible Party shall be entitled to retain all amounts received
in respect of
such Deleted Mortgage Loan.
(k)
Based upon information provided by the Depositor or the
applicable Originator, the applicable Servicer shall include
information
regarding the removal of such Deleted Mortgage Loan and the
substitution of the
Substitute Mortgage Loan or Loans in its Servicer Remittance Report
delivered to
the Master Servicer pursuant to Section 4.03(e) (with copies to the
Trustee) for
the Determination Date immediately following the receipt of such
information
(or, in the case of Wells Fargo, for the Determination Date that
occurs in the
calendar month immediately following the receipt of such
information), to the
extent such information is required to be included in the Servicer
Remittance
Report. Upon such substitution, the Substitute Mortgage Loan or
Loans shall be
subject to the terms of this Agreement in all respects, and, if the
substitution
is made by the Sponsor or the Depositor, as applicable, the Sponsor
or the
Depositor, as applicable, shall be deemed to have made with respect
to such
Substitute Mortgage Loan or Loans, as of the date of substitution,
the
representations and warranties made pursuant to Section 2.03(c)
with respect to
such Substitute Mortgage Loan. Upon receipt of a Request for
Release in
connection with any such substitution and certification by the
applicable
Servicer to the Trustee and the deposit into the applicable
Collection Account
of the amount required to be deposited therein in connection with
such
substitution as described in Section 2.03(l), the Trustee shall
release the
Mortgage File held for the benefit of the Certificateholders
relating to such
Deleted Mortgage Loan to the applicable Originator and the Trustee
shall execute
and deliver at the direction of the Sponsor, the Depositor or the
applicable
Originator, such instruments of transfer or assignment prepared by
the Depositor
or the applicable Originator, in each case without recourse, as
shall be
necessary to vest title in the Depositor or the applicable
Originator, of the
Trustee's interest in any Deleted Mortgage Loan substituted for
pursuant to this
Section 2.03.
(l) For any month in which the Sponsor, the Depositor or the
Responsible Party substitutes one or more Substitute Mortgage Loans
for one or
more Deleted Mortgage Loans, the applicable Servicer will determine
the amount
(if any) by which the aggregate unpaid principal balance of all
such Substitute
Mortgage Loans as of the date of substitution is less than the
aggregate unpaid
principal balance of all such Deleted Mortgage Loans. The amount of
such
shortage, plus an amount equal to the sum of (i) any accrued and
unpaid interest
on the Deleted Mortgage Loans and (ii) all unreimbursed Servicing
Advances with
respect to such Deleted Mortgage Loans, or the amount of any
similar shortage
with respect to a Substitute Mortgage Loan substituted by the
Responsible Party
under this Agreement (collectively, the "Substitution Adjustment
Amount"), shall
be deposited into the applicable Collection Account of the related
Servicer by
the Sponsor, the Depositor or the Responsible Party on or before
the
Distribution Account Deposit Date for the Distribution Date
following the
Prepayment Period during which the related Mortgage Loan became
required to be
purchased or replaced hereunder. The Depositor or the Sponsor shall
use
reasonable efforts to cause Accredited or Wilmington, as the case
may be, to
remit to the applicable Servicer for deposit into the related
Collection Account
any Substitution Adjustment Amount on or before the Distribution
Account Deposit
Date for the Distribution Date following the Prepayment Period
during which the
related Mortgage Loan became required to be purchased or replaced
hereunder.
(m) Any Mortgage Loan repurchased pursuant to this Section 2.03
will
be removed from the Trust Fund. The applicable Servicer shall
include
information regarding such repurchase in its Servicer Remittance
Report
delivered to the Master Servicer pursuant to Section 4.03(e) (with
copies to the
Trustee), for the Determination Date immediately following the
receipt of
information regarding such repurchase (or, in the case of Wells
Fargo, for the
Determination Date that occurs in the calendar month immediately
following the
receipt of such information), to the extent such information is
required to be
included in the Servicer Remittance Report. For purposes of
determining the
applicable Repurchase Price, any such repurchase shall occur or
shall be deemed
to occur as of the last day of the applicable Prepayment
Period.
(n) In the event that any Mortgage Loan shall have been
repurchased
pursuant to this Agreement or the Representations and Warranties
Agreement, the
Repurchase Price therefor shall be deposited by the applicable
Servicer in the
applicable Collection Account of the related Servicer pursuant to
Section 3.10
on or before the Distribution Account Deposit Date for the
Distribution Date
following the Prepayment Period during which such Mortgage Loan was
repurchased
and upon such deposit of the Repurchase Price and receipt of a
Request for
Release in the form of Exhibit J hereto, indicating such deposit,
the Trustee
shall release the related Custodial File held for the benefit of
the
Certificateholders to such Person as directed by the applicable
Servicer, and
the Trustee shall execute and deliver at such Person's direction
such
instruments of transfer or assignment prepared by such Person, in
each case
without recourse, representation or warranty, as shall be necessary
to transfer
title from the Trustee.
(o) In addition to any repurchase or substitution obligation by
the
Responsible Party under this Agreement, the Responsible Party shall
indemnify
the Depositor and its Affiliates, the Securities Administrator, the
Servicers,
the Sponsor, the Trustee and the Trust for any breach of any
representation and
warranty of the Responsible Party set forth in this Agreement, in
accordance
with the indemnification provisions relating to breaches of
representations and
warranties (including without limitation, the representations and
warranties set
forth in paragraph (aaa) of Schedule IV to this Agreement) and
defective
Mortgage Loans set forth in the First NLC Purchase Agreement as if
such
indemnification provisions were set forth herein for the benefit of
the
Depositor and its Affiliates, the Servicers, the Sponsor, the
Trustee and the
Trust. This indemnity shall survive the termination of this
Agreement.
(p) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement, the Responsible
Party under
this Agreement, Accredited under the Accredited Agreements or
Wilmington under
the Wilmington Agreements, to cure, repurchase or substitute any
Mortgage Loan
as to which a breach of a representation and warranty has occurred
and is
continuing, together with any related indemnification obligations
set forth
herein, shall constitute the sole remedies against such Persons
respecting such
breach available to Certificateholders, the Depositor (if
applicable), or the
Trustee on their behalf.
(q) Upon discovery by any of the parties hereto of a breach of
a
representation or warranty made by Accredited or Wilmington
pursuant to the
Accredited Agreements or the Wilmington Agreements, as applicable,
the party
discovering such breach shall give prompt written notice thereof to
the other
parties to this Agreement, Accredited or Wilmington, as applicable.
The Trustee
shall pursue all legal remedies available to the Trustee with
respect to such
breach under the Accredited Agreements or the Wilmington
Agreements, as the case
may be, as may be necessary or appropriate to enforce the rights of
the Trust
with respect thereto, if the Trustee has received written notice
from the
Depositor to pursue such remedies.
The provisions of this Section 2.03 shall survive delivery of
the
respective Custodial Files to the Trustee for the benefit of
the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The
Trustee
acknowledges the transfer and assignment to it of the Trust Fund
and,
concurrently with such transfer and assignment, the Securities
Administrator has
executed and delivered to or upon the order of the Depositor, the
Certificates
in authorized Denominations evidencing directly or indirectly the
entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust
Fund and
exercise the rights referred to above for the benefit of all
present and future
Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth
the
designations for federal income tax purposes of all interests
created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC
Provisions shall
be the Closing Date. The "latest possible maturity date" of the
regular
interests in each Trust REMIC is the Distribution Date occurring in
April 2037,
which is the Distribution Date in the month following the month in
which the
latest maturity date of any Mortgage Loan occurs. Amounts
distributable to the
Class X Certificates (prior to any reduction for any Basis Risk
Payment,
Upper-Tier CarryForward Amount, Net Swap Payment or Swap
Termination Payment),
exclusive of any amounts received from the Swap Provider or the Cap
Provider,
shall be deemed paid from the Upper-Tier REMIC to the Class X REMIC
in respect
of the Class UT-X Interest and the Class UT-IO Interest and then
from the Class
X REMIC in respect of the Class X Interest and the Class IO
Interest to the
Holders of the Class X Certificates prior to distribution of any
Basis Risk
Payments or Upper-Tier CarryForward Amounts to the Offered
Certificates and Net
Swap Payments or Swap Termination Payments to the Swap Provider.
For federal
income tax purposes, any amount distributed on the Offered
Certificates on any
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 Corresponding Class of 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.
Section 2.06 Representations and Warranties of the Depositor.
The
Depositor hereby represents, warrants and covenants to the Trustee,
the Master
Servicer, the Securities Administrator and the Servicers that as of
the date of
this Agreement or as of such date specifically provided herein:
(a) The Depositor is a corporation duly organized, validly
existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to
convey
the Mortgage Loans and to execute, deliver and perform, and to
enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized,
executed
and delivered by the Depositor, all requisite corporate action
having been
taken, and, assuming the due authorization, execution and delivery
hereof by the
other parties hereto, constitutes or will constitute the legal,
valid and
binding agreement of the Depositor, enforceable against the
Depositor in
accordance with its terms, except as such enforcement may be
limited by
bankruptcy, insolvency, reorganization, moratorium or other similar
laws
relating to or affecting the rights of creditors generally, and by
general
equity principles (regardless of whether such enforcement is
considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or
registration
or filing with, or notice to, any governmental authority or court
is required
for the execution, delivery and performance of or compliance by the
Depositor
with this Agreement or the consummation by the Depositor of any of
the
transactions contemplated hereby, except as have been made on or
prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or
the
fulfillment of or compliance with the terms and conditions of this
Agreement,
(i) conflicts or will conflict with or results or will result in a
breach of, or
constitutes or will constitute a default or results or will result
in an
acceleration under (A) the charter or bylaws of the Depositor, or
(B) of any
term, condition or provision of any material indenture, deed of
trust, contract
or other agreement or instrument to which the Depositor or any of
its
subsidiaries is a party or by which it or any of its subsidiaries
is bound; (ii)
results or will result in a violation of any law, rule, regulation,
order,
judgment or decree applicable to the Depositor of any court or
governmental
authority having jurisdiction over the Depositor or its
subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or
encumbrance which
would have a material adverse effect upon the Mortgage Loans or any
documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against
or
investigations of, the Depositor pending, or to the knowledge of
the Depositor,
threatened, before any court, administrative agency or other
tribunal, and no
notice of any such action, which, in the Depositor's reasonable
judgment, might
materially and adversely affect the performance by the Depositor of
its
obligations under this Agreement, or the validity or enforceability
of this
Agreement;
(g) The Depositor is not in default with respect to any order
or
decree of any court or any order, regulation or demand of any
federal, state,
municipal or governmental agency that may materially and adversely
affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had
good title to,
and was the sole owner of each Mortgage Loan, free of any interest
of any other
Person, and the Depositor has transferred all right, title and
interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and
the Mortgage
as and in the manner contemplated by this Agreement is sufficient
either (i)
fully to transfer to the Trustee, for the benefit of the
Certificateholders, all
right, title, and interest of the Depositor thereto as note holder
and mortgagee
or (ii) to grant to the Trustee, for the benefit of the
Certificateholders, the
security interest referred to in Section 12.04.
It is understood and agreed that the representations, warranties
and
covenants set forth in this Section 2.06 shall survive delivery of
the
respective Custodial Files to the Trustee and shall inure to the
benefit of the
Trustee.
Section 2.07 Enforcement of Obligations for Breach of Mortgage
Loan
Representations. Upon discovery by any of the parties hereto of a
breach of a
representation or warranty made by the Sponsor pursuant to the
Representations
and Warranties Agreement, the party discovering such breach shall
give prompt
written notice thereof to the other parties to this Agreement and
the Sponsor.
The Trustee shall pursue all legal remedies available to the
Trustee with
respect to such breach under the Representations and Warranties
Agreement, as
may be necessary or appropriate to enforce the rights of the Trust
with respect
thereto, if the Trustee has received written notice from the
Depositor directing
the Trustee to pursue such remedies.
ARTICLE III
ADMINISTRATION AND SERVICING
