Document:

EXHIBIT 4.2

                        MORGAN STANLEY ABS CAPITAL I INC.
                                   Depositor,

                                       and

                           CDC MORTGAGE CAPITAL INC.,
                               Unaffiliated Seller

                           ---------------------------

                         UNAFFILIATED SELLER'S AGREEMENT

                          Dated as of November 1, 2001

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                                TABLE OF CONTENTS

                                                                            Page

                                    ARTICLE I

                                   DEFINITIONS

Section 1.01.  Definitions.....................................................1

                                ARTICLE II

               PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

Section 2.01.  Agreement to Purchase the Mortgage Loans........................2
Section 2.02.  [Reserved]......................................................3
Section 2.03.  Purchase Price..................................................3
Section 2.04.  Conveyance of Mortgage Loans; Possession of Mortgage Files......3
Section 2.05.  Examination of Mortgage Files...................................3
Section 2.06.  Books and Records...............................................4
Section 2.07.  Cost of Delivery and Recordation of Documents...................4

                                ARTICLE III

                      REPRESENTATIONS AND WARRANTIES

Section 3.01.  Representations and Warranties as to the Unaffiliated Seller....4
Section 3.02.  Representations and Warranties of the Depositor.................6

                                ARTICLE IV

                          THE UNAFFILIATED SELLER

Section 4.01.  Covenants of the Unaffiliated Seller............................7
Section 4.02.  Merger or Consolidation.........................................7
Section 4.03.  Costs...........................................................7

                                 ARTICLE V

                           CONDITIONS OF CLOSING

Section 5.01.  Conditions of Depositor's Obligations...........................8
Section 5.02.  Conditions of Unaffiliated Seller's Obligations................10
Section 5.03.  Termination of Depositor's Obligations.........................11

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                                ARTICLE VI

                               MISCELLANEOUS

Section 6.01.  Notices........................................................11
Section 6.02.  Severability of Provisions.....................................11
Section 6.03.  Agreement of Unaffiliated Seller...............................11
Section 6.04.  Survival.......................................................12
Section 6.05.  Effect of Headings and Table of Contents.......................12
Section 6.06.  Successors and Assigns.........................................12
Section 6.07.  Confirmation of Intent; Grant of Security Interest.............12
Section 6.08.  Miscellaneous..................................................13
Section 6.09.  Amendments.....................................................13
Section 6.10.  Third-Party Beneficiaries......................................13
SECTION 6.11.  GOVERNING LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL...13
Section 6.12.  Execution in Counterparts......................................14
Section 6.13.  Subsequent Mortgage Loans......................................14

Exhibit A - Mortgage Loan Schedule

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              THIS  UNAFFILIATED  SELLER'S  AGREEMENT,  dated as of  November 1,
2001,  by and among MORGAN  STANLEY ABS CAPITAL I INC., a Delaware  corporation,
its successors and assigns (the  "Depositor"),  and CDC Mortgage Capital Inc., a
New York corporation and its successors (the "Unaffiliated Seller").

              WHEREAS,  Exhibit A attached  hereto and made a part hereof  lists
certain first and second lien mortgage loans (the "Mortgage Loans") owned by the
Unaffiliated Seller and the Unaffiliated Seller desires to sell to the Depositor
and that the Depositor desires to purchase; and

              WHEREAS,  it is the intention of the  Unaffiliated  Seller and the
Depositor that simultaneously  with the Unaffiliated  Seller's conveyance of the
Mortgage  Loans to the  Depositor on the Closing Date,  (a) the Depositor  shall
deposit  the  Mortgage  Loans in a trust  pursuant  to a Pooling  and  Servicing
Agreement  to be dated as of  November  1,  2001  (the  "Pooling  and  Servicing
Agreement"),  to be entered into by and among the Depositor, as depositor, Ocwen
Federal  Bank  FSB,  as  servicer  (in  such  capacity,  the  "Servicer"),   the
Unaffiliated  Seller,  Impac Funding  Corporation,  as originator,  ("IFC"), BNC
Mortgage Inc. ("BNC") together with IFC, the  "ORIGINATORS"),  and Bankers Trust
Company of  California,  N.A.,  as trustee  and  collateral  agent (in each such
capacity,  as  applicable,  the  "Trustee")  and (b)  the  Trustee  shall  issue
certificates  evidencing  beneficial  ownership interests in the property of the
trust fund formed by the Pooling and Servicing Agreement;

              NOW,  THEREFORE,  in  consideration of the premises and the mutual
agreements hereinafter set forth, the parties hereto agree as follows:

                                   ARTICLE I

                                   DEFINITIONS

              Section 1.01.  DEFINITIONS.  Whenever  used herein,  the following
words and  phrases,  unless  the  context  otherwise  requires,  shall  have the
meanings specified in this Article I:

              "AGREEMENT" means this Unaffiliated Seller's Agreement, as amended
or supplemented in accordance with the provisions hereof.

              "PROSPECTUS"  means  the  Prospectus,   dated  November  8,  2001,
relating  to  the  offering  by  the   Depositor   from  time  to  time  of  its
Mortgage-Pass-through  Certificates (Issuable in Series) in the form in which it
was or will be filed  with the  Commission  pursuant  to Rule  424(b)  under the
Securities Act with respect to the offer and sale of the Certificates.

              "PROSPECTUS  SUPPLEMENT"  means the Prospectus  Supplement,  dated
November 26, 2001,  relating to the offering of the  Certificates in the form in
which it was or will be filed with the Commission  pursuant to Rule 424(b) under
the Securities Act with respect to the offer and sale of the Certificates.

              "REGISTRATION STATEMENT" means that certain registration statement
on Form S-3, as amended (Registration No. 333-65702) relating to the offering by
the Depositor from time to time of its Mortgage-Backed Certificates (Issuable in
Series) as heretofore declared effective by the Commission.

              "TERMINATION  EVENT" means the existence of any one or more of the
following conditions:

                     (a)    a stop order  suspending  the  effectiveness  of the
       Registration  Statement  shall have been issued or a proceeding  for that
       purpose shall have been initiated or threatened by the Commission; or

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                     (b)    subsequent  to the  execution  and  delivery of this
       Agreement,  a downgrading,  or public  notification of a possible change,
       without  indication  of  direction,  shall  have  occurred  in the rating
       afforded  any of the debt  securities  or claims  paying  ability  of any
       person  providing  any  form  of  credit   enhancement  for  any  of  the
       Certificates,   by  any   "nationally   recognized   statistical   rating
       organization,"  as that term is defined by the Commission for purposes of
       Rule 436(g)(2) under the Securities Act; or

                     (c)    subsequent  to the  execution  and  delivery of this
       Agreement,  there shall have occurred an adverse change in the condition,
       financial  or  otherwise,  earnings,  affairs,  regulatory  situation  or
       business  prospects of the Unaffiliated  Seller reasonably  determined by
       the Depositor to be material; or

                     (d)    subsequent to the date of this Agreement there shall
       have  occurred  any  of  the  following:  (i) a  suspension  or  material
       limitation  in  trading  in  securities   substantially  similar  to  the
       Certificates;  (ii) a general moratorium on commercial banking activities
       in the State of New York  declared  by either  Federal  or New York State
       authorities; or (iii) the engagement by the United States in hostilities,
       or the escalation of such hostilities,  or any calamity or crisis, if the
       effect of any such event  specified  in this clause (iii) in the judgment
       of the Depositor  makes it  impracticable  or inadvisable to proceed with
       the public offering or the delivery of the  Certificates on the terms and
       in the manner contemplated in the Prospectus Supplement.

              "UNAFFILIATED  SELLER"  means CDC  Mortgage  Capital Inc. , in its
capacity as Unaffiliated Seller of the Mortgage Loans under this Agreement.

              Capitalized terms used herein that are not otherwise defined shall
have the  respective  meanings  ascribed  thereto in the Pooling  and  Servicing
Agreement.

                                   ARTICLE II

                 PURCHASE, SALE AND CONVEYANCE OF MORTGAGE LOANS

              Section 2.01. AGREEMENT TO PURCHASE THE MORTGAGE LOANS.

              (a)    Subject to the terms and conditions of this Agreement,  the
Unaffiliated  Seller agrees to sell, and the Depositor  agrees to purchase,  the
Mortgage  Loans  having the  Cut-Off  Date  Aggregate  Principal  Balance or, in
accordance  with Section 2.08 hereof,  such other balance as is evidenced by the
actual Cut-Off Date Aggregate  Principal  Balance of the Mortgage Loans accepted
by the Depositor on the Closing Date and listed in the Mortgage Loan Schedule.

              (b)    The Depositor and the Unaffiliated  Seller have agreed upon
which of the  Unaffiliated  Seller's  Mortgage  Loans are to be purchased by the
Depositor on the Closing Date pursuant to this Agreement,  and the  Unaffiliated
Seller has prepared a schedule describing the Mortgage Loans (the "MORTGAGE LOAN
SCHEDULE")  setting forth all of the Mortgage  Loans to be purchased  under this
Agreement,  which  schedule is attached  hereto as Exhibit A. The Mortgage  Loan
Schedule  shall  conform to the  definition of "Mortgage  Loan  Schedule" in the
Pooling and Servicing Agreement.

              (c)    The closing for the purchase and sale of the Mortgage Loans
shall take place at the offices of Dewey  Ballantine LLP, New York, New York, at
10:00 a.m.,  New York time, on November 29, 2001 or such other place and time as
the  parties  shall agree (such time being  herein  referred to as the  "Closing
Date").

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              Section 2.02. [RESERVED].

              Section   2.03.   PURCHASE   PRICE.   On  the  Closing   Date,  as
consideration  for the  Unaffiliated  Seller's sale of the Mortgage Loans to the
Depositor,  the Depositor will deliver to the Unaffiliated  Seller (i) an amount
in cash equal to 99.500% of the  aggregate  principal  balance as of the Closing
Date of the Offered Certificates, payable by wire transfer of same day funds and
(ii) the Class X, Class P and Class R Certificates.

              The  consideration  described in this  Section  2.03  collectively
represents full consideration for the Unaffiliated Seller's sale of the Mortgage
Loans to the Depositor.

              Section 2.04. CONVEYANCE OF MORTGAGE LOANS; POSSESSION OF MORTGAGE
FILES.

              (a)    On the Closing  Date the  Unaffiliated  Seller  shall sell,
transfer,  assign,  set over and  convey  or cause to be  assigned,  set over or
conveyed,  to the Depositor,  without  recourse but subject to the terms of this
Agreement,  all right,  title and  interest  in and to the  applicable  Mortgage
Loans,  including all principal  outstanding  as of, and all interest due after,
the Cut-Off Date (except for $135,810.00 in interest, which is being retained by
the Unaffiliated  Seller), the Insurance Policies relating to each such Mortgage
Loan,  all right,  title and interest in and to the  proceeds of such  Insurance
Policies and all of its rights under this Agreement with respect to the Mortgage
Loans from and after the Cut-Off  Date.  Upon payment of the purchase  price for
such  Mortgage  Loans  as  provided  in  Section  2.03  of this  Agreement,  the
Unaffiliated Seller shall have hereby, and shall be deemed to have, or caused to
have sold, transferred, assigned, set over and conveyed such Mortgage Loans, the
Insurance  Policies  relating to each such Mortgage Loan,  all right,  title and
interest in and to the  proceeds  of such  Insurance  Policies  and all of their
rights under this  Agreement  with respect to the Mortgage  Loans from and after
the Cut-Off Date.

              (b)    Upon the sale of such Mortgage Loans, the ownership of each
related  Mortgage  Note,  each related  Mortgage and the contents of the related
Mortgage File shall  immediately  vest in the Depositor and the ownership of all
related  records and documents with respect to each Mortgage Loan prepared by or
which come into the possession of the Unaffiliated Seller shall immediately vest
in the  Depositor.  The contents of any Mortgage  File in the  possession of the
Unaffiliated Seller at any time after such sale, and any principal collected and
interest due on the Mortgage  Loans after the Cut-Off Date and received by or on
behalf of the Unaffiliated Seller (except for $135,810.00 in interest,  which is
being  retained  by the  Unaffiliated  Seller),  shall  be held in  trust by the
Unaffiliated  Seller for the benefit of the Depositor as the owner thereof,  and
shall be promptly  delivered by the Unaffiliated  Seller to or upon the order of
the Depositor.

              (c)    Pursuant  to  the  Pooling  and  Servicing  Agreement,  the
Depositor  shall,  on the  Closing  Date,  assign  all of its  right,  title and
interest in and to the applicable Mortgage Loans, the related Insurance Policies
and any  proceeds  thereof  and all of its rights  under this  Agreement  to the
Trust.

              Section 2.05.  EXAMINATION OF MORTGAGE FILES. Prior to the Closing
Date, the  Unaffiliated  Seller shall make the Mortgage  Files  available to the
Depositor or its designee for examination at the  Unaffiliated  Seller's offices
or at such other place as the Unaffiliated Seller shall reasonably specify. Such
examination  may be made by the  Depositor  or its  designee  at any  time on or
before the Closing Date. If the Depositor or its designee makes such examination
prior to the Closing Date and  identifies any Mortgage Loans that do not conform
to the  requirements  of the  Depositor  as described  in this  Agreement,  such
Mortgage  Loans shall be deleted  from the  Mortgage  Loan  Schedule  and may be
replaced,  prior to the Closing Date, by substitute Mortgage Loans acceptable to
the  Depositor.  The  Depositor  may,  at its option and  without  notice to the
Unaffiliated  Seller,  purchase  all or  part  of  the  Mortgage  Loans  without
conducting any partial or complete  examination.  The fact that the Depositor or

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the  Trustee  has  conducted  or has failed to conduct  any  partial or complete
examination  of the Mortgage  Files shall not affect the rights of the Depositor
or the  Trustee  to  demand  repurchase  or other  relief  as  provided  in this
Agreement.

              Section  2.06.  BOOKS AND RECORDS.  The sale of each Mortgage Loan
shall be reflected on the  Unaffiliated  Seller's  accounting and other records,
balance  sheet  and  other  financial  statements  as a sale  of  assets  by the
Unaffiliated  Seller  to  the  Depositor.   The  Unaffiliated  Seller  shall  be
responsible for  maintaining,  and shall  maintain,  a complete set of books and
records  for each  Mortgage  Loan which  shall be clearly  marked to reflect the
ownership  of  each  Mortgage  Loan  by  the  Trustee  for  the  benefit  of the
Certificateholders and the Class A Certificate Insurer.

              Section 2.07. COST OF DELIVERY AND  RECORDATION OF DOCUMENTS.  The
costs  relating to the delivery and  recordation  of the documents  specified in
this  Article II in  connection  with the  Mortgage  Loans shall be borne by the
Originators.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

              Section   3.01.   REPRESENTATIONS   AND   WARRANTIES   AS  TO  THE
UNAFFILIATED  SELLER. The Unaffiliated  Seller hereby represents and warrants to
the Depositor, as of the Closing Date, that:

              (a)    The  Unaffiliated  Seller is a corporation  duly organized,
validly  existing and in good  standing  under the laws of the State of New York
and has all licenses  necessary to carry on its business as now being  conducted
and is licensed, qualified and in good standing in each state necessary in order
to conduct  business of the type  conducted  by the  Unaffiliated  Seller and to
perform its obligations as the Unaffiliated  Seller hereunder;  the Unaffiliated
Seller has the full power and authority, corporate and otherwise, to execute and
deliver this  Agreement and to perform in accordance  herewith;  the  execution,
delivery  and  performance  of this  Agreement  (including  all  instruments  of
transfer to be delivered pursuant to this Agreement) by the Unaffiliated  Seller
and the consummation of the transactions  contemplated hereby have been duly and
validly authorized;  this Agreement evidences the valid, binding and enforceable
obligation of the Unaffiliated  Seller;  and all requisite  corporate action has
been taken by the  Unaffiliated  Seller to make this Agreement valid and binding
upon the Unaffiliated Seller in accordance with its terms;

              (b)    No consent,  approval,  authorization or order of any court
or  governmental  agency or body is required  for the  execution,  delivery  and
performance  by the  Unaffiliated  Seller of or compliance  by the  Unaffiliated
Seller with this  Agreement  or the sale of the Mortgage  Loans  pursuant to the
terms of this Agreement or the consummation of the transactions  contemplated by
this  Agreement,  or if required,  such approval has been obtained  prior to the
Closing Date;

(c) Neither the execution and delivery of this  Agreement,  the  acquisition nor
origination  of  the  Mortgage  Loans  by  the   Unaffiliated   Seller  nor  the
transactions  contemplated hereby, nor the fulfillment of or compliance with the
terms and conditions of this Agreement, has or will conflict with or result in a
breach  of  any of the  terms,  conditions  or  provisions  of the  Unaffiliated
Seller's  charter  or  by-laws  or any legal  restriction  or any  agreement  or
instrument  to which  the  Unaffiliated  Seller is now a party or by which it is
bound or to which its property is subject,  or constitute a default or result in
an  acceleration  under  any  of  the  foregoing,   except  such  unfulfillment,
non-compliance  or  default or  acceleration  does not in the  aggregate  have a
material  adverse  effect on the  operation,  business,  condition  (business or
otherwise)  of the  Unaffiliated  Seller or result in the  violation of any law,
rule, regulation,  order, judgment or decree to which the Unaffiliated Seller or
its property is subject, except such violation

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does not in the  aggregate  have a  material  adverse  effect on the  operation,
business, condition (business or otherwise) of the Unaffiliated Seller or impair
the  ability of the Trustee  (or the  Servicer  as the agent of the  Trustee) to
realize on the Mortgage Loans, or impair the value of the Mortgage Loans;

              (d)    There  is no  action,  suit,  proceeding  or  investigation
pending nor, to the knowledge of the Unaffiliated  Seller,  threatened  before a
court,  administrative  agency or government  tribunal  against the Unaffiliated
Seller which, either in any one instance or in the aggregate,  may result in any
material  adverse  change  in the  business,  operations,  financial  condition,
properties or assets of the Unaffiliated  Seller, or in any material  impairment
of the right or  ability  of the  Unaffiliated  Seller to carry on its  business
substantially  as now conducted,  or which would draw into question the validity
of this Agreement,  the Mortgage Loans, or of any action taken or to be taken in
connection with the obligations of the Unaffiliated Seller contemplated  herein,
or which  would  impair  materially  the ability of the  Unaffiliated  Seller to
perform  under the terms of this  Agreement  or that will  prohibit its entering
into this Agreement or the consummation of any of the transactions  contemplated
hereby or under any subservicing agreements;

              (e)    The  Unaffiliated  Seller  is  not  in  violation  of or in
default with respect to, and the execution and delivery of this Agreement by the
Unaffiliated  Seller and its performance of and compliance with the terms hereof
will not  constitute a violation or 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, which violation or default might have consequences that
would  materially  and adversely  affect the  condition  (financial or other) or
operations  of  the  Unaffiliated   Seller  or  its  properties  or  might  have
consequences   that  would  materially  and  adversely  affect  its  performance
hereunder or under any subservicing agreement;

              (f)    Upon the  receipt of each  Trustee's  Mortgage  File by the
Depositor  (or  its  assignee)  under  this  Agreement,  the  Depositor  (or its
assignee) will own on behalf of the Trust Fund to each related Mortgage Loan and
such other items  comprising  the corpus of the Trust Fund free and clear of any
lien  created  by the  Unaffiliated  Seller  (other  than  liens  which  will be
simultaneously released);

              (g)    The consummation of the  transactions  contemplated by this
Agreement are in the ordinary course of business of the Unaffiliated Seller, and
the transfer,  assignment and conveyance of the Mortgage Notes and the Mortgages
by the  Unaffiliated  Seller  pursuant to this  Agreement are not subject to the
bulk transfer or any similar  statutory  provisions in effect in any  applicable
jurisdiction;

              (h)    With  respect  to  any  Mortgage  Loan   purchased  by  the
Unaffiliated Seller, the Unaffiliated Seller acquired title to the Mortgage Loan
in good faith, without notice of any adverse claim;

              (i)    The Unaffiliated Seller does not believe,  nor does it have
any reason or cause to believe,  that it cannot  perform each and every covenant
contained in this Agreement.  The Unaffiliated Seller is solvent and the sale of
the  Mortgage  Loans by the  Unaffiliated  Seller  pursuant to the terms of this
Agreement will not cause the Unaffiliated  Seller to become insolvent.  The sale
of the Mortgage Loans by the  Unaffiliated  Seller pursuant to the terms of this
Agreement was not undertaken with the intent to hinder,  delay or defraud any of
the Unaffiliated Seller's creditors;

              (j)    The  Mortgage  Loans are not  intentionally  selected  in a
manner  so as to affect  adversely  the  interests  of the  Depositor  or of any
transferee of the Depositor (including the Trust and the Trustee);

              (k)    The  Unaffiliated  Seller will treat the disposition of the
Mortgage  Loans  pursuant to this  Agreement  as a sale for  accounting  and tax
purposes;

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              (l)    The  Unaffiliated  Seller  has not dealt with any broker or
agent or anyone else that may be entitled to any commission or  compensation  in
connection  with the sale of the Mortgage  Loans to the Depositor  other than to
the Depositor or an affiliate thereof; and

              (m)    The consideration  received by the Unaffiliated Seller upon
the  sale  of  the  Mortgage  Loans  under  this  Agreement   constitutes   fair
consideration and reasonably equivalent value for the Mortgage Loans.

              Section 3.02. REPRESENTATIONS AND WARRANTIES OF THE DEPOSITOR. The
Depositor hereby represents,  warrants and covenants to the Unaffiliated Seller,
as of the date of execution of this Agreement and the Closing Date, that:

              (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
purchase each Mortgage  Loan and to execute,  deliver and perform,  and to enter
into and consummate all the transactions contemplated by this Agreement;

              (c)    This  Agreement  has  been  duly  and  validly  authorized,
executed and delivered by the Depositor,  and,  assuming the due  authorization,
execution and delivery hereof by the  Unaffiliated  Seller and the  Originators,
constitutes 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 such as have been made on or prior to
the Closing Date;

              (e)    The  Depositor  has filed or will file the  Prospectus  and
Prospectus  Supplement  with the Commission in accordance with Rule 424(b) under
the Securities Act; and

              (f)    None of the execution and delivery of this  Agreement,  the
purchase of the Mortgage Loans from the Unaffiliated Seller, the consummation of
the other transactions  contemplated hereby, or the fulfillment of or compliance
with the terms and conditions of this Agreement,  (i) conflicts or will conflict
with the charter or bylaws of the  Depositor or 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, any term,  condition
or provision of any  indenture,  deed of trust,  contract or other  agreement or
other  instrument  to which the Depositor is a party or by which it is bound and
which  is  material  to the  Depositor,  or (ii)  results  or will  result  in a
violation of any law, rule,  regulation,  order, judgment or decree of any court
or governmental authority having jurisdiction over the Depositor.

                                   ARTICLE IV

                             THE UNAFFILIATED SELLER

              Section  4.01.   COVENANTS  OF  THE   UNAFFILIATED   SELLER.   The
Unaffiliated Seller covenants to the Depositor as follows:

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              (a)    The Unaffiliated  Seller shall cooperate with the Depositor
and the firm of independent  certified public accountants  retained with respect
to the issuance of the  Certificates  in making  available all  information  and
taking  all steps  reasonably  necessary  to  permit  the  accountants'  letters
required hereunder to be delivered within the times set for delivery herein.

              (b)    The  Unaffiliated  Seller  agrees to satisfy or cause to be
satisfied  on or  prior  to the  Closing  Date,  all of  the  conditions  to the
Depositor's  obligations  set forth in Section  5.01  hereof that are within the
Unaffiliated Seller's (or its agents') control.

              (c)    The  Unaffiliated  Seller  hereby  agree  to do  all  acts,
transactions,  and things and to execute and deliver all agreements,  documents,
instruments,  and  papers  by and on behalf  of the  Unaffiliated  Seller as the
Depositor  or its  counsel may  reasonably  request in order to  consummate  the
transfer of the Mortgage  Loans to the  Depositor  and the  subsequent  transfer
thereof to the Trustee, and the rating, issuance and sale of the Certificates.

              Section 4.02.  MERGER OR  CONSOLIDATION.  The Unaffiliated  Seller
will keep in full effect its  existence,  rights and franchises as a corporation
and will  obtain and  preserve  its  qualification  to do  business as a foreign
corporation,  in each  jurisdiction  necessary  to perform its duties under this
Agreement.  Any Person into which the  Unaffiliated  Seller or the  Unaffiliated
Seller may be merged or  consolidated,  or any  corporation  resulting  from any
merger,  conversion or consolidation to which the Unaffiliated Seller shall be a
party,  or any Person  succeeding  to the business of the  Unaffiliated  Seller,
shall be approved by the  Depositor  which  approval  shall not be  unreasonably
withheld.  The  Unaffiliated  Seller  shall  send  notice of any such  merger or
consolidation to the Depositor.

              Section  4.03.   COSTS.  In  connection   with  the   transactions
contemplated under this Agreement and the Pooling and Servicing  Agreement,  the
Unaffiliated  Seller  shall  promptly  pay  (or  shall  promptly  reimburse  the
Depositor  to the  extent  that  the  Depositor  shall  have  paid or  otherwise
incurred):   (a)  the  fees  and   disbursements  of  the  Depositor's  and  the
Unaffiliated  Seller's counsel;  (b) the fees of S&P and Moody's; (c) any of the
fees of the Trustee and the fees and disbursements of the Trustee's counsel; (d)
expenses  incurred in connection  with printing the  Prospectus,  the Prospectus
Supplement,  any amendment or supplement thereto, any preliminary prospectus and
the Certificates; (e) fees and expenses relating to the filing of documents with
the Securities and Exchange  Commission  (including without limitation  periodic
reports under the Exchange Act); (f) the shelf registration  amortization fee of
0.025% of the Class A  Certificate  Balance of the Offered  Certificates  on the
Closing Date, paid in connection with the issuance of Offered Certificates;  (g)
the fees and disbursements for the accountants for the Unaffiliated  Seller; and
(h) all of the initial  expenses of the Class A Certificate  Insurer  including,
without  limitation,  legal fees and expenses,  accountant fees and expenses and
expenses in connection  with due diligence  conducted on the Custodial Files but
not including the initial premium paid to the Class A Certificate  Insurer.  For
the avoidance of doubt, the parties hereto  acknowledge that it is the intention
of the parties that the Depositor  shall not pay any of the  Trustee's  fees and
expenses (other than amounts paid from Trust Fund cashflow under Section 4.02 of
the  Pooling  and  Servicing  Agreement)  in  connection  with the  transactions
contemplated  by the  Pooling  and  Servicing  Agreement.  All  other  costs and
expenses in connection  with the  transactions  contemplated  hereunder shall be
borne by the party incurring such expenses.

                                    ARTICLE V

                              CONDITIONS OF CLOSING

              Section  5.01.   CONDITIONS  OF   DEPOSITOR'S   OBLIGATIONS.   The
obligations  of the Depositor to purchase the Mortgage  Loans will be subject to
the satisfaction on the Closing Date of the following

                                       7
<PAGE>

conditions.  Upon payment of the purchase  price for the  Mortgage  Loans,  such
conditions shall be deemed satisfied or waived.

              (a)    Each of the obligations of the  Unaffiliated  Seller and of
the  Originators  required  to be  performed  by it or them on or  prior  to the
Closing  Date  pursuant  to the  terms  of this  Agreement  or the  Pooling  and
Servicing  Agreement  shall have been duly  performed  and  complied  with,  the
representations  and warranties of the Unaffiliated  Seller under this Agreement
and of the Originators  under the Pooling and Servicing  Agreement shall be true
and correct as of the Closing Date and no event shall have occurred which,  with
notice or the passage of time,  would constitute a default under this Agreement,
and the  Depositor  shall  have  received  a  certificate  to the  effect of the
foregoing  signed by an authorized  officer of the  Unaffiliated  Seller and the
Originators.

              (b)    The  Depositor  shall have received a letter dated the date
of this  Agreement,  in form and  substance  acceptable to the Depositor and its
counsel,  prepared  by  Deloitte  & Touche  LLP,  independent  certified  public
accountants,  regarding the numerical  information  contained in the  Prospectus
Supplement  including,  but not limited to the  information  under the  captions
"Prepayment and Yield Considerations" and "The Mortgage Loan Pool" regarding any
numerical  information in any marketing  materials  relating to the Certificates
and regarding any other information as reasonably requested by the Depositor.

              (c)    The Mortgage Loans will be acceptable to the Depositor,  in
its sole reasonable discretion.

              (d)    The Depositor shall have received the following  additional
closing  documents,  in  form  and  substance  reasonably  satisfactory  to  the
Depositor and its counsel:

                     (i)    the Mortgage Loan Schedule;

                     (ii)   this Agreement, the Pooling and Servicing Agreement,
       the  Insurance   Agreement,   the   Indemnification   Agreement  and  the
       Underwriting  Agreement  dated  as  of  November  26,  2001  between  the
       Depositor and the Representative  and all documents required  thereunder,
       duly executed and delivered by each of the parties thereto other than the
       Depositor;

                     (iii)  officer's  certificates of an officer of each of the
       Originators and the  Unaffiliated  Seller,  dated as of the Closing Date,
       and attached thereto  resolutions of the board of directors and a copy of
       the charter and by-laws;

                     (iv)   copy of each of the Originators and the Unaffiliated
       Seller's charter and all amendments,  revisions, and supplements thereof,
       certified by a secretary of each entity;

                     (v)    an opinion of the  counsel for the  Originators  and
       the  Unaffiliated  Seller  as to  various  corporate  matters  in a  form
       acceptable  to the  Depositor,  its  counsel,  the  Class  A  Certificate
       Insurer,  S&P and  Moody's  (it  being  agreed  that  the  opinion  shall
       expressly  provide  that the  Trustee  shall be  entitled  to rely on the
       opinion);

                     (vi)   opinions of counsel for the Unaffiliated  Seller, in
       forms acceptable to the Depositor,  its counsel,  the Class A Certificate
       Insurer,  S&P and Moody's as to such matters as shall be required for the
       assignment of a rating to the Class A  Certificates  of "AAA" by S&P, and
       "Aaa" by Moody's (it being  agreed  that such  opinions  shall  expressly
       provide that the Trustee shall be entitled to rely on such opinions);

                                       8
<PAGE>

                     (vii)  a letter  from  Moody's  to the  effect  that it has
       assigned  ratings of "Aaa,"  "Aa2," "A2" and "Baa3" to the Class A, Class
       M-1, Class M-2 and Class B Certificates, respectively;

                     (viii) a letter from S&P to the effect that it has assigned
       ratings of "AAA," "AA," "A," and "BBB-" to the Class A, Class M-1,  Class
       M-2 and Class B Certificates, respectively;

                     (ix)   an opinion of  counsel  for the  Trustee in form and
       substance acceptable to the Depositor, its counsel,  Moody's, the Class A
       Certificate  Insurer  and S&P (it being  agreed  that the  opinion  shall
       expressly provide that the Unaffiliated  Seller shall be entitled to rely
       on the opinion);

                     (x)    opinions of counsel for each Originator, in form and
       substance acceptable to the Depositor, its counsel,  Moody's, the Class A
       Certificate  Insurer  and S&P (it being  agreed  that the  opinion  shall
       expressly provide that the Unaffiliated  Seller shall be entitled to rely
       on the opinion);

                     (xi)   an opinion or opinions of counsel for the  Servicer,
       in form and substance acceptable to the Depositor, its counsel, the Class
       A Certificate Insurer,  Moody's and S&P (it being agreed that the opinion
       shall expressly provide that the Unaffiliated Seller shall be entitled to
       rely on the opinion); and

                     (xii)  an opinion or  opinions  of counsel  for the Class A
       Certificate Insurer, in each case in form and substance acceptable to the
       Depositor, its counsel, Moody's and S&P (it being agreed that the opinion
       shall expressly provide that the Unaffiliated Seller shall be entitled to
       rely on the opinion).

              (e)    The Class A  Certificate  Insurance  Policy shall have been
duly executed, delivered and issued with respect to the Class A Certificates.

              (f)    All  proceedings  in  connection   with  the   transactions
contemplated  by this  Agreement  and all  documents  incident  hereto  shall be
satisfactory in form and substance to the Depositor and its counsel.

              (g)    The Unaffiliated  Seller shall have furnished the Depositor
with such other  certificates of its officers or others and such other documents
or opinions as the Depositor or its counsel may reasonably request.

              Section 5.02. CONDITIONS OF UNAFFILIATED SELLER'S OBLIGATIONS. The
obligations of the Unaffiliated  Seller under this Agreement shall be subject to
the satisfaction, on the Closing Date, of the following conditions:

              (a)    Each of the  obligations  of the  Depositor  required to be
performed  by it at or prior to the Closing  Date  pursuant to the terms of this
Agreement  shall  have  been duly  performed  and  complied  with and all of the
representations  and  warranties  of the Depositor  contained in this  Agreement
shall be true and correct as of the  Closing  Date and the  Unaffiliated  Seller
shall have received a certificate to that effect signed by an authorized officer
of the Depositor.

              (b)    The  Unaffiliated  Seller shall have received the following
additional documents:

                                       9
<PAGE>

                     (i)    the  Pooling  and  Servicing   Agreement,   and  all
       documents required thereunder,  in each case executed by the Depositor as
       applicable; and

                     (ii)   a copy of a letter from Moody's to the  Depositor to
       the effect that it has assigned  ratings of "Aaa," "Aa2," "A2" and "Baa3"
       to  the  Class  A,  Class  M-1,  Class  M-2  and  Class  B  Certificates,
       respectively,  and a copy of a letter  from S&P to the  Depositor  to the
       effect that it has assigned ratings of "AAA," "AA," "A" and "BBB-" to the
       Class A Certificates.

                     (iii)  an opinion of  counsel  for the  Trustee in form and
       substance acceptable to the Unaffiliated Seller and its counsel;

                     (iv)   an opinion or  opinions  of counsel  for the Class A
       Certificate Insurer, in each case in form and substance acceptable to the
       Unaffiliated Seller and its counsel.

                     (v)    an opinion of the  counsel for the  Depositor  as to
       securities  and tax  matters  in form  and  substance  acceptable  to the
       Unaffiliated Seller and its counsel; and

                     (vi)   an opinion of the  counsel for the  Depositor  as to
       true  sale  matters  in form  and  substance  acceptable  to the  Class A
       Certificate Insurer and its counsel.

              (c)    All legal opinion letters and accountant's  comfort letters
delivered in connection with the transactions contemplated by this Agreement and
the other  agreements  referred to herein shall be addressed to the Unaffiliated
Seller  and  shall be in form and  substance  satisfactory  to the  Unaffiliated
Seller.

              (d)    The Depositor shall have furnished the Unaffiliated  Seller
with such other  certificates of its officers or others and such other documents
to evidence  fulfillment  of the  conditions  set forth in this Agreement as the
Unaffiliated Seller may reasonably request.

              Section  5.03.   TERMINATION  OF  DEPOSITOR'S   OBLIGATIONS.   The
Depositor may terminate its obligations  hereunder by notice to the Unaffiliated
Seller at any time before  delivery of and payment of the purchase price for the
Mortgage  Loans if: (a) any of the  conditions set forth in Section 5.01 are not
satisfied when and as provided therein; (b) there shall have been the entry of a
decree  or  order  by  a  court  or  agency  or  supervisory   authority  having
jurisdiction in the premises for the  appointment of a conservator,  receiver or
liquidator in any insolvency,  readjustment  of debt,  marshalling of assets and
liabilities or similar proceedings of or relating to the Unaffiliated Seller, or
for the winding up or liquidation of the affairs of the Unaffiliated Seller; (c)
there shall have been the consent by the Unaffiliated  Seller to the appointment
of a conservator or receiver or liquidator in any  insolvency,  readjustment  of
debt,  marshalling  of assets  and  liabilities  or  similar  proceedings  of or
relating to the Unaffiliated  Seller or of or relating to  substantially  all of
the  property  of the  Unaffiliated  Seller;  (d) any  purchase  and  assumption
agreement with respect to the  Unaffiliated  Seller or the assets and properties
of the  Unaffiliated  Seller shall have been entered  into; or (e) a Termination
Event  shall have  occurred.  The  termination  of the  Depositor's  obligations
hereunder shall not terminate the Depositor's  rights  hereunder or its right to
exercise any remedy available to it at law or in equity.

                                   ARTICLE VI

                                  MISCELLANEOUS

              Section 6.01.  NOTICES.  All demands,  notices and  communications
hereunder  shall be in  writing  and shall be deemed to have been duly  given if
personally delivered to or mailed by registered

                                       10
<PAGE>

mail,  postage prepaid,  or transmitted by telex or telegraph and confirmed by a
similar mailed writing,  (i) if to the Depositor,  addressed to the Depositor at
Morgan  Stanley ABS Capital I Inc.,  1585  Broadway,  New York,  New York 10036,
Attention:  Managing  Director - Asset Backed  Finance  Group,  or to such other
address as the Depositor may designate in writing to the other parties,  or (ii)
if to the  Unaffiliated  Seller,  addressed  to the  Unaffiliated  Seller at CDC
Mortgage Capital Inc., 9 West 57th Street, New York, New York 10009,  Attention:
General  Counsel,  or to such  other  address  as the  Unaffiliated  Seller  may
designate in writing to the other parties.

              Section 6.02.  SEVERABILITY  OF PROVISIONS.  Any part,  provision,
representation,  warranty or covenant of this  Agreement  which is prohibited or
which is held to be void or unenforceable  shall be ineffective to the extent of
such  prohibition  or  unenforceability   without   invalidating  the  remaining
provisions hereof. Any part, provision, representation,  warranty or covenant of
this  Agreement  which is prohibited or  unenforceable  or is held to be void or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability  without  invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction   as  to  any  Mortgage   Loan  shall  not   invalidate  or  render
unenforceable such provision in any other jurisdiction.  To the extent permitted
by applicable law, the parties hereto waive any provision of law which prohibits
or renders void or unenforceable any provision hereof.

              Section 6.03.  AGREEMENT OF UNAFFILIATED  SELLER. The Unaffiliated
Seller agrees to execute and deliver such  instruments  and take such actions as
the Depositor may, from time to time,  reasonably request in order to effectuate
the purpose and to carry out the terms of this Agreement.

              Section 6.04.  SURVIVAL.  The parties to this Agreement agree that
the  representations,  warranties and agreements made by each of them herein and
in any certificate or other instrument delivered pursuant hereto shall be deemed
to be relied upon by the other party hereto,  notwithstanding  any investigation
heretofore  or  hereafter  made by such  other  party or on such  other  party's
behalf,  and that the  representations,  warranties and  agreements  made by the
parties hereto in this Agreement or in any such  certificate or other instrument
shall survive the delivery of and payment for the Mortgage Loans.

              Section  6.05.  EFFECT  OF  HEADINGS  AND TABLE OF  CONTENTS.  The
Article  and  Section  headings  herein  and  the  Table  of  Contents  are  for
convenience only and shall not affect the construction hereof.

              Section 6.06.  SUCCESSORS AND ASSIGNS.  This Agreement shall inure
to the benefit of and be binding  upon the parties  hereto and their  respective
successors  and permitted  assigns.  Except as expressly  permitted by the terms
hereof, this Agreement may not be assigned, pledged or hypothecated by any party
hereto to a third party  without the written  consent of the other party to this
Agreement.

              Section 6.07.  CONFIRMATION OF INTENT; GRANT OF SECURITY INTEREST.
It is the  express  intent of the  parties  hereto  that the  conveyance  of the
Mortgage Loans by the  Unaffiliated  Seller to the Depositor as  contemplated by
this Unaffiliated  Seller's  Agreement be, and be treated for all purposes as, a
sale of the Mortgage  Loans and that the conveyance of the Mortgage Loans by the
Unaffiliated  Seller  to the  Depositor  as  contemplated  by this  Unaffiliated
Seller's Agreement be, and be treated for accounting  purposes as, a sale of the
Mortgage  Loans.  It is,  further,  not the  intention  of the parties that such
conveyance be deemed a pledge of the Mortgage Loans by the  Unaffiliated  Seller
to the  Depositor  to  secure a debt or  other  obligation  of the  Unaffiliated
Seller.  However, in the event that,  notwithstanding the intent of the parties,
the Mortgage Loans are held to continue to be property of the Originators or the
Unaffiliated Seller then (a) this Unaffiliated  Seller's Agreement shall also be
deemed to be a security  agreement within the meaning of Articles 8 and 9 of the
Uniform  Commercial  Code;  (b) the transfer of the Mortgage  Loans provided for
herein shall be deemed to be a grant by the Originators to the

                                       11
<PAGE>

Unaffiliated  Seller  and by the  Unaffiliated  Seller  to  the  Depositor  of a
security  interest in all of such parties'  right,  title and interest in and to
the Mortgage  Loans and all amounts  payable on the Mortgage Loans in accordance
with  the  terms  thereof  and all  proceeds  of the  conversion,  voluntary  or
involuntary,  of the  foregoing  into  cash,  instruments,  securities  or other
property;  (c) the  possession by the Depositor of Mortgage Notes and such other
items of property as  constitute  instruments,  money,  negotiable  documents or
chattel  paper  shall be deemed to be  "possession  by the  secured  party"  for
purposes of perfecting  the security  interest  pursuant to Section 9-305 of the
Uniform Commercial Code; and (d) notifications to persons holding such property,
and  acknowledgments,  receipts  or  confirmations  from  persons  holding  such
property,  shall be deemed  notifications  to, or  acknowledgments,  receipts or
confirmations from, financial intermediaries,  bailees or agents (as applicable)
of the  Depositor for the purpose of perfecting  such  security  interest  under
applicable law. Any assignment of the interest of the Depositor  pursuant to any
provision  hereof  shall  also be deemed  to be an  assignment  of any  security
interest created hereby. The Unaffiliated Seller and the Depositor shall, to the
extent consistent with this Unaffiliated  Seller's Agreement,  take such actions
as may be necessary to ensure that, if this Unaffiliated Seller's Agreement were
deemed to create a  security  interest  in the  Mortgage  Loans,  such  security
interest would be deemed to be a perfected  security  interest of first priority
under  applicable law and will be maintained as such throughout the term of this
Agreement.

              Section 6.08.  MISCELLANEOUS.  This Agreement supersedes all prior
agreements and understandings relating to the subject matter hereof.

              Section 6.09. AMENDMENTS.

              (a)    This  Agreement  may be  amended  from  time to time by the
Unaffiliated Seller and the Depositor by written agreement, without notice to or
consent  of the  Certificateholders,  to  cure  any  ambiguity,  to  correct  or
supplement any provisions  herein, to comply with any changes in the Code, or to
make any other  provisions  with respect to matters or questions  arising  under
this  Agreement  which shall not be  inconsistent  with the  provisions  of this
Agreement; provided, however, that such action shall not, as evidenced by (i) an
Opinion of Counsel, at the expense of the party requesting the change, delivered
to the  Trustee or (ii) a letter from each Rating  Agency  confirming  that such
amendment will not result in the reduction,  qualification  or withdrawal of the
current rating of the Certificates, adversely affect in any material respect the
interests  of  any  Certificateholder;  and  provided,  further,  that  no  such
amendment  shall (x) reduce in any manner the amount of, or delay the timing of,
payments  received on Mortgage Loans which are required to be distributed on any
Certificate without the consent of the Holder of such Certificate, or (y) change
the rights or  obligations of any other party hereto without the consent of such
party,  or (z) cause  the  Unaffiliated  Seller  to  conduct  any  activity  not
permitted for qualified  special purpose  entities under the current  accounting
literature.

              (b)    It shall not be necessary  for the consent of Holders under
this Section to approve the particular  form of any proposed  amendment,  but it
shall be sufficient if such consent shall approve the substance thereof.

              Section 6.10.  THIRD-PARTY  BENEFICIARIES.  The parties agree that
each of the Class A Certificate  Insurer,  the  Servicer,  and the Trustee is an
intended  third-party  beneficiary of this Agreement to the extent  necessary to
enforce  the rights and to obtain the benefit of the  remedies of the  Depositor
under this  Agreement  which are  assigned to the Trustee for the benefit of the
Certificateholders and the Class A Certificate Insurer,  pursuant to the Pooling
and Servicing  Agreement,  and to the extent  necessary to obtain the benefit of
the  enforcement of the  obligations  and covenants of the  Unaffiliated  Seller
under Section 4.01 of this Agreement.

                                       12
<PAGE>

              SECTION 6.11.  GOVERNING LAW; CONSENT TO  JURISDICTION;  WAIVER OF
JURY TRIAL.

              (a)    THIS  AGREEMENT  SHALL BE  GOVERNED  BY, AND  CONSTRUED  IN
ACCORDANCE  WITH, THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS  PROVISIONS)
OF THE STATE OF NEW YORK.

              (B)    THE  DEPOSITOR  AND THE  UNAFFILIATED  SELLER  EACH  HEREBY
SUBMIT TO THE NON-EXCLUSIVE  JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK
AND THE UNITED STATES  DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN NEW
YORK CITY, AND EACH WAIVES  PERSONAL  SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY REGISTERED MAIL DIRECTED TO
THE  ADDRESS  SET FORTH IN SECTION  6.01 OF THIS  AGREEMENT  AND SERVICE SO MADE
SHALL BE  DEEMED  TO BE  COMPLETED  FIVE DAYS  AFTER  THE SAME  SHALL  HAVE BEEN
DEPOSITED IN THE U.S. MAIL, POSTAGE PREPAID. THE ORIGINATORS,  THE DEPOSITOR AND
THE  UNAFFILIATED  SELLER EACH HEREBY  WAIVES ANY  OBJECTION  BASED ON FORUM NON
CONVENIENS,  AND ANY OBJECTION TO VENUE OF ANY ACTION  INSTITUTED  HEREUNDER AND
CONSENTS  TO THE  GRANTING  OF SUCH  LEGAL  OR  EQUITABLE  RELIEF  AS IS  DEEMED
APPROPRIATE BY THE COURT.  NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF THE
ORIGINATORS, THE DEPOSITOR AND THE UNAFFILIATED SELLER TO SERVE LEGAL PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR AFFECT ANY SUCH PARTIES' RIGHT TO BRING ANY
ACTION OR PROCEEDING IN THE COURTS OF ANY OTHER JURISDICTION.

              (C)    THE DEPOSITOR AND THE UNAFFILIATED SELLER EACH HEREBY WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE,  WHETHER SOUNDING
IN CONTRACT,  TORT, OR OTHERWISE ARISING OUT OF, CONNECTED WITH,  RELATED TO, OR
IN CONNECTION WITH THIS AGREEMENT.  INSTEAD,  ANY DISPUTE RESOLVED IN COURT WILL
BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.

              Section 6.12.  EXECUTION IN  COUNTERPARTS.  This  Agreement may be
executed  in any  number of  counterparts,  each of which so  executed  shall be
deemed to be an original,  but all such counterparts  shall together  constitute
but one and the same instrument.

              Section  6.13.  SUBSEQUENT  MORTGAGE  LOANS..  Sales of Subsequent
Mortgage Loans shall be effectuated by means of Subsequent  Transfer  Agreements
on substantially the form of Exhibit L to the Pooling and Servicing Agreement.

                  [Remainder of Page Intentionally Left Blank]

                                       13
<PAGE>

              IN WITNESS  WHEREOF,  the  parties to this  Unaffiliated  Seller's
Agreement  have  caused  their names to be signed by their  respective  officers
thereunto duly authorized as of the date first above written.

                                           MORGAN STANLEY ABS CAPITAL I INC.

                                           By:
                                              ------------------------------
                                              Name:
                                              Title:

                                           CDC MORTGAGE CAPITAL INC.

                                           By:
                                              ------------------------------
                                              Name:
                                              Title:

                                           By:
                                              ------------------------------
                                              Name:
                                              Title:

                                       14EXHIBIT 10.1

                              ENDORSEMENT NO. 1 TO
                       FINANCIAL GUARANTY INSURANCE POLICY

FINANCIAL SECURITY                                               350 Park Avenue
ASSURANCE INC.                                          New York, New York 10022

TRUST:               The Trust created by the Pooling and  Servicing  Agreement,
                     dated as of  November  1, 2001  among  Morgan  Stanley  ABS
                     Capital I Inc., as Depositor, CDC Mortgage Capital Inc., as
                     Unaffiliated  Seller,  BNC Mortgage Inc., and IMPAC Funding
                     Corporation as Responsible Parties, Ocwen Federal Bank FSB,
                     as Servicer and Bankers Trust Company of California,  N.A.,
                     as Trustee

CERTIFICATES:        $168,100,000  CDC Mortgage  Capital Trust Series  2001-HE1,
                     Mortgage Pass-Through Certificates,  Series 2001-HE1, Class
                     A Certificates

Policy No.:          51198-N

Date of Issuance:    November 29, 2001

       1.     DEFINITIONS.  For all purposes of this Policy, the terms specified
below shall have the meanings or constructions provided below. Capitalized terms
used herein and not otherwise defined herein shall have the meanings provided in
the Pooling and Servicing Agreement unless the context shall otherwise require.

       "BUSINESS DAY" means any day other than (i) a Saturday,  Sunday, or legal
holiday; (ii) a day on which banking institutions in New York City or California
are authorized or obligated by law, executive order or governmental decree to be
closed.

       "GUARANTEED DISTRIBUTIONS" means, with respect to each Distribution Date,
the  distribution  to be made to Holders  of the  Certificates  in an  aggregate
amount  equal  to (i) the  Accrued  Certificate  Interest  with  respect  to the
Certificates  for each  Distribution  Date,  (ii) any Class A  Principal  Parity
Amount and (iii) the Class Certificate Balance of the Certificates to the extent
unpaid  on the  Final  Distribution  Date or  earlier  termination  of the Trust
pursuant to the terms of the  Pooling  and  Servicing  Agreement,  after  giving
effect to all other amounts due to the Certificates,  in each case in accordance
with the original  terms of the  Certificates  when issued and without regard to
any amendment or modification  of the  Certificates or the Pooling and Servicing
Agreement except  amendments or  modifications  to which Financial  Security has
given its prior written consent. Guaranteed Distributions shall not include, nor
shall  coverage  be  provided  under  this  Policy in  respect  of,  any  taxes,
withholding  or  other  charge  imposed  by any  governmental  authority  due in
connection with the payment of any Guaranteed Distribution to a Holder.

       "POLICY" means this Financial Guaranty Insurance Policy and includes each
endorsement thereto.

<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

       "POOLING  AND  SERVICING  AGREEMENT"  means  the  Pooling  and  Servicing
Agreement  dated as of November 1, 2001 among Morgan Stanley ABS Capital I Inc.,
as Depositor,  CDC Mortgage Capital Inc., as Unaffiliated  Seller,  BNC Mortgage
Inc., and IMPAC Funding Corporation,  as Responsible Parties, Ocwen Federal Bank
FSB, as Servicer and Bankers Trust Company of California,  N.A., as Trustee,  as
amended from time to time with the consent of Financial Security.

       "RECEIPT" and "RECEIVED" mean actual  delivery to Financial  Security and
to the Fiscal Agent (as defined  below),  if any,  prior to 12:00 noon, New York
City time,  on a Business Day;  delivery  either on a day that is not a Business
Day, or after 12:00 noon,  New York City time,  shall be deemed to be receipt on
the next succeeding  Business Day. If any notice or certificate  given hereunder
by the Trustee is not in proper form or is not properly  completed,  executed or
delivered,  it shall be deemed not to have been Received, and Financial Security
or its Fiscal  Agent  shall  promptly  so advise the Trustee and the Trustee may
submit an amended notice.

       "TERM OF THIS  POLICY"  means the period from and  including  the Date of
Issuance to and including the date on which (i) the unpaid principal balances of
all of the Certificates is zero, (ii) any period during which any payment on the
Certificates could have been avoided in whole or in part as a preference payment
under  applicable  bankruptcy,  insolvency,  receivership  or  similar  law  has
expired,  and (iii) if any  proceedings  requisite  to avoidance as a preference
payment have been commenced prior to the occurrence of (i) and (ii), a final and
nonappealable order in resolution of each such proceeding has been entered.

       "TRUSTEE"  means  Bankers  Trust  Company  of  California,  N.A.,  in its
capacity as Trustee under the Pooling and Servicing  Agreement and any successor
in such capacity.

       2.     NOTICES  AND  CONDITIONS  TO  PAYMENT  IN  RESPECT  OF  GUARANTEED
DISTRIBUTIONS.   Following  Receipt  by  Financial  Security  of  a  notice  and
certificate  from  the  Trustee  in the  form  attached  as  Exhibit  A to  this
Endorsement, Financial Security will pay any amount payable hereunder in respect
of Guaranteed  Distributions out of the funds of Financial Security on the later
to occur of (a) 12:00  noon,  New York City  time,  on the Second  Business  Day
following  such  Receipt;  and (b)  12:00  noon,  New  York  City  time,  on the
Distribution Date to which such claim relates. Payments due hereunder in respect
of Guaranteed  Distributions  will be disbursed by wire transfer of  immediately
available funds to the Class A Insurance Payment Account established pursuant to
the Pooling and  Servicing  Agreement  or, if no such Class A Insurance  Payment
Account has been established, to the Trustee.

       Financial  Security  shall be  entitled  to pay any amount  hereunder  in
respect of Guaranteed Distributions, including any acceleration payment, whether
or not any notice and certificate shall have been Received by Financial Security
as provided  above,  provided,  however,  that by  acceptance of this Policy the
Trustee  agrees to provide to  Financial  Security,  upon  Financial  Security's
request to the Trustee, a notice and certificate in respect of any such payments
made  by  Financial  Security.  Financial  Security  shall  be  entitled  to pay
principal hereunder on an accelerated basis if Financial Security shall so elect
in its sole  discretion,  at any time or from time to time, in whole or in part,
at an earlier  Distribution  Date than provided in the definition of "Guaranteed
Distributions,"  if such principal would have been payable under the Pooling and
Servicing  Agreement were funds sufficient to make such payment available to the
Trustee for

                                      -2-
<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

such  purpose.  Guaranteed  Distributions  insured  hereunder  shall not include
interest,  in respect of  principal  paid  hereunder  on an  accelerated  basis,
accruing from after the date of such payment of principal.  Financial Security's
obligations hereunder in respect of Guaranteed Distributions shall be discharged
to the extent  funds are  disbursed  by  Financial  Security as provided  herein
whether or not such funds are properly applied by the Trustee.

       3.     NOTICES  AND  CONDITIONS  TO  PAYMENT  IN  RESPECT  OF  GUARANTEED
DISTRIBUTIONS AVOIDED AS PREFERENCE PAYMENTS. If any Guaranteed  Distribution is
avoided  as  a  preference  payment  under  applicable  bankruptcy,  insolvency,
receivership or similar law,  Financial Security will pay such amount out of the
funds of  Financial  Security  on the  later of (a) the date when due to be paid
pursuant  to the  Order  referred  to below or (b) the first to occur of (i) the
fourth Business Day following Receipt by Financial  Security from the Trustee of
(A) a certified copy of the order of the court or other  governmental body which
exercised  jurisdiction  to the  effect  that the Holder is  required  to return
principal or interest  distributed with respect to the  Certificates  during the
Term of this Policy  because such  distributions  were  avoidable as  preference
payments under applicable bankruptcy law (the "Order"), (B) a certificate of the
Holder that the Order has been entered and is not subject to any stay and (C) an
assignment  duly  executed  and  delivered  by the  Holder,  in such  form as is
reasonably  required  by  Financial  Security  and  provided  to the  Holder  by
Financial Security,  irrevocably  assigning to Financial Security all rights and
claims of the Holder relating to or arising under the  Certificates  against the
debtor  which made such  preference  payment or  otherwise  with respect to such
preference  payment or (ii) the date of Receipt by Financial  Security  from the
Trustee of the items  referred to in clauses (A), (B) and (C) above if, at least
four Business Days prior to such date of Receipt,  Financial Security shall have
Received written notice from the Trustee that such items were to be delivered on
such date and such date was  specified  in such notice.  Such  payment  shall be
disbursed  to the  receiver,  conservator,  debtor-in-possession  or  trustee in
bankruptcy  named in the Order and not to the  Trustee  or any  Holder  directly
(unless a Holder has previously  paid such amount to the receiver,  conservator,
debtor-in-possession  or trustee in bankruptcy named in the Order, in which case
such payment shall be disbursed to the Trustee for  distribution  to such Holder
upon proof of such payment reasonably  satisfactory to Financial  Security).  In
connection with the foregoing, Financial Security shall have the rights provided
pursuant to Sections 4.05 and 4.06 of the Pooling and Servicing Agreement.

       4.     GOVERNING  LAW.  This Policy shall be governed by and construed in
accordance with the laws of the State of New York,  without giving effect to the
conflict of laws principles thereof.

       5.     FISCAL  AGENT.  At any  time  during  the  Term  of  this  Policy,
Financial  Security may appoint a fiscal agent (the "Fiscal Agent") for purposes
of this Policy by written notice to the Trustee at the notice address  specified
in the Pooling and Servicing Agreement specifying the name and notice address of
the  Fiscal  Agent.  From and after the date of  receipt  of such  notice by the
Trustee,  (i) copies of all notices and  documents  required to be  delivered to
Financial Security pursuant to this Policy shall be simultaneously  delivered to
the Fiscal  Agent and to  Financial  Security  and shall not be deemed  Received
until  Received by both and (ii) all  payments  required to be made by Financial
Security under this Policy may be made directly by Financial  Security or by the
Fiscal Agent on behalf of Financial  Security.  The Fiscal Agent is the agent of
Financial  Security only and the Fiscal Agent shall in no event be liable to any
Holder for any acts of the

                                      -3-
<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

Fiscal  Agent or any failure of  Financial  Security to deposit,  or cause to be
deposited, sufficient funds to make payments due under this Policy.

       6.     WAIVER OF DEFENSES.  To the fullest extent permitted by applicable
law, Financial Security agrees not to assert, and hereby waives, for the benefit
of each Holder,  all rights (whether by  counterclaim,  setoff or otherwise) and
defenses (including, without limitation, the defense of fraud), whether acquired
by  subrogation,  assignment  or  otherwise,  to the extent that such rights and
defenses  may be  available  to  Financial  Security  to  avoid  payment  of its
obligations under this Policy in accordance with the express  provisions of this
Policy.

       7.     NOTICES.  All  notices to be given  hereunder  shall be in writing
(except  as  otherwise  specifically  provided  herein)  and  shall be mailed by
registered mail or personally  delivered or telecopied to Financial  Security as
follows:

                    Financial Security Assurance Inc.
                    350 Park Avenue
                    New York, NY 10022
                    Attention: Managing Director - Transaction Oversight
                    Re:  CDC Mortgage Capital Trust Series 2001-HE1
                    Policy No.: 51198-N
                    Telecopy No.: (212) 339-3518
                    Confirmation: (212) 826-0100

Financial  Security  may specify a  different  address or  addresses  by writing
mailed or delivered to the Trustee.

       8.     PRIORITIES. In the event any term or provision of the face of this
Policy is inconsistent with the provisions of this  Endorsement,  the provisions
of this Endorsement shall take precedence and shall be binding.

       9.     EXCLUSIONS  FROM  INSURANCE  GUARANTY  FUNDS.  This  Policy is not
covered by the Property/Casualty Insurance Security Fund specified in Article 76
of the New York  Insurance  Law.  This  Policy  is not  covered  by the  Florida
Insurance  Guaranty  Association  created  under Part II of  Chapter  631 of the
Florida  Insurance  Code.  In  the  event  Financial  Security  were  to  become
insolvent,  any claims  arising  under this Policy are excluded from coverage by
the California Insurance Guaranty  Association,  established pursuant to Article
14.2 of Chapter 1 of Part 2 of Division 1 of the California Insurance Code.

       10.    SURRENDER OF POLICY.  The Trustee shall  surrender  this Policy to
Financial Security for cancellation upon expiration of the Term of this Policy

                                      -4-
<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

       11.    IN WITNESS WHEREOF,  FINANCIAL  SECURITY ASSURANCE INC. has caused
this Endorsement No. 1 to be executed by its Authorized Officer.

                                               FINANCIAL SECURITY ASSURANCE INC.

                                               By
                                                   -----------------------------
                                                         Authorized Officer

                                      -5-
<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

                                                                       EXHIBIT A
                                                                TO ENDORSEMENT 1

                         NOTICE OF CLAIM AND CERTIFICATE

                             (Letterhead of Trustee)

Financial Security Assurance Inc.
350 Park Avenue
New York, NY 10022

       Re:    CDC  Mortgage   Capital  Trust  2001-HE1   Mortgage   Pass-Through
Certificates, Series 2001-HE1

       The  undersigned,  a duly authorized  officer of Bankers Trust Company of
California,  N.A.  (the  "Trustee"),  hereby  certifies  to  Financial  Security
Assurance Inc.  ("Financial  Security"),  with  reference to Financial  Guaranty
Insurance  Policy No. 51198-N dated  November 29, 2001 (the "Policy")  issued by
Financial  Security  in  respect  of the CDC  Mortgage  Capital  Trust  2001-HE1
Mortgage Pass-Through Certificates, Series 2001-HE1 (the "Certificates"), that:

                     (i)    The Trustee is the Trustee for the Holders under the
       Pooling and Servicing Agreement.

                     (ii)   The sum of all amounts on deposit (or  scheduled  to
       be on deposit) in the Collection  Account and available for  distribution
       to the Holders  pursuant to the Pooling and Servicing  Agreement  will be
       $___________  (the  "Shortfall")  less than the Guaranteed  Distributions
       with respect to the Distribution Date.

                     (iii)  The  Trustee is making a claim  under the Policy for
       the Shortfall to be applied to  distributions of principal or interest or
       both with respect to the Certificates.

                     (iv)   The Trustee agrees that,  following receipt of funds
       from  Financial  Security,  it shall (a) hold such  amounts  in trust and
       apply the same directly to the payment of Guaranteed Distributions on the
       Certificates  when due;  (b) not apply such funds for any other  purpose;
       (c) not commingle such funds with other funds held by the Trustee and (d)
       maintain  an  accurate  record  of such  payments  with  respect  to each
       Certificate  and the  corresponding  claim  on the  Policy  and  proceeds
       thereof  and,  if  the  Certificate  is  required  to be  surrendered  or
       presented  for such  payment,  shall stamp on each such  Certificate  the
       legend "$ [insert  applicable  amount] paid by Financial Security and the
       balance  hereof has been  cancelled  and reissued" and then shall deliver
       such Certificate to Financial Security.

                     (v)    The  Trustee,  on  behalf  of  the  Holders,  hereby
       assigns to  Financial  Security the rights of the Holders with respect to
       the  Certificates  to  the  extent  of any  payments  under  the  Policy,
       including,  without limitation, any amounts due to the Holders in respect
       of  securities  law  violations  arising  from the  offer and sale of the
       Certificates.  The  foregoing  assignment  is in addition  to, and not in
       limitation  of, rights of  subrogation  otherwise  available to Financial
       Security in respect of such payments.  The Trustee shall

                                      A-1
<PAGE>

Policy No.: 51198-N                         Date of Issuance:  November 29, 2001

       take such  action  and  deliver  such  instruments  as may be  reasonably
       requested or required by Financial  Security to effectuate the purpose or
       provisions of this clause (v).

                     (vi)   The  Trustee,  on its  behalf  and on  behalf of the
       Holders, hereby appoints Financial Security as agent and attorney-in-fact
       for the Trustee and each such Holder in any legal proceeding with respect
       to the  Certificates.  The Trustee hereby agrees that Financial  Security
       may at any time during the  continuation  of any proceeding by or against
       the  Issuer  under  the  United  States  Bankruptcy  Code  or  any  other
       applicable  bankruptcy,  insolvency,   receivership,   rehabilitation  or
       similar law (an "Insolvency  Proceeding")  direct all matters relating to
       such Insolvency Proceeding, including without limitation, (A) all matters
       relating to any claim in connection with an Insolvency Proceeding seeking
       the avoidance as a preferential  transfer of any  distribution  made with
       respect to the Certificates (a "Preference  Claim"), (B) the direction of
       any appeal of any order relating to any Preference  Claim, at the expense
       of  Financial  Security but subject to  reimbursement  as provided in the
       Insurance  Agreement  and (C) the posting of any surety,  supersedeas  or
       performance bond pending any such appeal. In addition, the Trustee hereby
       agrees that Financial Security shall be subrogated to, and the Trustee on
       its behalf and on behalf of each Holder, hereby delegates and assigns, to
       the fullest  extent  permitted by law, the rights of the Trustee and each
       Holder in the conduct of any Insolvency  Proceeding,  including,  without
       limitation,  all rights of any party to an adversary proceeding or action
       with  respect  to any  court  order  issued in  connection  with any such
       Insolvency Proceeding.

       (vii)  Payment  should be made by wire  transfer  directed to the Class A
Insurance Payment Account.

       Unless the context  otherwise  requires,  capitalized  terms used in this
Notice of Claim and  Certificate  and not defined herein shall have the meanings
provided in the Policy.

       IN WITNESS WHEREOF, the Trustee has executed and delivered this Notice of
Claim and Certificate as of the ____________ day of ___________, _____.

                                       BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

                                       By
                                          --------------------------------------
                                       Title
                                             -----------------------------------

--------------------------------------------------------------------------------

For Financial Security or Fiscal Agent Use Only

Wire transfer sent on ____________________ by _______________________

Confirmation Number _____________________

                                      A-2

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