Document:

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                                                                    Exhibit 10.2

                                STATE OF NEW YORK
                       NEW YORK STATE DEPARTMENT OF LABOR
                               AMENDMENT NO. 6 TO
                       COMPTROLLER'S CONTRACT NO. C000857
                  WITH CLEARBLUE TECHNOLOGIES MANAGEMENT, INC.

         THIS AGREEMENT is made this 24TH DAY OF SEPTEMBER, 2003 by and between
the People of the State of New York, acting by and through Linda Angello, the
Commissioner of Labor, whose office is at the 5th Floor of Building 12, Governor
W. Averell Harriman State Office Building Campus, Albany, New York 12240
(hereinafter referred to as "Labor" or "State") and ClearBlue Technologies
Management, Inc., a corporation authorized to do business in the State of New
York, with an office at 224 Harrison Street, Syracuse, N.Y. 13202 (hereinafter
referred to as "ClearBlue" or "Contractor").

                              W I T N E S S E T H:

         WHEREAS, the parties entered into Comptroller's Contract No. C000857
(hereinafter "Contract") approved by the State Comptroller on November 30, 2000,
for the provision of Software development and maintenance, Web Hosting and Help
Desk services (hereinafter "Software Services"); and

         WHEREAS, the Contract provided for expenditures of up to Eighty Two
Million Dollars ($82,000,000.00) during the 5 year term of the Agreement
(hereinafter "Contract Total"), subject to the periodic extension of funding
from the United States Department of Labor; and

         WHEREAS, the Contract made available Nineteen Million Dollars
($19,000,000.00) for expenditure through June 14, 2001 (hereinafter "Contract
Funding"); and

         WHEREAS, Amendment No. 1 increased the Contract Funding $4,833,407 to
provide additional Software Services; and

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         WHEREAS, Amendment No. 2 increased the Contract Funding $25,540,000 to
provide additional Software Services; and

         WHEREAS, Amendment No. 3 increased the Contract Funding $4,384,994 to
provide additional Software Services, increased the hourly billable rates in
accordance with the Consumer Price Index for Syracuse, and assigned the Contract
from Applied Theory Corporation, Inc. to ClearBlue Technologies Management,
Inc.; and

         WHEREAS, Amendment No. 4 increased the Contract Funding $18,952,142 to
provide additional Software Services; and

         WHEREAS, Amendment No. 5 increased the Contract Total by $1,006,278.00
from $82,000,000.00 to $83,006,278.00 and the Contract Funding by $1,006,278.00
from $72,710,543.00 to $73,716,821.00 to permit the Department to provide
Software Services on behalf of the Rhode Island Department of Labor and
Training; and

         WHEREAS, the parties wish to amend the contract to increase the
Contract Funding and Contract Total amounts; to incorporate the requirements of
Executive Order 127; and to decrease hourly billable rates.

         WHEREAS, the parties are ready, willing and able to enter into such an
amendment (hereinafter "Contract Amendment No. 6").

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

         1.       The Contract Funding is hereby increased to permit the
                  Department to spend an additional $2,399,880.00 for Software
                  Services in accordance with the rates and terms contained in
                  the Contract and the Scope of Services, as set forth in
                  Exhibit A-1 and Exhibit A-2, copies of which are attached
                  hereto and incorporated herein.

         2.       The Contract Total is hereby increased by $52,000,000.00 from
                  $83,006,278.00 to $135,006,278.00 to provide Labor with
                  sufficient

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                  latitude for meeting projected contract needs up to the
                  expiration of the contract.

         3.       The Contract is hereby amended to require Contractor to
                  disclose persons or organizations retained, employed, or
                  designated by or on behalf of the Contractor to attempt to
                  influence the procurement process in accordance with Executive
                  Order 127.

         4.       The Contract is hereby amended to require Contractor to
                  complete and execute the Contractor Certification of
                  Compliance with Executive Order 127 form attached hereto.
                  Labor reserves the right to terminate this contract in the
                  event it is found that the certification filed by the
                  Contractor in accordance with New York State Executive Order
                  Number 127, signed by Governor Pataki on June 16, 2003, was
                  intentionally false or intentionally incomplete. Upon such
                  finding, Labor may exercise its termination right by providing
                  written notification to the Contractor in accordance with the
                  written notification terms of the contract.

         5.       Pursuant to Article 4, Compensation and Payment Terms of the
                  Contract, the hourly billable rates shall be decreased, in
                  accordance with good faith negotiations conducted with
                  Contractor, as set forth in Exhibit B.

         6.       This Agreement shall be deemed executory only to the extent of
                  funding available to the State for the performance of the
                  terms hereof and no liability on account thereof shall be
                  incurred by the State of New York beyond monies available for
                  purpose thereof.

         7.       This Agreement shall be governed by the laws of the State of
                  New York.

         8.       Appendix A, standard clauses for New York State contracts,
                  attached hereto, is hereby expressly made a part of this
                  Agreement as fully as if set forth at length herein.

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         9.       In all respects not inconsistent with this Contract Amendment
                  No. 6, the terms of the Contract as originally entered into
                  shall remain in full force and effect and binding upon the
                  parties hereto.

         10.      This Contract Amendment No. 6, the Contract and any prior
                  amendments, constitute the entire Agreement between the
                  parties hereto and no statement, promise, condition,
                  understanding, inducement or representation, oral or written,
                  expressed or implied, which is not contained herein shall be
                  binding or valid and this Agreement shall not be changed,
                  modified or altered in any manner except by an instrument in
                  writing executed by both parties hereto.

         11.      This Contract Amendment No. 6 shall not be deemed executed,
                  valid or binding unless and until approved in writing by the
                  Attorney General and the State Comptroller.

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         IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.

                                      CONTRACT NUMBER C000857

                                          Agency Certification

                                          "In addition to the acceptance of this
                                          contract, I also certify that original
                                          copies of this signature page will be
                                          attached to all other exact copies of
                                          this contract."

CLEARBLUE TECHNOLOGIES                    THE PEOPLE OF THE STATE
MANAGEMENT, INC.                          OF NEW YORK

BY: /S/ ARTHUR P. BECKER                  BY: /s/ EDWARD E. SNYDER
    -----------------------------             ---------------------------
    NAME: ARTHUR P. BECKER                    NAME: EDWARD E. SNYDER
    TITLE: CEO AND PRESIDENT                  TITLE: ASSOCIATE ACCOUNTANT
    FEDERAL I.D. NO.:

APPROVED AS TO FORM                                  APPROVED
ELIOT SPITZER                                        ALAN G. HEVESI
ATTORNEY GENERAL                                     STATE COMPTROLLER

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                                   EXHIBIT A-1

                                STATEMENT OF WORK

The purposes of this grant are to obtain through the New York Department of
Labor the services, staff, and related non-personal services, such as computer
hardware and software, needed to develop and maintain a service for clearing
labor between the States, as authorized by the Wagner-Peyser Act, to assist
employers in the recruitment of workers, to assist job seekers in finding
appropriate employment, and to provide other information and services that
improve the efficiency of the labor market. Activities under this grant will be
performed by the America's Job Bank Service Center (AJBSC), and will be focused
on assisting the Workforce Investment System in providing value to its customers
by expanding the resources that the states can bring to the labor market and
facilitating greater access to those resources. In furtherance of these
objectives, $2,200,000 is requested to provide funding under this grant for the
period from July 1, 2002 through September 30, 2003 to enable the AJBSC to
develop/integrate the following new functionality/features:

1        Incorporating the "Skills Profiler" (currently available in America's
         CareerInfoNet) into America's Job Bank's resume builder feature.

2        Integrating the "job profiles" feature developed by the National
         Federation of the Blind (NFB) for their Jobline product into America's
         Job Bank. This feature will allow businesses to create and maintain
         specific questions job seekers must answer to apply for a specific
         position (in addition to sending their resume).

3        Installing an expert system (that will be chosen in consultation with
         the AJBSC) into the data processing of the batch jobs coming from the
         states and PI employers. The expert system will assign an appropriate
         O*NET code to each job making the coding much more accurate for job
         matching purposes and associating appropriate labor market information
         to openings.

4        Upon completion of the first three tasks described above, if any
         financial resources made available to New York in this modification
         remain, they shall be used to build any additional functionality
         approved and prioritized by the AJB Committee (and the Assistant
         Secretary for ETA) using the change control process established for all
         of the CareerOneStop products.

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America's Job Bank Service Center has been provided with an additional
$2,200,000 from the U.S. Department of Labor Employment and Training
Administration for use in sustaining contracted development services in support
of America's Job Bank. This money will be used for the following tasks as
defined in ClearBlue Technologies Management, Inc contract C000857 as follows:

                  Task                                                   Cost

1.       Consulting/Applications Development Services-   AJB         $ 1,700,000

         Requirements and functional specifications, applications development,
         testing, systems maintenance and enhancements for AJB Version 4.X-9.X
         with O*Net Integration, AJB Association Version, WINS Version 1.X, OSOS
         Version 1.X-5.X, and Integration with ACINet and ALX.

2.       Consulting/Systems Integration Services-   AJB              $   500,000

         Analysis, design, development, project coordination and management,
         including hosting services, for implementation of AJB Version 4.X-9.X
         and related systems including Association Version, WINS Version 1.X,
         OSOS Version 1.X-5.X, ACINet, ALX, O*Net, data collection, existing
         batch conversion, and AJBSC on-line application.

                                                  TOTAL:             $ 2,200,000

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                                   EXHIBIT A-2

                                STATEMENT OF WORK

The purposes of this grant are to obtain through the New York Department of
Labor the services, staff, and related non-personal services, such as computer
hardware and software, needed to develop and maintain the America's One-Stop
Operating System, a self-service and mediated case management tool used by
One-Stop staff in assisting employers in the recruitment of workers, job seekers
in finding appropriate employment, and providing other information and services
that improve the efficiency of the labor market. Activities under this grant
will be performed by the America's Job Bank Service Center (AJBSC), and will be
focused on assisting the implementing Consortium states in providing value to
its customers by expanding the resources that the states can bring to the labor
market and facilitating greater access to those resources. In furtherance of
these objectives, $199,880 is requested to provide funding under this grant for
the period from July 1, 2002 through September 30, 2003 to enable the AJBSC to
carry out the following activities:

1.       Providing implementation and support services for existing Consortium
         states to bring up the America's One-Stop Operating System (AOSOS) in a
         state-maintained or hosted environment.

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America's Job Bank Service Center has been provided with an additional $199,880
from the U.S. Department of Labor Employment and Training Administration for use
in sustaining contracted development services in support of America's One-Stop
Operating System. This money will be used for the following tasks as defined in
ClearBlue Technologies Management, Inc contract C000857 as follows:

                  Task                                                    Cost

1.       Consulting/Applications Development Services- OSOS            $ 174,880

         Requirements and functional specifications, applications
         development, testing, systems maintenance and enhancements
for AJB Version 4.X-9.X with O*Net Integration, AJB Association Version, WINS
Version 1.X, OSOS Version 1.X-5.X, and Integration with ACINet and ALX.

2.       Consulting/Systems Integration Services- OSOS                 $  25,000

         Analysis, design, development, project coordination and management,
including hosting services, for implementation of AJB Version 4.X-9.X and
related systems including Association Version, WINS Version 1.X, OSOS Version
1.X-5.X, ACINet, ALX, O*Net, data collection, existing batch conversion, and
AJBSC on-line application.

                                                TOTAL:                 $ 199,880

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STANDARD CLAUSES FOR NYS CONTRACTS                                    APPENDIX A

                       STANDARD CLAUSES FOR NYS CONTRACTS

       The parties to the attached contract, license, lease, amendment or other
agreement of any kind (hereinafter, "the contract" or "this contract") agree to
be bound by the following clauses which are hereby made a part of the contract
(the word "Contractor" herein refers to any party other than the State, whether
a contractor, licenser, licensee, lessor, lessee or any other party):

1. EXECUTORY CLAUSE. In accordance with Section 41 of the State Finance Law,
the State shall have no liability under this contract to the Contractor or to
anyone else beyond funds appropriated and available for this contract.

2. NON-ASSIGNMENT CLAUSE. In accordance with Section 138 of the State Finance
Law, this contract may not be assigned by the Contractor or its right, title or
interest therein assigned, transferred, conveyed, sublet or otherwise disposed
of without the previous consent, in writing, of the State and any attempts to
assign the contract without the State's written consent are null and void. The
Contractor may, however, assign its right to receive payment without the State's
prior written consent unless this contract concerns Certificates of
Participation pursuant to Article 5-A of the State Finance Law.

3. COMPTROLLER'S APPROVAL. In accordance with Section 112 of the State Finance
Law (or, if this contract is with the State University or City University of New
York, Section 355 or Section 6218 of the Education Law), if this contract
exceeds $15,000 (or the minimum thresholds agreed to by the Office of the State
Comptroller for certain S.U.N.Y. and C.U.N.Y. contracts), or if this is an
amendment for any amount to a contract which, as so amended, exceeds said
statutory amount, or if, by this contract, the State agrees to give something
other than money when the value or reasonably estimated value of such
consideration exceeds $10,000, it shall not be valid, effective or binding upon
the State until it has been approved by the State Comptroller and filed in his
office. Comptroller's approval of contracts let by the Office of General
Services is required when such contracts exceed $30,000 (State Finance Law
Section 163.6.a).

4. WORKERS' COMPENSATION BENEFITS. In accordance with Section 142 of the State
Finance Law, this contract shall be void and of no force and effect unless the
Contractor shall provide and maintain coverage during the life of this contract
for the benefit of such employees as are required to be covered by the
provisions of the Workers' Compensation Law.

5. NON-DISCRIMINATION REQUIREMENTS. To the extent required by Article 15 of the
Executive Law (also known as the Human Rights Law) and all other State and
Federal statutory and constitutional non-discrimination provisions, the
Contractor will not discriminate against any employee or applicant for
employment because of race, creed, color, sex, national origin, sexual
orientation, age, disability, genetic predisposition or carrier status, or
marital status. Furthermore, in accordance with Section 220-e of the Labor Law,
if this is a contract for the construction, alteration or repair of any public
building or public work or for the manufacture, sale or distribution of
materials, equipment or supplies, and to the extent that this contract shall be
performed within the State of New York, Contractor agrees that neither it not
its subcontractors shall, by reason of race, creed, color, disability, sex, or
national origin: (a) discriminate in hiring against any New York State citizen
who is qualified and available to perform the work; or (b) discriminate against
or intimidate any employee hired for the performance of work under this
contract. If this is a building service contract as defined in Section 230 of
the Labor Law, then, in accordance with Section 239 thereof, Contractor agrees
that neither it nor its subcontractors shall by reason of race, creed, color,
national origin, age, sex or disability: (a) discriminate in hiring against any
New York State citizen who is qualified and available to perform the work; or
(b) discriminate against or intimidate any employee hired for the performance of
work under this contract. Contractor is subject to fines of $50.00 per person
per day for any violation of Section 220-e or Section 239 as well as possible
termination of this contract and forfeiture of all moneys due hereunder for a
second or subsequent violation.

6. WAGE AND HOURS PROVISIONS. If this is a public work contract covered by
Article 8 of the Labor Law or a building service contract covered by Article 9
thereof, neither Contractor's employees nor the employees of its subcontractors
may be required or permitted to work more than the number of hours or days
stated in said statutes, except as otherwise provided in the Labor Law and as
set forth in prevailing wage and supplement schedules issued by the State Labor
Department. Furthermore, Contractor and its subcontractors must pay at least the
prevailing wage rate and pay or provide the prevailing supplements, including
the premium rates for overtime pay, as determined by the State Labor Department
in accordance with the Labor Law.

7. NON-COLLUSIVE BIDDING CERTIFICATION. In accordance with Section 139-d of the
State Finance Law, if this contract was awarded based upon the submission of
bids, Contractor warrants, under penalty of perjury, that its bid was arrived at
independently and without collusion aimed at restricting competition. Contractor
further warrants that, at the time Contractor submitted its bid, an authorized
and responsible person executed and delivered to the State a non-collusive
bidding certification on Contractor's behalf.

8. INTERNATIONAL BOYCOTT PROHIBITION. In accordance with Section 220-f of the
Labor Law and Section 139-h of the State Finance Law, if this contract exceeds
$5,000, the Contractor agrees, as a material condition of the contract, that
neither the Contractor nor any substantially owned or affiliated person, firm,
partnership or corporation has participated, is participating, or shall
participate in an international boycott in violation of the federal Export
Administration Act of 1979 (50 USC App. Sections 2401 et seq.) or regulations
thereunder. If such Contractor, or any of the aforesaid affiliates of
Contractor, is convicted or is otherwise found to have violated said laws or
regulations upon the final determination of the United States Commerce
Department or any other appropriate agency of the United States subsequent to
the contract's execution, such contract, amendment or modification thereto shall
be rendered forfeit and void. The Contractor shall so notify the State
Comptroller within five (5) business days of such conviction, determination or
disposition of appeal (2NYCRR 105.4).

9. SET-OFF RIGHTS. The State shall have all of its common law, equitable and
statutory rights of set-off. These rights shall include, but not be limited to,
the State's option to withhold for the purposes of set-off any moneys due to
the Contractor under this contract up to any amounts due and owing to the State
with regard to this contract, any other contract with any State department or
agency, including any contract for a term commencing prior to the term of this
contract, plus any amounts due and owing to the State for any other reason
including, without limitation, tax delinquencies, fee delinquencies or monetary
penalties relative thereto. The State shall exercise its set-off rights in
accordance with normal State practices including, in cases of set-off pursuant
to an audit, the finalization of such audit by the State agency, its
representatives, or the State Comptroller.

10. RECORDS. The Contractor shall establish and maintain complete and accurate
books, records, documents, accounts and other evidence directly pertinent to
performance under this contract (hereinafter, collectively, "the Records"). The
Records must be kept for the balance of the calendar year in which they were
made and for six (6) additional years thereafter. The State Comptroller, the
Attorney General and any other person or entity authorized to conduct an
examination, as well as the agency or agencies involved in this contract, shall
have access to the Records during normal business hours at an office of the
Contractor

Page 1                                                                 May, 2003

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STANDARD CLAUSES FOR NYS CONTRACTS                                    APPENDIX A

within the State of New York or, if no such office is available, at a mutually
agreeable and reasonable venue within the State, for the term specified above
for the purposes of inspection, auditing and copying. The State shall take
reasonable steps to protect from public disclosure any of the Records which are
exempt from disclosure under Section 87 of the Public Officers Law (the
"Statute") provided that: (i) the Contractor shall timely inform an appropriate
State official, in writing, that said records should not be disclosed; and (ii)
said records shall be sufficiently identified; and (iii) designation of said
records as exempt under the Statute is reasonable. Nothing contained herein
shall diminish, or in any way adversely affect, the State's right to discovery
in any pending or future litigation.

11. IDENTIFYING INFORMATION AND PRIVACY NOTIFICATION. (a) FEDERAL EMPLOYER
IDENTIFICATION NUMBER and/or FEDERAL SOCIAL SECURITY NUMBER. All invoices or New
York State standard vouchers submitted for payment for the sale of goods or
services or the lease of real or personal property to a New York State agency
must include the payee's identification number, i.e., the seller's or lessor's
identification number. The number is either the payee's Federal employer
identification number or Federal social security number, or both such numbers
when the payee has both such numbers. Failure to include this number or numbers
may delay payment. Where the payee does not have such number or numbers, the
payee, on its invoice or New York State standard voucher, must give the reason
or reasons why the payee does not have such number or numbers.

(b) PRIVACY NOTIFICATION. (1) The authority to request the above personal
information from a seller of goods or services or a lessor of real or personal
property, and the authority to maintain such information, is found in Section 5
of the State Tax Law. Disclosure of this information by the seller or lessor to
the State is mandatory. The principal purpose for which the information is
collected is to enable the State to identify individuals, businesses and others
who have been delinquent in filing tax returns or may have understated their tax
liabilities and to generally identify persons affected by the taxes administered
by the Commissioner of Taxation and Finance. The information will be used for
tax administration purposes and for any other purpose authorized by law.

(2) The personal information is requested by the purchasing unit of the agency
contracting to purchase the goods or services or lease the real or personal
property covered by this contract or lease. The information is maintained in New
York State's Central Accounting System by the Director of Accounting Operations,
Office of the State Comptroller, AESOB, Albany, New York 12236.

12. EQUAL EMPLOYMENT OPPORTUNITIES FOR MINORITIES AND WOMEN. In accordance with
Section 312 of the Executive Law, if this contract is: (i) a written agreement
or purchase order instrument, providing for a total expenditure in excess of
$25,000.00, whereby a contracting agency is committed to expend or does expend
funds in return for labor, services, supplies, equipment, materials or any
combination of the foregoing, to be performed for, or rendered or furnished to
the contracting agency; or (ii) a written agreement in excess of $100,000.00
whereby a contracting agency is committed to expend or does expend funds for the
acquisition, construction, demolition, replacement, major repair or renovation
of real property and improvements thereon; or (iii) a written agreement in
excess of $100,000.00 whereby the owner of a State assisted housing project is
committed to expend or does expend funds for the acquisition, construction,
demolition, replacement, major repair or renovation of real property and
improvements thereon for such project, then:

(a) The Contractor will not discriminate against employees or applicants for
employment because of race, creed, color, national origin, sex, age, disability
or marital status, and will undertake or continue existing programs of
affirmative action to ensure that minority group members and women are afforded
equal employment opportunities without discrimination. Affirmative action shall
mean recruitment, employment, job assignment, promotion, upgradings, demotion,
transfer, layoff, or termination and rates of pay or other forms of
compensation;

(b) at the request of the contracting agency, the Contractor shall request each
employment agency, labor union, or authorized representative of workers with
which it has a collective bargaining or other agreement or understanding, to
furnish a written statement that such employment agency, labor union or
representative will not discriminate on the basis of race, creed, color,
national origin, sex, age, disability or marital status and that such union or
representative will affirmatively cooperate in the implementation of the
contractor's obligations herein; and

(c) the Contractor shall state, in all solicitations or advertisements for
employees, that, in the performance of the State contract, all qualified
applicants will be afforded equal employment opportunities without
discrimination because of race, creed, color, national origin, sex, age,
disability or marital status.

Contractor will include the provisions of "a", "b", and "c" above, in every
subcontract over $25,000.00 for the construction, demolition, replacement, major
repair, renovation, planning or design of real property and improvements thereon
(the "Work") except where the Work is for the beneficial use of the Contractor.
Section 312 does not apply to: (i) work, goods or services unrelated to this
contract; or (ii) employment outside New York State; or (iii) banking services,
insurance policies or the sale of securities. The State shall consider
compliance by a contractor or subcontractor with the requirements of any federal
law concerning equal employment opportunity which effectuates the purpose of
this section. The contracting agency shall determine whether the imposition of
the requirements of the provisions hereof duplicate or conflict with any such
federal law and if such duplication or conflict exists, the contracting agency
shall waive the applicability of Section 312 to the extent of such duplication
or conflict. Contractor will comply with all duly promulgated and lawful rules
and regulations of the Governor's Office of Minority and Women's Business
Development pertaining hereto.

13. CONFLICTING TERMS. In the event of a conflict between the terms of the
contract (including any and all attachments thereto and amendments thereof) and
the terms of this Appendix A, the terms of this Appendix A shall control.

14. GOVERNING LAW. This contract shall be governed by the laws of the State of
New York except where the Federal supremacy clause requires otherwise.

15. LATE PAYMENT. Timeliness of payment and any interest to be paid to
Contractor for late payment shall be governed by Article 11-A of the State
Finance Law to the extent required by law.

16. NO ARBITRATION. Disputes involving this contract, including the breach or
alleged breach thereof, may not be submitted to binding arbitration (except
where statutorily authorized), but must, instead, be heard in a court of
competent jurisdiction of the State of New York.

17. SERVICE OF PROCESS. In addition to the methods of service allowed by the
State Civil Practice Law & Rules ("CPLR"), Contractor hereby consents to service
of process upon it by registered or certified mail, return receipt requested.
Service hereunder shall be complete upon Contractor's actual receipt of process
or upon the State's receipt of the return thereof by the United States Postal
Service as refused or undeliverable. Contractor must promptly notify the State,
in writing, of each and every change of address to which service of process can
be made. Service by the State to the last known address shall be sufficient.
Contractor will have thirty (30) calendar days after service hereunder is
complete in which to respond.

Page 2                                                                 May, 2003

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STANDARD CLAUSES FOR NYS CONTRACTS                                    APPENDIX A

18. PROHIBITION ON PURCHASE OF TROPICAL HARDWOODS. The Contractor certifies and
warrants that all wood products to be used under this contract award will be in
accordance with, but not limited to, the specifications and provisions of State
Finance Law Section 165. (Use of Tropical Hardwoods) which prohibits purchase
and use of tropical hardwoods, unless specifically exempted, by the State or any
governmental agency or political subdivision or public benefit corporation.
Qualification for an exemption under this law will be the responsibility of the
contractor to establish to meet with the approval of the State.

In addition, when any portion of this contract involving the use of woods,
whether supply or installation, is to be performed by any subcontractor, the
prime Contractor will indicate and certify in the submitted bid proposal that
the subcontractor has been informed and is in compliance with specifications and
provisions regarding use of tropical hardwoods as detailed in Section 165 State
Finance Law. Any such use must meet with the approval of the State; otherwise,
the bid may not be considered responsive. Under bidder certifications, proof of
qualification for exemption will be the responsibility of the Contractor to meet
with the approval of the State.

19. MACBRIDE FAIR EMPLOYMENT PRINCIPLES. In accordance with the MacBride Fair
Employment Principles (Chapter 807 of the Laws of 1992), the Contractor hereby
stipulates that the Contractor either (a) has no business operations in Northern
Ireland, or (b) shall take lawful steps in good faith to conduct any business
operations in Northern Ireland in accordance with the MacBride Fair Employment
Principles (as described in Section 165 of the New York State Finance Law), and
shall permit independent monitoring of compliance with such principles.

20. OMNIBUS PROCUREMENT ACT OF 1992. It is the policy of New York State to
maximize opportunities for the participation of New York State business
enterprises, including minority and women-owned business enterprises as bidders,
subcontractors and suppliers on its procurement contracts.

Information on the availability of New York State subcontractors and suppliers
is available from:

       NYS Department of Economic Development
       Division for Small Business
       30 South Pearl St -- 7th Floor
       Albany, New York 12245
       Telephone: 518-292-5220

A directory of certified minority and women-owned business enterprises is
available from:

       NYS Department of Economic Development
       Division of Minority and Women's Business Development
       30 South Pearl St -- 2nd Floor
       Albany, New York 12245
       http://www.empire.state.ny.us

The Omnibus Procurement Act of 1992 requires that by signing this bid proposal
or contract, as applicable, Contractors certify that whenever the total bid
amount is greater than $1 million:

(a) The Contractor has made reasonable efforts to encourage the participation of
New York State Business Enterprises as suppliers and subcontractors, including
certified minority and women-owned business enterprises, on this project, and
has retained the documentation of these efforts to be provided upon request to
the State;

(b) The Contractor has complied with the Federal Equal Opportunity Act of 1972
(P.L. 92-261), as amended;

(c)The Contractor agrees to make reasonable efforts to provide notification to
New York State residents of employment opportunities on this project through
listing any such positions with the Job Service Division of the New York State
Department of Labor, or providing such notification in such manner as is
consistent with existing collective bargaining contracts or agreements. The
Contractor agrees to document these efforts and to provide said documentation to
the State upon request; and

(d) The Contractor acknowledges notice that the State may seek to obtain offset
credits from foreign countries as a result of this contract and agrees to
cooperate with the State in these efforts.

21. RECIPROCITY AND SANCTIONS PROVISIONS. Bidders are hereby notified that if
their principal place of business is located in a country, nation, province,
state or political subdivision that penalizes New York State vendors, and if the
goods or services they offer will be substantially produced or performed outside
New York State, the Omnibus Procurement Act 1994 and 2000 amendments (Chapter
684 and Chapter 383, respectively) require that they be denied contracts which
they would otherwise obtain. NOTE: As of May 15, 2002, the list of
discriminatory jurisdictions subject to this provision includes the states of
South Carolina, Alaska, West Virginia, Wyoming, Louisiana and Hawaii. Contact
NYS Department of Economic Development for a current list of jurisdictions
subject to this provision.

22. PURCHASES OF APPAREL. In accordance with State Finance Law 162 (4-a), the
State shall not purchase any apparel from any vendor unable or unwilling to
certify that: (i) such apparel was manufactured in compliance with all
applicable labor and occupational safety laws, including, but not limited to,
child labor laws, wage and hours laws and workplace safety laws, and (ii) vendor
will supply, with its bid (or, if not a bid situation, prior to or at the time
of signing a contract with the State), if known, the names and addresses of each
subcontractor and a list of all manufacturing plants to be utilized by the
bidder.

Page 3                                                                 May, 2003<PAGE>

================================================================================

                       MORGAN STANLEY ABS CAPITAL I INC.,

                                  as Depositor,

                             OCWEN FEDERAL BANK FSB,

                                  as Servicer,

                           CDC MORTGAGE CAPITAL INC.,

                             as Unaffiliated Seller,

                                       and

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,

                                   as Trustee,

                         POOLING AND SERVICING AGREEMENT

                          Dated as of November 1, 2003

                       CDC MORTGAGE CAPITAL TRUST 2003-HE4

                       MORTGAGE PASS-THROUGH CERTIFICATES,
                                 SERIES 2003-HE4

================================================================================

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                Page
                                                                                                                ----
<S>                                                                                                              <C>
ARTICLE I DEFINITIONS.............................................................................................8

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES..........................................48

   Section 2.01      Conveyance of Mortgage Loans................................................................48
   Section 2.02      Acceptance by the Trustee of the Mortgage Loans.............................................54
   Section 2.03      Representations, Warranties and Covenants of the Unaffiliated Seller and the Servicer.......55
   Section 2.04      The Depositor and the Mortgage Loans........................................................58
   Section 2.05      Delivery of Opinion of Counsel in Connection with Substitutions and Non-Qualified Mortgages.58
   Section 2.06      Execution and Delivery of Certificates......................................................58
   Section 2.07      REMIC Matters...............................................................................58
   Section 2.08      Representations and Warranties of the Depositor.............................................58

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.......................................................60

   Section 3.01      Servicer to Service Mortgage Loans..........................................................60
   Section 3.02      Subservicing Agreements Between the Servicer and Subservicers...............................62
   Section 3.03      Successor Subservicers......................................................................63
   Section 3.04      Liability of the Servicer...................................................................63
   Section 3.05      No Contractual Relationship Between Subservicers and the Trustee............................63
   Section 3.06      Assumption or Termination of Subservicing Agreements by Trustee.............................63
   Section 3.07      Collection of Certain Mortgage Loan Payments; Establishment of Certain Accounts.............64
   Section 3.08      Subservicing Accounts.......................................................................67
   Section 3.09      Collection of Taxes, Assessments and Similar Items; Escrow Accounts.........................67
   Section 3.10      Collection Account..........................................................................68
   Section 3.11      Withdrawals from the Collection Account.....................................................69
   Section 3.12      Investment of Funds in the Account..........................................................71
   Section 3.13      Maintenance of Hazard Insurance and Errors and Omissions and Fidelity Coverage..............72
   Section 3.14      Enforcement of Due-On-Sale Clauses Assumption Agreements....................................73
   Section 3.15      Realization Upon Defaulted Mortgage Loans...................................................74
   Section 3.16      Release of Mortgage Files...................................................................76
   Section 3.17      Title, Conservation and Disposition of REO Property.........................................77
   Section 3.18      Notification of Adjustments.................................................................79
   Section 3.19      Access to Certain Documentation and Information Regarding the Mortgage Loans................79
   Section 3.20      Documents, Records and Funds in Possession of the Servicer to be Held for the Trustee.......79
   Section 3.21      Servicing Compensation......................................................................80
   Section 3.22      Annual Statement as to Compliance...........................................................80

                                                         i
<PAGE>

   Section 3.23      Annual Independent Public Accountants' Servicing Statement; Financial Statements............80
   Section 3.24      Trustee to Act as Servicer..................................................................81
   Section 3.25      Compensating Interest.......................................................................82
   Section 3.26      Credit Reporting; Gramm-Leach-Bliley Act....................................................82
   Section 3.27      Advance Facilities..........................................................................82

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER............................................................84

   Section 4.01      Advances....................................................................................84
   Section 4.02      Priorities of Distribution..................................................................85
   Section 4.03      Monthly Statements to Certificateholders....................................................90
   Section 4.04      Certain Matters Relating to the Determination of LIBOR......................................93
   Section 4.05      The Certificate Insurance Policy............................................................94
   Section 4.06      Effect of Payments by the Certificate Insurer; Subrogation..................................95

ARTICLE V THE CERTIFICATES.......................................................................................96

   Section 5.01      The Certificates............................................................................96
   Section 5.02      Certificate Register; Registration of Transfer and Exchange of Certificates.................97
   Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates..........................................101
   Section 5.04      Persons Deemed Owners......................................................................101
   Section 5.05      Access to List of Certificateholders' Names and Addresses..................................102
   Section 5.06      Maintenance of Office or Agency............................................................102
   Section 5.07      Rights of the Certificate Insurer to Exercise Rights of Class A-1  Certificateholders......102
   Section 5.08      Trustee To Act Solely with Consent of the Certificate Insurer..............................103
   Section 5.09      Mortgage Loans, Trust Fund and Accounts Held for Benefit of the Certificate Insurer........103
   Section 5.10      Certificate Insurer Default................................................................103

ARTICLE VI THE DEPOSITOR AND THE SERVICER.......................................................................104

   Section 6.01      Respective Liabilities of the Depositor and the Servicer...................................104
   Section 6.02      Merger or Consolidation of the Depositor or the Servicer...................................104
   Section 6.03      Limitation on Liability of the Depositor, the Servicer and Others..........................105
   Section 6.04      Limitation on Resignation of the Servicer..................................................106
   Section 6.05      Additional Indemnification by the Servicer; Third Party Claims.............................106

ARTICLE VII DEFAULT.............................................................................................107

   Section 7.01      Events of Default..........................................................................107
   Section 7.02      Trustee to Act; Appointment of Successor...................................................109
   Section 7.03      Notification to Certificateholders.........................................................110

ARTICLE VIII CONCERNING THE TRUSTEE.............................................................................110

   Section 8.01      Duties of the Trustee......................................................................110
   Section 8.02      Certain Matters Affecting the Trustee......................................................111
   Section 8.03      Trustee Not Liable for Certificates or Mortgage Loans......................................112
   Section 8.04      Trustee May Own Certificates...............................................................113
   Section 8.05      Trustee's Fees and Expenses................................................................113

                                                         ii
<PAGE>

   Section 8.06      Eligibility Requirements for the Trustee...................................................113
   Section 8.07      Resignation and Removal of the Trustee.....................................................114
   Section 8.08      Successor Trustee..........................................................................114
   Section 8.09      Merger or Consolidation of the Trustee.....................................................115
   Section 8.10      Appointment of Co-Trustee or Separate Trustee..............................................115
   Section 8.11      Tax Matters................................................................................116
   Section 8.12      Periodic Filings...........................................................................119
   Section 8.13      Tax Classification of the Excess Reserve Fund Account......................................120
   Section 8.14      Cap Agreement..............................................................................121

ARTICLE IX TERMINATION..........................................................................................121

   Section 9.01      Termination upon Liquidation or Purchase of the Mortgage Loans.............................121
   Section 9.02      Final Distribution on the Certificates.....................................................122
   Section 9.03      Additional Termination Requirements........................................................123

ARTICLE X MISCELLANEOUS PROVISIONS..............................................................................124

   Section 10.01     Amendment..................................................................................124
   Section 10.02     Recordation of Agreement; Counterparts.....................................................126
   Section 10.03     Governing Law..............................................................................126
   Section 10.04     Intention of Parties.......................................................................126
   Section 10.05     Notices....................................................................................127
   Section 10.06     Severability of Provisions.................................................................127
   Section 10.07     Assignment.................................................................................128
   Section 10.08     Limitation on Rights of Certificateholders.................................................128
   Section 10.09     Inspection and Audit Rights................................................................129
   Section 10.10     Certificates Nonassessable and Fully Paid..................................................129
   Section 10.11     The Certificate Insurer Default............................................................129
   Section 10.12     Third Party Beneficiary....................................................................129
   Section 10.13     Waiver of Jury Trial.......................................................................129
   Section 10.14     Limitation of Damages......................................................................129

SCHEDULES

Schedule I        Mortgage Loan Schedule
Schedule IA       Schedule of Ocwen Serviced Loans
Schedule II       Representations and Warranties of the Servicer
Schedule IIA      Further Representations and Warranties of the Servicer
Schedule III      Representations and Warranties as to the Unaffiliated Seller

EXHIBITS

Exhibit A         Form of Class A-1, Class A-2, Class A-3, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2
                  and Class B-3 Certificate
Exhibit B         [Reserved]
Exhibit C         Form of Class P Certificate
Exhibit D         Form of Class R Certificate

                                                        iii
<PAGE>

Exhibit E         Form of Class X Certificate
Exhibit F         Form of Initial Certification of Trustee
Exhibit G         Form of Final Certification of Trustee
Exhibit H         Form of Transfer Affidavit
Exhibit I         Form of Transferor Certificate
Exhibit J         Form of Rule 144A Letter
Exhibit K         Form of Request for Release
Exhibit L         Form of Subsequent Transfer Agreement
Exhibit M         Depositor Certification
Exhibit N         Trustee/Servicer Certification
</TABLE>

                                       iv
<PAGE>

         THIS POOLING AND SERVICING AGREEMENT, dated as of November 1, 2003,
among MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), OCWEN FEDERAL BANK FSB, a federally chartered savings bank,
as servicer (the "Servicer"), CDC MORTGAGE CAPITAL INC., a New York corporation,
as unaffiliated seller (the "Unaffiliated Seller") and DEUTSCHE BANK NATIONAL
TRUST COMPANY, a national banking association, as trustee (the "Trustee"),

                              W I T N E S S E T H:
                              - - - - - - - - - -

         In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:

                              PRELIMINARY STATEMENT

         The Trustee shall elect that three segregated asset pools within the
Trust Fund be treated for federal income tax purposes as comprising three REMICs
(each a "REMIC" or, in the alternative, the Lower Tier REMIC, the Middle Tier
REMIC and the Upper Tier REMIC, respectively). Each Certificate, other than the
Class P and Class R Certificates, represents ownership of one or more regular
interests in the Upper Tier REMIC for purposes of the REMIC Provisions. The
Class R Certificate represents ownership of the sole class of residual interest
in each of the Lower Tier REMIC, Middle Tier REMIC and the Upper Tier REMIC for
purposes of the REMIC Provisions. Class UT-R, Class MT-R and Class LT-R comprise
the Class R Certificate. The Startup Day for each REMIC described herein is the
Closing Date. The latest possible maturity date for each regular interest is the
date referenced for such regular interest in this preliminary statement.

         The Upper Tier REMIC shall hold as assets the several classes of
uncertificated Middle Tier Regular Interests. Each such Middle Tier Regular
Interest is hereby designated as a regular interest in the Middle Tier REMIC.
Class MT-A-1, Class MT-A-2, Class MT-A-3, Class MT-M-1, Class MT-M-2, Class
MT-M-3, Class MT-B-1, Class MT-B-2 and Class MT-B-3 are hereby designated the MT
Accretion Directed Classes. The Class P Certificate represents beneficial
ownership of the Prepayment Charges, which portion of the Trust Fund shall be
treated as a grantor trust.

         The Middle Tier REMIC shall hold as assets the several classes of
uncertificated Lower Tier Regular Interests. Each such Lower Tier Regular
Interest is hereby designated as a regular interest in the Lower Tier REMIC.

         The Lower Tier REMIC shall hold as assets all of the assets included in
the Trust Fund other than Prepayment Charges, the Excess Reserve Fund Account,
the Pre-Funding Account, the Capitalized Interest Account and the Cap Agreement.
The Lower Tier REMIC shall issue the following classes of interests, and each
Lower Tier Interest, other than the Class LT-R Interest, is hereby designated as
a regular interest in the Lower Tier REMIC.

                                       1
<PAGE>

<TABLE>
<CAPTION>
 LOWER TIER CLASS     TIER INTEREST      INITIAL TIER PRINCIPAL
   DESIGNATION           RATE                  AMOUNT               LATEST POSSIBLE MATURITY DATE
-------------------  ---------------    ------------------------   -------------------------------
<S>                        <C>             <C>                               <C>
Class LT-C                 (1)             $619,729,919                      March 25, 2034
Class LT-N                 (2)                    (3)                        March 25, 2034
Class LT-PO                (4)             $138,352,501.24                   March 25, 2034
Class LT-R                 (5)                    (5)                        March 25, 2034
</TABLE>

(1)  The interest rate with respect to any Distribution Date for this interest
     is (i) during the Pre-Funding Period, an interest rate equal to a per annum
     variable rate equal to the weighted average of the Adjusted Net Mortgage
     Rates then in effect on the beginning of the related Due Period on the
     Initial Mortgage Loans, and (ii) thereafter, a per annum variable rate
     equal to the weighted average of the Adjusted Net Mortgage Rates then in
     effect on the beginning of the related Due Period on the Mortgage Loans.

(2)  The interest rate with respect to any Distribution Date for the Class LT-N
     is (i) during the Pre-Funding Period, all interest on the Subsequent
     Mortgage Loans for such Distribution Date divided by $138,352,501.24, and
     (ii) thereafter, 0.00%.

(3)  The Class LT-N will have a notional principal balance equal to
     $138,352,501.24.

(4)  The interest rate with respect to any Distribution Date for the Class LT-PO
     is (i) during the Pre-Funding Period, 0.00% and (ii) thereafter, a per
     annum variable rate equal to the weighted average of the Adjusted Net
     Mortgage Rates then in effect on the beginning of the related Due Period on
     the Mortgage Loans.

(5)  The Class LT-R is the sole class of residual interest in the Lower Tier
     REMIC. The Class LT-R does not have a principal amount or an interest rate.

         During the Pre-Funding Period, all principal payments (scheduled and
prepaid) and Realized Losses with respect to the Initial Mortgage Loans shall be
allocated to the Class LT-C, until such Class is paid in full or eliminated by
such losses. All principal payments (scheduled and prepaid) and Realized Losses
generated with respect to the Subsequent Mortgage Loans and any amounts
transferred from the Pre-Funding Account to the Lower Tier REMIC shall be
allocated to the Class LT-PO.

         On each Distribution Date thereafter, all principal payments (scheduled
and prepaid) and Realized Losses generated with respect to the Mortgage Loans
shall be allocated, pro rata, to the Class LT-C and Class LT-PO, until such
Classes are paid in full or eliminated by such losses.

         The Middle Tier REMIC shall issue the following classes of interests,
and each Middle Tier Interest, other than the Class MT-R Interest, is hereby
designated as a regular interest in the Middle Tier REMIC.

                                       2
<PAGE>

<TABLE>
<CAPTION>

   MIDDLE TIER CLASS        TIER           INITIAL TIER PRINCIPAL            CORRESPONDING      LATEST POSSIBLE
      DESIGNATION       INTEREST RATE              AMOUNT                        CLASS           MATURITY DATE
---------------------   --------------   --------------------------------   ---------------    -----------------
<S>                          <C>         <C>                                   <C>               <C>
Class MT-A-1                 (1)         1/2 of the Corresponding              Class A-1         March 25, 2034
                                         Class initial principal balance

Class MT-A-2                 (1)         1/2 of the Corresponding              Class A-2         March 25, 2034
                                         Class initial principal balance

Class MT-A-3                 (1)         1/2 of the Corresponding              Class A-3         March 25, 2034
                                         Class initial principal balance

Class MT-M-1                 (1)         1/2 of the Corresponding              Class M-1         March 25, 2034
                                         Class initial principal balance

Class MT-M-2                 (1)         1/2 of the Corresponding              Class M-2         March 25, 2034
                                         Class initial principal balance

Class MT-M-3                 (1)         1/2 of the Corresponding              Class M-3         March 25, 2034
                                         Class initial principal balance

Class MT-B-1                 (1)         1/2 of the Corresponding              Class B-1         March 25, 2034
                                         Class initial principal balance

Class MT-B-2                 (1)         1/2 of the Corresponding              Class B-2         March 25, 2034
                                         Class initial principal balance

Class MT-B-3                 (1)         1/2 of the Corresponding              Class B-3         March 25, 2034
                                         Class initial principal balance

Class MT-Accrual             (1)         1/2 of the sum of the Pool                              March 25, 2034
                                         Class initial principal balance

Class MT-N                   (2)                     (3)                                         March 25, 2034

Class MT-R                   (4)                     (4)                                         March 25, 2034
</TABLE>

                                       3
<PAGE>

(1)  The interest rate with respect to any Distribution Date for these interests
     is (i) during the Pre-Funding Period, the weighted average Pass-Through
     Rate of the Class LT-C and Class LT-PO, and (ii) thereafter, a per annum
     variable rate equal to the weighted average of the Adjusted Net Mortgage
     Rates then in effect on the beginning of the related Due Period on the
     Mortgage Loans.

(2)  The Class MT-N is entitled to all distributions of interest on the Class
     LT-N.

(3)  The Class MT-N will have a notional principal balance equal to the notional
     principal balance of the Class LT-N.

(4)  The Class MT-R is the sole class of residual interest in the Middle Tier
     REMIC. The Class MT-R does not have a principal amount or an interest rate.

         On each Distribution Date, 50% of the increase in the Subordinated
Amount will be payable as a reduction of the principal balances of the MT
Accretion Directed Classes and will be accrued and added to the principal
balance of the MT-Accrual Class. To this end, each MT Accretion Directed 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 principal balance of its
Corresponding Class. On each Distribution Date, the increase in the principal
balance of the MT-Accrual Class may not exceed interest accruals for such
Distribution Date for the MT-Accrual Class. If, with respect to any Distribution
Date, 50% of the increase in the Subordinated Amount exceeds accrued interest on
the MT-Accrual Class, the excess (accumulated with all such excess for all prior
Distribution Dates) will be added to any increase in the Subordinated Amount for
purposes of calculating accrued interest on the MT-Accrual Class payable as
principal on the MT Accretion Directed Classes on the next Distribution Date.

         All principal payments (scheduled and prepaid) on the Mortgage Loans
shall be allocated 50% to the MT-Accrual Class and 50% to the MT Accretion
Directed Classes, until paid in full. To this end, principal payments shall be
allocated among such MT Accretion Directed Classes in an amount equal to 50% of
the principal amounts allocated to their respective Corresponding Classes.
Notwithstanding the foregoing, principal payments allocated to the Class X
Certificates that result in the reduction of the Subordinated Amount shall be
allocated to the MT-Accrual Class until paid in full. Realized losses shall be
applied so that after all distributions have been made on each Distribution Date
(i) the principal balance of each MT Accretion Directed Class is equal to 50% of
the principal balance of its Corresponding Class, and (ii) the MT-Accrual Class
is equal to 50% of the sum of (1) the Pool Stated Principal Balance, (2) the
Subordinated Amount and (3) the Pre-Funding Amount, minus $100.

         The Upper Tier REMIC shall issue the following classes of interests,
and each Upper Tier Interest, other than the Class UT-R Interest, is hereby
designated as a regular interest in the Upper Tier REMIC.

<TABLE>
<CAPTION>
UPPER TIER CLASS            UPPER TIER        INITIAL UPPER TIER                                 LATEST POSSIBLE
  DESIGNATION              INTEREST RATE       PRINCIPAL AMOUNT       CORRESPONDING CLASS         MATURITY DATE
----------------          ---------------    --------------------    ---------------------      -----------------
<S>                              <C>            <C>                     <C>                       <C>
   Class A-1                     (1)            $200,000,000            Class A-1(15)             March 25, 2034

                                       4
<PAGE>

<CAPTION>
UPPER TIER CLASS            UPPER TIER        INITIAL UPPER TIER                                 LATEST POSSIBLE
  DESIGNATION              INTEREST RATE       PRINCIPAL AMOUNT       CORRESPONDING CLASS         MATURITY DATE
----------------          ---------------    --------------------    ---------------------      -----------------
<S>                              <C>            <C>                     <C>                       <C>
   Class A-2                     (2)            $301,100,000            Class A-2(15)             March 25, 2034
   Class A-3                     (3)            $122,316,000            Class A-3(15)             March 25, 2034
   Class M-1                     (4)            $49,417,000             Class M-1(15)             March 25, 2034
   Class M-2                     (5)            $38,013,000             Class M-2(15)             March 25, 2034
   Class M-3                     (6)            $11,404,000             Class M-3(15)             March 25, 2034
   Class B-1                     (7)            $11,404,000             Class B-1(15)             March 25, 2034
   Class B-2                     (8)            $7,603,000              Class B-2(15)             March 25, 2034
   Class B-3                     (9)            $8,743,000              Class B-3(15)             March 25, 2034
   Class X-1(14)                (10)                  (10)                                        March 25, 2034
   Class X-2(14)                (11)                  (12)              Class X                   March 25, 2034
   Class UT-R                   (13)            $                       Class R                   March 25, 2034
</TABLE>

(1)  The Class A-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 0.310% or (y) after the
     Optional Termination Date, 0.620% and (b) the Adjusted WAC Cap minus the
     Premium Rate.

(2)  The Class A-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 0.230% or (y) after the
     Optional Termination Date, 0.460% and (b) the Adjusted WAC Cap.

(3)  The Class A-3 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 0.550% or (y) after the
     Optional Termination Date, 1.100% and (b) the Adjusted WAC Cap.

(4)  The Class M-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 0.650% or (y) after the
     Optional Termination Date, 0.975% and (b) the Adjusted WAC Cap.

(5)  The Class M-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 1.650% or (y) after the
     Optional Termination Date, 2.475% and (b) the Adjusted WAC Cap.

                                       5
<PAGE>

(6)  The Class M-3 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 1.950% or (y) after the
     Optional Termination Date, 2.925% and (b) the Adjusted WAC Cap.

(7)  The Class B-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 3.000% or (y) after the
     Optional Termination Date, 4.500% and (b) the Adjusted WAC Cap.

(8)  The Class B-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 3.750% or (y) after the
     Optional Termination Date, 5.625% and (b) the Adjusted WAC Cap.

(9)  The Class B-3 Certificates will bear interest during each Interest Accrual
     Period at a variable rate equal to the lesser of (a) one-month LIBOR plus
     (x) on or prior to the Optional Termination Date, 3.750% or (y) after the
     Optional Termination Date, 5.625% and (b) the Adjusted WAC Cap.

(10) The Class X has an initial principal balance of $10,263,458, but it will
     not accrue interest on such balance but will accrue interest on a notional
     principal balance. As of any Distribution Date, the Class X-1 shall have a
     notional principal balance equal to the Pool Stated Principal Balance as of
     the first day of the related Interest Accrual Period. With respect to any
     Interest Accrual Period, the Class X-1 shall bear interest at a rate equal
     to the excess, if any, of the Middle Tier WAC Cap over the product of (i) 2
     and (ii) the weighted average Pass-Through Rate of the Middle Tier Regular
     Interests, where each MT Accretion Directed Class is subject to a cap and a
     floor equal to the Pass-Through Rate on its Corresponding Class, and the
     MT-Accrual Class is subject to a cap of zero. With respect to any
     Distribution Date, interest that so accrues on the notional principal
     balance of the Class X-1 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.

(11) The Class X-2 is entitled to all distributions of interest on the Class
     MT-N.

(12) The Class X-2 will have a notional principal balance equal to the notional
     principal balance of the Class MT-N.

(13) The Class UT-R is the sole class of residual interest in the Upper Tier
     REMIC. The Class UT-R does not have an interest rate.

(14) The Class X Certificates will represent two regular interests in the Upper
     Tier REMIC, the Class X-1 and Class X-2.

(15) 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 in respect of any
     Basis Risk Carry Forward Amounts. For

                                       6
<PAGE>

     federal income tax purposes, the Trustee will treat a Certificateholder's
     right to receive payments from the Excess Reserve Fund Account as payments
     made pursuant to a notional principal contract written by the Class X
     Certificateholder.

         The minimum denomination for each Class of Certificates, other than the
Class P, Class R and the Class X Certificates, will be $25,000 and integral
multiples of $1 thereof. The Class P, Class R and the Class X Certificates will
each represent a 100% Percentage Interest in such class.

         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.

Subordinated Certificates.........  Class M-1, Class M-2, Class M-3, Class B-1,
                                    Class B-2 and Class B-3

Delay Certificates................  None.

ERISA-Restricted Certificates.....  Class R Certificates, Class P Certificate
                                    and Class X Certificate;

Floating Rate Certificates........  Class A-1, Class A-2, Class A-3 and
                                    Subordinated Certificates.

LIBOR Certificates................  Class A-1, Class A-2, Class A-3 and
                                    Subordinated Certificates.

Non-Delay Certificates............  Class A-1, Class A-2, Class A-3, Class X and
                                    Subordinated

Offered Certificates..............  All Classes of Certificates other than the
                                    Private Certificates.

Physical Certificates.............  Class P, Class X and Class R Certificates.

Private Certificates..............  Class P, Class X and Class R Certificates.

Rating Agencies...................  Moody's, Fitch and Standard & Poor's.

Regular Certificates..............  All Classes of Certificates other than the
                                    Class P and Class R

Residual Certificates.............  Class R Certificates.

                                       7
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

         Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:

         60+ Day Delinquent Loan: 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 past due (without giving effect to any grace period), each
Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for which
the Mortgagor has filed for bankruptcy.

         Accepted Servicing Practices: With respect to any Mortgage Loan, those
mortgage servicing practices set forth in Section 3.01.

         Account: Any of the Capitalized Interest Account, the Collection
Account, the Distribution Account, any Escrow Account, the Excess Reserve Fund
Account, the Insurance Payment Account or the Pre-Funding Account. Each Account
shall be an Eligible Account.

         Accredited: Accredited Home Lenders, Inc., a California corporation.

         Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and Accredited, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Accredited in
connection with any Subsequent Transfer of Accredited Mortgage Loans.

         Accredited Mortgage Loan: A Mortgage Loan which was acquired from
Accredited by the Unaffiliated Seller pursuant to the Accredited Purchase
Agreement, and which has been acquired by the Trust Fund.

         Accredited Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of October 1, 2003, as amended to date, by and
between the Unaffiliated Seller and Accredited.

         Accrued Certificate Interest: With respect to any Distribution Date for
each Class of Certificates (other than the Class P, Class R and Class X
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
Shortfalls for the related Due Period allocated to such Class pursuant to
Section 4.02.

         Addition Notice: A written notice from the Unaffiliated Seller to the
Trustee, the Rating Agencies and the Certificate Insurer that the Unaffiliated
Seller desires to make a Subsequent Transfer.

                                       8
<PAGE>

         Adjustable Rate Mortgage Loan: A Mortgage Loan bearing interest at an
adjustable rate.

         Adjusted Mortgage Rate: As to each Mortgage Loan and at any time, the
per annum rate equal to the Mortgage Rate less the Servicing Fee Rate.

         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.

         Adjusted WAC Cap: The weighted average of the Pass-Through Rates of the
Middle Tier Regular Interests (other than the Class MT-N).

         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.

         Advances: Collectively, the P&I Advances and Servicing Advances.

         Advance Facility: As defined in Section 3.27.

         Advance Facility Trustee: As defined in Section 3.27.

         Advance Reimbursement Amount: As defined in Section 3.27.

         Advancing Person: As defined in Section 3.27.

         Aegis: Aegis Mortgage Corporation, a Delaware corporation.

         Aegis Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and Aegis, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Aegis in connection with any
Subsequent Transfer of Aegis Mortgage Loans.

         Aegis Mortgage Loan: A Mortgage Loan which was acquired from Aegis by
the Unaffiliated Seller pursuant to the Aegis Purchase Agreement, and which has
been acquired by the Trust Fund.

         Aegis Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of December 1, 2002, as amended to date, by and between the
Unaffiliated Seller and Aegis.

         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.

                                       9
<PAGE>

         Agreement: This Pooling and Servicing Agreement and all amendments or
supplements hereto.

         Ameriquest: Ameriquest Mortgage Company, a Delaware corporation.

         Ameriquest Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and Ameriquest, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Ameriquest in
connection with any Subsequent Transfer of Ameriquest Mortgage Loans.

         Ameriquest Mortgage Loan: A Mortgage Loan which was acquired from
Ameriquest by the Unaffiliated Seller pursuant to the Ameriquest Purchase
Agreement, and which has been acquired by the Trust Fund.

         Ameriquest Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 30, 2003, as amended to date, by and
between the Unaffiliated Seller and Ameriquest.

         Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in the Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments 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.

         Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Regular 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 and Recognition Agreement: The Accredited Assignment
Agreement, the Aegis Assignment Agreement, the Ameriquest Assignment Agreement,
the BNC Assignment Agreement, the Chapel Mortgage Assignment Agreement, the CIT
Assignment Agreement, the Encore Assignment Agreement, the FGMC Assignment
Agreement, the First Banc Assignment Agreement, the Impac Assignment Agreement,
the Lenders Direct Assignment Agreement, the Master Financial Assignment
Agreement, the Novelle Assignment Agreement, the People's Choice Assignment
Agreement or the SIB Mortgage Assignment Agreement, as applicable.

         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.

         Average Net Proceeds: As defined in Exhibit M hereto.

                                       10
<PAGE>

         Balloon Loan: Any Mortgage Loan that provided on the date of
origination for an amortization schedule extending beyond its stated maturity
date.

         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 Carry Forward Amount: With respect to each Class of Regular
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of Regular Certificates is
based upon the Adjusted WAC Cap, the excess of (i) the amount of interest such
Class of Certificates would otherwise be entitled to receive on such
Distribution Date 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, over (ii) the amount of interest payable on such Class of
Certificates calculated at the Adjusted WAC Cap, for such Distribution Date and
(B) the Basis Risk Carry Forward 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, a payment in an amount
equal to any Basis Risk Carry Forward Amount; provided, however, that with
respect to any Distribution Date, the payment cannot exceed the amounts
otherwise available for distribution on the Class X Certificates plus any
Interest Rate Cap Payment with respect to such Distribution Date.

         Best's: Best's Key Rating Guide, as the same shall be amended from time
to time.

         BNC: BNC Mortgage, Inc., a Delaware corporation.

         BNC Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and BNC, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and BNC in connection with any
Subsequent Transfer of BNC Mortgage Loans.

         BNC Mortgage Loan: A Mortgage Loan which was acquired from BNC by the
Unaffiliated Seller pursuant to the BNC Purchase Agreement, and which has been
acquired by the Trust Fund.

         BNC Purchase Agreement: The Amended and Restated Mortgage Loan Purchase
and Warranties Agreement, dated as of February 26, 2002, as amended to date, by
and between the Unaffiliated Seller and BNC.

         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 State of New
York, Utah, New Jersey and Florida, (b) the state in which the Servicer's
servicing operations are located, or (c) the State in

                                       11
<PAGE>

which the Trustee's operations are located, are authorized or obligated by law
or executive order to be closed.

         Cap Agreement: The Class A Cap Agreement, the Class M Cap Agreement
and/or the Class B Cap Agreement, as applicable.

         Cap Provider: Morgan Stanley Capital Services Inc., a Delaware
corporation, and any successor thereto.

         Capitalized Interest Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(e) in the name of the Trustee
for the benefit of the Offered Certificateholders and designated "Deutsche Bank
National Trust Company, in trust for registered holders of CDC Mortgage Capital
Trust 2003-HE4, Mortgage Pass-Through Certificates, Series 2003-HE4".

         Capitalized Interest Requirement: With respect to the Distribution
Dates occurring in December 2003, January 2004 and February 2004, the excess, if
any, of (x) the Accrued Certificate Interests for all classes of the Offered
Certificates for such Distribution Date over (y) all scheduled installments of
interest (net of the related Expense Fees) due on the Mortgage Loans in the
related Due Period. In no event will the Capitalized Interest Requirement be
less than zero.

         Certificate: Any one of the Certificates executed by the Trustee in
substantially the forms attached hereto as exhibits.

         Certificate Balance: With respect to any Class of Certificates, other
than the Class X and Class R 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
Subordinated Certificates, reduced by any Applied Realized Loss Amounts
applicable to such Class of Subordinated Certificates. The Class X and Class R
Certificates have no Certificate Balance.

         Certificate Insurance Policy: The Financial Guaranty Insurance Policy
No. 51470-N, and all endorsements thereto dated the Closing Date, issued by the
Certificate Insurer for the benefit of the Class A-1 Certificateholders.

         Certificate Insurer: Financial Security Assurance Inc., a monoline
stock insurance company organized and created under the laws of the State of New
York, and any successors thereto.

         Certificate Insurer Default: The existence and continuance of any of
the following:

         (a) the Certificate Insurer shall have failed to make a required
    payment when due under the Certificate Insurance Policy;

                                       12
<PAGE>
         (b) the Certificate Insurer shall have (i) filed a petition or
    commenced any case or proceeding under any provision or chapter of the
    United States Bankruptcy Code, the New York State Insurance Law or any other
    similar federal or state law relating to insolvency, bankruptcy,
    rehabilitation, liquidation, or reorganization, (ii) made a general
    assignment for the benefit of its creditors or (iii) had an order for relief
    entered against it under the United States Bankruptcy Code, the New York
    State Insurance Law or any other similar federal or state law relating to
    insolvency, bankruptcy, rehabilitation, liquidation, or reorganization that
    is final and nonappealable; or

         (c) a court of competent jurisdiction, the New York Department of
    Insurance or any other competent regulatory authority shall have entered a
    final and nonappealable order, judgment or decree (i) appointing a
    custodian, trustee, agent, or receiver for the Certificate Insurer or for
    all or any material portion of its property or (ii) authorizing the taking
    of possession by a custodian, trustee, agent, or receiver of the Certificate
    Insurer or of all or any material portion of its property.

         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 Depositor or any Affiliate of the Depositor 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
any such Person (including the Depositor) owns 100% of the Percentage Interests
evidenced by a Class of Certificates, such Certificates shall be deemed to be
Outstanding for the purposes of any provision hereof that requires the consent
of the Holders of Certificates of a particular Class as a condition to the
taking of any action hereunder. The Trustee is entitled to rely conclusively on
a certification of the Depositor or any Affiliate of the Depositor in
determining which Certificates are registered in the name of an Affiliate of the
Depositor.

         Certification: As defined in Section 8.12(b).

         Chapel Mortgage: Chapel Mortgage Corporation, a New Jersey corporation.

         Chapel Mortgage Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and Chapel Mortgage, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Chapel
Mortgage in connection with any Subsequent Transfer of Chapel Mortgage Loans.

         Chapel Mortgage Loan: A Mortgage Loan which was acquired from Chapel
Mortgage by the Unaffiliated Seller pursuant to the Chapel Mortgage Purchase
Agreement, and which has been acquired by the Trust Fund.

                                       13
<PAGE>

         Chapel Mortgage Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 4, 2002, as amended to date, by and
between the Unaffiliated Seller and Chapel Mortgage.

         CIT: Collectively, The CIT Group/Consumer Finance, Inc., a Delaware
corporation, The CIT Group/Consumer Finance, Inc. (NY), a New York corporation,
and The CIT Group/Consumer Finance, Inc. (TN), a Delaware corporation.

         CIT Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and CIT, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and CIT in connection with any
Subsequent Transfer of CIT Mortgage Loans.

         CIT Mortgage Loan: A Mortgage Loan which was acquired from CIT by the
Unaffiliated Seller pursuant to the CIT Purchase Agreement, and which has been
acquired by the Trust Fund.

         CIT Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of March 24, 2003, by and between the Unaffiliated Seller
and CIT.

         Class: All Certificates bearing the same class designation as set forth
in the Preliminary Statement.

         Class A Cap Agreement: The interest rate cap agreement, relating to the
Class A Certificates, dated November 25, 2003 with the Cap Provider, as "Party
A" thereunder, and the Unaffiliated Seller, as "Party B" thereunder, or any
replacement thereof.

         Class A Certificates: The Class A-1 Certificates, the Class A-2
Certificates and the Class A-3 Certificates.

         Class A Interest Rate Cap Payment: On the 24th day of each month
(subject to adjustment in accordance with ISDA's "Preceding Business Day
Convention"), the product of (A) (i) commencing December 24, 2003 until and
including August 24, 2005, the number of basis points by which one-month LIBOR
exceeds 6.500% (up to a maximum excess of 250 basis points); (ii) commencing
September 24, 2005 until and including February 24, 2006, the number of basis
points by which one-month LIBOR exceeds 7.750% (up to a maximum excess of 250
basis points); (iii) commencing March 24, 2006 until and including August 24,
2006, the number of basis points by which one-month LIBOR exceeds 8.500% (up to
a maximum excess of 175 basis points; or (iv) commencing September 24, 2006
until and including November 24, 2006, the number of basis points by which
one-month LIBOR exceeds 9.250% (up to a maximum excess of 100 basis points), (B)
the Class A notional balance and (C) the Class A notional balance multiplier,
each as set forth on the notional balance and multiplier schedule attached to
the Class A Cap Agreement as applicable to that Distribution Date, based on an
"actual/360" accrual.

         Class A Principal Distribution Amount: With respect to any Distribution
Date, an amount equal to the excess of (x) the aggregate Class Certificate
Balances of the Class A Certificates immediately prior to such Distribution Date
over (y) the lesser of (A) the product of

                                       14
<PAGE>

64.00% of the Current Maximum Amount and (B) the excess, if any, of the Current
Maximum Amount over $3,801,318.

         Class A Sequential Certificates: The Class A-2 Certificates and the
Class A-3 Certificates.

         Class A-1 Certificates: All Certificates bearing the class designation
of "Class A-1 Certificates."

         Class A-1 Deficiency: With respect to any Distribution Date and the
Class A-1 Certificates, an amount equal to the sum of:

         (i)    the Class A-1 Interest Deficit Amount; plus

         (ii)   the Class A-1 Principal Parity Amount, if any, for such
                Distribution Date.

         Class A-1 Interest Deficit Amount: With respect to any Distribution
Date and the Class A-1 Certificates, the product of (i) the Interest Deficit
Amount and (ii) a fraction, the numerator of which is the outstanding Class
Certificate Balance of the Class A-1 Certificates on such Distribution Date, and
the denominator of which is the aggregate outstanding Class Certificate Balances
of all Class A Certificates on such Distribution Date, in each case, without
taking into account any reduction of principal on such Certificates on such
Distribution Date.

         Class A-1 Principal Parity Amount: With respect to any Distribution
Date, the product of (i) the Principal Parity Deficit and (ii) a fraction, the
numerator of which is the initial Class Certificate Balance of the Class A-1
Certificates, and the denominator of which is the initial aggregate Class
Certificate Balances of all Class A Certificates.

         Class A-2 Certificates: All Certificates bearing the class designation
of "Class A-2 Certificates."

         Class A-3 Certificates: All Certificates bearing the class designation
of "Class A-3 Certificates."

         Class B Cap Agreement: The interest rate cap agreement, relating to the
Class B Certificates, dated November 25, 2003 with the Cap Provider, as "Party
A" thereunder, and the Unaffiliated Seller, as "Party B" thereunder, or any
replacement thereof.

         Class B Interest Rate Cap Payment: On the 24th day of each month
(subject to adjustment in accordance with ISDA's "Preceding Business Day
Convention"), the product of (A)(i) commencing December 24, 2003 until and
including August 24, 2005, the number of basis points by which one-month LIBOR
exceeds 3.150% (up to a

                                       15
<PAGE>

maximum excess of 260 basis points), (ii) commencing September 24, 2005 until
and including February 24, 2006, the number of basis points by which one-month
LIBOR exceeds 4.300% (up to a maximum excess of 220 basis points), (iii)
commencing March 24, 2006 until and including August 24, 2006, the number of
basis points by which one-month LIBOR exceeds 4.900% (up to a maximum excess of
185 basis points), (iv) commencing September 24, 2006 until and including
February, 24 2007, the number of basis points by which one-month LIBOR exceeds
5.500% (up to a maximum excess of 125 basis points) or (v) commencing March 24,
2007 until and including August 24, 2007, the number of basis points by which
one-month LIBOR exceeds 6.250% (up to a maximum excess of 50 basis points), (B)
the Class B notional balance and (C) the Class B notional balance multiplier,
each as set forth on the notional balance and multiplier schedule attached to
the Class B Cap Agreement as applicable to that Distribution Date, based on an
"actual/360" accrual.

         Class B-1 Certificates: All Certificates bearing the class designation
of "Class B-1 Certificates."

         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
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class Certificate
Balance of the Class M-3 Certificates (after taking into account distribution of
the Class M-3 Principal Distribution Amount on such Distribution Date), and (E)
the Class Certificate Balance of the Class B-1 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 93.00% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$3,801,318.

         Class B-2 Certificates: All Certificates bearing the class designation
of "Class B-2 Certificates".

         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
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), (D) the Class Certificate
Balance of the Class M-3 Certificates (after taking into account distribution of
the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the
Class Certificate Balance of the Class B-1 Certificates (after taking into
account distribution of the Class B-1 Principal Distribution Amount on such
Distribution Date), and (F) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 95.00% of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum Amount over $3,801,318.

         Class B-3 Certificates: All Certificates bearing the class designation
of "Class B-3 Certificates".

         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
distribution of the Class A Principal Distribution Amount

                                       16
<PAGE>

on such Distribution Date), (B) the Class Certificate Balance of the Class M-1
Certificates (after taking into account distribution of the Class M-1 Principal
Distribution Amount on such Distribution Date), (C) the Class Certificate
Balance of the Class M-2 Certificates (after taking into account distribution of
the Class M-2 Principal Distribution Amount on such Distribution Date), (D) the
Class Certificate Balance of the Class M-3 Certificates (after taking into
account distribution of the Class M-3 Principal Distribution Amount on such
Distribution Date), (E) the Class Certificate Balance of the Class B-1
Certificates (after taking into account distribution of the Class B-1 Principal
Distribution Amount on such Distribution Date), (F) the Class Certificate
Balance of the Class B-2 Certificates (after taking into account distribution of
the Class B-2 Principal Distribution Amount on such Distribution Date) and (G)
the Class Certificate Balance of the Class B-3 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 97.30% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$3,801,318.

         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 M Cap Agreement: The interest rate cap agreement, relating to the
Class M Certificates, dated November 25, 2003 with the Cap Provider, as "Party
A" thereunder, and the Unaffiliated Seller, as "Party B" thereunder, or any
replacement thereof.

         Class M Interest Rate Cap Payment: On the 24th day of each
month(subject to adjustment in accordance with ISDA's "Preceding Business Day
Convention"), an amount equal to the product of (A)(i) commencing December 24,
2003 until and including August 24, 2005, the number of basis points by which
one-month LIBOR exceeds 5.500% (up to a maximum excess of 260 basis points),
(ii) commencing September 24, 2005 until and including February 24, 2006, the
number of basis points by which one-month LIBOR exceeds 6.600% (up to a maximum
excess of 220 basis points), (iii) commencing March 24, 2006 until and including
August 24, 2006, the number of basis points by which one-month LIBOR exceeds
7.200% (up to a maximum excess of 185 basis points), (iv) commencing September
24, 2006 until and including February, 24 2007, the number of basis points by
which one-month LIBOR exceeds 7.800% (up to a maximum excess of 125 basis
points) or (v) commencing March 24, 2007 until and including August 24, 2007,
the number of basis points by which one-month LIBOR exceeds 8.550% (up to a
maximum excess of 50 basis points), (B) the Class M notional balance and (C) the
Class M notional balance multiplier, each as set forth on the notional balance
schedule attached to the Class M Cap Agreement as applicable to that
Distribution Date, based on an "actual/360" accrual

         Class M-1 Certificates: All Certificates bearing the class designation
of "Class M-1 Certificates".

         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
distribution of the Class A Principal Distribution Amount on 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) 77.00%
of the Current

                                       17
<PAGE>

Maximum Amount and (B) the excess, if any, of the Current Maximum Amount over
$3,801,318.

         Class M-2 Certificates: All Certificates bearing the class designation
of "Class M-2 Certificates."

         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
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on 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) 87.00% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $3,801,318.

         Class M-3 Certificates: All Certificates bearing the class designation
of "Class M-3 Certificates".

         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
distribution of the Class A Principal Distribution Amount on such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account distribution of the Class M-1 Principal Distribution Amount
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2
Certificates (after taking into account distribution of the Class M-2 Principal
Distribution Amount on such Distribution Date), and (D) the Class Certificate
Balance of the Class M-3 Certificates immediately prior to such Distribution
Date over (ii) 90.00% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $3,801,318.

         Class P Certificates: All Certificates bearing the class designation of
"Class P Certificates".

         Class R Certificates: All Certificates bearing the class designation of
"Class R Certificates".

         Class X Certificates: All Certificates bearing the designation of
"Class X Certificates".

         Class X Distributable Amount: On any Distribution Date, the sum of (i)
the amount of interest that has accrued on the Class X Regular Interests and not
applied as an Extra Principal Distribution Amount on such Distribution Date,
plus any such accrued interest remaining undistributed from prior Distribution
Dates, and (ii) any portion of the principal balance of the Class X Regular
Interest which is distributable as a Subordination Reduction Amount, less any
amounts paid as a Basis Risk Payment.

         Closing Date: November 25, 2003.

                                       18
<PAGE>

         Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.

         Collection Account: As defined in Section 3.10(a).

         Compensating Interest: For any Distribution Date, the lesser of (a) the
Prepayment Interest Shortfall, if any, for such Distribution Date, and (b) the
Servicing Fee payable to the Servicer for such Distribution Date.

         Condemnation Proceeds: All awards of settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.

         Corporate Trust Office: The designated office of the Trustee in the
State of California at which at any particular time its corporate trust business
with respect to this Agreement is administered, which office at the date of the
execution of this Agreement is located at 1761 East St. Andrew Place, Santa Ana,
California 92705, Attn: Trust Administration DC03M4, facsimile no. (714)
247-6478 and which is the address to which notices to and correspondence with
the Trustee should be directed.

         Corresponding Class: The class of interests in any REMIC created under
this Agreement that correspond to the Class of interests in another such REMIC
or to a Class of Certificates in the manner set out below:

          MIDDLE TIER            UPPER TIER          CORRESPONDING
       CLASS DESIGNATION          INTEREST            CERTIFICATE
      -------------------       ------------        ---------------
         Class MT-A-1             Class A-1            Class A-1
         Class MT-A-2             Class A-2            Class A-2
         Class MT-A-3             Class A-3            Class A-3
         Class MT-M-1             Class M-1            Class M-1
         Class MT-M-2             Class M-2            Class M-2
         Class MT-M-3             Class M-3            Class M-3
         Class MT-B-1             Class B-1            Class B-1
         Class MT-B-2             Class B-2            Class B-2
         Class MT-B-3             Class B-3            Class B-3

         Cumulative Loss Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Applied Realized Loss Amounts incurred from the Cut-off Date to the
last day of the preceding calendar month less any amounts received with respect
to Applied Realized Loss Amounts on the related Mortgage Loans subsequent to the
Final Recovery Determination being made with respect to such Mortgage Loans and
the denominator of which is the Scheduled Principal Balance of the Mortgage
Loans as of the Cut-off Date.

         Current Maximum Amount: With respect to any Distribution Date, the sum
of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans in
the Trust at such time,

                                       19
<PAGE>

and (ii) with respect to each Distribution Date on or prior to February 25,
2004, the Pre-Funding Amount immediately prior to such Distribution Date, net of
investment earnings on deposit therein.

         Custodial File: With respect to each Mortgage Loan, the file retained
by the Trustee consisting of items (i) - (viii) of Section 2.01(c).

         Cut-off Date: With respect to the Initial Mortgage Loans, November 1,
2003, and with respect to each Subsequent Mortgage Loan, the related Subsequent
Cut-off Date.

         Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date.

         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.

         Data Tape Information: The information provided by the Unaffiliated
Seller as of November 1, 2003 to the Depositor 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 Monthly 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 or adjustable); (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 and term of Prepayment Charges
applicable to such Mortgage Loan, if any; and (21) with respect to each
Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap. 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 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.

                                       20
<PAGE>

         Deficient Valuation: With respect to any Mortgage Loan, a valuation of
the related Mortgaged Property by a court of competent jurisdiction in an amount
less than the then- outstanding principal balance of the Mortgage Loan, which
valuation results from a proceeding initiated under the Bankruptcy Code.

         Definitive Certificates: 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: A Mortgage Loan that is repurchased by the
Unaffiliated Seller or the related Originator, as applicable, or replaced with a
Substitute Mortgage Loan in accordance with the terms hereof and the related
Mortgage Loan Purchase Agreement.

         Delinquency Trigger Event: With respect to a Distribution Date after
the Stepdown Date, the event that is in effect if the quotient (expressed as a
percentage) of (x) the three-month rolling daily average of the Stated Principal
Balance of 60+ Day Delinquent Loans as of the last day of the related Due
Period, over (y) the Pool Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period exceeds 44.50% of the prior period's
Senior Enhancement Percentage.

         Delinquent: A mortgage loan is "Delinquent" if any monthly payment due
on a due date is not made by the close of business on the next scheduled due
date for that mortgage loan (including all Mortgage Loans in foreclosure,
Mortgage Loans in respect of REO Properties and Mortgage Loans for which the
related Mortgagor has declared bankruptcy). A mortgage loan is "30 days
Delinquent" if the monthly payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month
in which that monthly payment was due or, if there was no corresponding date
(e.g., as when a 30-day month follows a 31-day month in which the payment was
due on the 31st day of that month), then on the last day of that immediately
preceding month; and similarly for "60 days Delinquent" and "90 days
Delinquent," etc.

         Delivery Date: With respect to the Initial Mortgage Loans, the Closing
Date; with respect to any Subsequent Mortgage Loans, the related Subsequent
Transfer Date therefor.

         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,
or its successor 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.

                                       21
<PAGE>

         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 Remittance Date, the Business
Day immediately preceding such Remittance Date.

         Distribution Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(d) in the name of the Trustee
for the benefit of the Certificateholders and designated "Deutsche Bank National
Trust Company, in trust for registered holders of CDC Mortgage Capital Trust
2003-HE4, Mortgage Pass-Through Certificates, Series 2003-HE4".

         Distribution Date: The 25th day of each calendar month after the
initial issuance of the Certificates, or if such day is not a Business Day, the
next succeeding Business Day, commencing in December 2003.

         Document Exception Report: The report attached to Exhibit G 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 each 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) a demand account maintained with an
Eligible Institution or (ii) a trust account or accounts maintained with a
federal or state chartered depository institution or trust company acting in its
fiduciary capacity or (iii) any other account acceptable to each Rating Agency.
Eligible Accounts may bear interest, and may include, if otherwise qualified
under this definition, accounts maintained with the Trustee.

         Eligible Institution: A federal or state chartered depository
institution or trust company, which (x) with respect to any Eligible Account,
the amounts on deposit in which will be held for less than 30 days, the
commercial paper, short-term debt obligations, or other short-term deposits of
which are rated at least "F1" by Fitch, "P-1" by Moody's, and either "A-1+" or
"A-1", if the amounts on deposit represent less than 20% of the initial par
value of the securities, are not intended to be used as credit enhancement and
are to be held for less than 30 days, by Standard & Poor's (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicer and the Trustee) or (y) with respect to any Eligible Account,
the amounts on deposit in which will be held for no more than 365 days, the
long-term unsecured debt obligations of which are rated at least "A" by Fitch,
"A" by Standard & Poor's and "A2" by Moody's (or a comparable rating if another
Rating Agency is specified by the Depositor by written notice to the Servicer
and the Trustee).

         Encore: Encore Credit Corporation, a California corporation.

                                       22
<PAGE>

         Encore Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and Encore, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Encore in connection with any
Subsequent Transfer of Encore Mortgage Loans.

         Encore Mortgage Loan: A Mortgage Loan which was acquired from Encore by
the Unaffiliated Seller pursuant to the Encore Purchase Agreement, and which has
been acquired by the Trust Fund.

         Encore Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of December 1, 2002, as amended to date, by and between the
Unaffiliated Seller and Encore.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         ERISA-Restricted Certificate: As specified in the Preliminary
Statement.

         Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).

         Escrow Payments: As defined in Section 3.09(b).

         Event of Default: As defined in Section 7.01.

         Excess Reserve Fund Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c) in the name
of the Trustee for the benefit of the Offered Certificateholders and designated
"Deutsche Bank National Trust Company, in trust for registered holders of CDC
Mortgage Capital Trust 2003-HE4, Mortgage Pass-Through Certificates, Series
2003-HE4".

         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.

         Expense Fees: As to each Mortgage Loan, the sum of the Servicing Fee
and the Trustee Fee.

         Expense Fee Rate: As to each Mortgage Loan, a per annum rate equal to
the sum of the Servicing Fee Rate and the Trustee Fee Rate.

         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 Subordination Deficiency for such Distribution Date.

         Fannie Mae: The Federal National Mortgage Association, or any successor
thereto.

                                       23
<PAGE>

         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.

         FGMC: First Guaranty Mortgage Corporation, a Virginia corporation.

         FGMC Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and FGMC, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and FGMC in connection with any
Subsequent Transfer of FGMC Mortgage Loans.

         FGMC Mortgage Loan: A Mortgage Loan which was acquired from FGMC by the
Unaffiliated Seller pursuant to the FGMC Purchase Agreement, and which has been
acquired by the Trust Fund.

         FGMC Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of August 1, 2003, as amended to date, by and between the
Unaffiliated Seller and FGMC.

         FHLMC: 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. Final
Certification: A certification submitted by the Trustee in substantially the
form of Exhibit G hereto.

         Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO Property purchased
by an Originator as contemplated by the Assignment and Recognition Agreements),
a determination made by the Servicer that all Insurance Proceeds, Liquidation
Proceeds and other payments or recoveries which the Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. The Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.

         Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in each of the
following months:

                                                               FINAL SCHEDULED
                                                              DISTRIBUTION DATE
                                                              -----------------
Class A-1 Certificates....................................     March 25, 2034
Class A-2 Certificates....................................     March 25, 2034
Class A-3 Certificates....................................     March 25, 2034
Class M-1 Certificates....................................     March 25, 2034
Class M-2 Certificates....................................     March 25, 2034
Class M-3 Certificates....................................     March 25, 2034

                                       24
<PAGE>

                                                               FINAL SCHEDULED
                                                              DISTRIBUTION DATE
                                                              -----------------
Class B-1 Certificates....................................     March 25, 2034
Class B-2 Certificates....................................     March 25, 2034
Class B-3 Certificates....................................     March 25, 2034
Class X Certificates......................................     March 25, 2034
Class P Certificates......................................     March 25, 2034
Class R Certificates......................................     March 25, 2034

         First Banc: First Banc Mortgage, Inc., a Missouri corporation.

         First Banc Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and First Banc, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and First Banc in
connection with any Subsequent Transfer of First Banc Mortgage Loans.

         First Banc Mortgage Loan: A Mortgage Loan which was acquired from First
Banc by the Unaffiliated Seller pursuant to the First Banc Purchase Agreement,
and which has been acquired by the Trust Fund.

         First Banc Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of April 1, 2003, as amended to date, by and
between the Unaffiliated Seller and First Banc.

         Fitch: Fitch, Inc. If Fitch is designated as a Rating Agency in the
Preliminary Statement, for purposes of Section 10.05(b) the address for notices
to Fitch shall be Fitch, Inc., One State St. Plaza, New York, New York 10004,
Attention: Residential Mortgage Surveillance Group - Morgan Stanley ABS Capital
I Inc. 2003-HE4, or such other address as Fitch may hereafter furnish to the
Depositor and the Servicer.

         Fixed Rate Mortgage Loan: A Mortgage Loan bearing interest at a fixed
rate.

         Floating Rate Certificates: As specified in the Preliminary Statement.

         Floor Amount: An amount equal to the product of (x) 0.50% and (y) the
Maximum Pool Principal Balance.

         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.

         High Cost Loan: A Mortgage Loan classified as (a) a "high cost" loan
under the Home Ownership and Equity Protection Act of 1994 or (b) a "high cost,"
"threshold," "covered", "predatory" or similar loan under any other applicable
state, federal or local law.

                                       25
<PAGE>

         I&I Payments: Payments due and owing under the Insurance and Indemnity
Agreement.

         Impac: Impac Funding Corporation, a California corporation.

         Impac Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and Impac, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Impac in connection with any
Subsequent Transfer of Impac Mortgage Loans.

         Impac Mortgage Loan: A Mortgage Loan which was acquired from Impac by
the Unaffiliated Seller pursuant to the Impac Purchase Agreement, and which has
been acquired by the Trust Fund.

         Impac Purchase Agreement: The Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of January 29, 2003, as amended to
date, by and between the Unaffiliated Seller and Impac.

         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.

         Initial Cut-off Date: November 1, 2003.

         Initial Mortgage Loans: The Mortgage Loans delivered by the Depositor
on the Startup Date.

         Initial Pre-Funded Amount: The amount of $138,352,501.24.

         Insurance and Indemnity Agreement: The Insurance and Indemnity
Agreement dated as of November 1, 2003 among the Certificate Insurer, the
Servicer and the Unaffiliated Seller, as such agreement may be amended or
supplemented in accordance with the provisions thereof.

         Insurance Payment Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 4.05(c) in the name of the Trustee
for the benefit of the Class A-1 Certificateholders and the Certificate Insurer,
and designated "Deutsche Bank National Trust Company, in trust for Financial
Security Assurance Inc. and the registered holders of CDC Mortgage Capital Trust
2003-HE4, Mortgage Pass-Through Certificates, Series 2003-HE4."

         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.

                                       26
<PAGE>

         Insured Payment: With respect to any Distribution Date, the amount of
the Class A-1 Deficiency for that Distribution Date.

         Interest Accrual Period: With respect to any Distribution Date, the
period beginning with the immediately preceding Distribution Date (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 prior
to the current Distribution Date (on an actual/360 day count basis).

         Interest Deficit Amount: With respect to any Distribution Date, the
excess of (i) the aggregate Accrued Certificate Interest for all Classes of the
Class A Certificates on such Distribution Date, over (ii) an amount equal to the
Interest Remittance Amount less the Premium Amount and the Trustee Fee, in each
case, for such Distribution Date.

         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 Payment: The Class A Interest Rate Cap Payment, the
Class M Interest Rate Cap Payment and/or the Class B Interest Rate Cap Payment,
as applicable.

         Interest Remittance Amount: With respect to any Distribution Date, the
sum of (a) the sum, without duplication, of the following amounts received by
the Trustee from the Servicer on the related Remittance Date:

         (i) all installments of interest due on the Mortgage Loans during the
    related Due Period and received or advanced by the Servicer on or prior to
    the related Remittance Date;

         (ii) Compensating Interest paid by the Servicer on such Remittance
    Date;

         (iii) the interest component of all Substitution Adjustment Amounts and
    Repurchase Prices received by the Servicer during the related Due Period;

         (iv) the interest component of all Condemnation Proceeds, Insurance
    Proceeds and Liquidation Proceeds received by the Servicer during the
    related Due Period (in each case, net (but not to be reduced below zero) of
    unreimbursed expenses incurred in connection with a liquidation or
    foreclosure and unreimbursed Advances, if any); and

         (v) the interest component of the proceeds of any termination of the
    Trust Fund;

reduced by the Servicing Fee for the related Due Period, together with amounts
in reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to the Agreement; and

(b) the Capitalized Interest Requirement, if any, deposited into the
Distribution Account on such Distribution Date.

                                       27
<PAGE>

         Investment Account: As defined in Section 3.12(a).

         Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.

         Late Collections: With respect to any Mortgage Loan and any Due Period,
all amounts received subsequent to the Determination Date immediately following
such Due Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Liquidation Proceeds or otherwise, which represent late payments or
collections of principal and/or interest due (without regard to any acceleration
of payments under the related Mortgage and Mortgage Note) but delinquent for
such Due Period and not previously recovered.

         Late Payment Rate: Has the meaning ascribed thereto in the Insurance
and Indemnity Agreement.

         Lenders Direct: Lenders Direct Capital Corporation, a California
corporation.

         Lenders Direct Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and Lenders Direct, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lenders Direct
in connection with any Subsequent Transfer of Lenders Mortgage Loans.

         Lenders Direct Mortgage Loan: A Mortgage Loan which was acquired from
Lenders Direct by the Unaffiliated Seller pursuant to the Lenders Direct
Purchase Agreement, and which has been acquired by the Trust Fund.

         Lenders Direct Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of October 1, 2003, as amended
to date, by and between the Unaffiliated Seller and Lenders Direct.

         LIBOR: With respect to any Interest Accrual Period for the LIBOR
Certificates, the rate determined by the Trustee on the related LIBOR
Determination Date on the basis of the offered rate for one-month U.S. dollar
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London
time) on such date; provided that if such rate does not appear on Telerate Page
3750, the rate for such date will be determined on the basis of the rates at
which one-month U.S. dollar deposits are offered by the Reference Banks at
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will 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 Servicer, at
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.
dollar loan to leading European banks.

         LIBOR Certificates: As specified in the Preliminary Statement.

                                       28
<PAGE>

         LIBOR Determination Date: With respect to any Interest Accrual Period
(other than the initial Interest Accrual Period) for the LIBOR 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 was liquidated in the
calendar month preceding the month of such Distribution Date and as to which the
Servicer has certified (in accordance with this Agreement) 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.

         Liquidation Event: With respect to any Mortgage Loan, any of the
following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery
Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is
removed from coverage under this Agreement by reason of its being purchased,
sold or replaced pursuant to or as contemplated by this Agreement. With respect
to any REO Property, either of the following events: (i) a Final Recovery
Determination is made as to such REO Property; or (ii) such REO Property is
removed from coverage under this Agreement by reason of its being purchased
pursuant to this Agreement.

         Liquidation Proceeds: Cash received in connection with the liquidation
of a defaulted Mortgage Loan, whether through trustee's sale, foreclosure sale
or otherwise.

         Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan, the
ratio (expressed as a percentage) of the original outstanding principal amount
of the 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 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.

         Loss Trigger Event: With respect to any Distribution Date, the event
that is in effect if the aggregate amount of Realized Losses incurred since the
related Cut-off Date through the last day of the related Prepayment Period
divided by the Maximum Pool Principal Balance exceeds the applicable percentage
as follows with respect to such Distribution Date: (a) 4.00% for the
Distribution Dates occurring from December 2006 to November 2007; (b) 5.00% for
Distribution Dates occurring from December 2007 to November 2008; and (c) 5.75%
for Distribution Dates occurring in December 2008 and thereafter.

         Lower Tier Regular Interest: As described in the Preliminary Statement.
Lower Tier REMIC: As described in the Preliminary Statement

         Master Financial: Master Financial, Inc., a California corporation.

         Master Financial Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor

                                       29
<PAGE>

and Master Financial, and each other Assignment and Recognition Agreement by and
among the Unaffiliated Seller, the Depositor and Master Financial in connection
with any Subsequent Transfer of Master Financial Mortgage Loans.

         Master Financial Mortgage Loan: A Mortgage Loan which was acquired from
Master Financial by the Unaffiliated Seller pursuant to the Master Financial
Purchase Agreement, and which has been acquired by the Trust Fund.

         Master Financial Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 1, 2003, as amended to date, by and
between the Unaffiliated Seller and Master Financial.

         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 Mortgage Loan.

         Maximum Pool Principal Balance: The aggregate Stated Principal Balances
of all Initial Mortgage Loans as of the Initial Cut-off Date plus the Initial
Pre-Funded Amount.

         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 the MERS Procedure Manual and
(b) the Originators have designated or will designate the Trust 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.

         Middle Tier Regular Interest: As described in the Preliminary
Statement.

         Middle Tier REMIC: As described in the Preliminary Statement.

         Middle Tier WAC Cap: The weighted average of the Pass-Through Rates of
the Middle Tier Regular Interests (other than the Class MT-N) minus, in the case
of the Class MT-A-1 Interest, two times the Premium Rate.

         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 Mortgage Loan.

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<PAGE>

         Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.

         Moody's: Moody's Investors Service, Inc. If Moody's is designated as a
Rating Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Moody's shall be Moody's Investors Service, Inc., 99
Church Street, New York, New York 10007, Attention: Residential Mortgage
Pass-Through Group, or such other address as Moody's may hereafter furnish to
the Depositor and the Servicer.

         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 Purchase Agreement: The Accredited Purchase Agreement,
the Aegis Purchase Agreement, the Ameriquest Purchase Agreement, the BNC
Purchase Agreement, the CIT Mortgage Purchase Agreement, the Chapel Mortgage
Purchase Agreement, the Encore Purchase Agreement, the FGMC Purchase Agreement,
the First Banc Purchase Agreement, the Impac Purchase Agreement, the Lenders
Direct Purchase Agreement, the Master Financial Purchase Agreement, the Novelle
Purchase Agreement, the People's Choice Purchase Agreement or the SIB Mortgage
Purchase Agreement, as applicable.

         Mortgage Loans: 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, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding
replaced or repurchased Mortgage Loans. As applicable, "Mortgage Loan" shall be
deemed to refer to REO Property.

         Mortgage Loan Schedule: A schedule of Mortgage Loans annexed hereto as
Schedule I, such schedule setting forth the following information with respect
to each Mortgage Loan: (1) the Originator's Mortgage Loan number; (2) the city,
state and zip code of the Mortgaged Property; (3) a code indicating whether the
Mortgaged Property is a single family residence, two-family residence,
three-family residence, four-family residence, PUD or condominium; (4) the
current Mortgage Interest Rate; (5) the current net Mortgage Rate; (6) the
current Monthly Payment; (7) 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) the
Loan-to-Value Ratio; (12) the next Interest Rate Adjustment Date; (13) the
lifetime Mortgage Interest Rate Cap; (14) whether the Mortgage Loan is
convertible or not; (15) a code indicating the mortgage guaranty insurance
company; (16) the Servicing Fee; (17) the identity of the related Originator of
such Mortgage Loan; (18) the Mortgagor's name; (19) the "paid-through" date
(based on payments received from the related Mortgagor) as of the Cut-off Date;
and (20) the Servicing Transfer Date.

                                       31
<PAGE>

         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 with respect to Adjustable Rate
Mortgage Loans.

         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: The real property (or leasehold estate, if
applicable) identified on the Mortgage Loan Schedule as securing repayment of
the debt evidenced by a Mortgage Note.

         Mortgagor: The obligor(s) on a Mortgage Note.

         Net Interest Margin Securities: As defined in Section 9.01.

         Net Monthly Excess Cash Flow: For any Distribution Date the amount
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 exceeds the sum of
the Compensating Interest payments made on such Distribution Date.

         NIM Closing Date: On or about November 25, 2003.

         NIMs Trust: CDC Mortgage Capital Inc. NIM Trust 2003-HE4N, a Delaware
business trust.

         Non-Delay Certificates: As specified in the Preliminary Statement.

         Nonrecoverable Advance: Any Servicing Advances previously made or
proposed to be made in respect of a Mortgage Loan or REO Property, which, in the
good faith business judgment of the Servicer, will not or, in the case of a
proposed Servicing Advance, would not, be ultimately recoverable from related
late payments, Insurance Proceeds, Liquidation Proceeds or otherwise on such
Mortgage Loan or REO Property. The determination by the Servicer that it has
made a Nonrecoverable Advance or that any proposed Servicing Advances, if made,
would constitute a Nonrecoverable Advance, shall be evidenced by an Officers'
Certificate delivered to the Trustee.

         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 Servicer, will not or, in the case of a proposed P&I
Advance, would not be ultimately recoverable from related late payments,
Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or REO Property
as provided herein.

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<PAGE>

         Notice of Final Distribution: The notice to be provided pursuant to
Section 9.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.

         Novelle: Novelle Financial Services, Inc., a California corporation.

         Novelle Assignment Agreement: The Assignment and Recognition Agreement,
dated as of November 25, 2003, by and among the Unaffiliated Seller, the
Depositor and Novelle, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Novelle in connection with
any Subsequent Transfer of Novelle Mortgage Loans.

         Novelle Mortgage Loan: A Mortgage Loan which was acquired from Novelle
by the Unaffiliated Seller pursuant to the Novelle Purchase Agreement, and which
has been acquired by the Trust Fund.

         Novelle Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of September 27, 2002, by and between the Unaffiliated
Seller and Novelle.

         Ocwen: Ocwen Federal Bank FSB, a federally chartered savings bank.

         Offered Certificates: As specified in the Preliminary Statement.

         Officer's Certificate: A certificate signed by an officer of the
Servicer with responsibility for the servicing of the Mortgage Loans 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 the Servicer or the Subservicer, reasonably acceptable to the
Trustee and to the Certificate Insurer; provided that any Opinion of Counsel
relating to (a) qualification of the Mortgage Loans in a 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 the Servicer of
the Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer of the Mortgage Loans or in an affiliate of either and
(iii) is not connected with the Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.

         Optional Termination Date: means:

         (i) For so long as the Class X Certificates are 100% owned, either
    directly or indirectly, by the Unaffiliated Seller or any Affiliate thereof,
    then the Servicer may cause the Optional Termination Date to occur on any
    Distribution Date when the aggregate Stated Principal Balance of the
    Mortgage Loans is 10.00% or less of the Maximum Pool Principal Balance; and

         (ii) If the Class X Certificates are not 100% owned, either directly or
    indirectly, by the Unaffiliated Seller or any Affiliate thereof, then the
    Holders of a majority in Class Certificate Balance of the Class X
    Certificates may cause the Optional

                                       33
<PAGE>

    Termination Date to occur on any Distribution Date when the aggregate Stated
    Principal Balance of the Mortgage Loans is 10.00% or less of the Maximum
    Pool Principal Balance, and, if such Class X Certificateholders do not do
    so, then the Servicer shall also have such right.

         Originator: The party that originated or acquired a Mortgage Loan and,
more specifically, (i) with respect to any Accredited Mortgage Loan, Accredited,
(ii) with respect to any Aegis Mortgage Loan, Aegis, (iii) with respect to any
Ameriquest Mortgage Loan, Ameriquest, (iv) with respect to any BNC Mortgage
Loan, BNC, (v) with respect to any CIT Mortgage Loan, CIT (vi) with respect to
any Chapel Mortgage Loan, Chapel Mortgage, (vii) with respect to any Encore
Mortgage Loan, Encore, (viii) with respect to any First Banc Mortgage Loan,
First Banc, (ix) with respect to any FGMC Mortgage Loan, FGMC, (x) with respect
to any Impac Mortgage Loan or Novelle Mortgage Loan, Impac or Novelle, as
applicable, (x) with respect to any Lenders Direct Mortgage Loan, Lenders Direct
(xi) with respect to any Master Financial Mortgage Loan, Master Financial, (xii)
with respect to any People's Choice Mortgage Loan, People's Choice and (xiii)
with respect to any SIB Mortgage Loan, SIB Mortgage.

         OTS: Office of Thrift Supervision, and any successor thereto.

         Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:

         (i) Certificates theretofore canceled by the Trustee or delivered to
    the Trustee for cancellation; and

         (ii) Certificates in exchange for which or in lieu of which other
    Certificates have been executed and delivered by the Trustee pursuant to
    this Agreement.

         Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with a
Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.

         Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.

         P&I Advance: As to any Mortgage Loan or REO Property, any advance made
by the Servicer in respect of any Remittance Date with respect to any Mortgage
Loan representing the aggregate of all payments of principal and interest on
such Mortgage Loan, net of the related Servicing Fee, that were due, and that
were delinquent or unpaid 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 Regular
Certificates, on or prior to the Optional Termination Date the following
percentages: Class A-1, 0.310%, Class A-2

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<PAGE>

0.230%, Class A-3, 0.550%, Class M-1, 0.650%, Class M-2, 1.650%, Class M-3,
1.950%, Class B-1, 3.000%, Class B-2, 3.750% and Class B-3, 3.750%. Commencing
on the first Distribution Date after the Optional Termination Date, the
Pass-Through Margins shall increase to: Class A-1, 0.620%, Class A-2 0.460%,
Class A-3, 1.100%, Class M-1, 0.975%, Class M-2, 2.475%, Class M-3, 2.925%,
Class B-1, 4.500%, Class B-2, 5.625%, and Class B-3, 5.625%.

         Pass-Through Rate: For each Class of Certificates and each Lower Tier
and Middle Tier Regular Interest, the per annum rate set forth or calculated in
the manner described in the Preliminary Statement.

         People's Choice: People's Choice Home Loan, Inc., a Wyoming
corporation.

         People's Choice Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003 as amended to date, by and among the
Unaffiliated Seller, the Depositor and People's Choice, and each other
Assignment and Recognition Agreement by and among the Unaffiliated Seller, the
Depositor and People's Choice in connection with any Subsequent Transfer of
People's Choice Mortgage Loans.

         People's Choice Mortgage Loan: A Mortgage Loan which was acquired from
People's Choice by the Unaffiliated Seller pursuant to the People's Choice
Purchase Agreement, and which has been acquired by the Trust Fund.

         People's Choice Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of October 24, 2002, as amended
to date, by and between the Unaffiliated Seller and People's Choice.

         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 the Servicer, the Trustee or any of their respective
Affiliates:

         (i) direct obligations of, or obligations fully guaranteed as to timely
    payment of principal and interest by, the United States or any agency or
    instrumentality thereof; provided such obligations are backed by the full
    faith and credit of the United States;

         (ii) demand and time deposits in, certificates of deposit of, or
    bankers' acceptances (which shall each have an original maturity of not more
    than 90 days and, in the case of bankers' acceptances, shall in no event
    have an original maturity of more than 365 days or a remaining maturity of
    more than 30 days) denominated in United States dollars and issued by, any
    Eligible Institution;

                                       35
<PAGE>

         (iii) repurchase obligations with respect to any security described in
    clause (i) above entered into with an Eligible 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 or an Affiliate thereof, that have been rated "Aaa" by
    Moody's, "AAA" by Fitch and "AAA" by Standard & Poor's; and

         (vii) if previously confirmed in writing to the Trustee and to the
    Certificate Insurer, 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, (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 REMIC created hereunder 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

                                       36
<PAGE>

to tax and, with the exception of the Federal Home Loan Mortgage Corporation, 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 which were Outstanding Mortgage Loans as of the last day of
the related Due Period.

         Preference Amount: Any amounts distributed in respect of the Class A-1
Certificates that are recovered from any Holder of such Certificates as a
voidable preference by a trustee in bankruptcy pursuant to the United States
Bankruptcy Code or other similar law in accordance with a final, nonappealable
order of a court having competent jurisdiction and which have not theretofore
been repaid to such Holder.

         Preference Claim: As defined in Section 4.05(f).

         Pre-Funding Account: The Eligible Account created and maintained by the
Trustee pursuant to Section 3.07(f) in the name of the Trustee for the benefit
of the Certificateholders, and designated "Deutsche Bank National Trust Company,
in trust for registered holders of CDC Mortgage Capital Trust 2003-HE4, Mortgage
Pass-Through Certificates, Series 2003-HE4," the funds of which, during the
Pre-Funding Period, shall be applied to the purchase of Subsequent Mortgage
Loans.

         Pre-Funding Amount: With respect to any date, the amount on deposit in
the Pre-Funding Account.

         Pre-Funding Earnings: The actual investment earnings realized on
amounts deposited in the Pre-Funding Account.

         Pre-Funding Period: The period commencing on the Startup Date and
ending on the earliest to occur of (i) the date on which the amount on deposit
in the Pre-Funding Account (exclusive of any investment earnings) is less than
$100,000, (ii) the date on which any Event of Default occurs and (iii) February
24, 2004.

         Premium Amount: The product of (i) the Premium Rate and (ii) the
Certificate Balance of the Class A-1 Certificates immediately prior to such
Distribution Date.

         Premium Rate: The rate at which the "Premium" is determined as
described in the letter dated November 25, 2003 between the Unaffiliated Seller
and the Certificate Insurer (a copy of which shall be provided by the
Unaffiliated Seller to the Trustee).

                                       37
<PAGE>

         Prepayment Charge: Any prepayment premium, penalty or charge collected
by the Servicer with respect to a Mortgage Loan from a Mortgagor in connection
with any voluntary Principal Prepayment in Full pursuant to the terms of the
related Mortgage Note.

         Prepayment Interest Shortfall: With respect to any Remittance Date, the
sum of, for each Mortgage Loan that was during the related Prepayment Period the
subject of a Principal Prepayment in Full, that was applied by the Servicer to
reduce the outstanding principal balance of such Mortgage Loan on a date
preceding the Due Date in the succeeding Prepayment Period, 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 related
Prepayment Period.

         Prepayment Period: With respect to any Distribution Date, the calendar
month preceding the calendar month in which such Distribution Date occurs.

         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 Parity Deficit: With respect to any Distribution Date, the
excess of (i) the aggregate Class Certificate Balances of the Class A
Certificates on that Distribution Date, after taking into account any reduction
(other than, with respect to the Class A-1 Certificates, reductions due to
payments from the Certificate Insurance Policy on that Distribution Date), of
those Class Certificate Balances on that Distribution Date, less the excess of
(a) any Principal Parity Deficits for all prior Distribution Dates over (b) any
Class A-1 Principal Parity Amount for all prior Distribution Dates over (ii) the
Current Maximum Amount for that Distribution Date. For the first Distribution
Date, the Principal Parity Deficit will equal zero.

         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 in advance of its scheduled Due Date, excluding any prepayment
penalty or premium thereon and which is not accompanied by an amount of interest
representing scheduled interest due on any date or dates in any month or months
subsequent to the month of prepayment.

         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 Remittance Date, the
sum, without duplication, of: (i) all scheduled installments of principal due on
the Mortgage Loans during the related Due Period and received or advanced by the
Servicer on or prior to the related Remittance Date; (ii) the principal
component of all Condemnation Proceeds, Insurance Proceeds and Liquidation
Proceeds during the related Due Period (in each case, net of remaining (i.e.,
not deducted from the Interest Remittance Amount) 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
during the related Prepayment Period; (iv) the principal component of all
Substitution Adjustment Amounts and Repurchase Prices received by

                                       38
<PAGE>

the Servicer during the related Due Period; and (v) the principal component of
the proceeds of any termination of the Trust Fund; reduced by remaining amounts
(i.e., not deducted from the Interest Remittance Amount) in reimbursement for
Advances previously made with respect to the Mortgage Loans and other amounts as
to which the Servicer is entitled to be reimbursed pursuant to this Agreement.

         Private Certificates: As specified in the Preliminary Statement.

         Prospectus Supplement: The Prospectus Supplement, dated November 14,
2003, relating to the Offered Certificates.

         PTCE 95-60: As defined in Section 5.02(b).

         PUD: Planned Unit Development.

         Qualified Insurer: A mortgage guaranty insurance company duly
qualified as such under the laws of the state of its principal place of business
and each state having jurisdiction over such insurer in connection with the
insurance policy issued by such insurer, duly authorized and licensed in such
states to transact a mortgage guaranty insurance business in such states and to
write the insurance provided by the insurance policy issued by it, approved as a
FNMA- or FHLMC-approved mortgage insurer or having a claims paying ability
rating of at least "AA" or equivalent rating by a nationally recognized
statistical rating organization. Any replacement insurer with respect to a
Mortgage Loan must have at least as high a claims paying ability rating as the
insurer it replaces had on the Closing Date.

         Rating Agency: Each of Standard & Poor's, Fitch and Moody's. If such
organization or a successor is no longer in existence, "Rating Agency" shall be
such nationally recognized statistical rating organization, or other comparable
Person, as is designated by the Depositor, notice of which designation shall be
given to the Trustee. References herein to a given rating or rating category of
a Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 10.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as such
Rating Agency may hereafter furnish to the Depositor and the Servicer.

         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 Certificate issued in Definitive Form, the
Record Date shall be the close of business on the last Business Day of the month
immediately preceding such applicable Distribution Date.

         Realized Loss: The excess of the outstanding principal balance of a
defaulted Mortgage Loan over the net Liquidation Proceeds with respect thereto
that are allocable to principal.

         Reference Bank: As defined in Section 4.04.

         Regular Certificates: As specified in the Preliminary Statement.

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<PAGE>

         Reimbursement Amount: As of any Distribution Date, the sum of (a)(i)
all Insured Payments previously received by the Trustee and all Preference
Amounts previously paid by the Certificate Insurer and in each case not
previously repaid to the Certificate Insurer pursuant to Section 4.02(a) plus
(ii) interest accrued on each such Insured Payment and Preference Amounts not
previously repaid calculated at the Late Payment Rate from the date the Trustee
received the related Insured Payment or Preference Amounts were paid by the
Certificate Insurer and (b)(i) any amounts then due and owing to the Certificate
Insurer under the Insurance and Indemnity Agreement (excluding the Premium
Amount due on such Distribution Date), as certified to the Trustee by the
Certificate Insurer plus (ii) interest on such amounts at the rate specified in
the Insurance and Indemnity Agreement. The Certificate Insurer shall notify the
Trustee and the Unaffiliated Seller of the amount of any Reimbursement Amount.

         Relief Act Shortfall: With respect to any Distribution Date and any
Mortgage Loan, any reduction in the amount of interest or principal collectible
on such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended,
and similar state laws.

         Remainder Amount: As defined in Section 9.01.

         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
REMICs, 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.

         REMIC Trust: The segregated pool of assets consisting of the Trust
Fund, exclusive of Prepayment Charges and the Excess Reserve Fund Account.

         Remittance Date: The 18th day (or if such 18th day is not a Business
Day, the first Business Day immediately preceding) of any month.

         REO Disposition: The final sale by the 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 Property: A Mortgaged Property acquired by the Trust Fund through
foreclosure or deed-in-lieu of foreclosure in connection with a defaulted
Mortgage Loan.

         Representative: Morgan Stanley & Co. Incorporated, as representative on
behalf of itself, Banc of America Securities LLC, Countrywide Securities
Corporation and J.P. Morgan Securities Inc.

                                       40
<PAGE>

         Repurchase Price: With respect to any Mortgage Loan, an amount equal to
the sum (without duplication) of (i) the unpaid principal balance of such
Mortgage Loan as of the date of repurchase and (ii) (x) if such Mortgage Loan is
being repurchased by the Unaffiliated Seller, the sum of (A) interest on such
unpaid principal balance of such Mortgage Loan at the Mortgage Rate from the
last date through which interest has been paid and distributed to the Trustee to
the last day of the month in which such repurchase occurs, (B) all unreimbursed
P&I Advances and Servicing Advances, (C) all unpaid Servicing Fees, (D) all
expenses reasonably incurred by the Servicer, the Trustee, the Certificate
Insurer or the Unaffiliated Seller, as the case may be, in respect of a breach
or defect, including, without limitation, expenses arising out of any such
party's enforcement of the Originator's repurchase obligation, to the extent not
included in (B), and (E) all costs and expenses incurred by, or on behalf of,
the Trust Fund in connection with any violation by such Mortgage Loan of a
predatory or abusive-lending law or (y) if such Mortgage Loan is being
repurchased by the related Originator, all other amounts payable by such
Originator in accordance with the terms of the related Mortgage Loan Purchase
Agreement.

         Request for Release: The Request for Release submitted by the Servicer
to the Trustee, substantially in the form of Exhibit K.

         Residual Certificates: As specified in the Preliminary Statement.

         Responsible Officer: When used with respect to the Trustee, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Assistant
Treasurer or any other officer of the Trustee customarily performing functions
similar to those performed by any of the above designated officers who at such
time shall be officers to whom, with respect to a particular matter, such matter
is referred because of such officer's knowledge of and familiarity with the
particular subject and who shall have direct responsibility for the
administration of this Agreement.

         Rule 144A Letter: As defined in Section 5.02(b).

         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.

         Scheduled Principal Balance: With respect to any Mortgage Loan: (a) as
of the Cut-off Date, the outstanding principal balance of such Mortgage Loan as
of such date, net of the principal portion of all unpaid Monthly Payments, if
any, due on or before such date; (b) as of any Due Date subsequent to the
Cut-off Date up to and including the Due Date in the calendar month in which a
Liquidation Event occurs with respect to such Mortgage Loan, the Scheduled
Principal Balance of such Mortgage Loan as of the Cut-off Date, minus the sum of
(i) the principal portion of each Monthly Payment due on or before such Due Date
but subsequent to the Cut-off Date, whether or not received, (ii) all Principal
Prepayments received before such Due Date but after the Cut-off Date, (iii) the
principal portion of all Liquidation Proceeds and Insurance Proceeds received
before such Due Date but after the Cut-off Date, net of any portion thereof that
represents principal due (without regard to any acceleration of payments under
the related Mortgage and Mortgage Note) on a Due Date occurring on or before the
date on which such proceeds were received and (iv) any reduction in the
principal balance of such Mortgage Loan incurred with respect thereto as a
result of a Deficient Valuation occurring before such Due Date, but only to the
extent such reduction in principal balance represents a reduction in the portion
of principal of such Mortgage Loan not yet due (without regard to any
acceleration of payments under the

                                       41
<PAGE>

related Mortgage and Mortgage Note) as of the date of such Deficient Valuation;
and (c) as of any Due Date subsequent to the occurrence of a Liquidation Event
with respect to such Mortgage Loan, zero.

         SEC: As defined in Section 8.12(a).

         Securities Act: The Securities Act of 1933, as amended.

         Senior Enhancement Percentage: With respect to any Distribution Date,
the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distributions of the
Principal Distribution Amount for such Distribution Date) by (y) the Current
Maximum Amount for that Distribution Date.

         Senior Specified Enhancement Percentage: As of any date of
determination, 36.00%.

         Servicer: Ocwen Federal Bank FSB, a federally chartered savings bank,
and its successors and assigns, in its capacity as servicer hereunder.

         Servicer Termination Test: With respect to any Distribution Date, the
Servicer Termination Test will be failed with respect to the Servicer if either:

         (a) the Cumulative Loss Percentage exceeds (i) in months 1 through 24,
    2.50%, (ii) in months 25 through 36, 4.00%, (iii) in months 37 through 48,
    5.25% and (iv) in month 49 and thereafter, 6.70%; or

         (b) the quotient (expressed as a percentage) of (x) the Stated
    Principal Balance of Mortgage Loans 60 days Delinquent or more as of the end
    of the related Due Period (including Mortgage Loans in bankruptcy,
    foreclosure or represented by an REO Property) over (y) the aggregate Stated
    Principal Balance of the Mortgage Loans as of the end of the related Due
    Period, exceeds 20%.

         Servicing Advances: The reasonable "out-of-pocket" costs and expenses
(including legal fees) incurred by the 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 and protection of a Mortgaged Property, (ii) any
enforcement or judicial proceedings, including foreclosures and litigation, in
respect of a particular Mortgage Loan, (iii) the management (including
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,
Section 3.13 and Section 3.15 hereof. Servicing advances also include any
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in connection with executing and recording instruments of
satisfaction, deeds of

                                       42
<PAGE>

reconveyance or Assignments of Mortgage in connection with any satisfaction or
foreclosure in respect of any Mortgage Loan to the extent not recovered from the
Mortgagor or otherwise payable under this Agreement. The Servicer shall not be
required to make any Nonrecoverable Advances.

         Servicing Fee: With respect to each Mortgage Loan and for any calendar
month, an amount equal to one month's interest (or in the event of any payment
of interest which accompanies a Principal Prepayment in Full made by the
Mortgagor during such calendar month, interest for the number of days covered by
such payment of interest) at the Servicing Fee Rate on the same principal amount
on which interest on such Mortgage Loan accrues for such calendar month. Such
fee shall be payable monthly, and shall be pro rated for any portion of a month
during which the Mortgage Loan is serviced by the Servicer under this Agreement.
The Servicing Fee is payable solely from, the interest portion (including
recoveries with respect to interest from Liquidation Proceeds and proceeds
received with respect to REO Properties, to the extent permitted by Section
3.11) of such Monthly Payment collected by the Servicer, or as otherwise
provided under Section 3.11.

         Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.

         Servicing File: With respect to each Mortgage Loan, the file retained
by the 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 each of the other Mortgage Loan documents required to be delivered by
the related Originator pursuant to the terms of the related Mortgage Loan
Purchase Agreement.

         Servicing Officer: Any officer of the Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Trustee by the Servicer on the Closing Date pursuant to this Agreement, as
such list may from time to time be amended.

         Servicing Transfer Date: With respect to each Mortgage Loan, the date
on which Ocwen commenced servicing such Mortgage Loan, as set forth on the
Mortgage Loan Schedule.

         SIB Mortgage: SIB Mortgage Corp., a New Jersey corporation.

         SIB Mortgage Assignment Agreement: The Assignment and Recognition
Agreement, dated as of November 25, 2003, by and among the Unaffiliated Seller,
the Depositor and SIB Mortgage, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and SIB Mortgage
in connection with any Subsequent Transfer of SIB Mortgage Loans.

         SIB Mortgage Loan: A Mortgage Loan which was acquired from SIB Mortgage
by the Unaffiliated Seller pursuant to the SIB Mortgage Purchase Agreement, and
which has been acquired by the Trust Fund.

         SIB Mortgage Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of July 11, 2002, as amended to date, by and
between the Unaffiliated Seller and SIB Mortgage.

                                       43
<PAGE>

         Similar Law: As defined in Section 5.02(b).

         Specified Subordinated Amount: With respect to any Distribution Date
prior to the Stepdown Date, an amount equal to 1.35% of the Maximum Pool
Principal Balance; and with respect to any Distribution Date on and after the
Stepdown Date, an amount equal to 2.70% of the Current Maximum Amount for that
Distribution Date subject to a minimum amount equal to 0.50% of the Maximum Pool
Principal Balance; provided, however, that if, on any Distribution Date, a
Trigger Event has occurred, the Specified Subordinated Amount shall not be
reduced to the applicable percentage of the Current Maximum Amount, but instead
remain the same as the prior period's Specified Subordinated Amount until the
distribution date on which a Trigger Event is no longer occurring. When the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, the Specified Subordinated Amount shall thereafter equal zero.

         Standard & Poor's: Standard & Poor's Ratings Services, a division of
the McGraw-Hill Companies, Inc. If Standard & Poor's is designated as a Rating
Agency in the Preliminary Statement, for purposes of Section 10.05(b) the
address for notices to Standard & Poor's shall be Standard & Poor's, 55 Water
Street, New York, New York 10041, Attention: Residential Mortgage Surveillance
Group - Morgan Stanley ABS Capital I Inc. 2003-HE4, or such other address as
Standard & Poor's may hereafter furnish to the Depositor and the Servicer.

         Startup Day: For each REMIC created hereunder, the Closing Date.

         Stated Principal Balance: As to each Mortgage Loan, (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, to the extent actually received, minus
(ii) all amounts previously distributed to the Trustee with respect to the
related Mortgage Loan representing payments or recoveries of principal,
including Advances in respect of scheduled payments of principal. For purposes
of any Distribution Date, the Stated Principal Balance of any Mortgage Loan will
give effect to any scheduled payments of principal received or advanced prior to
the related Remittance Date and any unscheduled principal payments and other
unscheduled principal collections received during the related Prepayment Period.

         Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in December 2006 and (b) the Distribution Date on which
the aggregate Class Certificate Balance of the Class A Certificates are reduced
to zero and (ii) the first Distribution Date on which the Senior Enhancement
Percentage (calculated for this purpose only after taking into account scheduled
and unscheduled payments of principal on the Mortgage Loans on the last day of
the related Due Period but prior to any applications of Principal Distribution
Amount to the Offered Certificates on the applicable Distribution Date) is
greater than or equal to the Senior Specified Enhancement Percentage.

         Subordinated Amount: As of any Distribution Date, the excess, if any,
of (a) the Current Maximum Amount for that Distribution Date on such
Distribution Date over (b) the aggregate of the Class Certificate Balances of
the Offered Certificates as of such Distribution Date plus the Class Certificate
Balances of the Class P Certificates (after giving effect to the payment of the
Principal Remittance Amount on such Certificates on such Distribution Date).

                                       44
<PAGE>

         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
Total Monthly Excess Spread.

         Subservicer: As defined in Section 3.02(a).

         Subservicing Account: As defined in Section 3.08.

         Subservicing Agreement: As defined in Section 3.02.

         Subsequent Cut-off Date: As to any Subsequent Mortgage Loans, the date
specified in the Addition Notice delivered in connection therewith, which date
shall be the close of business on the first day of the month in which such
Subsequent Mortgage Loans will be conveyed to the Trust Fund.

         Subsequent Mortgage Loans: The Mortgage Loans hereafter transferred and
assigned to the Trust Fund pursuant to Section 2.01(c), each of which shall have
been purchased by the Unaffiliated Seller under a Mortgage Loan Purchase
Agreement.

         Subsequent Transfer: The transfer and assignment by the Depositor to
the Trust of the Subsequent Mortgage Loans pursuant to the terms hereof.

         Subsequent Transfer Agreement: A subsequent transfer agreement in
substantially the form of Exhibit L.

         Subsequent Transfer Date: The Business Day on which a Subsequent
Transfer occurs.

                  Substitute Mortgage Loan: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance
with the terms of this Agreement or the related Mortgage Loan Purchase
Agreement, as applicable, which must, on the date of such substitution, as
confirmed in a Request for Release, substantially in the form of Exhibit K, (i)
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; (ii) be accruing interest at a rate no lower than and not more than 1% per
annum higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value
Ratio no higher than that of the Deleted Mortgage Loan; (iv) have a remaining
term to maturity no greater than (and not more than one year less than that of)
the Deleted Mortgage Loan; and (v) comply with each representation and warranty
set forth in Sections 3.01(f), 3.01(h) and 3.03 of the Unaffiliated Seller's
Agreement, each representation and warranty set forth in the applicable Mortgage
Loan Purchase Agreement and each representation and warranty set forth in
Sections 2.01(c)(ii)(k) and (l) hereof.

                                       45
<PAGE>

         Substitution Adjustment Amount: The meaning ascribed to such term
pursuant to Section 2.03.

         Tax Service Contract: As defined in Section 3.09(a).

         Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).

         Termination Price: As defined in Section 9.01.

         Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest collected (prior to the
Remittance Date) or advanced on the Mortgage Loans for Due Dates during the
related Due Period (net of Expense Fees, Premium Amount and Reimbursement
Amounts, if any) over (ii) the sum of the interest payable to the Classes of
Floating Rate Certificates on such Distribution Date.

         Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.

         Transfer Affidavit: As defined in section 5.02(b).

         Transferor Certificate: As defined in Section 5.02(b).

         Trigger Event: The occurrence of either a Delinquency Trigger Event or
a Loss Trigger Event.

         Trust Fund: The corpus of the trust created hereunder consisting of (i)
the Mortgage Loans and all interest and principal received on or with respect
thereto after the related Cut-off Date, other than such amounts which were due
on the Mortgage Loans on or before the related Cut-off Date; (ii) each 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) all rights of the
Depositor against the Unaffiliated Seller under the Unaffiliated Seller's
Agreement; (v) all rights of the Depositor against each Originator under the
related Assignment and Recognition Agreement and the related Mortgage Loan
Purchase Agreement; (vi) the Certificate Insurance Policy; (vii) the Cap
Agreement, for the benefit of the Holders of the Offered Certificates (other
than the Class A-1 Certificateholders); and (viii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.

         Trustee: Deutsche Bank National Trust Company and its successors and,
if a successor trustee is appointed hereunder, such successor.

         Trustee Fee: As to any Distribution Date, an amount equal to the sum of
(a) the product of one-twelfth of the Trustee Fee Rate times the sum of (i) the
aggregate Stated Principal Balances of the Mortgage Loans at the end of the
prior Due Period, and (ii) the amount on deposit in the Pre-Funding Account at
the end of such prior Due Period and (b) any reasonable

                                       46
<PAGE>

compensation and expenses of a separate trustee or co-trustee to be paid
pursuant to Section 8.10(d).

         Trustee Fee Rate: With respect to each Mortgage Loan, 0.0040% per
annum.

         Unaffiliated Seller's Agreement: The Unaffiliated Seller's Agreement,
dated as of the date hereof, among the Unaffiliated Seller and the Depositor
relating to the sale of the Mortgage Loans from the Unaffiliated Seller to the
Depositor.

         Unpaid Interest Amounts: As of any Distribution Date and any Class of
Certificates, the sum of (a) the excess of (i) the sum of the Accrued
Certificate Interest for such Distribution Date and any portion of such Accrued
Certificate Interest from prior Distribution Dates remaining unpaid over (ii)
the amount in respect of interest on such Class of Certificates actually
distributed on that Distribution Date and (b) 30 days' interest on such excess
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) Applied
Realized Loss Amounts with respect to such Class over (ii) the sum of all
distributions in reduction of such Applied Realized Loss Amounts 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 Regular Interest: As described in the Preliminary Statement.

         Upper Tier REMIC: As described in the Preliminary Statement.

         U.S. Person: Shall mean (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 all 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.

                                       47
<PAGE>

         WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the product of (i) the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Mortgage Loans,
in the case of the Class A-1 Certificates, minus the Premium Rate and (ii) a
fraction, the numerator of which is 30 and the denominator of which is the
actual number of days in the Interest Accrual Period related to such
Distribution Date.

                                   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, other than any
Subsequent Mortgage Loans, which will be so sold, transferred, assigned,
set-over and conveyed on the related Subsequent Transfer Date.

         (b) In connection with the transfer and assignment of each Mortgage
Loan, the Unaffiliated Seller 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 (to the extent such
documents or instruments are required to be delivered by the related Originator
under each Mortgage Loan Purchase Agreement):

         (i) the original Mortgage Note bearing all intervening endorsements
    evidencing a complete chain of assignment from the originator to the related
    Originator, endorsed "Pay to the order of _________, without recourse" and
    signed in the name of the related Originator by an authorized officer. To
    the extent that there is no room on the face of the Mortgage Notes for
    endorsements, the endorsement may be contained on an allonge, if state law
    so allows and the Trustee is so advised by the related Originator that state
    law so allows. If the Mortgage Loan was acquired by an Originator in a
    merger, the endorsement must be by "[related Originator], successor by
    merger to [name of predecessor]". If the Mortgage Loan was acquired or
    originated by the related Originator while doing business under another
    name, the endorsement must be by "[related Originator], formerly known as
    [previous name]";

         (ii) the original of any guarantee executed in connection with the
    Mortgage Note;

         (iii) the original Mortgage with evidence of recording thereon. If in
    connection with any Mortgage Loan, the original Mortgage with evidence of
    recording thereon cannot be delivered on or prior to the related Delivery
    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, then the related Originator, as required by

                                       48
<PAGE>

    the terms of the related Mortgage Loan Purchase Agreement, will be required
    to deliver to the Trustee a photocopy of such Mortgage and (i) the original
    recorded Mortgage or a copy of such Mortgage certified by such public
    recording office to be a true and complete copy of the original recorded
    Mortgage promptly upon receipt thereof by the related Originator (but in any
    event within 360 days from the related Delivery Date); or (ii) 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, if any, with evidence of recording thereon;

         (v) the original Assignment of Mortgage for each Mortgage Loan endorsed
    in blank, in form and substance acceptable for recording (except with
    respect to MERS Designated Loans);

         (vi) the originals of all intervening assignments of mortgage,
    evidencing a complete chain of assignment from the originator (or MERS with
    respect to each MERS Designated Mortgage Loan) to the related Originator,
    with evidence of recording thereon 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;

         (vii) the original or duplicate lender's title policy and all riders
    thereto or, if such original is unavailable, either an original title binder
    or an original or copy of the title commitment, and if copies then certified
    to be true and complete by the title company; and

         (viii) the security agreement, chattel mortgage or equivalent document
    executed in connection with the Mortgage, if any.

         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 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 Servicer shall forward to the Trustee additional
original documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan approved by the Servicer, in
accordance with the terms of this Agreement. All such mortgage documents held by
the Trustee as to each Mortgage Loan shall constitute the "Custodial File".

                                       49
<PAGE>

         On or prior to the related Delivery Date, the Unaffiliated Seller shall
deliver, or cause the related Originator to deliver, to the Trustee Assignments
of Mortgage, in blank, for each Mortgage Loan. If an Assignment of Mortgage is
required to be recorded pursuant to the terms hereof, the Trustee shall promptly
forward such Assignment of Mortgage to the Servicer for recording. No later than
thirty (30) Business Days following the date of receipt by the Servicer of all
necessary recording information for a Mortgage, the Servicer shall promptly
submit or cause to be submitted for recording, at the expense of the
Unaffiliated Seller (the Unaffiliated Seller to seek reimbursement from the
related Originator under the applicable Mortgage Loan Purchase Agreement) 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 Assignment of Mortgage shall not be required to be completed and
submitted for recording with respect to any MERS Designated Mortgage Loan or any
Mortgage Loan (other than any Mortgage Loan where the Mortgaged Property is
located in any state where recordation is required by any Rating Agency to
obtain the initial ratings on the Certificates, which states as of the date
hereof, are Florida and Maryland) until the earliest to occur of (i) direction
by the Certificate Insurer or (ii) upon a determination by the Servicer that
recordation is necessary for the enforcement of rights under, or satisfaction or
assignment of, the related Mortgage, at which time, the Servicer shall record
any such Assignment of Mortgage in accordance with the terms hereof. If any
Assignment of Mortgage is required to be recorded pursuant to the terms hereof,
the Mortgage shall be assigned from the related Originator, to "Deutsche Bank
National Trust Company, as trustee under the Pooling and Servicing Agreement
dated as of November 1, 2003, Morgan Stanley ABS Capital I Inc. Trust 2003-HE4."
In the event that any such assignment is lost or returned unrecorded because of
a defect therein, the Unaffiliated Seller shall cause the related Originator to
promptly prepare a substitute assignment to cure such defect and thereafter
cause each such assignment to be duly recorded. In the event the Unaffiliated
Seller does not pay or otherwise reimburse the Servicer for any of the foregoing
costs of recording any such Assignment of Mortgage, the Servicer shall be
entitled to be reimbursed from the Trust Fund from amounts on deposit in the
Collection Account. In the event the related Originator fails to reimburse the
Unaffiliated Seller for the recording costs described above, upon receipt of
written direction from the Unaffiliated Seller, the Trustee shall assign its
rights under the applicable Mortgage Loan Purchase Agreement solely with respect
to payment of such expenses to the Unaffiliated Seller.

         The Unaffiliated Seller shall use commercially reasonable efforts to
assist the Servicer in causing the related Originator to deliver (at the expense
of such Originator pursuant to the related Mortgage Loan Purchase Agreement) to
the Servicer copies of all trailing documents required to be included in the
Custodial File at the same time the originals or certified copies thereof are
delivered to the Trustee, such documents, including, but not limited to, the
mortgagee policy of title insurance and any mortgage loan documents upon return
from the recording office. The Unaffiliated Seller shall use commercially
reasonable efforts to assist the Servicer in seeking reimbursement from the
related Originator pursuant to the related Mortgage Loan Purchase Agreement for
any fees or costs incurred by the Servicer in obtaining such documents.

         On or prior to the Closing Date, the Unaffiliated Seller shall deliver
to the Trustee and the Servicer a copy of the Data Tape Information in
electronic, machine readable medium in

                                       50
<PAGE>

a form mutually acceptable to the Trustee and the Servicer. Within ten days of
the Closing Date, the Unaffiliated Seller shall deliver a copy of the complete
Mortgage Loan Schedule to the Trustee and the Servicer.

         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 90 days following the related Delivery Date, and in the event
that the Originator does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the Trustee
or the Certificate Insurer, the Trustee shall notify the related Originator to
repurchase the Mortgage Loan pursuant to the related Mortgage Loan Purchase
Agreement, upon the request of the Depositor, the Trustee or the Certificate
Insurer, at the Repurchase Price and in the manner specified in Section 2.03.
The foregoing repurchase provision shall not apply in the event that the related
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 the related Originator shall instead be required to
deliver a recording receipt of such recording office or, if such recording
receipt is not available, an officer's certificate of a servicing officer of the
Originator confirming that such document has been accepted for recording.

         (c) Purchase and Sale of Subsequent Mortgage Loans.

         (i) Subject to the satisfaction of the conditions set forth in
    paragraph (ii) below, and upon the Trustee's receipt of a Subsequent
    Transfer Agreement executed by all other parties thereto, in consideration
    of the Trustee's delivery on the related Subsequent Transfer Dates to or
    upon the order of the Depositor of all or a portion of the balance of funds
    in the Pre-Funding Account, the Depositor shall on any Subsequent Transfer
    Date sell, transfer, assign, set over and convey to the Trustee without
    recourse but subject to terms and provisions of this Agreement, all of the
    right, title and interest of the Depositor in and to the Subsequent Mortgage
    Loans, including the outstanding principal of and interest due on such
    Subsequent Mortgage Loans, and all other related assets included or to be
    included in the Trust Fund with respect thereto.

         The amount released from the Pre-Funding Account with respect to a
    transfer of Subsequent Mortgage Loans shall be one-hundred percent (100%) of
    the aggregate Stated Principal Balances as of the related Subsequent Cut-off
    Date of the Subsequent Mortgage Loans so transferred.

         (ii) The Subsequent Mortgage Loans and the other property and rights
    related thereto described in paragraph (a) above shall be transferred by the
    Depositor to the Trust Fund only upon the satisfaction of each of the
    following conditions on or prior to the related Subsequent Transfer Date:

              (a) the Unaffiliated Seller shall have provided the Depositor, the
         Trustee, the Rating Agencies and the Certificate Insurer with a timely
         Addition Notice, which shall include a Mortgage Loan Schedule, listing
         the Subsequent Mortgage Loans and shall have provided any other
         information reasonably

                                       51
<PAGE>

         requested by any of the foregoing with respect to the Subsequent
         Mortgage Loans;

              (b) the Servicer shall have deposited in the Collection Account
         all collections of (x) principal in respect of the Subsequent Mortgage
         Loans received and due after the related Subsequent Cut-off Date and
         (y) interest due on the Subsequent Mortgage Loans after the related
         Subsequent Cut-off Date;

              (c) as of each Subsequent Transfer Date, the Unaffiliated Seller
         was not insolvent nor will be made insolvent by such transfer nor is
         the Unaffiliated Seller aware of any pending insolvency;

              (d) such addition will not result in a "prohibited transaction"
         (as defined in the REMIC Provisions) for any REMIC held by the Trust
         Fund, and will not cause any REMIC held by the Trust Fund to cease to
         qualify as a REMIC, as evidenced by an Opinion of Counsel with respect
         to such matters (which may be a blanket opinion dated the Closing
         Date);

              (e) the Pre-Funding Period shall not have terminated;

              (f) the Unaffiliated Seller shall have delivered to the Trustee an
         executed Assignment and Recognition Agreement with respect to each
         related Originator of Subsequent Mortgage Loans to be added to the
         Trust Fund on such Subsequent Transfer Date (which Assignment and
         Recognition Agreement shall include a representation and warranty from
         the related Originator that none of the Subsequent Mortgage Loans is a
         High Cost Loan, none of the Subsequent Mortgage Loans is covered by the
         Home Ownership and Equity Protection Act of 1994 and none of the
         Subsequent Mortgage Loans is in violation of any comparable state law);

              (g) the Unaffiliated Seller shall have delivered to the Trustee an
         Officer's Certificate confirming the satisfaction of each condition
         precedent specified in this paragraph (ii), and the Opinion of Counsel
         referenced in clause (d);

              (h) the Unaffiliated Seller and the Depositor shall have delivered
         to the Trustee an executed copy of a Subsequent Transfer Agreement,
         substantially in the form of Exhibit L hereto; and

              (i) the Unaffiliated Seller shall have obtained the consent of the
         Certificate Insurer.

         (iii) The obligation of the Trust Fund to purchase the Subsequent
    Mortgage Loans on a Subsequent Transfer Date is subject to the requirements
    that, following the purchase of such Subsequent Mortgage Loans, with respect
    to the entire mortgage loan pool:

              (a) no more than 2.40% may be second lien mortgage loans;

                                       52
<PAGE>

              (b) no more than 37.00% and no less than 31.00% may be Fixed Rate
         Mortgage Loans;

              (c) the weighted average original term to maturity may not exceed
         360 months;

              (d) the weighted average gross Mortgage Rate must not be less than
         7.35%, or more than 7.60%;

              (e) the weighted average LTV must not exceed 82.50%, and no more
         than 46.00% of the Mortgage Loans may have LTVs in excess of 80.00%;

              (f) no Mortgage Loan may have a Stated Principal Balance in excess
         of $1,000,000 as of the related Cut-off Date;

              (g) at least 79.00% of the Mortgage Loans must have prepayment
         penalties;

              (h) the weighted average Gross Margin for the Adjustable Rate
         Mortgage Loans must be at least 5.95%;

              (i) the weighted average credit score (FICO Score) must be at
         least 618, and none of the Mortgage Loans may have credit scores below
         500;

              (j) no Mortgage Loan originated on or after October 1, 2002 but
         before or on March 7, 2003 will be secured by property located in the
         State of Georgia and no mortgage loan originated on or after March 7,
         2003 is a "high cost home loan" as defined under the Georgia Fair
         Lending Act;

              (k) no Mortgage Loan originated on or after November 27, 2003 will
         be secured by property located in the State of New Jersey which is or
         will be occupied by the borrower under such Mortgage Loan as the
         borrower's principal dwelling;

              (l) no Mortgage Loan originated on or after January 1, 2004 will
         be secured by property located in the State of New Mexico; and

              (m) the weighted average Stated Documentation and No Ratio
         Documentation percentage must not exceed 48.00%.

         Any of the requirements set forth in clauses (ii) and (iii) above may
    be waived or modified in any respect with the consent of the Certificate
    Insurer and the Rating Agencies.

         (iv) In connection with the transfer and assignment of the Subsequent
    Mortgage Loans, the Unaffiliated Seller shall satisfy the document delivery
    requirements set forth in Section 2.01(b).

                                       53
<PAGE>

         Section 2.02 Acceptance by the Trustee of the Mortgage Loans.

         The Trustee shall acknowledge, on each Delivery Date, receipt of the
documents identified in the Initial Certification in the form annexed hereto as
Exhibit F, 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 and the
Certificate Insurer. The Trustee acknowledges that it will maintain possession
of the related Mortgage Notes in the State of California, unless otherwise
permitted by the Rating Agencies and the Certificate Insurer.

         In connection with each Delivery, the Trustee shall deliver via
facsimile (with original to follow the next Business Day) to the Depositor, the
Unaffiliated Seller, the Servicer and the Certificate Insurer an Initial
Certification on or prior to the related Delivery Date, certifying receipt of
the related Mortgage Notes and Assignments of Mortgage for each related Mortgage
Loan. The Trustee shall not be responsible to verify the validity, sufficiency
or genuineness of any document in any Custodial File.

         Within 120 days after the related Delivery Date, the Trustee shall
ascertain that all documents required to be reviewed by it are in its
possession, and shall deliver to the Depositor, the Unaffiliated Seller, the
Servicer and the Certificate Insurer a Final Certification to the effect that,
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such
certification as an exception and not covered by such certification): (i) all
documents required to be delivered to 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) and (18) of the
Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape Information
respecting such Mortgage Loan is correct; (iv) each Mortgage Note has been
endorsed as provided in Section 2.01 of this Agreement; and (v) with respect to
each MERS Designated Loan, the Trustee, on behalf of the Trust Fund, is the
beneficial owner of such MERS Designated Loan on the MERS System. The Trustee
shall not be responsible to verify the validity, sufficiency or genuineness of
any document in any Custodial File. Upon receipt of such Final Certification, if
the Depositor, the Unaffiliated Seller or the Certificate Insurer determines
that any noncompliance identified by the Trustee is a breach of a representation
or warranty relating to such Mortgage Loan, such party shall give written notice
to the Trustee thereof.

         The Trustee shall retain possession and custody of each Custodial File
in accordance with and subject to the terms and conditions set forth herein. The
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 the Servicer from time to time.

                                       54
<PAGE>

         Section 2.03 Representations, Warranties and Covenants of the
Unaffiliated Seller and the Servicer.

         (a) The Servicer hereby makes the representations and warranties set
forth in (i) Schedule II hereto to the Depositor, the Unaffiliated Seller, the
Certificate Insurer and the Trustee and (ii) Schedule IIA hereto to the
Unaffiliated Seller and the Certificate Insurer, in each case, as of the Closing
Date, and with respect to Subsequent Mortgage Loans, as of the related
Subsequent Transfer Date; provided, however, that in the case of clause (ii),
the Servicer only makes representations and warranties with respect to those
Mortgage Loans on Schedule IA hereto for which the Servicing Transfer Date has
occurred prior to the Closing Date or the related Subsequent Transfer Date, as
applicable.

         (b) CDC Mortgage Capital Inc., in its capacity as the Unaffiliated
Seller, hereby makes the representations and warranties set forth in Schedule
III hereto to the Depositor, the Trustee and the Certificate Insurer, as of the
Closing Date.

         (c) It is understood and agreed by the Servicer and the Unaffiliated
Seller that the representations and warranties set forth in Section 2.03 shall
survive the transfer of the Mortgage Loans to the Trust Fund, and shall inure to
the benefit of the Trust Fund 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 Depositor,
the Unaffiliated Seller, the Certificate Insurer, the Trustee or the Servicer of
a breach by the Unaffiliated Seller of any of the foregoing representations or
any of the representations and warranties made pursuant to Sections 3.01(f),
3.01(h) or 3.03 of the Unaffiliated Seller's Agreement or by any Originator of
the representations and warranties made pursuant to the related Assignment and
Recognition Agreement, the party discovering such breach shall give prompt
written notice to the others.

         (d) Within 90 days of the earlier of either discovery by or notice to
the Unaffiliated Seller of any breach of a representation or warranty set forth
in Section 3.01(f), 3.01(h) or 3.03 of the Unaffiliated Seller's Agreement that
materially and adversely affects the value of the Mortgage Loans or the interest
of the Trustee, the Certificate Insurer or the Certificateholders therein, the
Unaffiliated Seller shall use its best efforts to cure such breach in all
material respects and, if such breach cannot be remedied, the Unaffiliated
Seller shall, (i) if such 90-day period expires prior to the second anniversary
of the related Delivery Date, remove such Mortgage Loan from the Trust Fund and
substitute in its place a Substitute Mortgage Loan, in the manner and subject to
the conditions set forth in this Section 2.03; or (ii) repurchase such Mortgage
Loan at the Repurchase Price; provided, however, that any such substitution
pursuant to (i) above shall not be effected prior to the delivery to the Trustee
of the Opinion of Counsel required by Section 2.05, if any, and a Request for
Release substantially in the form of Exhibit K, and the Mortgage File for any
such Substitute Mortgage Loan.

         With respect to any Substitute Mortgage Loan or Loans, the Unaffiliated
Seller shall deliver to the Trustee for the benefit of the Certificateholders
the Mortgage Note, the Mortgage, the related Assignment of the 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. No
substitution is permitted to be made in any calendar month after

                                       55
<PAGE>

the Determination Date for such month. 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 related Originator on the next
succeeding Distribution Date. For the Due Period of substitution, distributions
to Certificateholders will include the monthly payment due on any Deleted
Mortgage Loan for such Due Period and thereafter the related Originator shall be
entitled to retain all amounts received in respect of such Deleted Mortgage
Loan.

         For any month in which the Unaffiliated Seller substitutes one or more
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Servicer
will determine the amount (if any) by which the aggregate principal balance of
all such Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (after
application of the scheduled principal portion of the monthly payments due in
the Due Period of substitution). The Unaffiliated Seller shall deposit the
amount of such shortage (the "Substitution Adjustment Amount") plus, an amount
equal to the aggregate of any unreimbursed Advances and accrued and unpaid
Servicing Fees with respect to such Deleted Mortgage Loans into the Collection
Account on or before the Remittance Date for the Distribution Date in the month
succeeding the calendar month during which the related Mortgage Loan became
required to be purchased or replaced hereunder.

         Upon discovery that any document does not comply with the requirements
set forth in clauses (i) through (iv) of the Trustee's review of the Custodial
Files pursuant to Section 2.02 or receipt of written notice of a breach of a
representation and warranty, the Trustee shall in turn promptly notify the
applicable Originator (with a copy to the Servicer, the Certificate Insurer and
the Unaffiliated Seller) in writing of such non-compliance or breach and request
that the related Originator cure such non-compliance or breach within the time
period set forth in the applicable Mortgage Loan Purchase Agreement (but in any
event, within 60 days from the date the related Originator is notified of such
non-compliance or breach) and if the related Originator does not cure such
non-compliance or breach in all material respects during such period, the
Trustee shall notify such Originator to repurchase such Mortgage Loan from the
Trust Fund at the Repurchase Price. In the event the Trustee receives written
notice of a breach by any Originator of a representation and warranty that is
subject to an automatic sixty-day repurchase obligation pursuant to Section 9.03
of the related Mortgage Loan Purchase Agreement, which representations and
warranties relate to Prepayment Fees, Predatory Lending Regulations, Single
Premium Credit Insurance, the Georgia Fair Lending Act, the Fair Credit
Reporting Act, New York State Banking Law or failure of a Mortgage Loan to
constitute a "qualified mortgage" within the meaning of Section 860G(a)(3) of
the Code, the Trustee shall notify such Originator to repurchase the Mortgage
Loan at the Repurchase Price within sixty (60) days of such Originator's receipt
of such notice.

         (e) Upon delivery of the Final Certification with respect to each
Mortgage Loan, the Trustee will notify the related Originator within 5 Business
Days of such delivery of any missing documents from the Custodial File and if
the related Originator does not deliver such missing documents within 60 days
from the date the related Originator is notified of such noncompliance or
breach, the Trustee shall notify such Originator to repurchase such Mortgage
Loan from the Trust Fund at the Repurchase Price.

                                       56
<PAGE>

         (f) Based solely on information received with respect to any Substitute
Mortgage Loan from the Unaffiliated Seller or the related Originator, as
applicable, the Servicer shall amend the Mortgage Loan Schedule to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans and the Servicer shall deliver the amended Mortgage Loan
Schedule to the Trustee. Upon such substitution, the Substitute Mortgage Loan or
Loans shall be subject to the terms of this Agreement in all respects, and the
Unaffiliated Seller 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 Sections 3.01(f), 3.01(h) and 3.03 of the
Unaffiliated Seller's Agreement with respect to such Mortgage Loan. Upon any
such substitution and the deposit to the Collection Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph, the Trustee shall release the Mortgage
File relating to such Deleted Mortgage Loan to the Unaffiliated Seller or the
related Originator, as applicable, and shall execute and deliver at the
Unaffiliated Seller's or related Originator's direction, as applicable, such
instruments of transfer or assignment prepared by such party, in each case
without recourse, as shall be necessary to vest title in the Unaffiliated Seller
or the related Originator, or its designee, as applicable, the Trustee's
interest in any Deleted Mortgage Loan substituted for pursuant to this Section
2.03.

         (g) In the event that the Unaffiliated Seller or the related
Originator, as applicable, shall have repurchased a Mortgage Loan, the
Repurchase Price therefor shall be deposited in the Collection Account pursuant
to Section 3.10 on or before the Remittance Date for the Distribution Date in
the month following the month during which the Unaffiliated Seller or the
related Originator, as applicable, became obligated hereunder to repurchase or
replace such Mortgage Loan and upon such deposit of the Repurchase Price, the
delivery of the Opinion of Counsel required by Section 2.05 and receipt of a
Request for Release in the form of Exhibit K hereto, the Trustee shall release
the related Custodial File to such Person as directed by the 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,
as shall be necessary to transfer title from the Trustee. It is understood and
agreed that the obligation under this Agreement of any Person to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against such Persons respecting such
breach available to Certificateholders, the Depositor, the Unaffiliated Seller,
the Certificate Insurer or the Trustee on their behalf. In the event such
required repurchase or replacement does not occur, the Trustee shall take such
actions as directed upon written direction from the Depositor or the Certificate
Insurer and the provision of reasonable indemnity satisfactory to the Trustee in
accordance with Sections 6.03 and 8.02.

         (h) If the Unaffiliated Seller is required to repurchase or replace a
Mortgage Loan pursuant to the terms hereof, upon receipt by the Trustee of
written direction from the Unaffiliated Seller and either the related Repurchase
Price or Substitute Mortgage Loan, as applicable, the Trustee shall assign to
the Unaffiliated Seller its rights under the related Mortgage Loan Purchase
Agreement solely with respect to such Mortgage Loan by an assignment in form and
substance mutually satisfactory to the Unaffiliated Seller and the Trustee.

         (i) The representations and warranties made pursuant to this Section
2.03 shall survive delivery of the respective Custodial Files to the Trustee.

                                       57
<PAGE>

         Section 2.04 The Depositor and the Mortgage Loans.

         The Depositor hereby represents and warrants to the Trustee and to the
Certificate Insurer with respect to each Mortgage Loan as of the date hereof or
such other date set forth herein that as of the related Delivery Date, and
following the transfer of the Mortgage Loans to it by the Unaffiliated Seller,
the Depositor had good title to the Mortgage Loans and the Mortgage Notes were
subject to no offsets, defenses or counterclaims.

         The Depositor hereby assigns, transfers and conveys to the Trustee all
of its rights with respect to the Initial Mortgage Loans and shall, on each
subsequent Transfer Date, convey all of its right, title and interest with
respect to the related subsequent Mortgage Loans.

         Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Non-Qualified Mortgages.

         Notwithstanding any contrary provision of this Agreement, no
substitution pursuant to Section 2.03 shall be made more than 30 days after the
related Delivery Date unless the Unaffiliated Seller delivers, or causes the
related Originator to deliver, as applicable, to the Trustee an Opinion of
Counsel, at the expense of the Unaffiliated Seller or the related Originator, as
applicable, addressed to the Trustee, to the effect that such substitution will
not (i) result in the imposition of the tax on "prohibited transactions" on the
Trust Fund or contributions after the Startup Date, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause the Trust Fund
to fail to qualify as one or more REMICs at any time that any Certificates are
outstanding.

         Section 2.06 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, 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, and for the benefit of the Certificate Insurer.

         Section 2.07 REMIC Matters.

         The Preliminary Statement sets forth the designations for federal
income tax purposes of all interests created hereby. The "Startup Day" for
purposes of the REMIC Provisions shall be the Closing Date. The "latest possible
maturity date" is March 25, 2034, which is the sixth Distribution Date following
the latest Mortgage Loan maturity date.

         Section 2.08 Representations and Warranties of the Depositor.

         The Depositor hereby represents, warrants and covenants to the Trustee,
the Servicer and to the Certificate Insurer that as of the date of this
Agreement or as of such date specifically provided herein:

                                       58
<PAGE>

         (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 by-laws 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

                                       59
<PAGE>

         (h) Immediately prior to the transfer and assignment by the Depositor
to the Trustee, the Depositor had, or, with respect to the subsequent Mortgage
Loans, will have, good title to, and was, or will be, the sole owner of each
Mortgage Loan, free of any interest of any other Person, and the Depositor has
transferred, or shall transfer, 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 and for the
benefit of the Certificate Insurer, 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 and for the benefit of the Certificate
Insurer, the security interest referred to in Section 10.04.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.08 shall survive delivery of the
respective Custodial Files to the Trustee or to a custodian, as the case may be,
and shall inure to the benefit of the Trustee.

                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF MORTGAGE LOANS

         Section 3.01 Servicer to Service Mortgage Loans.

         (a) For and on behalf of the Certificateholders, and for the benefit of
the Certificate Insurer, the Servicer shall service and administer the Mortgage
Loans in accordance with the terms of this Agreement and the respective Mortgage
Loans and, to the extent consistent with such terms, in the same manner in which
it services and administers similar mortgage loans for its own portfolio, giving
due consideration to customary and usual standards of practice of mortgage
lenders and loan servicers administering similar mortgage loans but without
regard to:

         (i) any relationship that the Servicer, any Subservicer or any
    Affiliate of the Servicer or any Subservicer may have with the related
    Mortgagor;

         (ii) the ownership or non-ownership of any Certificate by the Servicer
    or any Affiliate of the Servicer;

         (iii) the Servicer's obligation to make P&I Advances or Servicing
    Advances; or

         (iv) the Servicer's or any Subservicer's right to receive compensation
    for its services hereunder or with respect to any particular transaction.

         To the extent consistent with the foregoing, the Servicer shall seek to
maximize the timely and complete recovery of principal and interest on the
Mortgage Notes. Subject only to the above-described servicing standards and the
terms of this Agreement and of the respective Mortgage Loans, the Servicer shall
have full power and authority, acting alone or through Subservicers as provided
in Section 3.02, to do or cause to be done any and all things in connection with
such servicing and administration which it may deem necessary or desirable.
Without limiting the generality of the foregoing, the Servicer in its own name
or in the name of a

                                       60
<PAGE>

Subservicer is hereby authorized and empowered by the Trustee when the Servicer
believes it appropriate in its best judgment in accordance with the servicing
standards set forth above, to execute and deliver any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, and
all other comparable instruments, with respect to the Mortgage Loans and the
Mortgaged Properties and to institute foreclosure proceedings or obtain a
deed-in-lieu of foreclosure so as to convert the ownership of such properties,
and to hold or cause to be held title to such properties, on behalf of the
Trustee. The Servicer shall service and administer the Mortgage Loans in
accordance with applicable state and federal law and shall provide to the
Mortgagors any reports required to be provided to them thereby. The Servicer
shall also comply in the performance of this Agreement with all reasonable rules
and requirements of each insurer under any standard hazard insurance policy.
Subject to Section 3.15, the Trustee shall execute, at the written request of
the Servicer, and furnish to the Servicer and any Subservicer such documents as
are necessary or appropriate to enable the Servicer or any Subservicer to carry
out their servicing and administrative duties hereunder, and the Trustee hereby
grants to the Servicer, and this Agreement shall constitute, a power of attorney
to carry out such duties including a power of attorney to take title to
Mortgaged Properties after foreclosure on behalf of the Trustee. The Trustee
shall execute a separate power of attorney in favor of the Servicer for the
purposes described herein to the extent necessary or desirable to enable the
Servicer to perform its duties hereunder. The Trustee shall not be liable for
the actions of the Servicer or any Subservicers under such powers of attorney.

         (b) Subject to Section 3.09(b), in accordance with the standards of the
preceding paragraph, the Servicer shall advance or cause to be advanced funds as
necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by the Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.

         (c) Notwithstanding anything in this Agreement to the contrary, the
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and the Servicer shall not (i) permit any
modification with respect to any Mortgage Loan that would change the Mortgage
Rate, reduce or increase the principal balance (except for reductions resulting
from actual payments of principal) or change the final maturity date on such
Mortgage Loan or (ii) permit any modification, waiver or amendment of any term
of any Mortgage Loan that would both (A) effect an exchange or reissuance of
such Mortgage Loan under Section 1001 of the Code (or final, temporary or
proposed Treasury regulations promulgated thereunder) and (B) cause any REMIC to
fail to qualify as a REMIC under the Code or the imposition of any tax on
"prohibited transactions" or "contributions after the startup date" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.

         (d) The Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release the Servicer
from the responsibilities or liabilities arising under this Agreement.

                                       61
<PAGE>

         Section 3.02 Subservicing Agreements Between the Servicer and
Subservicers.

         (a) Subject to the consent of the Certificate Insurer (so long as no
Certificate Insurer Default has occurred and is continuing), which consent shall
not be unreasonably withheld, the Servicer may enter into Subservicing
Agreements with Subservicers (each, a "Subservicer"), for the servicing and
administration of the Mortgage Loans.

         Unless otherwise approved by the Certificate Insurer (so long as no
Certificate Insurer Default has occurred and is continuing), each Subservicer
shall be (i) authorized to transact business in the state or states in which the
related Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, (ii) an institution approved as
a mortgage loan originator by the Federal Housing Administration or an
institution that has deposit accounts insured by the FDIC and (iii) a Freddie
Mac or Fannie Mae approved mortgage servicer. Each Subservicing Agreement must
impose on the Subservicer requirements conforming to the provisions set forth in
Section 3.08 and provide for servicing of the Mortgage Loans consistent with the
terms of this Agreement. The Servicer will examine each Subservicing Agreement
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
The Servicer and the Subservicers may enter into and make amendments to the
Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to the Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. The Servicer shall deliver to the
Trustee, the Unaffiliated Seller, the Certificate Insurer and the Depositor
copies of all Subservicing Agreements, and any amendments or modifications
thereof, promptly upon the Servicer's execution and delivery of such
instruments.

         (b) As part of its servicing activities hereunder, the Servicer (except
as otherwise provided in the last sentence of this paragraph), for the benefit
of the Trustee, shall enforce the obligations of each Subservicer under the
related Subservicing Agreement, including, without limitation, any obligation to
make advances in respect of delinquent payments as required by a Subservicing
Agreement. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements, and the pursuit
of other appropriate remedies, shall be in such form and carried out to such an
extent and at such time as the Servicer, in its good faith business judgment,
would require were it the owner of the related Mortgage Loans. The Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement, to the extent, if any, that such recovery exceeds all amounts due
in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.

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         Section 3.03 Successor Subservicers.

         The Servicer shall be entitled to terminate any Subservicing Agreement
and the rights and obligations of any Subservicer pursuant to any Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement. In the event of termination of any Subservicer, all servicing
obligations of such Subservicer shall be assumed simultaneously by the Servicer
without any act or deed on the part of such Subservicer or the Servicer, and the
Servicer either shall service directly the related Mortgage Loans or shall enter
into a Subservicing Agreement with a successor Subservicer which qualifies under
Section 3.02.

         Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer shall, for any reason, no longer be the Servicer (including termination
due to an Event of Default).

         Section 3.04 Liability of the Servicer.

         Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Servicer and a
Subservicer or reference to actions taken through a Subservicer or otherwise,
the Servicer shall remain obligated and primarily liable to the Trustee for the
servicing and administering of the Mortgage Loans in accordance with the
provisions of Section 3.01 without diminution of such obligation or liability by
virtue of such Subservicing Agreements or arrangements or by virtue of
indemnification from the Subservicer and to the same extent and under the same
terms and conditions as if the Servicer alone were servicing and administering
the Mortgage Loans. The Servicer shall be entitled to enter into any agreement
with a Subservicer for indemnification of the Servicer by such Subservicer and
nothing contained in this Agreement shall be deemed to limit or modify such
indemnification.

         Section 3.05 No Contractual Relationship Between Subservicers and the
Trustee.

         Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
Servicer alone, and the Trustee (or any successor Servicer) shall not be deemed
a party thereto and shall have no claims, rights, obligations, duties or
liabilities with respect to the Subservicer except as set forth in Section 3.06.
The Servicer shall be solely liable for all fees owed by it to any Subservicer,
irrespective of whether the Servicer's compensation pursuant to this Agreement
is sufficient to pay such fees.

         Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.

         In the event the Servicer at any time shall for any reason no longer be
the Servicer (including by reason of the occurrence of a Event of Default), the
Trustee or its designee shall thereupon assume all of the rights and obligations
of the Servicer under each Subservicing Agreement that the Servicer may have
entered into, with copies thereof provided to the Trustee

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prior to the Trustee assuming such rights and obligations, unless the Trustee
elects to terminate any Subservicing Agreement in accordance with its terms as
provided in Section 3.03.

         Upon such assumption, the Trustee, its designee or the successor
servicer shall be deemed, subject to Section 3.03, to have assumed all of the
Servicer's interest therein and to have replaced the Servicer as a party to each
Subservicing Agreement to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) the Servicer shall not
thereby be relieved of any liability or obligations under any Subservicing
Agreement that arose before it ceased to be the Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor Servicer shall be
deemed to have assumed any liability or obligation of the Servicer that arose
before it ceased to be the Servicer.

         The Servicer at its expense shall, upon request of the Trustee, deliver
to the assuming party all documents and records relating to each Subservicing
Agreement and the Mortgage Loans then being serviced and an accounting of
amounts collected and held by or on behalf of it, and otherwise use its best
efforts to effect the orderly and efficient transfer of the Subservicing
Agreements to the assuming party.

         Section 3.07 Collection of Certain Mortgage Loan Payments;
Establishment of Certain Accounts.

         (a) The Servicer shall make reasonable efforts to collect all payments
called for under the terms and provisions of the Mortgage Loans, and shall, to
the extent such procedures shall be consistent with this Agreement and the terms
and provisions of any applicable insurance policies, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. Consistent with the foregoing, the
Servicer may (i) waive any late payment charge or, if applicable, any penalty
interest, or (ii) extend the due dates for the Scheduled Payments due on a
Mortgage Note for a period of not greater than 180 days; provided that any
extension pursuant to clause (ii) above shall not affect the amortization
schedule of any Mortgage Loan for purposes of any computation hereunder, except
as provided below. In the event of any such arrangement pursuant to clause (ii)
above, the Servicer shall make timely advances on such Mortgage Loan during such
extension pursuant to Section 4.01 and in accordance with the amortization
schedule of such Mortgage Loan without modification thereof by reason of such
arrangements, subject to Section 4.01(d) pursuant to which the Servicer shall
not be required to make any such advances that are Nonrecoverable P&I Advances.
Notwithstanding the foregoing, the Servicer may not waive, in whole or in part,
a Prepayment

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Charge, except under the following circumstances: (i) such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of the Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan, and
doing so is standard and customary in servicing mortgage loans similar to the
Mortgage Loans (including any waiver of a Prepayment Charge in connection with a
refinancing of a Mortgage Loan that is related to a default or a reasonably
foreseeable default), and in no event will the Servicer waive a Prepayment
Charge in connection with a refinancing of a Mortgage Loan that is not related
to a default or a reasonably foreseeable default or (ii) such Prepayment Charge
is not permitted to be collected by applicable law. If a Prepayment Charge is
waived other than as permitted by the prior sentence, then the Servicer is
required to pay the amount of such waived Prepayment Charge, for the benefit of
the Holders of the Class P Certificates, by depositing such amount into the
Collection Account together with and at the time that the amount prepaid on the
related Mortgage Loan is required to be deposited into the Collection Account.
Notwithstanding any provision in this Agreement to the contrary, in the event
the Prepayment Charge payable under the terms of the Mortgage Note is less than
the amount of the Prepayment Charge set forth in the Mortgage Loan Schedule or
other information provided to the Servicer, the Servicer shall not have any
liability or obligation with respect to such difference, and in addition shall
not have any liability or obligation to pay the amount of any uncollected
Prepayment Charge if the failure to collect such amount is the direct result of
inaccurate or incomplete information on the Mortgage Loan Schedule.

         (b) (i) The Trustee shall establish and maintain the Excess Reserve
Fund Account, on behalf of the Class X Certificateholders, to secure their
limited recourse obligation to pay to the Floating Rate Certificateholders Basis
Risk Carry Forward Amounts.

         (ii) On each Distribution Date, the Trustee shall deposit the amount of
    any Basis Risk Payment made for the benefit of the Certificateholders and
    any Interest Rate Cap Payment made for the benefit of the Offered
    Certificates for such date into the Excess Reserve Fund Account.

         (c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward Amount on any Class of Certificates, the Trustee shall (1)
withdraw from the Distribution Account and deposit in the Excess Reserve Fund
Account, as set forth in Section 4.02(a)(iii)(N), the lesser of (a) the sum of
(x) the Class X Distributable Amount (without regard to the reduction in the
definition thereof with respect to the Basis Risk Carry Forward Amount) (to the
extent remaining after the distributions specified in Sections
4.02(a)(iii)(A)-(M), and (y) each Interest Rate Cap Payment, if any, with
respect to such Distribution Date, and (b) the Basis Risk Carry Forward Amount
and (2) withdraw from the Excess Reserve Fund Account amounts necessary to pay
to such Class or Classes of Certificates the Basis Risk Carry Forward Amount.
Such payments shall be allocated to those Classes on a pro rata basis based upon
the amount of Basis Risk Carry Forward Amount owed to each such Class and shall
be paid in the priority set forth in Section 4.02(a)(iii)(O).

         (ii) The Trustee shall account for the Excess Reserve Fund Account as
    an outside reserve fund within the meaning of Treasury Regulation
    1.860G-2(h) and not as an asset of any REMIC created pursuant to this
    Agreement. The beneficial owner of the Excess Reserve Fund Account is the
    Class X Certificateholder. For all federal tax purposes, amounts transferred
    by the Upper Tier REMIC to the Excess Reserve Fund Account shall be treated
    as distributions by the Trustee to the Class X Certificateholder.

         (iii) Any Basis Risk Carry Forward Amounts paid by the Trustee to the
    Floating Rate Certificateholders shall be accounted for by the Trustee as
    amounts paid first to the Holders of the Class X Certificate and then to the
    respective Class or Classes of Floating Rate Certificates. In addition, the
    Trustee shall account for the Floating Rate Certificateholders' rights to
    receive payments of Basis Risk Carry Forward Amounts as rights in a limited
    recourse interest rate cap contract written by the Class X
    Certificateholders in favor of the Floating Rate Certificateholders.

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<PAGE>

         (iv) Notwithstanding any provision contained in this Agreement, the
    Trustee shall not be required to make any payments from the Excess Reserve
    Fund Account except as expressly set forth in this Section 3.07(c).

         (d) The Trustee shall establish and maintain the Distribution Account
on behalf of the Certificateholders. The Trustee shall, promptly upon receipt,
deposit in the Distribution Account and retain therein the following:

         (i) the aggregate amount remitted by the Servicer to the Trustee
    pursuant to Section 3.11;

         (ii) any amount deposited by the Servicer pursuant to Section 3.10 in
    connection with any losses on Permitted Investments; and

         (iii) any other amounts deposited hereunder which are required to be
    deposited in the Distribution Account.

         In the event that the Servicer shall remit any amount not required to
be remitted, it may at any time direct the Trustee in writing to withdraw such
amount from the Distribution Account, any provision herein to the contrary
notwithstanding. Such direction may be accomplished by delivering notice to the
Trustee which describes the amounts deposited in error in the Distribution
Account. All funds deposited in the Distribution Account shall be held by the
Trustee in trust for the Certificateholders until disbursed in accordance with
this Agreement or withdrawn in accordance with Section 4.02. In no event shall
the Trustee incur liability for withdrawals from the Distribution Account at the
direction of the Servicer.

         (e) The Trustee shall establish and maintain the Capitalized Interest
Account, on behalf of the Certificateholders. On the Closing Date, the Trustee
shall deposit $576,984.00 into the Capitalized Interest Account from the
proceeds of the sale of the Offered Certificates. Withdrawals from the
Capitalized Interest Account shall be made in accordance with Sections 4.02(c)
and (d). The Trustee shall account for the Capitalized Interest Account as an
outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h) and
not as an asset of any REMIC created pursuant to this Agreement. The beneficial
owner of the Capitalized Interest Account shall be the Unaffiliated Seller.

         (f) The Trustee shall establish and maintain the Pre-Funding Account on
behalf of the Certificateholders. On the Closing Date, the Trustee shall deposit
the Initial Pre-Funded Amount into the Pre-Funding Account from the proceeds of
the sale of the Offered Certificates. Withdrawals from the Pre-Funding Account
shall be made in accordance with Sections 4.02(e) and (f).

         (g) The Trustee may invest the funds in the Accounts if directed in
writing by the Servicer, with respect to the Collection Account and the
Distribution Account or by the Unaffiliated Seller, with respect to the
Pre-Funding Account and the Capitalized Interest Account in each case, in
Permitted Investments, which directions shall be in accordance with Section
3.12. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested.

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         (h) The Servicer shall give prior written notice to the Trustee, each
Rating Agency and the Depositor of any proposed change of the location of the
Collection Account.

         Section 3.08 Subservicing Accounts.

         In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Subservicer will be required to
establish and maintain one or more accounts (collectively, the "Subservicing
Account"). The Subservicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Servicer. The Subservicer shall deposit in the
clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after the Subservicer's receipt thereof, all proceeds
of Mortgage Loans received by the Subservicer less its servicing compensation to
the extent permitted by the Subservicing Agreement, and shall thereafter deposit
such amounts in the Subservicing Account, in no event more than two Business
Days after the deposit of such funds into the clearing account. The Subservicer
shall thereafter deposit such proceeds in the Collection Account or remit such
proceeds to the Servicer for deposit in the Collection Account not later than
two Business Days after the deposit of such amounts in the Subservicing Account.
For purposes of this Agreement, the Servicer shall be deemed to have received
payments on the Mortgage Loans when the Subservicer receives such payments.

         Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.

         (a) The Servicer shall ensure that each of the Mortgage Loans shall be
covered by a paid-in-full, life-of-the-loan tax service contract with a
nationally recognized provider acceptable to the Servicer (each, a "Tax Service
Contract"). Each Tax Service Contract shall be assigned to the Trustee, or its
designee, at the Servicer's expense in the event that the Servicer is terminated
as Servicer of the related Mortgage Loan.

         (b) To the extent that the services described in this paragraph (b) are
not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) hereof, the Servicer undertakes to perform such functions. The
Servicer shall establish and maintain, or cause to be established and
maintained, one or more accounts (the "Escrow Accounts"), which shall be
Eligible Accounts. The Servicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Servicer's receipt thereof, all collections from the Mortgagors (or related
advances from Subservicers) for the payment of taxes, assessments, hazard
insurance premiums and comparable items for the account of the Mortgagors
("Escrow Payments") collected on account of the Mortgage Loans and shall
thereafter deposit such Escrow Payments in the Escrow Accounts, in no event more
than two Business Days after the deposit of such funds in the clearing account,
for the purpose of effecting the payment of any such items as required under the
terms of this Agreement. Withdrawals of amounts from an Escrow Account may be
made only to (i) effect payment of taxes, assessments, hazard insurance
premiums, and comparable items; (ii) reimburse the Servicer (or a Subservicer to
the extent provided in the

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related Subservicing Agreement) out of related collections for any advances made
pursuant to Section 3.01 (with respect to taxes and assessments) and Section
3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any sums as
may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account, and the
Servicer shall be entitled to withdraw from the Escrow Account any interest
earned and not required to be paid to Mortgagors; (v) clear and terminate the
Escrow Account at the termination of the Servicer's obligations and
responsibilities in respect of the Mortgage Loans under this Agreement; or (vi)
recover amounts deposited in error. As part of its servicing duties, the
Servicer or Subservicers shall pay to the Mortgagors interest on funds in Escrow
Accounts, to the extent required by law and, to the extent that interest earned
on funds in the Escrow Accounts is insufficient, to pay such interest from its
or their own funds, without any reimbursement therefor. To the extent that a
Mortgage does not provide for Escrow Payments, the Servicer shall determine
whether any such payments are made by the Mortgagor in a manner and at a time
that avoids the loss of the Mortgaged Property due to a tax sale or the
foreclosure of a tax lien. The Servicer assumes full responsibility for the
payment of all such bills within such time and shall effect payments of all such
bills irrespective of the Mortgagor's faithful performance in the payment of
same or the making of the Escrow Payments and shall make advances from its own
funds to effect such payments; provided, however, that such advances are deemed
to be Servicing Advances.

         Section 3.10 Collection Account.

         (a) On behalf of the Trustee, the Servicer shall establish and
maintain, or cause to be established and maintained, one or more Eligible
Accounts (such account or accounts, the "Collection Account"), held in trust for
the benefit of the Trustee. On behalf of the Trustee, the Servicer shall deposit
or cause to be deposited in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after the Servicer's
receipt thereof, and shall thereafter deposit in the Collection Account, in no
event more than two Business Days after the deposit of such funds into the
clearing account, as and when received or as otherwise required hereunder, the
following payments and collections received or made by it subsequent to the
related Cut-off Date (other than in respect of principal or interest on the
related Mortgage Loans due on or before the related Cut-off Date, and except for
$107,597.34 in interest, which is being retained by the Unaffiliated Seller), or
payments (other than Principal Prepayments) received by it on or prior to the
related Cut-off Date but allocable to a Due Period subsequent thereto:

         (i) all payments on account of principal, including Principal
    Prepayments, on the Mortgage Loans;

         (ii) all payments on account of interest (net of the related Servicing
    Fee) on each Mortgage Loan;

         (iii) all Insurance Proceeds to the extent such Insurance Proceeds are
    not to be applied to the restoration of the related Mortgaged Property or
    released to the related Mortgagor in accordance with the express
    requirements of law or in accordance with

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    prudent and customary servicing practices, Condemnation Proceeds and
    Liquidation Proceeds;

         (iv) any amounts required to be deposited pursuant to Section 3.12 in
    connection with any losses realized on Permitted Investments with respect to
    funds held in the Collection Account;

         (v) any amounts required to be deposited by the Servicer pursuant to
    the second paragraph of Section 3.13(a) in respect of any blanket policy
    deductibles;

         (vi) all proceeds of any Mortgage Loan repurchased or purchased in
    accordance with this Agreement; and

         (vii) all Prepayment Charges collected by the Servicer.

         The foregoing requirements for deposit in the Collection Accounts shall
be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by the Servicer in the Collection Account and shall, upon
collection, belong to the Servicer as additional compensation for its servicing
activities. In the event the Servicer shall deposit in the Collection Account
any amount not required to be deposited therein, it may at any time withdraw
such amount from the Collection Account, any provision herein to the contrary
notwithstanding.

         (b) Funds in the Collection Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Servicer shall give notice to the Trustee and the Depositor of the location of
the Collection Account maintained by it when established and prior to any change
thereof.

         Section 3.11 Withdrawals from the Collection Account.

         (a) The Servicer shall, from time to time, make withdrawals from the
Collection Account for any of the following purposes or as described in Section
4.01:

         (i) On or prior to the Remittance Date, to remit to the Trustee the
    Interest Remittance Amount and the Principal Remittance Amount in respect of
    the related Distribution Date together with all amounts representing
    Prepayment Charges from the Mortgage Loans received during the related
    Prepayment Period;

         (ii) to reimburse the Servicer for unreimbursed P&I Advances, but only
    to the extent of amounts received which represent Late Collections (net of
    the related Servicing Fees) of Monthly Payments on Mortgage Loans with
    respect to which such P&I Advances were made in accordance with the
    provisions of Section 4.01;

         (iii) to pay the Servicer or any Subservicer (a) any unpaid Servicing
    Fees or (b) any unreimbursed Servicing Advances with respect to each
    Mortgage Loan, but only to the extent of any Late Collections or other
    amounts as may be collected by the Servicer

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    from the related Mortgagor, or otherwise received with respect to such
    Mortgage Loan (or the related REO Property);

         (iv) to pay to the Servicer as servicing compensation (in addition to
    the Servicing Fee) on the Remittance Date any interest or investment income
    earned on funds deposited in the Collection Account;

         (v) to pay to the Unaffiliated Seller or the related Originator, as
    applicable, with respect to each Mortgage Loan that has previously been
    purchased or replaced by the Unaffiliated Seller or such Originator, as
    applicable, pursuant to this Agreement, all amounts received thereon
    subsequent to the date of purchase or substitution, as the case may be;

         (vi) to reimburse the Servicer for (a) any P&I Advance or Servicing
    Advance previously made which the Servicer has determined to be a
    Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in accordance
    with the provisions of Section 4.01 and (b) any unpaid Servicing Fees to the
    extent not recoverable from Late Collections or other amounts received with
    respect to the related Mortgage Loan under Section 3.11(a)(iii); provided,
    that this clause (b) shall only apply with respect to Servicing Fees to
    second lien Mortgage Loans;

         (vii) to pay, or to reimburse the Servicer for advances in respect of,
    expenses incurred in connection with any Mortgage Loan pursuant to Section
    3.15;

         (viii) to reimburse the Servicer, the Depositor or the Trustee for
    expenses incurred by or reimbursable to the Servicer, the Depositor or the
    Trustee, as the case may be, pursuant to Section 6.03;

         (ix) to reimburse the Servicer, the Unaffiliated Seller, the Depositor,
    the Certificate Insurer or the Trustee, as the case may be, for expenses
    reasonably incurred in respect of the breach or defect giving rise to the
    purchase obligation under Section 2.03 of this Agreement that were included
    in the Repurchase Price of the Mortgage Loan, including any expenses arising
    out of the enforcement of the purchase obligation to the extent not
    otherwise paid pursuant to the terms hereof;

         (x) to withdraw any amounts deposited in the Collection Account in
    error; and

         (xi) to clear and terminate the Collection Account upon termination of
    this Agreement.

         (b) The Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Collection Account, to the extent held by or on behalf of
it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii) and (ix)
above. The Servicer shall provide written notification to the Trustee, on or
prior to the next succeeding Remittance Date, upon making any withdrawals from
the Collection Account pursuant to subclause (a)(vii) above.

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         Section 3.12 Investment of Funds in the Account.

         (a) The Servicer may direct the investment of funds in the Collection
Account and may direct the Trustee to invest funds in the Distribution Account,
and the Unaffiliated Seller may direct the Trustee to invest the funds in the
Pre-Funding Account and the Capitalized Interest Account (each of such Accounts,
for purposes of this Section 3.12, an "Investment Account"), in one or more
Permitted Investments bearing interest or sold at a discount, and maturing,
unless payable on demand no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Agreement. All such investment directions shall be in writing
and if the Trustee does not receive such written instructions no investment
shall be made. All such Permitted Investments shall be held to maturity, unless
payable on demand. Any investment of funds in an Investment Account shall be
made in the name of the Trustee. The Trustee shall be entitled to sole
possession (except with respect to investment direction of funds held in the
related Account and any income and gain realized thereon) over each such
investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the Trustee or its agent, together
with any document of transfer necessary to transfer title to such investment to
the Trustee. In the event amounts on deposit in an Investment Account are at any
time invested in a Permitted Investment payable on demand, the Trustee may:

         (x)  consistent with any notice required to be given thereunder, demand
              that payment thereon be made on the last day such Permitted
              Investment may otherwise mature hereunder in an amount equal to
              the lesser of (1) all amounts then payable thereunder and (2) the
              amount required to be withdrawn on such date; and

         (y)  demand payment of all amounts due thereunder that such Permitted
              Investment would not constitute a Permitted Investment in respect
              of funds thereafter on deposit in the Investment Account.

         (b) (i) All income and gain realized from the investment of funds
    deposited in the Collection Account and the Distribution Account held by or
    on behalf of the Servicer, shall be for the benefit of the Servicer and
    shall be subject to its withdrawal in the manner set forth in Section 3.11
    in the case of income in the Collection Account, and on each Distribution
    Date, the Trustee shall withdraw from the Distribution Account, and remit to
    the Servicer all amounts in respect of such income and gain in the
    Distribution Account. Whether in regard to the Collection Account or the
    Distribution Account, the Servicer shall deposit in the Collection Account
    or the Distribution Account, as applicable, the amount of any loss of
    principal incurred in respect of any such Permitted Investment directed by
    the Servicer made with funds in such accounts immediately upon realization
    of such loss.

         (ii) All income and gain realized from the investment of funds
    deposited in the Pre-Funding Account and the Capitalized Interest Account
    held by or on behalf of the Unaffiliated Seller shall be retained in such
    Investment Account, subject to withdrawal as provided in Section 4.02.
    Whether in regard to the Pre-Funding Account or the Capitalized Interest
    Account, the Unaffiliated Seller shall deposit in the Pre-Funding

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    Account or the Capitalized Interest Account, as applicable, the amount of
    any loss of principal incurred in respect of any such Permitted Investment
    made with funds in such accounts immediately upon realization of such loss.

         (c) Except as otherwise expressly provided in this Agreement, if any
default occurs in the making of a payment due under any Permitted Investment, or
if a default occurs in any other performance required under any Permitted
Investment, the Trustee shall take such action as may be appropriate to enforce
such payment or performance, including the institution and prosecution of
appropriate proceedings. The Trustee shall not be liable for the amount of any
loss incurred in respect of any investment or lack of investment of funds held
in any Investment Account or the Distribution Account if made in accordance with
this Section 3.12.

         (d) The Trustee or its Affiliates are permitted to receive additional
compensation that could be deemed to be in the Trustee's economic self-interest
for (i) serving as investment adviser, administrator, shareholder, servicing
agent, custodian or sub-custodian with respect to certain of the Permitted
Investments, (ii) using Affiliates to effect transactions in certain Permitted
Investments and (iii) effecting transactions in certain Permitted Investments.
Such compensation shall not be considered an amount that is reimbursable or
payable pursuant to this Agreement.

         Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage.

         (a) The Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage on the related Mortgaged Property in an
amount which is at least equal to the least of (i) the current principal balance
of such Mortgage Loan, (ii) the amount necessary to fully compensate for any
damage or loss to the improvements that are a part of such property on a
replacement cost basis and (iii) the maximum insurable value of the improvements
which are a part of such Mortgaged Property, in each case in an amount not less
than such amount as is necessary to avoid the application of any coinsurance
clause contained in the related hazard insurance policy. The Servicer shall also
cause to be maintained fire insurance with extended coverage on each REO
Property in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property, plus accrued interest at the Mortgage Rate and related
Servicing Advances. The Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by the Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that the Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the Collection
Account, subject to withdrawal pursuant to Section 3.11. Any cost incurred by
the Servicer in maintaining any such insurance shall not, for the purpose of
calculating distributions to the Trustee, be added to the unpaid principal
balance of the related Mortgage Loan, notwithstanding that the terms of such
Mortgage Loan so permit. It is understood and agreed that no earthquake or other
additional insurance is to be required of any Mortgagor other than pursuant to
such applicable laws and regulations as shall at any time be in

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force and as shall require such additional insurance. If the Mortgaged Property
or REO Property is at any time in an area identified in the Federal Register by
the Federal Emergency Management Agency as having special flood hazards and
flood insurance has been made available, the Servicer will cause to be
maintained a flood insurance policy in respect thereof. Such flood insurance
shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance
available for the related Mortgaged Property under the national flood insurance
program (assuming that the area in which such Mortgaged Property is located is
participating in such program).

         In the event that the Servicer shall obtain and maintain a blanket
policy with an insurer having a General Policy Rating of A:X or better in Best's
(or such other rating that is comparable to such rating) insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Servicer shall, in the event that there
shall not have been maintained on the related Mortgaged Property or REO Property
a policy complying with the first two sentences of this Section 3.13, and there
shall have been one or more losses which would have been covered by such policy,
deposit to the Collection Account from its own funds the amount not otherwise
payable under the blanket policy because of such deductible clause. In
connection with its activities as administrator and servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of itself, the
Trustee claims under any such blanket policy in a timely fashion in accordance
with the terms of such policy.

         (b) The Servicer shall keep in force during the term of this Agreement
a policy or policies of insurance covering errors and omissions for failure in
the performance of the Servicer's obligations under this Agreement, which policy
or policies shall be in such form and amount that would meet the requirements of
Fannie Mae or Freddie Mac if it were the purchaser of the Mortgage Loans, unless
the Servicer has obtained a waiver of such requirements from Fannie Mae or
Freddie Mac. The Servicer shall also maintain a fidelity bond in the form and
amount that would meet the requirements of Fannie Mae or Freddie Mac, unless the
Servicer has obtained a waiver of such requirements from Fannie Mae or Freddie
Mac. The Servicer shall provide the Trustee with copies of any such insurance
policies and fidelity bond. The Servicer shall be deemed to have complied with
this provision if an Affiliate of the Servicer has such errors and omissions and
fidelity bond coverage and, by the terms of such insurance policy or fidelity
bond, the coverage afforded thereunder extends to the Servicer. Any such errors
and omissions policy and fidelity bond shall by its terms not be cancelable
without thirty days' prior written notice to the Trustee. The Servicer shall
also cause each Subservicer to maintain a policy of insurance covering errors
and omissions and a fidelity bond which would meet such requirements.

         Section 3.14 Enforcement of Due-On-Sale Clauses Assumption Agreements.

         The Servicer will, to the extent it has knowledge of any conveyance or
prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"due-on-sale" clause, if any, applicable thereto;

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provided, however, that the Servicer shall not be required to take such action
if, in its sole business judgment, the Servicer believes it is not in the best
interests of the Trust Fund and shall not exercise any such rights if prohibited
by law from doing so. If the Servicer reasonably believes it is unable under
applicable law to enforce such "due-on-sale" clause or if any of the other
conditions set forth in the proviso to the preceding sentence apply, the
Servicer will enter into an assumption and modification agreement from or with
the person to whom such property has been conveyed or is proposed to be
conveyed, pursuant to which such person becomes liable under the Mortgage Note
and, to the extent permitted by applicable state law, the Mortgagor remains
liable thereon. The Servicer is also authorized to enter into a substitution of
liability agreement with such person, pursuant to which the original Mortgagor
is released from liability and such person is substituted as the Mortgagor and
becomes liable under the Mortgage Note; provided that no such substitution shall
be effective unless such person satisfies the underwriting criteria of the
Servicer, has a credit risk rating at least equal to that of the original
Mortgagor and such substitution is in the best interest of Certificateholders as
determined by the Servicer. In connection with any assumption, modification or
substitution, the Servicer shall apply such underwriting standards and follow
such practices and procedures as shall be normal and usual in its general
mortgage servicing activities and as it applies to other mortgage loans owned
solely by it. The Servicer shall not take or enter into any assumption and
modification agreement, however, unless (to the extent practicable in the
circumstances) it shall have received confirmation, in writing, of the continued
effectiveness of any applicable hazard insurance policy, or a new policy meeting
the requirements of this Section is obtained. Any fee collected by the Servicer
in respect of an assumption or substitution of liability agreement will be
retained by the Servicer as additional servicing compensation. In connection
with any such assumption, no material term of the Mortgage Note (including, but
not limited to, the related Mortgage Rate and the amount of the Scheduled
Payment) may be amended or modified, except as otherwise required pursuant to
the terms thereof. The Servicer shall notify the Trustee that any such
substitution, modification or assumption agreement has been completed by
forwarding to the Trustee the executed original of such substitution or
assumption agreement, which document shall be added to the related Mortgage File
and shall, for all purposes, be considered a part of such Mortgage File to the
same extent as all other documents and instruments constituting a part thereof.

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or by the terms of the Mortgage Note or any
assumption which the Servicer may be restricted by law from preventing, for any
reason whatever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.

         Section 3.15 Realization Upon Defaulted Mortgage Loans.

         The Servicer shall use its best efforts, consistent with customary
servicing practices as described in Section 3.01, to foreclose upon or otherwise
comparably convert (which may include an acquisition of REO Property) the
ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07, and

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which are not released from this Agreement pursuant to any other provision
hereof. The Servicer shall use reasonable efforts to realize upon such defaulted
Mortgage Loans in such manner as will maximize the receipt of principal and
interest by the Trustee, taking into account, among other things, the timing of
foreclosure proceedings. The foregoing is subject to the provisions that, in any
case in which Mortgaged Property shall have suffered damage from an uninsured
cause, the Servicer shall not be required to expend its own funds toward the
restoration of such property unless it shall determine in its sole discretion
(i) that such restoration will increase the net proceeds of liquidation of the
related Mortgage Loan to the Trustee, after reimbursement to itself for such
expenses, and (ii) that such expenses will be recoverable by the Servicer
through Insurance Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. The Servicer shall be responsible for
all other costs and expenses incurred by it in any such proceedings; provided,
however, that it shall be entitled to reimbursement thereof from the related
property, as contemplated in Section 3.11.

         The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be applied in the
following order of priority: first, to reimburse the Servicer or any Subservicer
for any related unreimbursed Servicing Advances, pursuant to Section 3.11 or
3.17; second, to accrued and unpaid interest on the Mortgage Loan or REO Imputed
Interest, at the Mortgage Rate, to the date of the liquidation or REO
Disposition, or to the Due Date prior to the Remittance Date on which such
amounts are to be distributed if not in connection with a liquidation or REO
Disposition; third, to reimburse the Servicer for any related unreimbursed P&I
Advances, pursuant to Section 3.11; and fourth, as a recovery of principal of
the Mortgage Loan. If the amount of the recovery so allocated to interest is
less than a full recovery thereof, that amount will be allocated as follows:
first, to unpaid Servicing Fees; and second, as interest at the Mortgage Rate
(net of the Servicing Fee Rate). The portion of the recovery so allocated to
unpaid Servicing Fees shall be reimbursed to the Servicer or any Subservicer
pursuant to Section 3.11 or 3.17. The portions of the recovery so allocated to
interest at the Mortgage Rate (net of the Servicing Fee Rate) and to principal
of the Mortgage Loan shall be applied as follows: first, to reimburse the
Servicer or any Subservicer for any related unreimbursed Servicing Advances in
accordance with Section 3.11 or 3.17, and second, to the Trustee in accordance
with the provisions of Section 4.02, subject to the last paragraph of Section
3.17 with respect to certain excess recoveries from an REO Disposition.

         Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event the Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, the Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, the
Servicer shall promptly provide the Trustee with a written report of the
environmental inspection.

         After reviewing the environmental inspection report, the Servicer shall
determine how to proceed with respect to the Mortgaged Property. In the event
(a) the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the Servicer
determines to proceed with foreclosure or acceptance of a deed in lieu of
foreclosure, the Servicer shall be reimbursed for all reasonable costs

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associated with such foreclosure or acceptance of a deed in lieu of foreclosure
and any related environmental clean-up costs, as applicable, from the related
Liquidation Proceeds, or if the Liquidation Proceeds are insufficient to fully
reimburse the Servicer, the Servicer shall be entitled to be reimbursed from
amounts in the Collection Account pursuant to Section 3.11 hereof. In the event
the Servicer determines not to proceed with foreclosure or acceptance of a deed
in lieu of foreclosure, the Servicer shall be reimbursed from general
collections for all Servicing Advances made with respect to the related
Mortgaged Property from the Collection Account pursuant to Section 3.11 hereof.

         Section 3.16 Release of Mortgage Files.

         (a) Upon the payment in full of any Mortgage Loan, or the receipt by
the Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Servicer will, within five (5) Business
Days of the payment in full, notify the Trustee by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the Collection Account pursuant to Section 3.10 have been or will
be so deposited) of a Servicing Officer and shall request delivery to it of the
Custodial File. Upon receipt of such certification and request, the Trustee
shall promptly release the related Custodial File to the Servicer within five
(5) Business Days. No expenses incurred in connection with any instrument of
satisfaction or deed of reconveyance shall be chargeable to the Collection
Account.

         (b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any insurance policy relating to the Mortgage Loans, the Trustee shall, upon
request of the Servicer and delivery to the Trustee, of a Request for Release,
release the related Custodial File to the Servicer, and the Trustee shall, at
the direction of the Servicer, execute such documents as shall be necessary to
the prosecution of any such proceedings and the Servicer shall retain the
Mortgage File in trust for the benefit of the Trustee. Such Request for Release
shall obligate the Servicer to return each and every document previously
requested from the Custodial File to the Trustee when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Collection Account or the Mortgage File or such document has been delivered to
an attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Servicer has delivered to the Trustee a certificate of a Servicing Officer
certifying as to the name and address of the Person to which such Mortgage File
or such document was delivered and the purpose or purposes of such delivery.
Upon receipt of a certificate of a Servicing Officer stating that such Mortgage
Loan was liquidated and that all amounts received or to be received in
connection with such liquidation that are required to be deposited into the
Collection Account have been so deposited, or that such Mortgage Loan has become
an REO Property, a copy of the Request for Release of Documents shall be
released by the Trustee to the Servicer or its designee.

         Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the Servicer any court pleadings, requests for trustee's
sale or other documents reasonably necessary to the foreclosure or trustee's
sale in respect of a Mortgaged Property or to

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any legal action brought to obtain judgment against any Mortgagor on the
Mortgage Note or Mortgage or to obtain a deficiency judgment, or to enforce any
other remedies or rights provided by the Mortgage Note or Mortgage or otherwise
available at law or in equity, or shall exercise and deliver to the Servicer a
power of attorney sufficient to authorize the Servicer to execute such documents
on its behalf. Each such certification shall include a request that such
pleadings or documents be executed by the Trustee and a statement as to the
reason such documents or pleadings are required and that the execution and
delivery thereof by the Trustee will not invalidate or otherwise affect the lien
of the Mortgage, except for the termination of such a lien upon completion of
the foreclosure or trustee's sale.

         Upon receipt of a Request for Release under this Section 3.16, the
Trustee shall deliver the related Custodial File to the Servicer by regular
mail, unless the Servicer requests that the Trustee deliver such Custodial File
to the Servicer by overnight courier (in which case such delivery shall be at
the Servicer's expense). To the extent that the Servicer requires an overnight
courier for such delivery and incurs the related expense due to the Servicer not
having previously received copies of the documents required to be delivered to
the Servicer hereunder, the Unaffiliated Seller shall use commercially
reasonable efforts to assist the Servicer in causing the related Originator
pursuant to the related Mortgage Loan Purchase Agreement to reimburse the
Servicer for such expense.

         Section 3.17 Title, Conservation and Disposition of REO Property.

         (a) This Section shall apply only to REO Properties acquired for the
account of the Trustee and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from the Trustee pursuant to
any provision hereof. In the event that title to any such REO Property is
acquired, the Servicer shall cause the deed or certificate of sale to be issued
in the name of the Trustee, on behalf of the Certificateholders.

         (b) The Servicer shall manage, conserve, protect and operate each REO
Property for the Trustee solely for the purpose of its prompt disposition and
sale. The Servicer, either itself or through an agent selected by the Servicer,
shall manage, conserve, protect and operate the REO Property in the same manner
that it manages, conserves, protects and operates other foreclosed property for
its own account, and in the same manner that similar property in the same
locality as the REO Property is managed. The Servicer shall attempt to sell the
same (and may temporarily rent the same for a period not greater than one year,
except as otherwise provided below) on such terms and conditions as the Servicer
deems to be in the best interest of the Trustee. The Servicer shall notify the
Trustee from time to time as to the status of each REO Property.

         (c) The Servicer shall use its best efforts to dispose of the REO
Property as soon as possible and shall sell such REO Property in any event
within one year after title has been taken to such REO Property, unless the
Servicer determines, and gives an appropriate notice to the Trustee to such
effect, that a longer period is necessary for the orderly liquidation of such
REO Property. If a period longer than one year is permitted under the foregoing
sentence and is necessary to sell any REO Property, the Servicer shall report
monthly to the Trustee as to the progress being made in selling such REO
Property. The Trustee has no obligation with respect to REO dispositions.

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         (d) [Reserved].

         (e) The Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
Collection Account.

         (f) The Servicer shall deposit net of reimbursement to the Servicer for
any related outstanding P&I Advances, Servicing Advances and unpaid Servicing
Fees provided in Section 3.11 hereof, or cause to be deposited, on a daily basis
in the Collection Account all revenues received with respect to the related REO
Property and shall withdraw therefrom funds necessary for the proper operation,
management and maintenance of the REO Property.

         (g) The Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed P&I Advances and Servicing Advances
as well as any unpaid Servicing Fees from proceeds received in connection with
the REO Disposition, as further provided in Section 3.11.

         (h) Any net proceeds which are in excess of the applicable Stated
Principal Balance plus all unpaid REO Imputed Interest thereon through the date
of the REO Disposition shall be retained by the Servicer as additional servicing
compensation.

         (i) The Servicer shall use its reasonable best efforts to sell, or
cause the Subservicer to sell, any REO Property as soon as possible, but in no
event later than the conclusion of the third calendar year beginning after the
year of its acquisition by the REMIC unless (i) the Servicer applies for an
extension of such period from the Internal Revenue Service pursuant to the REMIC
Provisions and Code Section 856(e)(3), in which event such REO Property shall be
sold within the applicable extension period, or (ii) the Servicer obtains for
the Trustee an Opinion of Counsel, addressed to the Depositor, the Trustee and
the Servicer, to the effect that the holding by the REMIC of such REO Property
subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause the
REMIC to fail to qualify as a REMIC under the REMIC Provisions or comparable
provisions of relevant state laws at any time. The Servicer shall manage,
conserve, protect and operate each REO Property for the Trustee solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by the REMIC of any "income from
non-permitted assets" within the meaning of Section 860F(a)(2)(B) of the Code or
any "net income from foreclosure property" which is subject to taxation under
Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the Servicer shall either itself or through an agent selected by the
Servicer protect and conserve such REO Property in the same manner and to such
extent as is customary in the locality where such REO Property is located and
may, incident to its conservation and protection of the interests of the Trustee
on behalf of the Certificateholders, rent the same, or any part thereof, as the
Servicer deems to be in the best interest of the Trustee on behalf of the
Certificateholders for the period prior to the sale of such REO Property;
provided, however, that any rent received or accrued with respect to such REO
Property qualifies as "rents from real property" as defined in Section 856(d) of
the Code.

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         Section 3.18 Notification of Adjustments.

         With respect to each Adjustable Rate Mortgage Loan, the Servicer shall
adjust the Mortgage Rate on the related Interest Rate Adjustment Date and shall
adjust the Scheduled Payment on the related mortgage payment adjustment date, if
applicable, in compliance with the requirements of applicable law and the
related Mortgage and Mortgage Note. The Servicer shall execute and deliver any
and all necessary notices required under applicable law and the terms of the
related Mortgage Note and Mortgage regarding the Mortgage Rate and Scheduled
Payment adjustments. The Servicer shall promptly, upon written request therefor,
deliver to the Trustee such notifications and any additional applicable data
regarding such adjustments and the methods used to calculate and implement such
adjustments. Upon the discovery by the Servicer or the receipt of notice from
the Trustee that the Servicer has failed to adjust a Mortgage Rate or Scheduled
Payment in accordance with the terms of the related Mortgage Note, the Servicer
shall deposit in the Collection Account from its own funds the amount of any
interest loss caused as such interest loss occurs.

         Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans.

         The Servicer shall provide, or cause the Subservicer to provide, to the
Depositor, the Unaffiliated Seller, the Certificate Insurer, the Trustee, the
OTS or the FDIC and the examiners and supervisory agents thereof access to the
documentation regarding the Mortgage Loans in its possession. Such access shall
be afforded without charge, but only upon reasonable and prior written request
and during normal business hours at the offices of the Servicer or any
Subservicer. Nothing in this Section shall derogate from the obligation of any
such party to observe any applicable law prohibiting disclosure of information
regarding the Mortgagors and the failure of any such party to provide access as
provided in this Section as a result of such obligation shall not constitute a
breach of this Section.

         Section 3.20 Documents, Records and Funds in Possession of the Servicer
to be Held for the Trustee.

         The Servicer shall account fully to the Trustee for any funds received
by the Servicer or which otherwise are collected by the Servicer as Liquidation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan. All Mortgage
Files and funds collected or held by, or under the control of, the Servicer in
respect of any Mortgage Loans, whether from the collection of principal and
interest payments or from Liquidation Proceeds, including, but not limited to,
any funds on deposit in the Collection Account, shall be held by the Servicer
for and on behalf of the Trustee and shall be and remain the sole and exclusive
property of the Trustee, subject to the applicable provisions of this Agreement.
The Servicer also agrees that it shall not create, incur or subject any Mortgage
File or any funds that are deposited in any Account, or any funds that otherwise
are or may become due or payable to the Trustee for the benefit of the
Certificateholders, to any claim, lien, security interest, judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or otherwise any
claim or right of setoff against any Mortgage File or any funds collected on, or
in connection with, a Mortgage Loan, except, however, that the Servicer shall be
entitled to set off against and deduct from any such funds any amounts that are
properly due and payable to the Servicer under this Agreement.

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         Section 3.21 Servicing Compensation.

         (a) As compensation for its activities hereunder, the Servicer shall,
with respect to each Mortgage Loan, be entitled to retain from deposits to the
Collection Account and from Liquidation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, the Servicer shall be entitled to recover unpaid Servicing Fees out of
related late collections and as otherwise permitted under Section 3.11. The
right to receive the Servicing Fee may not be transferred in whole or in part
except in connection with the transfer of all of the Servicer's responsibilities
and obligations under this Agreement; provided, however, that the Servicer may
pay from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.

         (b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by
the Servicer only to the extent such fees or charges are received by the
Servicer. The Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to
withdraw from the Collection Account and the Distribution Account, as additional
servicing compensation, interest or other income earned on deposits therein.

         (c) The Servicer shall be required to pay all expenses incurred by it
in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by the Servicer), and shall not be entitled to reimbursement
therefor except as specifically provided in Section 3.11.

         Section 3.22 Annual Statement as to Compliance.

         The Servicer will deliver or cause to be delivered to the Depositor,
the Rating Agencies, the Unaffiliated Seller, the Certificate Insurer, and the
Trustee on or before March 15th of each calendar year, commencing in 2005, an
Officer's Certificate stating, as to each signatory thereof, that (i) a review
of the activities of the Servicer during the preceding calendar year and of
performance under this Agreement has been made under such officer's supervision,
and (ii) to the best of such officer's knowledge, based on such review, the
Servicer has fulfilled all of its obligations under this Agreement throughout
such year, or, if there has been a default in the fulfillment of any such
obligation, specifying each such default known to such officers and the nature
and status thereof.

         Section 3.23 Annual Independent Public Accountants' Servicing
Statement; Financial Statements.

         (a) Not later than March 15th of each calendar year commencing in 2005,
the Servicer, at its expense, shall cause a nationally recognized firm of
independent certified public accountants to furnish to the Depositor, the
Unaffiliated Seller, the Certificate Insurer, the Rating Agencies and the
Trustee a report stating that (i) it has obtained a letter of representation
regarding certain matters from the management of the Servicer which includes an
assertion that

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the Servicer has complied with certain minimum residential mortgage loan
servicing standards, identified in the Uniform Single Attestation Program for
Mortgage Bankers established by the Mortgage Bankers Association of America,
with respect to the servicing of residential mortgage loans during the most
recently completed fiscal year and (ii) on the basis of an examination conducted
by such firm in accordance with standards established by the American Institute
of Certified Public Accountants, such representation is fairly stated in all
material respects, subject to such exceptions and other qualifications that may
be appropriate. In rendering its report such firm may rely, as to matters
relating to the direct servicing of residential mortgage loans by Subservicers,
upon comparable reports of firms of independent certified public accountants
rendered on the basis of examinations conducted in accordance with the same
standards (rendered within one year of such report) with respect to those
Subservicers.

         (b) As soon as available, and in any event within 90 days after the
close of each fiscal year of the Servicer, the Servicer, at its expense, shall
cause the audited balance sheets of Ocwen Financial Corporation, as of the end
of such fiscal year and the audited statements of income, changes in equity and
cash flows of Ocwen Financial Corporation, for such fiscal year, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the preceding fiscal year, prepared in
accordance with generally accepted accounting principles, consistently applied,
and accompanied by the certificate of the nationally recognized firm of
independent certified public accountants to be delivered to the Certificate
Insurer.

         Section 3.24 Trustee to Act as Servicer.

         In the event that the Servicer shall for any reason no longer be the
Servicer hereunder (including by reason of an Event of Default), except as
provided under Section 7.02, the Trustee or its successor shall thereupon assume
all of the rights and obligations of the Servicer hereunder arising thereafter
(except that the Trustee shall not be (i) liable for losses of the Servicer
pursuant to Section 3.10 or any acts or omissions of the predecessor Servicer
hereunder, (ii) obligated to make Advances if it is prohibited from doing so by
applicable law, (iii) obligated to effectuate repurchases or substitutions of
Mortgage Loans hereunder, including, but not limited to, repurchases or
substitutions pursuant to Section 2.03, (iv) responsible for expenses of the
Servicer pursuant to Section 2.03 or (v) deemed to have made any representations
and warranties of the Servicer hereunder). Any such assumption shall be subject
to Section 7.02.

         Every subservicing agreement entered into by the Servicer shall contain
a provision giving the successor Servicer the option to terminate such agreement
in the event a successor Servicer is appointed.

         If the Servicer shall for any reason no longer be the Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor Servicer) may, at its option, succeed to any rights and obligations of
the Servicer under any subservicing agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor Servicer) shall not
incur any liability or have any obligations in its capacity as successor
Servicer under a subservicing agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of the Servicer thereunder; and the Servicer shall not

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thereby be relieved of any liability or obligations under the subservicing
agreement arising prior to the date of such succession.

         The Servicer shall, upon request of the Trustee, but at the expense of
the Servicer, deliver to the assuming party all documents and records relating
to each subservicing agreement (if any) and the Mortgage Loans then being
serviced thereunder and an accounting of amounts collected held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

         Section 3.25 Compensating Interest.

         The Servicer shall remit to the Trustee on each Remittance Date an
amount from its own funds equal to the Compensating Interest for the related
Distribution Date.

         Section 3.26 Credit Reporting; Gramm-Leach-Bliley Act.

         (a) The Servicer agrees to fully furnish, in accordance with the Fair
Credit Reporting Act and its implementing regulations, accurate and complete
information (i.e., favorable and unfavorable) on its borrower credit files to
Equifax, Experian, and Trans Union Credit Information Company (three of the
credit repositories), on a monthly basis.

         (b) The Servicer shall comply with Title V of the Gramm-Leach-Bliley
Act of 1999 and all applicable regulations promulgated thereunder, relating to
the Mortgage Loans and the related borrowers and shall provide all required
notices thereunder.

         Section 3.27 Advance Facilities.

         With the prior written consent of the Certificate Insurer, the Servicer
is hereby authorized to enter into a financing or other facility (an "Advance
Facility") under which (l) the Servicer sells, assigns or pledges to another
Person (an "Advancing Person") the Servicer's rights under this Agreement to be
reimbursed for any Advances and/or (2) an Advancing Person agrees to fund some
or all P&I Advances or Servicing Advances required to be made by the Servicer
pursuant to this Agreement. Except as provided in the preceding sentence, no
consent of any party is required before the Servicer may enter into an Advance
Facility. Notwithstanding the existence of any Advance Facility under which an
Advancing Person agrees to fund P&I Advances and/or Servicing Advances on the
Servicer's behalf, the Servicer shall remain obligated pursuant to this
Agreement to make P&I Advances and Servicing Advances pursuant to and as
required by this Agreement, and shall not be relieved of such obligations by
virtue of such Advance Facility.

         Reimbursement amounts ("Advance Reimbursement Amounts") shall consist
solely of amounts in respect of P&I Advances and/or Servicing Advances made with
respect to the Mortgage Loans for which the Servicer would be permitted to
reimburse itself in accordance with this Agreement, assuming the Servicer had
made the related P&I Advance(s) and/or Servicing Advance(s).

         The Servicer shall maintain and provide to any successor Servicer a
detailed accounting on a loan-by-loan basis as to amounts advanced by, pledged
or assigned to, and

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reimbursed to any Advancing Person. The successor Servicer shall be entitled to
rely on any such information provided by the predecessor Servicer, and the
successor Servicer shall not be liable for any errors in such information.

         An Advancing Person who purchases or receives an assignment or pledge
of the rights to be reimbursed for P&I Advances and/or Servicing Advances,
and/or whose obligations hereunder are limited to the funding of P&I Advances
and/or Servicing Advances shall not be required to meet the criteria for
qualification of a subservicer set forth in this Agreement.

         The documentation establishing any Advance Facility shall require that
Advance Reimbursement Amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed P&I Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the Servicer to provide to
the related Advancing Person or its designee loan-by-loan information with
respect to each Advance Reimbursement Amount distributed to such Advancing
Person or to a trustee or custodian (an "Advance Facility Trustee") on each
Distribution Date, to enable the Advancing Person or Advance Facility Trustee to
make the FIFO allocation of each Advance Reimbursement Amount with respect to
each Mortgage Loan. The Servicer shall remain entitled to be reimbursed pursuant
to the Advance Facility by the Advancing Person or Advance Facility Trustee for
all P&I Advances and Servicing Advances funded by the Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.

         Any amendment to this Section 3.27 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.27, including amendments to
add provisions relating to a successor Servicer, may be entered into by the
Trustee, the Depositor, the Unaffiliated Seller and the Servicer without the
consent of any Certificateholder, but with the consent of the Certificate
Insurer, notwithstanding anything to the contrary in this Agreement. Prior to
entering into an Advance Facility, the Servicer shall notify the lender under
such facility in writing that: (a) the Advances financed by and/or pledged to
the lender are obligations owed to the Servicer on a non-recourse basis payable
only from the cash flows and proceeds received under this Agreement for
reimbursement of such Advances only to the extent provided herein, and the
Trustee is not otherwise obligated or liable to repay any Advances financed by
the lender; (b) the Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
(c) the Trustee shall not have any responsibility to track or monitor the
administration of the financing arrangement between the Servicer and the lender;
(d) if the Servicer is replaced by a successor servicer, the lender shall
continue to be entitled to receive reimbursements as provided in clause (a)
above but shall have no further right to make advances with respect to the
transaction subject to this Agreement; and (e) (i) the pledge, if any, of
Servicer's rights to the lender under the facility conveys no rights (such as a
right to fees after the removal of the Servicer or the right to become a
substitute servicer) under this Agreement, or against the Trust Fund, any
investor in or guarantor of securities issued hereunder, or any person other
than the Servicer, (ii) the Servicer is only pledging assets and rights that it
owns and any purported pledge of any assets or rights that are not property of
the Servicer shall be of force and effect and will not be deemed to create any
additional rights or assets of either the lender or the

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Servicer and (iii) the lender shall take such steps as are reasonably necessary
to confirm to a successor servicer that it has no rights in any collateral due
or payable on or after the date of servicing transfer other than the Servicer's
rights to reimbursement of Advances (to be repaid pursuant to the terms of this
Agreement) for Advances made prior to such servicing transfer.

                                   ARTICLE IV

                                DISTRIBUTIONS AND
                            ADVANCES BY THE SERVICER

         Section 4.01 Advances.

         (a) The amount of P&I Advances to be made by the Servicer for any
Remittance Date shall equal, subject to Section 4.01(c), the sum of (i) with
respect to the Mortgage Loans, the aggregate amount of Scheduled Payments (with
each interest portion thereof net of the related Servicing Fee), due on the Due
Date immediately preceding such Remittance Date in respect of such Mortgage
Loans, which Scheduled Payments were not received as of the close of business on
the last Business Day of the immediately preceding calendar month, plus (ii)
with respect to each REO Property, which REO Property was acquired during or
prior to the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the Collection Account for distribution on
such Remittance Date.

         (b) On the Remittance Date, the Servicer shall remit in immediately
available funds to the Trustee an amount equal to the aggregate amount of P&I
Advances, if any, to be made in respect of the Mortgage Loans and REO Properties
for the related Remittance Date either (i) from its own funds, (ii) from the
Collection Account, to the extent of funds held therein for future distribution
(in which case, it will cause to be made an appropriate entry in the records of
Collection Account that Amounts Held For Future Distribution have been, as
permitted by this Section 4.01, used by the Servicer in discharge of any such
P&I Advance) or (iii) in the form of any combination of (i) and (ii) aggregating
the total amount of P&I Advances to be made by the Servicer with respect to the
Mortgage Loans and REO Properties. Any Amounts Held For Future Distribution and
so used shall be appropriately reflected in the Servicer's records and replaced
by the Servicer by deposit in the Collection Account on or before any future
Remittance Date to the extent required.

         (c) The obligation of the Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan or REO Property, shall
continue until a Final Recovery Determination in connection therewith or the
removal thereof from coverage under this Agreement, except as otherwise provided
in this Section.

         (d) Notwithstanding anything herein to the contrary, no P&I Advance or
Servicing Advance shall be required to be made hereunder by the Servicer if such
P&I Advance

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or Servicing Advance would, if made, constitute a Nonrecoverable P&I Advance or
Nonrecoverable Advance. The determination by the Servicer that it has made a
Nonrecoverable P&I Advance or a Nonrecoverable Advance or that any proposed P&I
Advance or Servicing Advance, if made, would constitute a Nonrecoverable P&I
Advance or a Nonrecoverable Advance, respectively, shall be evidenced by an
Officers' Certificate of the Servicer delivered to the Trustee.

         (e) Except as otherwise provided herein, the Servicer shall be entitled
to reimbursement pursuant to Section 3.11 hereof for P&I Advances and Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.

         Section 4.02 Priorities of Distribution.

         (a) On each Distribution Date, the Trustee will make the disbursements
and transfers from available funds then on deposit in the Distribution Account
in the following order of priority:

         (i)  from the Interest Remittance Amount, in the following order of
    priority:

         (A)  to the Certificate Insurer, the Premium Amount for such
              Distribution Date;

         (B)  concurrently, with equal priority of payment, to the holders of
              the Class A Certificates, pro rata, the Accrued Certificate
              Interest and any Unpaid Interest Amounts for the Class A
              Certificates;

         (C)  to the Certificate Insurer, any Reimbursement Amount then owing to
              it on account of a prior draw relating to interest on the Class
              A-1 Certificates;

         (D)  to the Class M-1 Certificates, the Accrued Certificate Interest
              for such Class on such Distribution Date;

         (E)  to the Class M-2 Certificates, the Accrued Certificate Interest
              for such class on such Distribution Date;

         (F)  to the Class M-3 Certificates, the Accrued Certificate Interest
              for such Class on such Distribution Date;

         (G)  to the Class B-1 Certificates, the Accrued Certificate Interest
              for such Class on such Distribution Date;

         (H)  to the Class B-2 Certificates, the Accrued Certificate Interest
              for such Class on such Distribution Date; and

         (I)  to the Class B-3 Certificates, the Accrued Certificate Interest
              for such Class on such Distribution Date;

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         (ii) (x) on each Distribution Date (A) before the Stepdown Date or (B)
    with respect to which a Trigger Event is in effect, to the holders of the
    Class or Classes of Offered Certificates then entitled to distributions of
    principal as set forth below, and to the Certificate Insurer, from the
    amounts remaining on deposit in the Distribution Account after making
    distributions pursuant to clause (i) above, an amount equal to the Principal
    Distribution Amount in the following order of priority:

         (A)  to the holders of the Class A-1 Certificates and the Class A
              Sequential Certificates, pro rata, the Principal Distribution
              Amount, until the Class Certificate Balance of each Class of the
              Class A Certificates has been reduced to zero, with amounts
              allocated to the Class A Sequential Certificates further allocated
              first to the Class A-2 Certificates until those Certificates are
              reduced to zero and then to the Class A-3 Certificates until those
              Certificates are reduced to zero;

         (B)  to the Certificate Insurer, the amount of any Reimbursement Amount
              then owing to the Certificate Insurer on account of a prior draw
              relating to principal on the Class A-1 Certificates;

         (C)  to the Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
              Class B-3 Certificates, in that order, until the respective Class
              Certificate Balances are reduced to zero;

              (y) on each Distribution Date (1) on and after the Stepdown Date
    and (2) as long as a Trigger Event is not in effect, to the holders of the
    related Class or Classes of Offered Certificates then entitled to
    distribution of principal, from amounts remaining on deposit in the
    Distribution Account after making distributions pursuant to clause (i)
    above, an amount equal to, in the aggregate, the Principal Distribution
    Amount in the following amounts and order of priority:

         (A)  to the holders of the Class A-1 Certificates and the Class A
              Sequential Certificates, pro rata, the Principal Distribution
              Amount, until the Class Certificate Balance of each Class of the
              Class A Certificates has been reduced to zero, with amounts
              allocated to the Class A Sequential Certificates further allocated
              first to the Class A-2 Certificates until those Certificates are
              reduced to zero and then to the Class A-3 Certificates until those
              Certificates are reduced to zero;

         (B)  to the Certificate Insurer, the amount of any Reimbursement Amount
              then owing to the Certificate Insurer on account of a prior draw
              relating to principal on the Class A-1 Certificates;

         (C)  to the Class M-1 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class M-1 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero;

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<PAGE>

         (D)  to the Class M-2 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class M-2 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero;

         (E)  to the Class M-3 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class M-3 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero;

         (F)  to the Class B-1 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class B-1 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero;

         (G)  to the Class B-2 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class B-2 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero; and

         (H)  to the Class B-3 Certificates, the lesser of the remaining
              Principal Distribution Amount and the Class B-3 Principal
              Distribution Amount, until the Class Certificate Balance thereof
              has been reduced to zero;

         (iii) any amount remaining in the Distribution Account after the
    distributions in clauses (i) and (ii) above, plus as specifically indicated
    below, from amounts on deposit in the Excess Reserve Fund Account, shall be
    distributed in the following order of priority:

         (A)  to the Certificate Insurer, to the extent of any remaining
              Reimbursement Amount then owing to it;

         (B)  to the holders of the Class M-1 Certificates, any Unpaid Interest
              Amounts for such Class;

         (C)  to the holders of the Class M-1 Certificates, any Unpaid Realized
              Loss Amount for such Class;

         (D)  to the holders of the Class M-2 Certificates, any Unpaid Interest
              Amounts for such Class;

         (E)  to the holders of the Class M-2 Certificates, any Unpaid Realized
              Loss Amount for such Class;

         (F)  to the holders of the Class M-3 Certificates, any Unpaid Interest
              Amounts for such Class;

         (G)  to the holders of the Class M-3 Certificates, any Unpaid Realized
              Loss Amount for such Class;

         (H)  to the holders of the Class B-1 Certificates, any Unpaid Interest
              Amounts for such Class;

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         (I)  to the holders of the Class B-1 Certificates, any Unpaid Realized
              Loss Amount for such Class;

         (J)  to the holders of the Class B-2 Certificates, any Unpaid Interest
              Amounts for such Class;

         (K)  to the holders of the Class B-2 Certificates, any Unpaid Realized
              Loss Amount for such Class;

         (L)  to the holders of the Class B-3 Certificates, any Unpaid Interest
              Amounts for such Class; (M) to the holders of the Class B-3
              Certificates, any Unpaid Realized Loss Amount for such Class;

         (N)  to the Excess Reserve Fund Account, the amount of any Basis Risk
              Payment for such Distribution Date;

         (O)  (i) from any Class A Interest Rate Cap Payment on deposit in the
              Excess Reserve Fund Account with respect to that Distribution
              Date, an amount equal to any unpaid remaining Basis Risk Carry
              Forward Amount with respect to the Class A Certificates for that
              Distribution Date, allocated (a) first, between the Class A-1,
              Class A-2 and Class A-3 Certificates pro rata, based upon their
              respective Class Certificate Balances and (b) second, any
              remaining amounts to the Class A-1, Class A-2 and Class A-3
              Certificates, pro rata, based on any Basis Risk Carry Forward
              Amounts remaining unpaid, in order to reimburse such unpaid
              amounts, (ii) from any Class M Interest Rate Cap Payment on
              deposit in the Excess Reserve Fund Account with respect to that
              Distribution Date, an amount equal to any unpaid remaining Basis
              Risk Carry Forward Amount with respect to the Class M Certificates
              for that Distribution Date, allocated (a) first, among the Class
              M-1, Class M-2 and Class M-3 Certificates pro rata, based upon
              their respective Class Certificate Balances and (b) second, any
              remaining amounts to the Class M-1, Class M-2 and Class M-3
              Certificates, pro rata, based on any Basis Risk Carry Forward
              Amounts remaining unpaid, in order to reimburse such unpaid
              amounts, and (iii) from any Class B Interest Rate Cap Payment on
              deposit in the Excess Reserve Fund Account with respect to that
              Distribution Date, an amount equal to any unpaid remaining Basis
              Risk Carry Forward Amount with respect to the Class B Certificates
              for that Distribution Date, allocated (a) first, among the Class
              B-1, Class B-2 and Class B-3 Certificates pro rata, based upon
              their respective Class Certificate Balances and (b) second, any
              remaining amounts to the Class B-1, Class B-2 and Class B-3
              Certificates, pro rata, based on any Basis Risk Carry Forward
              Amounts remaining unpaid, in order to reimburse such unpaid
              amounts;

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         (P)  from amounts on deposit in the Excess Reserve Fund Account (not
              including any Interest Rate Cap Payment included in that account)
              with respect to such Distribution Date, an amount equal to any
              Basis Risk Carry Forward Amount for such Distribution Date in the
              same order and priority in which Accrued Certificate Interest is
              allocated among those Classes of Certificates;

         (Q)  to the holders of the Class P Certificates, the outstanding
              principal balance thereof, if any, and to the holders of the Class
              X Certificates, the remainder of the Class X Distributable Amount
              not distributed pursuant to Sections 4.02(a)(iii)(A)-(P) (to the
              extent stated in clause (i) of the definition of Class X
              Distributable Amount, as interest, and to the extent stated in
              clause (ii) of the definition of Class X Distributable Amount, as
              principal); and

         (R)  to the holders of the Class R Certificates, any remaining amount.

         (b) On each Distribution Date, all amounts representing Prepayment
Charges from the Mortgage Loans received during the related Prepayment Period
will be distributed to the holders of the Class P Certificates.

         (c) On the December 2003, January 2004 and February 2004 Distribution
Dates, the Trustee shall transfer from the Capitalized Interest Account to the
Distribution Account the Capitalized Interest Requirement, if any, for such
Distribution Date.

         (d) On the Distribution Date following either the final Subsequent
Transfer Date or February 24, 2004, whichever date is earlier, any amounts
remaining in the Capitalized Interest Account and all Pre-Funding Earnings in
the Pre-Funding Account, after taking into account the transfers in respect of
the Distribution Date described in clause (c) above, shall be paid by the
Trustee to the Unaffiliated Seller.

         (e) On each Subsequent Transfer Date, the Unaffiliated Seller shall
instruct in writing the Trustee to withdraw from the Pre-Funding Account an
amount equal to 100% of the aggregate Stated Principal Balances as of the
related Subsequent Cut-off Date of the Subsequent Mortgage Loans sold to the
Trust Fund on such Subsequent Transfer Date and pay such amount to or upon the
order of the Unaffiliated Seller upon satisfaction of the conditions set forth
in Section 2.01(c) with respect to such transfer. The Trustee may conclusively
rely on such written instructions from the Unaffiliated Seller.

         (f) If the Pre-Funding Amount available in the Pre-Funding Account
(exclusive of Pre-Funding Earnings) has been reduced to $100,000 or less by the
close of business on January 1, 2004 then, on the January 26, 2004 Distribution
Date, after giving effect to any reductions in such Pre-Funding Amount on such
date, the Trustee shall withdraw from the related Pre-Funding Account on such
date and deposit in the Distribution Account the amount on deposit in the
Pre-Funding Account other than any Pre-Funding Earnings; if the Pre-Funding
Amount available in the Pre-Funding Account has not been reduced to zero by the
close of business on February 24, 2004, the Trustee shall withdraw from the
Pre-Funding Account the

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amount on deposit therein, other than the Pre-Funding Earnings, and deposit such
amount on the February 25, 2004 Distribution Date into the Distribution Account.
The amount deposited into the Distribution Account pursuant to the preceding
sentence from the Pre-Funding Account shall be distributed to the Holders of the
Certificates, pro rata, based on their relative Class Certificate Balances
immediately prior to the related Distribution Date, as a separate payment of
principal, on the related Distribution Date.

         (g) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date will be allocated as a
reduction in the following order:

         (1) First, to the amount of interest payable to the Class X
    Certificates; and

         (2) Second, pro rata, as a reduction of the Accrued Certificate
    Interest for the Class A-1, Class A-2, Class A-3, Class M-1, Class M-2,
    Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, based on the
    amount of interest to which such Classes would otherwise be entitled.

         Section 4.03 Monthly Statements to Certificateholders.

         (a) Not later than each Distribution Date, the Trustee shall make
available to each Certificateholder, the Servicer, the Depositor, the
Unaffiliated Seller, the Certificate Insurer and each Rating Agency a statement
setting forth with respect to the related distribution:

         (i) the amount thereof allocable to principal, separately identifying
    the aggregate amount of any Principal Prepayments and Liquidation Proceeds
    included therein;

         (ii) the amount thereof allocable to interest, any Unpaid Interest
    Amounts included in such distribution and any remaining Unpaid Interest
    Amounts after giving effect to such distribution, any Basis Risk Carry
    Forward Amount for such Distribution Date and the amount of all Basis Risk
    Carry Forward Amount covered by withdrawals from the Excess Reserve Fund
    Account on such Distribution Date;

         (iii) if the distribution to the Holders of such Class of Certificates
    is less than the full amount that would be distributable to such Holders if
    there were sufficient funds available therefor, the amount of the shortfall
    and the allocation thereof as between principal and interest, including any
    Basis Risk Carry Forward Amount not covered by amounts in the Excess Reserve
    Fund Account;

         (iv) the Class Certificate Balance of each Class of Certificates after
    giving effect to the distribution of principal on such Distribution Date;

         (v) the Pool Stated Principal Balance for the following Distribution
    Date;

         (vi) the amount of the Servicing Fees paid to or retained by the
    Servicer or Subservicer (with respect to the Subservicers, in the aggregate)
    with respect to such Distribution Date;

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         (vii) the Pass-Through Rate for each such Class of Certificates with
    respect to such Distribution Date;

         (viii) the amount of Advances included in the distribution on such
    Distribution Date and the aggregate amount of Advances reported by the
    servicer as outstanding as of the close of business on such Distribution
    Date;

         (ix) the number and aggregate Scheduled Principal Balances of Mortgage
    Loans (1) as to which the Scheduled Payment is delinquent 31 to 60 days, 61
    to 90 days and 91 or more days, (2) that have become REO Property, (3) that
    are in foreclosure and (4) that are in bankruptcy, in each case as of the
    close of business on the last Business Day of the immediately preceding
    month;

         (x) with respect to any Mortgage Loan that became an REO Property
    during the preceding calendar month, the loan number and Stated Principal
    Balance of such Mortgage Loan as of the close of business on the
    Determination Date preceding such Distribution Date and the date of
    acquisition thereof;

         (xi) the total number and principal balance of any REO Properties (and
    market value, if available) as of the close of business on the Determination
    Date preceding such Distribution Date;

         (xii) whether a Trigger Event has occurred and is continuing (including
    the calculation of thereof and the aggregate outstanding balance of all 60+
    Day Delinquent Loans);

         (xiii) the amount on deposit in the Excess Reserve Fund Account (after
    giving effect to distributions on such Distribution Date);

         (xiv) the aggregate amount of Applied Realized Loss Amounts incurred
    during the preceding calendar month and aggregate Applied Realized Loss
    Amounts through such Distribution Date;

         (xv) the amount of any Net Monthly Excess Cash Flow on such
    Distribution Date and the allocation thereof to the Certificateholders with
    respect to Applied Realized Losses and Unpaid Interest Amounts;

         (xvi) the Subordinated Amount and Required Subordinated Amount;

         (xvii) the Interest Remittance Amount, the Principal Remittance Amount
    and the Prepayment Charges remitted by Servicer with respect to that
    Distribution Date;

         (xviii) the Pre-Funded Amount as of the end of the prior Due Period;

         (xix) the amount of any principal prepayment on the Certificates
    resulting from the application of unused moneys in the Pre-Funding Account;

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         (xx) the Class A-1 Deficiency and the Insured Payment for such
    Distribution Date;

         (xxi) the Reimbursement Amount immediately prior to such Distribution
    Date, and the amount of any payments to the Certificate Insurer on account
    thereof on such Distribution Date; and

         (xxii) the Class A Interest Rate Cap Payment, if any, the Class M
    Interest Rate Cap Payment, if any, and the Class B Interest Rate Cap
    Payment, if any, for such Distribution Date.

         (b) The Trustee's responsibility for providing the above statement is
limited to the availability, timeliness and accuracy of the information derived
from the Servicer pursuant to Section 4.03(d) below or, in the case of the
Reimbursement Amount, from the Certificate Insurer. The Trustee will provide the
above statement via the Trustee's internet website, except that the Trustee
shall deliver a hard copy of such statement to the Certificate Insurer on each
Distribution Date. The Trustee's website will initially be located at
https://www.corporatetrust.db.com and assistance in using the website can be
obtained by calling the Trustee's investor relations desk at 1-800-735-7777. A
paper copy of the statement will also be made available upon request.

         (c) Within a reasonable period of time after the end of each calendar
year, the Trustee shall cause to be furnished to each Person who at any time
during the calendar year was a Certificateholder, a statement containing the
information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of this Section
4.03 aggregated for such calendar year or applicable portion thereof during
which such Person was a Certificateholder. Such obligation of the Trustee shall
be deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time in effect.

         (d) Not later than the Determination Date, the Servicer shall furnish
to the Trustee a monthly remittance advice statement containing such information
as shall be reasonably requested by the Trustee to provide the reports required
by Section 4.03(a) as to the accompanying remittance and the period ending on
the close of business on the last Business Day of the immediately preceding
month.

         The Servicer shall furnish to the Trustee an individual loan accounting
report, as of the last Business Day of each month, to document Mortgage Loan
payment activity on an individual Mortgage Loan basis. With respect to each
month, the corresponding individual loan accounting report (in electronic
format) shall be received by the Trustee no later than the related Determination
Date, which report shall contain the following:

         (i) with respect to each Scheduled Payment, the amount of such
    remittance allocable to principal (including a separate breakdown of any
    Principal Prepayment, including the date of such prepayment, and any
    prepayment penalties or premiums, along with a detailed report of interest
    on principal prepayment amounts remitted in accordance with Section 3.25);

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         (ii) with respect to each Scheduled Payment, the amount of such
    remittance allocable to interest and assumption fees;

         (iii) the amount of servicing compensation received by the Servicer
    during the prior distribution period;

         (iv) the individual and aggregate Stated Principal Balance of the
    Mortgage Loans;

         (v) the individual and aggregate Scheduled Principal Balances of the
    Mortgage Loans;

         (vi) the aggregate of any expenses reimbursed to the Servicer during
    the prior distribution period pursuant to Section 3.05;

         (vii) the number and aggregate Scheduled Principal Balances of Mortgage
    Loans (a) as to which the Scheduled Payment is delinquent (1) 31 to 60 days,
    (2) 61 to 90 days and (3) 91 days or more; (b) as to which foreclosure has
    commenced; (c) as to which REO Property has been acquired and (d) that are
    in bankruptcy.

         Section 4.04 Certain Matters Relating to the Determination of LIBOR.

         Until all of the LIBOR Certificates are paid in full, the Trustee will
at all times retain at least four Reference Banks for the purpose of determining
LIBOR with respect to each Interest Determination Date. The Servicer initially
shall designate the Reference Banks. Each "Reference Bank" shall be a leading
bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Trustee and shall have an established place of business in
London. If any such Reference Bank should be unwilling or unable to act as such
or if the Servicer should terminate its appointment as Reference Bank, the
Servicer shall promptly appoint or cause to be appointed another Reference Bank.
The Trustee shall have no liability or responsibility to any Person for (i) the
selection of any Reference Bank for purposes of determining LIBOR or (ii) any
inability to retain at least four Reference Banks which is caused by
circumstances beyond its reasonable control.

         The Pass-Through Rate for each Class of LIBOR Certificates for each
Interest Accrual Period shall be determined by the Trustee on each LIBOR
Determination Date so long as the LIBOR Certificates are outstanding on the
basis of LIBOR and the respective formulae appearing in footnotes corresponding
to the LIBOR Certificates in the table relating to the Certificates in the
Preliminary Statement. The Trustee shall not have any liability or
responsibility to any Person for its inability, following a good-faith
reasonable effort, to obtain quotations from the Reference Banks or to determine
the arithmetic mean referred to in the definition of LIBOR, all as provided for
in this Section 4.04 and the definition of LIBOR. The establishment of LIBOR and
each Pass-Through Rate for the LIBOR Certificates by the Trustee shall (in the
absence of manifest error) be final, conclusive and binding upon each Holder of
a Certificate and the Trustee.

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         Section 4.05 The Certificate Insurance Policy.

         (a) Within two (2) days following each Remittance Date, the Trustee
shall determine with respect to the immediately following Distribution Date, the
amount to be on deposit in the Distribution Account on such Distribution Date as
a result of the (i) Servicer's remittance of the Interest Remittance Amount and
the Principal Remittance Amount on the related Remittance Date, and (ii) any
transfers to the Distribution Account made from the Capitalized Interest Account
and/or the Pre-Funding Account relating to such Distribution Date pursuant to
Section 4.02 hereof, excluding the amount of any Insured Payment.

         (b) If on any Distribution Date there is a Class A-1 Deficiency, the
Trustee shall complete a Notice in the form of Exhibit A to the Certificate
Insurance Policy and submit such notice to the Certificate Insurer no later than
12:00 noon New York City time on the second Business Day preceding such
Distribution Date as a claim for an Insured Payment in an amount equal to such
Class A-1 Deficiency.

         (c) The Trustee shall establish a separate Eligible Account for the
benefit of Holders of the Class A-1 Certificates and the Certificate Insurer,
referred to herein as the "Insurance Payment Account," over which the Trustee
shall have exclusive control and sole right of withdrawal. The Trustee shall
deposit upon receipt any amount paid under the Certificate Insurance Policy in
the Insurance Payment Account and distribute such amount only for purposes of
payment to the Class A-1 Certificateholders of the Insured Amount and such
amount may not be applied to satisfy any costs, expenses or liabilities of the
Servicer, the Trustee or the Trust Fund. Amounts paid under the Certificate
Insurance Policy, to the extent needed to pay the Insured Amount, shall be
transferred to the Distribution Account on the related Distribution Date and
disbursed by the Trustee to the Class A-1 Certificateholders in accordance with
Section 4.02. It shall not be necessary for such payments to be made by checks
or wire transfers separate from the checks or wire transfers used to pay other
distributions to the Class A-1 Certificateholders with other funds available to
make such payment. However, the amount of any payment of principal or of
interest on the Class A-1 Certificates to be paid from funds transferred from
the Insurance Payment Account shall be noted as provided in paragraph (d) below
in the Certificate Register and in the statement to be furnished to Holders of
such Certificates pursuant to Section 4.03(a). Funds held in the Insurance
Payment Account shall not be invested. Any funds remaining in the Insurance
Payment Account on the first Business Day following a Distribution Date shall be
returned to the Certificate Insurer pursuant to the written instructions of the
Certificate Insurer by the end of such Business Day.

         (d) The Trustee shall keep a complete and accurate record of the amount
of interest and principal paid in respect of any Class A-1 Certificate from
moneys received under the Certificate Insurance Policy. The Certificate Insurer
shall have the right to inspect such records at reasonable times during normal
business hours upon one Business Day's prior notice to the Trustee.

         (e) In the event that the Trustee has received a certified copy of an
order of the appropriate court that any Insured Payment has been voided in whole
or in part as a preference payment under applicable bankruptcy law, the Trustee
shall so notify the Certificate Insurer, shall comply with the provisions of the
Certificate Insurance Policy to obtain payment

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by the Certificate Insurer of such voided Insured Payment, and shall, at the
time it provides notice to the Certificate Insurer, notify, by mail to the Class
A-1 Certificateholders of the affected Certificates that, in the event any Class
A-1 Certificateholder's Insured Payment is so recovered, such Class A-1
Certificateholder will be entitled to payment pursuant to the Certificate
Insurance Policy, a copy of which shall be made available through the Trustee,
the Certificate Insurer or the Certificate Insurer's fiscal agent, if any, and
the Trustee shall furnish to the Certificate Insurer or its fiscal agent, if
any, its records evidencing the payments which have been made by the Trustee and
subsequently recovered from the Class A-1 Certificateholders, and dates on which
such payments were made.

         (f) The Trustee shall promptly notify the Certificate Insurer of any
proceeding or the institution of any action, of which a Responsible Officer of
the Trustee has actual knowledge, seeking the avoidance as a preferential
transfer under applicable bankruptcy, insolvency, receivership or similar law (a
"Preference Claim") of any distribution made with respect to the Class A-1
Certificates. Each Class A-1 Certificateholder, by its purchase of Class A-1
Certificates, the Servicer and the Trustee agree that the Certificate Insurer
(so long as no Certificate Insurer Default exists) may at any time during the
continuation of any proceeding relating to a Preference Claim direct all matters
relating to such Preference Claim, including, without limitation, (i) the
direction of any appeal of any order relating to such Preference Claim and (ii)
the posting of any surety, supersedes or performance bond pending any such
appeal. In addition and without limitation of the foregoing, the Certificate
Insurer shall be subrogated to, and each Class A-1 Certificateholder, the
Servicer and the Trustee hereby delegate and assign to the Certificate Insurer,
to the fullest extent permitted by law, the rights of the Trustee, the Servicer
and each Class A-1 Certificateholder in the conduct of any such Preference
Claim, including, without limitation, all rights of any party to any adversary
proceeding or action with respect to any court order issued in connection with
any such Preference Claim.

         (g) The Trustee shall, upon retirement of the Class A-1 Certificates,
furnish to the Certificate Insurer a notice of such retirement, and, upon
retirement of the Class A-1 Certificates and the expiration of the term of the
Certificate Insurance Policy, surrender the Certificate Insurance Policy to the
Certificate Insurer for cancellation.

         Section 4.06 Effect of Payments by the Certificate Insurer;
Subrogation.

         Anything herein to the contrary notwithstanding, any payment with
respect to principal of or interest on the Class A-1 Certificates which is made
with moneys received pursuant to the terms of the Certificate Insurance Policy
shall not be considered payment of the Class A-1 Certificates from the Trust
Fund. The Depositor, the Servicer and the Trustee acknowledge, and each Holder
by its acceptance of a Class A-1 Certificate agrees, that without the need for
any further action on the part of the Certificate Insurer, the Depositor, the
Servicer, the Trustee or the Certificate Registrar (a) to the extent the
Certificate Insurer makes payments, directly or indirectly, on account of
principal of or interest on the Class A-1 Certificates to the Holders of such
Class A-1 Certificates, the Certificate Insurer will be fully subrogated to, and
each Class A-1 Certificateholder, the Servicer and the Trustee hereby delegate
and assign to the Certificate Insurer, to the fullest extent permitted by law,
the rights of such Holders to receive such principal and interest from the Trust
Fund, including, without limitation, any amounts due to the Class A-1
Certificateholders in respect of securities law violations arising from the
offer

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and sale of the Class A-1 Certificates, and (b) the Certificate Insurer shall be
paid such amounts from the sources and in the manner provided herein for the
payment of such amounts and as provided in the Insurance and Indemnity
Agreement. The Trustee and the Servicer shall cooperate in all respects with any
reasonable request by the Certificate Insurer for action to preserve or enforce
the Certificate Insurer's rights or interests under this Agreement without
limiting the rights or affecting the interests of the Holders as otherwise set
forth herein.

                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01 The Certificates.

         The Certificates shall be substantially in the forms attached hereto as
exhibits. The Certificates shall be issuable in registered form, in the minimum
denominations, integral multiples in excess thereof (except that one Certificate
in each Class may be issued in a different amount which must be in excess of the
applicable minimum denomination) and aggregate denominations per Class set forth
in the Preliminary Statement.

         The Depositor hereby directs the Trustee to register the Class X and
the Class P Certificates initially to "CDC Mortgage Capital Inc." and then on
the Closing Date as follows: "Deutsche Bank National Trust Company, as Indenture
Trustee on behalf of the Noteholders of the CDC Mortgage Capital Inc. NIM Trust
2003-HE4N", and to deliver such Class X and Class P Certificates on the NIM
Closing Date to Deutsche Bank National Trust Company, as trustee of the NIM
Trust.

         Subject to Section 9.02 respecting the final distribution on the
Certificates, on each Distribution Date the Trustee shall make distributions to
each Certificateholder of record on the preceding Record Date either (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, if such Holder has so
notified the Trustee at least five Business Days prior to the related Record
Date or (y) by check mailed by first class mail to such Certificateholder at the
address of such holder appearing in the Certificate Register.

         The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee by an authorized officer. Certificates bearing the manual
or facsimile signatures of individuals who were, at the time such signatures
were affixed, authorized to sign on behalf of the Trustee shall bind the
Trustee, notwithstanding that such individuals or any of them have ceased to be
so authorized prior to the countersignature and delivery of any such
Certificates or did not hold such offices at the date of such Certificate. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless countersigned by the Trustee by manual signature, and
such countersignature upon any Certificate shall be conclusive evidence, and the
only evidence, that such Certificate has been duly executed and delivered
hereunder. All Certificates shall be dated the date of their countersignature.
On the Closing Date, the Trustee shall countersign the Certificates to be issued
at the direction of the Depositor, or any affiliate thereof.

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         The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate
transfers.

         Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.

         (a) The Trustee shall maintain, or cause to be maintained in accordance
with the provisions of Section 5.06, a Certificate Register for the Trust Fund
in which, subject to the provisions of subsections (b) and (c) below and to such
reasonable regulations as it may prescribe, the Trustee shall provide for the
registration of Certificates and of transfers and exchanges of Certificates as
herein provided. Upon surrender for registration of transfer of any Certificate,
the Trustee shall execute and deliver, in the name of the designated transferee
or transferees, one or more new Certificates of the same Class and aggregate
Percentage Interest.

         At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing
the same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Trustee. Whenever any Certificates are
so surrendered for exchange, the Trustee shall execute, authenticate, and
deliver the Certificates which the Certificateholder making the exchange is
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his
attorney duly authorized in writing.

         No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.

         All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with
the Trustee's customary procedures.

         (b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. Except
with respect to the transfer of the Class X and Class P Certificates to the NIMs
Trust on the Closing Date, in the event that a transfer is to be made in
reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Trustee in writing the
facts surrounding the transfer in substantially the form set forth in Exhibit I
(the "Transferor Certificate") and either (i) there shall be delivered to the
Trustee a letter in substantially the form of Exhibit J (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under
the Securities Act. The Depositor shall provide to any Holder of a Private
Certificate and any prospective transferee designated by any such Holder,
information regarding the related Certificates and the Mortgage Loans and such
other

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information as shall be necessary to satisfy the condition to eligibility set
forth in Rule 144A(d)(4) for transfer of any such Certificate without
registration thereof under the Securities Act pursuant to the registration
exemption provided by Rule 144A. The Trustee and the Servicer shall cooperate
with the Depositor in providing the Rule 144A information referenced in the
preceding sentence, including providing to the Depositor such information
regarding the Certificates, the Mortgage Loans and other matters regarding the
Trust Fund as the Depositor shall reasonably request to meet its obligation
under the preceding sentence. Each Holder of a Private Certificate desiring to
effect such transfer shall, and does hereby agree to, indemnify the Trustee and
the Depositor and the Servicer against any liability that may result if the
transfer is not so exempt or is not made in accordance with such federal and
state laws.

         Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, no transfer of an
ERISA-Restricted Certificate shall be made unless the Trustee shall have
received a representation letter from the transferee in substantially the form
of Exhibit J, to the effect that either (A) such transferee is not an employee
benefit plan or arrangement subject to Title I of ERISA, Section 4975 of the
Code or any Federal, state or local law ("Similar Law") materially similar to
the foregoing provisions of ERISA or the Code, nor a person acting on behalf of
any such plan or arrangement nor using the assets of any such plan or
arrangement to effect such transfer or (B) with respect to the transfer of an
ERISA-Restricted Certificate that is not a Private Certificate, such transferee
is an insurance company that is purchasing the Certificate with funds contained
in an "insurance company general account" (as such term is defined in Section
V(e) of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60") and the
purchase and holding of such Certificate are covered under Sections I and III of
PTCE 95-60. For purposes of the preceding sentence, with respect to an
ERISA-Restricted Certificate that is not a Private Certificate, in the event the
representation letter referred to in the preceding sentence is not furnished,
such representation shall be deemed to have been made to the Trustee by the
transferee's (including an initial acquiror's) acceptance of the
ERISA-Restricted Certificates. In the event that such representation is
violated, such attempted transfer or acquisition shall be void and of no effect.

         To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such
Certificate to the Holder thereof or taking any other action with respect to
such Holder under the provisions of this Agreement so long as the transfer was
registered by the Trustee in accordance with the foregoing requirements.

         (c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:

         (i) Each Person holding or acquiring any Ownership Interest in a
    Residual Certificate shall be a Permitted Transferee and shall promptly
    notify the Trustee of any change or impending change in its status as a
    Permitted Transferee.

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         (ii) No Ownership Interest in a Residual Certificate may be registered
    on the Closing Date or thereafter transferred, and the Trustee shall not
    register the Transfer of any Residual Certificate unless, in addition to the
    certificates required to be delivered to the Trustee under subparagraph (b)
    above, the Trustee shall have been furnished with an affidavit (a "Transfer
    Affidavit") of the initial owner or the proposed transferee in the form
    attached hereto as Exhibit H.

         (iii) Each Person holding or acquiring any Ownership Interest in a
    Residual Certificate shall agree (A) to obtain a Transfer Affidavit from any
    other Person to whom such Person attempts to Transfer its Ownership Interest
    in a Residual Certificate, (B) to obtain a Transfer Affidavit from any
    Person for whom such Person is acting as nominee, trustee or agent in
    connection with any Transfer of a Residual Certificate, (C) not to Transfer
    its Ownership Interest in a Residual Certificate or to cause the Transfer of
    an Ownership Interest in a Residual Certificate to any other Person if it
    has actual knowledge that such Person (i) is not a Permitted Transferee or
    that such Transfer Affidavit is false, (ii) if such transfer is for the
    purpose of impeding the assessment or collection of tax, (iii) if it has
    actual knowledge or reason to know that the proposed transferee would be
    unwilling or unable to pay taxes attributed to the Residual Certificate or
    (iv) if it has actual knowledge or reason to know that the proposed
    transferee will not honor the restrictions on subsequent transfers of the
    Residual Certificate set forth in this Section 5.02(c) and in the Transfer
    Affidavit, (D) to conduct a reasonable investigation of the financial
    condition of the proposed transferee and transfer its Ownership Interest in
    the Residual Certificate only if, as a result of such investigation, it
    concludes that the proposed transferee has historically paid its debts as
    they came due and will continue to pay its debts as they come due in the
    future, and (E) not to cause income from its Ownership Interest in a
    Residual Certificate to be attributable to a foreign permanent establishment
    or fixed base (within the meaning of an applicable income tax treaty) of the
    Person or another U.S. taxpayer.

         (iv) Any attempted or purported Transfer of any Ownership Interest in a
    Residual Certificate in violation of the provisions of this Section 5.02(c)
    shall be absolutely null and void and shall vest no rights in the purported
    Transferee. If any purported transferee shall become a Holder of a Residual
    Certificate in violation of the provisions of this Section 5.02(c), then the
    last preceding Permitted Transferee shall be restored to all rights as
    Holder thereof retroactive to the date of registration of Transfer of such
    Residual Certificate. The Trustee shall be under no liability to any Person
    for any registration of Transfer of a Residual Certificate that is in fact
    not permitted by Section 5.02(b) and this Section 5.02(c) or for making any
    payments due on such Certificate to the Holder thereof or taking any other
    action with respect to such Holder under the provisions of this Agreement so
    long as the Transfer was registered after receipt of the related Transfer
    Affidavit, Transferor Certificate and the Rule 144A Letter. The Trustee
    shall be entitled but not obligated to recover from any Holder of a Residual
    Certificate that was in fact not a Permitted Transferee at the time it
    became a Holder or, at such subsequent time as it became other than a
    Permitted Transferee, all payments made on such Residual Certificate at and
    after either such time. Any such payments so recovered by the Trustee shall
    be paid and delivered by the Trustee to the last preceding Permitted
    Transferee of such Certificate.

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         (v) The Depositor shall use its best efforts to make available, upon
    receipt of written request from the Trustee, all information necessary to
    compute any tax imposed under Section 860E(e) of the Code as a result of a
    Transfer of an Ownership Interest in a Residual Certificate to any Holder
    who is not a Permitted Transferee.

         The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion
of Counsel shall not be an expense of the Trust Fund, the Trustee, the
Unaffiliated Seller or the Servicer, to the effect that the elimination of such
restrictions will not cause the transfer to be disregarded under Treasury
Regulation 1.860E-1(c), cause the Trust Fund hereunder to fail to qualify as a
REMIC at any time that the Certificates are outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to
ensure that the record ownership of, or any beneficial interest in, a Residual
Certificate is not transferred, directly or indirectly, to a Person that is not
a Permitted Transferee and (b) to provide for a means to compel the Transfer of
a Residual Certificate which is held by a Person that is not a Permitted
Transferee to a Holder that is a Permitted Transferee.

         (d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.

         (e) Except as provided below, the Book-Entry Certificates shall at all
times remain registered in the name of the Depository or its nominee and at all
times: (i) registration of the Certificates may not be transferred by the
Trustee except to another Depository; (ii) the Depository shall maintain
book-entry records with respect to the Certificate Owners and with respect to
ownership and transfers of such Book-Entry Certificates; (iii) ownership and
transfers of registration of the Book-Entry Certificates on the books of the
Depository shall be governed by applicable rules established by the Depository;
(iv) the Depository may collect its usual and customary fees, charges and
expenses from its Depository Participants; (v) the Trustee shall deal with the
Depository, Depository Participants and indirect participating firms as
representatives of the Certificate Owners of the Book-Entry Certificates for
purposes of exercising the rights of holders under this Agreement, and requests
and directions for and votes of such representatives shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; and
(vi) the Trustee may rely and shall be fully protected in relying upon
information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners.

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.

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<PAGE>

         If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge
its responsibilities as Depository, and (ii) the Trustee or the Depositor is
unable to locate a qualified successor, (y) the Depositor at its option advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default, Certificate
Owners representing at least 51% of the Certificate Balance of the Book-Entry
Certificates together advise the Trustee and the Depository through the
Depository Participants in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Certificate
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,
fully-registered Certificates (the "Definitive Certificates") to Certificate
Owners requesting the same. Upon surrender to the Trustee of the related Class
of Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Trustee shall issue the Definitive
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be
liable for any delay in delivery of such instruction and each may conclusively
rely on, and shall be protected in relying on, such instructions. The Depositor
shall provide the Trustee with an adequate inventory of certificates to
facilitate the issuance and transfer of Definitive Certificates. Upon the
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such
Definitive Certificates and the Trustee shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder; provided, that the
Trustee shall not by virtue of its assumption of such obligations become liable
to any party for any act or failure to act of the Depository.

         Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.

         If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate and (b) there is delivered to the Depositor, the Servicer,
the Certificate Insurer and the Trustee such security or indemnity as may be
required by them to hold each of them harmless, then, in the absence of notice
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, countersign and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible
evidence of ownership, as if originally issued, whether or not the lost, stolen
or destroyed Certificate shall be found at any time.

         Section 5.04 Persons Deemed Owners.

         The Servicer, the Trustee, the Depositor, the Certificate Insurer and
any agent of the Servicer, the Depositor, the Certificate Insurer or the Trustee
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this
Agreement and for all other purposes whatsoever, and neither

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the Servicer, the Trustee, the Depositor, the Certificate Insurer nor any agent
of the Servicer, the Depositor, the Certificate Insurer or the Trustee shall be
affected by any notice to the contrary.

         Section 5.05 Access to List of Certificateholders' Names and Addresses.

         If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication which such Certificateholders propose to transmit, or if the
Depositor or Servicer shall request such information in writing from the
Trustee, then the Trustee shall, within ten Business Days after the receipt of
such request, provide the Depositor, the Servicer or such Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Trustee, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Trustee shall not be held accountable by reason of the disclosure of any such
information as to the list of the Certificateholders hereunder, regardless of
the source from which such information was derived.

         Section 5.06 Maintenance of Office or Agency.

         The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may
be surrendered for registration of transfer or exchange. The Trustee initially
designates the offices of its agent for such purposes located at c/o DTC
Transfer Agent Services, 55 Water Street, Jeanette Park Entrance, New York, New
York 10041. The Trustee will give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.

         Section 5.07 Rights of the Certificate Insurer to Exercise Rights of
Class A-1 Certificateholders.

         By accepting its Class A-1 Certificate, each Class A-1
Certificateholder agrees that unless a Certificate Insurer Default exists, the
Certificate Insurer shall be deemed to be the Class A-1 Certificateholders for
all purposes (other than with respect to the receipt of payment on the Class A-1
Certificates) and shall have the right to exercise all rights of the Class A-1
Certificateholders under this Agreement and under the Class A-1 Certificates
without any further consent of the Class A-1 Certificateholders, including,
without limitation:

         (a) the right to require the Unaffiliated Seller to repurchase Mortgage
Loans pursuant to Section 2.03 to the extent set forth in such Section;

         (b) the right to give notices of breach or to terminate the rights and
obligations of the Servicer as servicer pursuant to Section 7.01;

         (c) the right to direct the actions of the Trustee during the
continuance of a Servicer default pursuant to Sections 3.24, 7.01 and 7.02;

         (d) the right to institute proceedings against the Servicer pursuant to
Section 7.01;

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         (e) the right to direct the Trustee to investigate certain matters
pursuant to Sections 8.01 and 8.02;

         (f) the right to remove the Trustee pursuant to Section 8.07; and

         (g) any rights or remedies expressly given the Class A-1
Certificateholders.

         In addition, each Certificateholder agrees that, subject to Section
10.11, unless a Certificate Insurer Default exists, the rights specifically
enumerated above may only be exercised by the Certificateholders with the prior
written consent of the Certificate Insurer.

         Section 5.08 Trustee To Act Solely with Consent of the Certificate
Insurer.

         Unless a Certificate Insurer Default exists, the Trustee shall not,
without the Certificate Insurer's consent or unless directed by the Certificate
Insurer:

         (a) terminate the rights and obligations of the Servicer as Servicer
pursuant to Section 7.01;

         (b) agree to any amendment pursuant to Section 10.01; or

         (c) undertake any litigation.

         The Certificate Insurer may, in writing and in its sole discretion
renounce all or any of its rights under this Agreement or any requirement for
the Certificate Insurer's consent for any period of time.

         Section 5.09 Mortgage Loans, Trust Fund and Accounts Held for Benefit
of the Certificate Insurer.

         (a) The Trustee shall hold the Trust Fund and the Custodial Files for
the benefit of the Certificateholders and the Certificate Insurer and all
references in this Agreement and in the Certificates to the benefit of Holders
of the Certificates shall be deemed to include the Certificate Insurer. The
Trustee shall follow all reasonable instructions and requests of the Certificate
Insurer to assist it to take action to preserve or enforce the Certificate
Insurer's rights or interests under this Agreement unless a Certificate Insurer
Default exists.

         (b) The Servicer hereby acknowledges and agrees that it shall service
the Mortgage Loans for the benefit of the Certificateholders and for the benefit
of the Certificate Insurer, and all references in this Agreement to the benefit
of or actions on behalf of the Certificateholders shall be deemed to include the
Certificate Insurer.

         Section 5.10 Certificate Insurer Default.

         Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if a Certificate Insurer Default exists, or if and
to the extent the Certificate Insurer has delivered its written renunciation of
all of its rights under this Agreement, all provisions of this Agreement which
(a) permit the Certificate Insurer to exercise rights of the Class A-1

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Certificateholders, (b) restrict the ability of the Certificateholders, the
Servicer or the Trustee to act without the consent or approval of the
Certificate Insurer, (c) provide that a particular act or thing must be
acceptable to the Certificate Insurer, (d) permit the Certificate Insurer to
direct (or otherwise to require) the actions of the Trustee, the Servicer or the
Certificateholders, (e) provide that any action or omission taken with the
consent, approval or authorization of the Certificate Insurer shall be
authorized hereunder or shall not subject the party taking or omitting to take
such action to any liability hereunder or (f) which have a similar effect, shall
be of no further force and effect and the Trustee shall administer the Trust
Fund and perform its obligations hereunder solely for the benefit of the Holders
of the Certificates. Nothing in the foregoing sentence, nor any action taken
pursuant thereto or in compliance therewith, shall be deemed to have released
the Certificate Insurer from any obligation or liability it may have to any
party or to the Class A-1 Certificateholders hereunder, under any other
agreement, instrument or document (including, without limitation, the
Certificate Insurance Policy) or under applicable law.

                                   ARTICLE VI

                         THE DEPOSITOR AND THE SERVICER

         Section 6.01 Respective Liabilities of the Depositor and the Servicer.

         The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by them herein.

         Section 6.02 Merger or Consolidation of the Depositor or the Servicer.

         The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federal savings bank, as
the case may be, under the laws of the United States or under the laws of one of
the states thereof and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.

         Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or the Servicer shall be a party, or any person succeeding to the
business of the Depositor or the Servicer, shall be the successor of the
Depositor or the Servicer, as the case may be, hereunder, without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell
mortgage loans to, and to service mortgage loans on behalf of, Fannie Mae or
FHLMC.

         The Servicer is and shall continue to be an institution which is a
Fannie Mae and FHLMC approved seller/servicer in good standing and shall
maintain a net worth of at least $30,000,000.

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         Section 6.03 Limitation on Liability of the Depositor, the Servicer and
Others.

         Neither the Depositor, the Servicer, the Trustee nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Servicer, the Trustee or any such Person against any breach of
representations or warranties made by it herein or protect the Depositor, the
Servicer, the Trustee or any such Person from any liability which would
otherwise be imposed by reasons of willful misfeasance, bad faith or negligence
(or with respect to the Depositor, gross negligence) in the performance of
duties or by reason of reckless disregard of obligations and duties hereunder.
The Depositor and any director, officer, employee or agent of the Depositor may
rely in good faith on any document of any kind prima facie properly executed and
submitted by any Person respecting any matters arising hereunder. The Depositor,
the Servicer, the Trustee and any director, officer, employee or agent of the
Depositor, the Servicer or the Trustee shall be indemnified by the Trust Fund
and held harmless against any loss, liability or expense incurred in connection
with any audit, controversy or judicial proceeding relating to a governmental
taxing authority or any legal action relating to this Agreement or the
Certificates (including, as to the Trustee, the undertaking of actions as
directed by the Unaffiliated Seller or the Certificate Insurer pursuant to
Section 2.03), other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence (or with respect to the Depositor,
gross negligence) in the performance of their respective duties hereunder or by
reason of reckless disregard of their respective obligations and duties
hereunder. The Depositor shall not be under any obligation to appear in,
prosecute or defend any legal action that is not incidental to its respective
duties hereunder and which in its opinion may involve it in any expense or
liability; provided, however, that the Depositor may in its discretion undertake
any such action (or direct the Trustee to undertake any such actions pursuant to
Section 2.03 hereof for the benefit of the Certificateholders) that it may deem
necessary or desirable in respect of this Agreement and the rights and duties of
the parties hereto and interests of the Trustee and the Certificateholders
hereunder. In such event, the legal expenses and costs of such action and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Depositor shall be entitled to be reimbursed therefor out of
the Collection Account.

         Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for
any action taken or for refraining from the taking of any action in good faith
pursuant to this Agreement; provided, however, that this provision shall not
protect the Servicer or any such person against any breach of warranties or
representations made herein, or failure to perform its obligations in compliance
with the terms of this Agreement, or any liability which would otherwise be
imposed by reason of any breach of the terms and conditions of this Agreement.
The Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer shall not be
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with
this Agreement and which in its opinion may involve it in any expenses or
liability; provided, however, that the Servicer may undertake any such action
which it may deem necessary or desirable in respect to this Agreement and the
rights and duties of the parties hereto. In such event, the legal expenses and
costs of such

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action and any liability resulting therefrom shall be expenses, costs and
liabilities of the Trust Fund, and the Servicer shall be entitled to be
reimbursed therefor out of the Collection Account. In the event the Servicer
agrees, at the request of the Depositor, to act on behalf of the Depositor in
any litigation relating to the origination of a Mortgage Loan, the Depositor
shall pay all expenses associated with the defense and management of such claim
(without reimbursement from the Trust Fund).

         Section 6.04 Limitation on Resignation of the Servicer.

         The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the
Servicer, the Certificate Insurer, the Depositor and the Trustee or upon the
determination that its duties hereunder are no longer permissible under
applicable law and such incapacity cannot be cured by the Servicer. Any such
determination permitting the resignation of the Servicer shall be evidenced by
an Opinion of Counsel to such effect delivered to the Depositor and the Trustee
which Opinion of Counsel shall be in form and substance acceptable to the
Depositor and the Trustee. No such resignation shall become effective until a
successor shall have assumed the Servicer's responsibilities and obligations
hereunder. Notwithstanding anything to the contrary herein, the Servicer may
pledge or assign as collateral all its rights, title and interest under this
Agreement to a lender (the "Lender"); provided that the Lender may only
terminate the Servicer under this Agreement if there has been an Event of
Default under this Agreement, in which event the Lender may replace the Servicer
in the same manner and subject to the same conditions applicable in the event
the Servicer is appointing a successor Servicer upon a servicer termination
pursuant to Section 7.02.

         Section 6.05 Additional Indemnification by the Servicer; Third Party
Claims.

         The Servicer shall indemnify the Depositor, the Unaffiliated Seller and
the Trustee and hold them harmless against any and all claims, losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments, and any other costs, fees and expenses that any of them may
sustain in any way related to any breach by the Servicer, of any of its
representations and warranties referred to in Section 2.03(a)(i) or the failure
of the Servicer to perform its duties and service the Mortgage Loans in
compliance with the terms of this Agreement. The Servicer shall indemnify the
Unaffiliated Seller and the Trust Fund and hold it harmless against any and all
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses
that it may sustain in any way related to any breach by the Servicer, of any of
its representations and warranties referred to in Section 2.03(a)(ii). The
Servicer immediately shall notify the Depositor, the Unaffiliated Seller and the
Trustee if a claim is made by a third party with respect to any such breach or
failure by the Servicer under this Agreement, assume (with the prior written
consent of the Depositor, the Unaffiliated Seller and the Trustee) the defense
of any such claim and pay all expenses in connection therewith, including
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Depositor, the Unaffiliated Seller
or the Trustee in respect of such claim; provided, that if it is determined that
the Servicer is not obligated to indemnify such parties in accordance with this
Section 6.05, each such party (or the Trust Fund, if applicable) shall promptly
reimburse the Servicer in connection with each of the foregoing payments made to
such party by the Servicer.

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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01 Events of Default.

         "Event of Default," wherever used herein, means any one of the
following events:

         (a) any failure by the Servicer to remit to the Trustee any payment
required to be made under the terms of this Agreement which continues unremedied
for a period of one Business Day after the date upon which written notice of
such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor, by the Certificate Insurer or by the Trustee or to
the Trustee by Certificateholders evidencing percentage interests of at least
25% in the Certificates; or

         (b) failure on the part of the Servicer duly to observe or perform in
any material respect any other of the covenants or agreements on the part of the
Servicer set forth in this Agreement which continues unremedied for a period of
forty-five days (except that such number of days shall be fifteen in the case of
a failure to pay any premium for any insurance policy required to be maintained
under this Agreement) after the earlier of (i) the date on which written notice
of such failure, requiring the same to be remedied, shall have been given to the
Servicer by the Depositor, by the Certificate Insurer, or by the Trustee, or to
the Trustee by Certificateholders of Certificates evidencing percentage
interests of at least 25% in the Certificates and (ii) actual knowledge of such
failure by a Servicing Officer of the Servicer; or

         (c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling of
assets and liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the Servicer and
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or

         (d) the Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to
the Servicer or of or relating to all or substantially all of its property; or

         (e) the Servicer shall admit in writing its inability to pay its debts
generally as they become due, file a petition to take advantage of any
applicable insolvency or reorganization statute, make an assignment for the
benefit of its creditors, or voluntarily suspend payment of its obligations; or

         (f) any failure by the Servicer of the Servicer Termination Test; or

         (g) any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01
which continues unremedied for one Business Day immediately following the
Remittance Date; or

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         (h) a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders or the Certificate Insurer and which
continues unremedied for a period of thirty days after the earlier of (i) the
date upon which written notice of such breach is given to the Servicer by the
Trustee or the Depositor, or to the Servicer, the Depositor, the Certificate
Insurer and the Trustee by any Certificateholders entitled to at least 25% of
the Voting Rights in the Certificates or by the Certificate Insurer and (ii)
actual knowledge of such breach by a Servicing Officer of the Servicer; or

         (i) any reduction, withdrawal or qualification of the Servicer's
servicer rating by any Rating Agency which results in the Servicer being deemed
unacceptable by any Rating Agency to act as a primary servicer for this
transaction or a primary servicer or a special servicer for any other
mortgage-backed or asset-backed transaction rated or to be rated by any such
Rating Agency; or

         (j) the Certificate Insurer notifies the Trustee in writing of any
uncured "event of default" (as such term is used in the Insurance and Indemnity
Agreement) by the Servicer under the Insurance and Indemnity Agreement.

         If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, subject to Section 5.08(a), or at the direction of the Certificate Insurer,
or of Holders holding at least 51% of the Voting Rights, the Trustee shall, by
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the Trustee shall not be
required to give written notice to the Servicer of the occurrence of an Event of
Default described in clauses (b) through (i) of this Section 7.01 unless and
until a Responsible Officer of the Trustee has actual knowledge of the
occurrence of such an Event of Default. On and after the receipt by the Servicer
of such written notice, all authority and power of the Servicer hereunder,
whether with respect to the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee. The Trustee shall make any P&I Advance which the Servicer
failed to make subject to Section 4.01, whether or not the obligations of the
Servicer have been terminated pursuant to this Section. The Trustee is hereby
authorized and empowered to execute and deliver, on behalf of the Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including,
without limitation, the transfer to the Trustee of all cash amounts which shall
at the time be credited to the Collection Account, or thereafter be received
with respect to the Mortgage Loans.

         Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice
terminating such Servicer's rights and

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obligations as Servicer hereunder and received after such notice, that portion
thereof to which such Servicer would have been entitled pursuant to Section
3.11, and any other amounts payable to such Servicer hereunder the entitlement
to which arose prior to the termination of its activities hereunder in
accordance with Section 3.11 and in the time period specified in Section 3.11.
The Servicer shall continue to be entitled to the benefits of Section 6.03,
notwithstanding any termination hereunder, with respect to events occurring
prior to such termination.

         Section 7.02 Trustee to Act; Appointment of Successor.

         On and after the time the Servicer receives a notice of termination
pursuant to Section 3.24 or Section 7.01, subject to the third paragraph of this
Section 7.02, the Trustee shall, unless the Certificate Insurer shall have named
an alternative successor Servicer and given written notice thereof to the
Trustee of at least 30 days prior to the effective date of the transfer of
servicing to such successor, subject to and to the extent provided in Section
3.05, be the successor to the Servicer in its capacity as servicer under this
Agreement and the transactions set forth or provided for herein and shall be
subject to all the responsibilities, duties and liabilities relating thereto
placed on the Servicer by the terms and provisions hereof and applicable law
including the obligation to make P&I Advances or Servicing Advances pursuant to
Section 4.01. As compensation therefor, the Trustee shall be entitled to all
funds relating to the Mortgage Loans that the Servicer would have been entitled
to charge to the Collection Account or Distribution Account if the Servicer had
continued to act hereunder including, if the Servicer was receiving the
Servicing Fee, the Servicing Fee and the income on investments or gain related
to the Collection Account and Distribution Account.

         Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01 or if it is
otherwise unable to so act, appoint, or petition a court of competent
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the
Certificates by each Rating Agency, as the successor to the Servicer hereunder
in the assumption of all or any part of the responsibilities, duties or
liabilities of the Servicer hereunder. Any successor to the Servicer shall be an
institution which is a Fannie Mae and FHLMC approved seller/servicer in good
standing, which has a net worth of at least $30,000,000, which is willing to
service the Mortgage Loans and which executes and delivers to the Depositor and
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,
obligations and liabilities of the Servicer (other than liabilities of the
Servicer under Section 6.03 incurred prior to termination of the Servicer under
Section 7.01), with like effect as if originally named as a party to this
Agreement; provided that each Rating Agency acknowledges that its rating of the
Certificates in effect immediately prior to such assignment and delegation will
not be qualified or reduced, as a result of such assignment and delegation.
Pending appointment of a successor to the Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall, subject to
Section 3.05, act in such capacity as hereinabove provided. In connection with
such appointment and assumption, the Trustee may make such arrangements for the
compensation of such successor out of payments on Mortgage Loans as it and such
successor shall agree; provided, however, that no such compensation shall be in
excess of the Servicing Fee Rate and amounts paid to the Servicer from

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investments. The Trustee and such successor shall take such action, consistent
with this Agreement, as shall be necessary to effectuate any such succession.
Neither the Trustee nor any other successor servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making, any
distribution hereunder or any portion thereof or any failure to perform, or any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Servicer to deliver or provide, or any delay in
delivering or providing, any cash, information, documents or records to it.

         Notwithstanding any provision in this Agreement to the contrary, prior
to the 20th day following the notice of termination of the Servicer and with the
consent of the Certificate Insurer (such consent not to be unreasonably
withheld, delayed or conditioned), the terminated Servicer may appoint a
successor Servicer that satisfies the eligibility criteria of a successor
Servicer set forth in this Section 7.02; provided such successor Servicer agrees
to fully effect the servicing transfer within 90 days following the termination
of the Servicer and to make all P&I Advances and Servicing Advances that would
otherwise be made by the Trustee under this Section 7.02 as of the date of such
appointment and prior thereto, the terminated Servicer makes all P&I Advances
and Servicing Advances; otherwise the Trustee shall appoint a successor Servicer
as otherwise set forth in this Section 7.02. Any proceeds received in connection
with the appointment of such successor Servicer shall be the property of the
terminated Servicer or its designee.

         Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service
as servicer, maintain in force the policy or policies that the Servicer is
required to maintain pursuant to Section 6.05.

         Section 7.03 Notification to Certificateholders.

         (a) Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders, the Certificate Insurer, the Unaffiliated Seller and to each
Rating Agency.

         (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Certificateholders, the Certificate
Insurer, the Unaffiliated Seller and each Rating Agency notice of each such
Event of Default hereunder known to the Trustee, unless such Event of Default
shall have been cured or waived.

                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         Section 8.01 Duties of the Trustee.

         The Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred and remains uncured, the
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in their exercise as a
prudent

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person would exercise or use under the circumstances in the conduct of such
person's own affairs.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form
required by this Agreement. The Trustee shall not be responsible for the
accuracy or content of any resolution, certificate, statement, opinion, report,
document, order, or other instrument.

         No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.

         Unless an Event of Default known to the Trustee has occurred and is
continuing,

         (a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;

         (b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and

         (c) the Trustee shall not be liable with respect to any action taken,
suffered, or omitted to be taken by it in good faith in accordance with the
direction of the Certificate Insurer, or of Holders of Certificates evidencing
not less than 25% of the Voting Rights of Certificates relating to the time,
method, and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee under this
Agreement.

         Section 8.02 Certain Matters Affecting the Trustee.

         Except as otherwise provided in Section 8.01:

         (a) the Trustee may request and rely upon and shall be protected in
acting or refraining from acting upon any resolution, Officer's Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to
ascertain or confirm the genuineness of any signature of any such party or
parties;

         (b) the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or
accountants and any Opinion of

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Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;

         (c) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;

         (d) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other paper
or document, unless requested in writing so to do by the Certificate Insurer, or
by Holders of Certificates evidencing not less than 25% of the Voting Rights
allocated to each Class of Certificates;

         (e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder;

         (f) the Trustee shall not be required to risk or expend its own funds
or otherwise incur any financial liability in the performance of any of its
duties or in the exercise of any of its rights or powers hereunder if it shall
have reasonable grounds for believing that repayment of such funds or adequate
indemnity against such risk or liability is not assured to it;

         (g) the Trustee shall not be liable for any loss on any investment of
funds pursuant to this Agreement (other than as issuer of the investment
security);

         (h) the Trustee shall not be deemed to have knowledge of an Event of
Default until a Responsible Officer of the Trustee shall have received written
notice thereof; and

         (i) the Trustee shall be under no obligation to exercise any of the
trusts, rights or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.

         Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.

         The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document other than with respect to the Trustee's execution and
countersignature of the Certificates. The Trustee shall not be accountable for
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or the Servicer.

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         The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to
otherwise perfect or maintain the perfection of any security interest or lien
granted to it hereunder (unless the Trustee shall have become the successor
Servicer).

         The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the
exercise of the powers and authority conferred and vested in it by this
Agreement. Each of the undertakings and agreements made on the part of the
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended
for the purpose of binding only the Trust Fund.

         Section 8.04 Trustee May Own Certificates.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it
were not the Trustee.

         Section 8.05 Trustee's Fees and Expenses.

         (a) As compensation for its activities under this Agreement, the
Trustee may withdraw from the Distribution Account on each Distribution Date the
Trustee Fee for the Distribution Date. The Trustee and any director, officer,
employee, or agent of the Trustee shall be indemnified by the Servicer against
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any failure by the Servicer to perform its obligations under this
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement.

         The Trustee shall not be entitled to payment or reimbursement from the
Unaffiliated Seller for any routine ongoing expenses incurred by the Trustee in
the ordinary course of its duties as Trustee, Registrar, or paying agent under
this Agreement or for any other expenses, including indemnification payments,
except as set forth herein.

         Section 8.06 Eligibility Requirements for the Trustee.

         The Trustee hereunder shall at all times be a corporation or
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, subject
to supervision or examination by federal or state authority and with a credit
rating which would not cause either of the Rating Agencies to reduce their
respective then current ratings of the Certificates (or having provided such
security from time to time as is sufficient to avoid such reduction) as
evidenced in writing by each Rating Agency. If such corporation or association
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section 8.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with this
Section 8.06, the Trustee shall resign immediately in the manner and with the
effect specified in Section 8.07. The entity serving as Trustee may have normal
banking and trust relationships

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with the Depositor and its affiliates or the Servicer and its affiliates;
provided, however, that such entity cannot be an affiliate of the Depositor, the
Unaffiliated Seller or the Servicer other than the Trustee in its role as
successor to the Servicer.

         Section 8.07 Resignation and Removal of the Trustee.

         The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the
Servicer, the Certificate Insurer, the Unaffiliated Seller, each Rating Agency
not less than 60 days before the date specified in such notice, when, subject to
Section 8.08, such resignation is to take effect, and acceptance by a successor
trustee in accordance with Section 8.08 meeting the qualifications set forth in
Section 8.06. If no successor trustee meeting such qualifications shall have
been so appointed and have accepted appointment within 30 days after the giving
of such notice or resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.

         If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee reasonably acceptable to the Certificate Insurer by
written instrument, in triplicate, one copy of which shall be delivered to the
Trustee, one copy to the Servicer and one copy to the successor trustee.

         The Certificate Insurer or the Holders of Certificates entitled to at
least 51% of the Voting Rights may at any time remove the Trustee and appoint a
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of
which shall be delivered by the successor Trustee to the Servicer, one complete
set to the Trustee so removed and one complete set to the successor so
appointed. The successor trustee shall notify each Rating Agency of any removal
of the Trustee.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.

         Section 8.08 Successor Trustee.

         Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become fully vested with all the rights, powers, duties and
obligations of its predecessor hereunder, with the like effect as if originally
named as trustee

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herein. The Depositor, the Certificate Insurer, the Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties, and obligations.

         No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.

         Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.

         Section 8.09 Merger or Consolidation of the Trustee.

         Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder; provided that such corporation shall be eligible under
Section 8.06 without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.

         Section 8.10 Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which
any part of the Trust Fund or property securing any Mortgage Note may at the
time be located, the Servicer and the Trustee acting jointly shall have the
power and shall execute and deliver all instruments to appoint one or more
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
Servicer and the Trustee may consider appropriate. If the Servicer shall not
have joined in such appointment within 15 days after the receipt by it of a
request to do so, or in the case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 and no notice to
Certificateholders of the appointment of any co-trustee or separate trustee
shall be required under Section 8.08.

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

         (a) To the extent necessary to effectuate the purposes of this Section
8.10, all rights, powers, duties and obligations conferred or imposed upon the
Trustee, except for the obligation of the Trustee under this Agreement to
advance funds on behalf of the Servicer, shall

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<PAGE>

be conferred or imposed upon and exercised or performed by the Trustee and such
separate trustee or co-trustee jointly (it being understood that such separate
trustee or co-trustee is not authorized to act separately without the Trustee
joining in such act), except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed (whether as
Trustee hereunder or as successor to the Servicer hereunder), the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to the
applicable Trust Fund or any portion thereof in any such jurisdiction) shall be
exercised and performed singly by such separate trustee or co-trustee, but
solely at the direction of the Trustee;

         (b) No trustee hereunder shall be held personally liable because of any
act or omission of any other trustee hereunder and such appointment shall not,
and shall not be deemed to, constitute any such separate trustee or co-trustee
as agent of the Trustee;

         (c) The Trustee may at any time accept the resignation of or remove any
separate trustee or co-trustee; and

         (d) The Trustee, and not the Servicer, shall be liable for the payment
of reasonable compensation and expenses to any such separate trustee or
co-trustee from the Trustee Fee payable to the Trustee on each Distribution
Date.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the
Trustee. Every such instrument shall be filed with the Trustee and a copy
thereof given to the Servicer and the Depositor.

         Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

         Section 8.11 Tax Matters.

         As set forth in the Preliminary Statement, the assets within the Trust
Fund for which any REMIC election is to be made shall constitute, and the
conduct of matters relating to such assets shall be consistent with the
treatment of such assets as, a REMIC. To this end, the Trustee covenants and
agrees to act as agent (and the Trustee is hereby appointed to act as agent) on
behalf of any REMIC created hereunder, and that in such capacity it shall:

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         (a) prepare and file in a timely manner, a U.S. Real Estate Mortgage
Investment Conduit Income Tax Return (Form 1066 or any successor form adopted by
the Internal Revenue Service) and prepare and file with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to any REMIC described in the
Preliminary Statement containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;

         (b) within thirty days of the Closing Date, furnish to the Internal
Revenue Service on Form 8811 or as otherwise may be required by the Code, the
name, title, address, and telephone number of the person that the holders of the
Certificates may contact for tax information relating thereto, together with
such additional information as may be required by such Form, and update such
information at the time or times in the manner required by the Code;

         (c) make an election that each of the Lower Tier REMIC, the Middle Tier
REMIC and the Upper Tier REMIC be treated as a REMIC on the federal tax return
for its first taxable year (and, if necessary, under applicable state law);

         (d) prepare and forward to the Certificateholders and to the Internal
Revenue Service and, if necessary, state tax authorities, all information
returns and reports as and when required to be provided to them in accordance
with the REMIC Provisions, including the calculation of any original issue
discount using the Prepayment Assumption (as defined in the Prospectus
Supplement);

         (e) provide information necessary for the computation of tax imposed on
the transfer of a Residual Certificate to a Person that is not a Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);

         (f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status as a REMIC under the REMIC Provisions;

         (g) not knowingly or intentionally take any action or omit to take any
action that would cause the termination of the REMIC status of any REMIC created
hereunder;

         (h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any REMIC created hereunder
before its termination when and as the same shall be due and payable (but such
obligation shall not prevent the Trustee or any other appropriate Person from
contesting any such tax in appropriate proceedings and shall not prevent the
Trustee from withholding payment of such tax, if permitted by law, pending the
outcome of such proceedings);

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         (i) cause federal, state or local income tax or information returns to
be signed by the Trustee or such other person as may be required to sign such
returns by the Code or state or local laws, regulations or rules;

         (j) maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information; and

         (k) as and when necessary and appropriate, represent each REMIC created
hereunder in any administrative or judicial proceedings relating to an
examination or audit by any governmental taxing authority, request an
administrative adjustment as to any taxable year of each REMIC created
hereunder, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any REMIC created
hereunder, and otherwise act on behalf of the REMIC in relation to any tax
matter or controversy involving it.

         The Trustee shall treat the rights of the Class P Certificateholders to
Prepayment Charges as the beneficial ownership of interests in a grantor trust,
and not as an obligation of any REMIC created hereunder, for federal income tax
purposes.

         To enable the Trustee to perform its duties under this Agreement, the
Depositor shall provide to the Trustee within ten days after the Closing Date
all information or data that the Trustee requests in writing and determines to
be relevant for tax purposes to the valuations and offering prices of the
Certificates, including the price, yield, prepayment assumption, and projected
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor
shall provide information to the Trustee concerning the value to each Class of
Certificates of the right to receive Basis Risk Carry Forward Amounts from the
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the
Trustee promptly upon written request therefor any additional information or
data that the Trustee may, from time to time, reasonably request to enable the
Trustee to perform its duties under this Agreement. The Depositor hereby
indemnifies the Trustee for any losses, liabilities, damages, claims, or
expenses of the Trustee arising from any errors or miscalculations of the
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.

         If any tax is imposed on "prohibited transactions" of any REMIC created
hereunder as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of such REMIC as defined in Section 860G(c) of the Code,
on any contribution to the REMIC after the Startup Day pursuant to Section
860G(d) of the Code, or any other tax is imposed, including any minimum tax
imposed on the REMIC pursuant to Sections 23153 and 24874 of the California
Revenue and Taxation Code, if not paid as otherwise provided for herein, the tax
shall be paid by (i) the Trustee if such tax arises out of or results from
negligence of the Trustee in the performance of any of its obligations under
this Agreement, (ii) the Servicer if such tax arises out of or results from a
breach by the Servicer of any of its obligations under this Agreement, (iii) the
Unaffiliated Seller shall pay if such tax arises out of or results from the

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Unaffiliated Seller's obligation to repurchase a Mortgage Loan pursuant to
Section 2.03, or (iv) in all other cases, or if the Trustee, the Servicer or the
Unaffiliated Seller fails to honor its obligations under the preceding clauses
(i) or (ii), any such tax will be paid with amounts otherwise to be distributed
to the Certificateholders, as provided in Section 4.02(a).

         Section 8.12 Periodic Filings.

         (a) The Trustee and the Servicer shall reasonably cooperate with the
Depositor in connection with the Trust's satisfying the reporting requirements
under the Securities Exchange Act of 1934, as amended. The Trustee shall prepare
on behalf of the Trust any Forms 8-K and 10-K customary for similar securities
as required by the Exchange Act and the Rules and Regulations of the Securities
and Exchange Commission (the "SEC") thereunder, and the Trustee shall file (via
the SEC's Electronic Data Gathering and Retrieval System) such Forms with the
SEC on behalf of the Depositor. The Depositor hereby grants to the Trustee a
limited power of attorney to execute and file each such Form 8-K but only to the
extent no accompanying certification is required to be filed on behalf of the
Depositor. Such power of attorney shall continue until either the earlier of (i)
receipt by the Trustee from the Depositor of written termination of such power
of attorney and (ii) the termination of the Trust. The Depositor shall execute
the Form 10-K. The Trustee shall have no liability with respect to any failure
to properly prepare or file such periodic reports resulting from or relating to
the Trustee's inability or failure to obtain any information not resulting from
its own negligence or willful misconduct.

         (b) Each Form 8-K shall be filed by the Trustee with the SEC within 15
days after each Distribution Date, including a Form 8-K with a copy of the
statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to March 30th of each year (or such earlier date as may be
required by the Exchange Act and the Rules and Regulations of the SEC), the
Trustee shall file a Form 10-K, in substance as required by applicable law or
the SEC's staff interpretations. Such Form 10-K shall include as exhibits the
Servicer's annual statement of compliance described under Section 3.22 (upon
which the Trustee may rely) and the accountant's report described under Section
3.23, in each case to the extent they have been timely delivered to the Trustee.
If they are not so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are
delivered to the Trustee. The Form 10-K shall also include a certification in
the form attached hereto as Exhibit M (the "Certification"), which shall be
signed by the senior officer of the Depositor in charge of securitization. The
Trustee shall prepare and deliver each Form 10-K to the Depositor for execution
no later than March 20th (or if such day is not a Business Day, the immediately
preceding Business Day) of each year. The Depositor shall return the executed
Form 10-K to the Trustee for filing no later than March 25th (or if such day is
not a Business Day, the immediately preceding Business Day) of each year.

         (c) Notwithstanding that the Certification is to be signed by an
officer of the Depositor, a Responsible Officer of the Trustee shall sign a
certification, in the form attached hereto as Exhibit N for the benefit of the
Depositor and its officers, directors and Affiliates in respect of items 1
through 3 thereof of the Certification (provided, however, that the Trustee
shall not undertake an analysis of the accountant's report attached as an
exhibit to the Form 10-K), and a Servicing Officer of the Servicer who is
responsible for the servicing and

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administration of the Mortgage Loans shall sign a certification in the form
attached hereto as Exhibit N for the benefit of the Depositor, the Trustee and
their respective officers, directors and Affiliates in respect of items 4 and 5
of the Certification. Each such certification shall be delivered to the
Depositor and the Trustee (as applicable), no later than March 15th of each year
(or if such day is not a Business Day, the immediately preceding Business Day)
and the Depositor shall deliver the Certification to be filed to the Trustee no
later than March 20th of each year (or if such day is not a Business Day, the
immediately preceding Business Day). In the event that prior to the filing date
of the Form 10-K in March of each year, the Trustee or the Servicer has actual
knowledge of information material to the Certification, that party shall
promptly notify the Depositor and each of the other parties signing the
certifications. In addition, (i) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors and Affiliates from and against any
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments and other costs and expenses arising out of or
based upon any breach of the Trustee's obligations under this Section 8.12(c) or
the Trustee's negligence, bad faith or willful misconduct in connection
therewith and (ii) the Servicer shall indemnify and hold harmless the Depositor,
the Trustee and their respective officers, directors and Affiliates from and
against any losses, damages, penalties, fines, forfeitures, reasonable and
necessary legal fees and related costs, judgments and other costs and expenses
arising out of or based upon any breach of the Servicer's obligations under this
Section 8.12(c) or the Servicer's negligence, bad faith or willful misconduct in
connection therewith. If the indemnification provided for herein is unavailable
or insufficient to hold harmless the indemnified party then (i) the Trustee
agrees in connection with a breach of the Trustee's obligations under this
Section 8.12(c) or the Trustee's negligence, bad faith or willful misconduct in
connection therewith that it shall contribute to the amount paid or payable by
the Depositor as a result of the losses, claims, damages or liabilities of the
Depositor in such proportion as is appropriate to reflect the relative fault of
the Depositor on the one hand and the Trustee on the other and (ii) the Servicer
agrees that it shall contribute to the amount paid or payable by the Depositor
and/or the Trustee as a result of the losses, claims, damages or liabilities of
the Depositor and/or the Trustee in such proportion as is appropriate to reflect
the relative fault of the Depositor and the Trustee, as the case may be, on the
one hand and the Servicer on the other in connection with a breach of the
Servicer's obligations under this Section 8.12(c) or the Servicer's negligence,
bad faith or willful misconduct in connection therewith.

         (d) Upon any filing with the Securities and Exchange Commission, the
Trustee shall promptly deliver to the Depositor a copy of any such executed
report, statement or information.

         (e) Prior to January 30 of the first year in which the Trustee is able
to do so under applicable law, the Trustee shall, in accordance with applicable
law, file a Form 15D Suspension Notification with respect to the Trust Fund in a
timely manner.

         Section 8.13 Tax Classification of the Excess Reserve Fund Account.

         For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account as an outside reserve fund, within the meaning of Treasury
Regulation (section)1.860G-2(h), that is beneficially owned by the holder of the
Class X Certificate. The Trustee shall treat the rights that each Class of
Certificates has to receive payments of Basis Risk Carry Forward

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Amounts from the Excess Reserve Fund Account as rights to receive payments under
an interest rate cap contract written by the Class X Certificateholder in favor
of each Class. Accordingly, each Class of Certificates (excluding the Class X,
Class P and Class R Certificates) will comprise two components - an Upper Tier
Regular Interest and an interest in a notional principal contract. The Trustee
shall allocate the issue price for a Class of Certificates between such two
components for purposes of determining the issue price of the Upper Tier Regular
Interest component based on information received from the Depositor.

         Section 8.14 Cap Agreements.

         The Trustee is hereby authorized and directed to execute and deliver
the Cap Agreements and to acknowledge the provisions thereof.

                                   ARTICLE IX

                                   TERMINATION

         Section 9.01 Termination upon Liquidation or Purchase of the Mortgage
Loans.

         Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the purchase, on or after the
applicable Optional Termination Date, by the Servicer or the Class X
Certificateholders of all Mortgage Loans (and REO Properties) at the price equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan
(other than in respect of REO Property) plus accrued interest thereon at the
applicable Adjusted Mortgage Rate, (ii) the lesser of (x) the appraised value of
any REO Property as determined by the higher of two appraisals completed by two
independent appraisers selected by the Servicer at the expense of the Servicer
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO
Property, in each case plus accrued and unpaid interest thereon at the
applicable Adjusted Net Mortgage Rate and (iii) all costs and expenses incurred
by, or on behalf of, the Trust Fund, of which the Trustee has actual knowledge,
in connection with any violation by such Mortgage Loan of any predatory or
abusive-lending law (the "Termination Price") and (b) the later of (i) the
maturity or other liquidation (or any Advance with respect thereto) of the last
Mortgage Loan remaining in the Trust Fund and the disposition of all REO
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the
trusts created hereby continue beyond the expiration of 21 years from the death
of the survivor of the descendants of Joseph P. Kennedy, the late Ambassador of
the United States to the Court of St. James's, living on the date hereof.

         Notwithstanding the foregoing, if Standard & Poor's has rated a class
of debt securities ("Net Interest Margin Securities") that are backed by the
Class X Certificates and Class P Certificates and that are outstanding on any
date on which the Servicer intends to exercise its option to purchase the
Mortgage Loans, the Servicer will be permitted to exercise such option only if
one of the following additional conditions is met: (i) after distribution of the
Termination Price to the Certificateholders (other than the Holders of the Class
X Certificates, Class P Certificates and Class R Certificates) to redeem the
related Certificates, the remainder of the Termination Price (the "Remainder
Amount") is distributed to the Holders of the Class X

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Certificates and Class P Certificates and is sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the Net Interest Margin
Securities; or (ii) (A) at the same time that the Servicer remits the
Termination Price to the Trustee, it also remits to the Trustee an additional
amount which, in combination with the Remainder Amount, is sufficient to pay the
outstanding principal amount of and accrued and unpaid interest on the Net
Interest Margin Securities, and (B) the Trustee remits the Remainder Amount to
the Holders of the Class X Certificates and Class P Certificates and remits that
additional amount directly to the indenture trustee (plus any outstanding fees
and expenses due and owing to the indenture trustee) under the indenture
creating the Net Interest Margin Securities.

         No such purchase will be permitted without the consent of the
Certificate Insurer, unless no draw on the Certificate Insurance Policy would be
made and no amounts due to the Certificate Insurer would remain unreimbursed on
the final Distribution Date.

         Section 9.02 Final Distribution on the Certificates.

         If on any Determination Date, the Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other
than the funds in the Collection Account, the Servicer shall direct the Trustee
promptly to send a Notice of Final Distribution to each Certificateholder. If
the Servicer or the Class X Certificateholder elects to terminate the Trust Fund
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date the
Notice of Final Distribution is to be mailed to the affected Certificateholders
such electing party shall notify the Depositor and the Trustee of the date the
Servicer or the Class X Certificateholder intends to terminate the Trust Fund
and of the applicable repurchase price of the Mortgage Loans and REO Properties.

         A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Trustee by
letter to Certificateholders mailed not earlier than the 10th day and not later
than the 15th day of the month next preceding the month of such final
distribution. Any such Notice of Final Distribution shall specify (a) the
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein
designated, (b) the amount of such final distribution, (c) the location of the
office or agency at which such presentation and surrender must be made, and (d)
that the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice
of Final Distribution to each Rating Agency at the time such Notice of Final
Distribution is given to Certificateholders.

         In the event such Notice of Final Distribution is given, the Servicer
shall cause all funds in the Collection Account to be remitted to the Trustee
for deposit in the Distribution Account on the Business Day prior to the
applicable Distribution Date in an amount equal to the final distribution in
respect of the Certificates. Upon such final deposit with respect to the Trust
Fund and the receipt by the Trustee of a Request for Release therefor, the
Trustee shall promptly release to the Servicer the Custodial Files for the
Mortgage Loans.

                                      122
<PAGE>

         Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case on
the final Distribution Date and in the order set forth in Section 4.02, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates (except the Class X Certificate), the Certificate Balance
thereof plus for each such Class and the Class X Certificate accrued interest
thereon in the case of an interest-bearing Certificate and (ii) as to the
Residual Certificates, the amount, if any, which remains on deposit in the
Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.

         In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the
above mentioned written notice, the Trustee shall give a second written notice
to the remaining Certificateholders to surrender their Certificates for
cancellation and receive the final distribution with respect thereto. If within
six months after the second notice all the applicable Certificates shall not
have been surrendered for cancellation, the Trustee may take appropriate steps,
or may appoint an agent to take appropriate steps, to contact the remaining
Certificateholders concerning surrender of their Certificates, and the cost
thereof shall be paid out of the funds and other assets which remain a part of
the Trust Fund. If within one year after the second notice all Certificates
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund
which remain subject hereto.

         Section 9.03 Additional Termination Requirements.

         In the event the Servicer or the Class X Certificateholder, as
applicable, exercises its purchase option with respect to the Mortgage Loans as
provided in Section 9.01, the Trust Fund shall be terminated in accordance with
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer or the Class X
Certificateholder, as applicable, to the effect that the failure to comply with
the requirements of this Section 9.03 will not (i) result in the imposition of
taxes on "prohibited transactions" on either REMIC as defined in Section 860F of
the Code, or (ii) cause either the Lower Tier REMIC, the Middle Tier REMIC or
the Upper Tier REMIC to fail to qualify as a REMIC at any time that any
Certificates are outstanding:

         (a) The Trustee shall sell all of the assets of the Trust Fund to the
Servicer or the Class X Certificateholder, as applicable, and, within 90 days of
such sale, shall distribute to the Certificateholders the proceeds of such sale
in complete liquidation of each of the Lower Tier REMIC, the Middle Tier REMIC
and the Upper Tier REMIC.

         (b) The Trustee shall attach a statement to the final federal income
tax return for each of the Lower Tier REMIC, the Middle Tier REMIC and the Upper
Tier REMIC stating that pursuant to Treasury Regulation (section)1.860F-1, the
first day of the 90-day liquidation period for each such REMIC was the date on
which the Trustee sold the assets of the Trust Fund to the Servicer or the Class
X Certificateholder, as applicable.

                                      123
<PAGE>

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

         Section 10.01 Amendment.

         This Agreement may be amended from time to time (x) by the Depositor,
the Servicer and the Trustee, with the prior written consent of the Certificate
Insurer, (y) with the consent of the Unaffiliated Seller unless the Trustee
receives an Opinion of Counsel (which Opinion of Counsel shall not be an expense
of the Trustee or the Trust Fund) stating that the amendment will not adversely
affect the Unaffiliated Seller, but (z) without the consent of any of the
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any
defective provision herein or to supplement any provision herein which may be
inconsistent with any other provision herein, (iii) to add to the duties of the
Depositor or the Servicer, (iv) to add any other provisions with respect to
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided,
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the
Trustee or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that the amendment
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter
from each Rating Agency stating that the amendment would not result in the
downgrading or withdrawal of the respective ratings then assigned to the
Certificates; it being understood and agreed that any such letter in and of
itself will not represent a determination as to the materiality of any such
amendment and will represent a determination only as to the credit issues
affecting any such rating.

         In addition, this Agreement may also be amended from time to time (x)
by the Trustee, the Depositor and the Servicer, with the prior written consent
of the Certificate Insurer, and (y) with the consent of the Unaffiliated Seller
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel
shall not be an expense of the Trustee or the Trust Fund) stating that the
amendment will not adversely affect the Unaffiliated Seller, but (z) without the
consent of the Certificateholders, to modify, eliminate or add to any of its
provisions to such extent as shall be necessary or helpful to (i) maintain the
qualification of the Lower Tier REMIC, the Middle Tier REMIC and the Upper Tier
REMIC under the Code, (ii) avoid or minimize the risk of the imposition of any
tax on the Lower Tier REMIC, the Middle Tier REMIC or the Upper Tier REMIC
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; provided, that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.

         This Agreement may also be amended from time to time (x) by the
Depositor, the Servicer and the Trustee, with the prior written consent of the
Certificate Insurer, (y) with the consent of the Unaffiliated Seller unless the
Trustee receives an Opinion of Counsel (which

                                      124
<PAGE>

Opinion of Counsel shall not be an expense of the Trustee or the Trust Fund)
stating that the amendment will not adversely affect the Unaffiliated Seller,
and (z), except as set forth in Section 3.27, with the consent of the Holders of
Certificates evidencing Percentage Interests aggregating not less than 66-2/3%
of each Class of Certificates (based on the aggregate outstanding principal
balance of such class at such time) affected thereby, for the purpose of adding
any provisions to or changing in any manner or eliminating any of the provisions
of this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment shall (i) reduce in any
manner the amount of, or delay the timing of, payments required to be
distributed on any Certificate without the consent of the Holder of such
Certificate, (ii) adversely affect in any material respect the interests of the
Holders of any Class of Certificates in a manner other than as described in (i),
without the consent of the Holders of Certificates of such Class evidencing, as
to such Class, Percentage Interests aggregating not less than 66-2/3%, or (iii)
reduce the aforesaid percentages of Certificates the Holders of which are
required to consent to any such amendment, without the consent of the Holders of
all such Certificates then outstanding.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel, which opinion shall not be an expense of the
Trustee or the Trust Fund, to the effect that such amendment will not cause the
imposition of any tax on any REMIC or the Certificateholders or cause any REMIC
to fail to qualify as a REMIC at any time that any Certificates are outstanding.

         Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the
Depositor, the Unaffiliated Seller or any of their respective Affiliates shall
be deemed not to be outstanding (and shall not be considered when determining
the percentage of Certificateholders consenting or when calculating the total
number of Certificates entitled to consent) for purposes of determining if the
requisite consents of Certificateholders under this Section 10.01 have been
obtained.

         Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder and each Rating Agency.

         It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

         Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)
either (A) the amendment does not adversely affect in any material

                                      125
<PAGE>

respect the interests of any Certificateholder or (B) the conclusion set forth
in the immediately preceding clause (A) is not required to be reached pursuant
to this Section 10.01.

         Section 10.02 Recordation of Agreement; Counterparts.

         This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Servicer at its expense, but only upon
receipt of an Opinion of Counsel to the effect that such recordation materially
and beneficially affects the interests of the Certificateholders.

         For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

         Section 10.03 Governing Law.

         THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.

         Section 10.04 Intention of Parties.

         It is the express intent of the parties hereto that the conveyance (i)
of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the
parties, such assets are held to be the property of the Depositor, as the case
may be, or if for any other reason this Agreement is held or deemed to create a
security interest in either such assets, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of
the State of New York and (ii) the conveyances provided for in this Agreement
shall be deemed to be an assignment and a grant by the Depositor to the Trustee,
for the benefit of the Certificateholders, of a security interest in all of the
assets transferred, whether now owned or hereafter acquired.

         The Depositor for the benefit of the Certificateholders and of the
Certificate Insurer shall, to the extent consistent with this Agreement, take
such actions as may be necessary to ensure that, if this Agreement were deemed
to create a security interest in the Trust Fund, such security interest would be
deemed to be a perfected security interest of first priority under applicable
law and will be maintained as such throughout the term of the Agreement. The
Depositor shall arrange for filing any Uniform Commercial Code continuation
statements in connection with any security interest granted or assigned to the
Trustee for the benefit of the Certificateholders.

                                      126
<PAGE>

         Section 10.05 Notices.

         (a) The Trustee shall use its best efforts to promptly provide notice
to each Rating Agency with respect to each of the following of which it has
actual knowledge:

         1. Any material change or amendment to this Agreement;

         2. The occurrence of any Event of Default that has not been cured;

         3. The resignation or termination of the Servicer or the Trustee and
the appointment of any successor;

         4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.03; and

         5. The final payment to Certificateholders.

         (b) In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:

         1. Each report to Certificateholders described in Section 4.03; and

         2. Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.

         All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor or the Representative, Morgan Stanley ABS Capital I Inc. or Morgan
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention:
Michelle Wilke, Esq., (b) in the case of the Servicer, Ocwen Federal Bank FSB,
1675 Palm Beach Lakes Blvd., Suite 10A, West Palm Beach, Florida 33401,
Attention: Secretary, or such other address as may be hereafter furnished to the
parties hereto in writing, (c) in the case of the Trustee to the Corporate Trust
Office, Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa
Ana, California 92705-4934, Attention: Trust Administration DC03M4, or such
other address as the Trustee may hereafter furnish to the parties hereto, (d) in
the case of the Unaffiliated Seller, CDC Mortgage Capital, Inc., 9 West 57th
Street, New York, New York 10019, Attention: General Counsel, or such other
address as the Unaffiliated Seller may hereafter furnish to the parties hereto,
(e) in the case of each of the Rating Agencies, the address specified therefor
in the definition corresponding to the name of such Rating Agency and (f) in the
case of any Originator, the address specified therefor in the applicable
Mortgage Loan Purchase Agreement. Notices to Certificateholders shall be deemed
given when mailed, first class postage prepaid, to their respective addresses
appearing in the Certificate Register.

         Section 10.06 Severability of Provisions.

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements,

                                      127
<PAGE>

provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.

         Section 10.07 Assignment.

         Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee, the Certificate Insurer and
Depositor; provided, however, that, subject to Section 3.27, the Servicer may
pledge or sell its interest in any reimbursements for P&I Advances or Servicing
Advances hereunder.

         Section 10.08 Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such
Certificateholder's legal representative or heirs to claim an accounting or to
take any action or commence any proceeding in any court for a petition or
winding up of the trust created hereby, or otherwise affect the rights,
obligations and liabilities of the parties hereto or any of them.

         No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the
Trust Fund, or the obligations of the parties hereto, nor shall anything herein
set forth or contained in the terms of the Certificates be construed so as to
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.

         No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates, and the Certificate Insurer, shall also
have made written request to the Trustee to institute such action, suit or
proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity shall have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.

                                      128
<PAGE>

         Section 10.09 Inspection and Audit Rights.

         The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor, the Unaffiliated Seller, the Certificate
Insurer or the Trustee during the Servicer's normal business hours, to examine
all the books of account, records, reports and other papers of the Servicer
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the party conducting the inspection and to discuss its affairs, finances and
accounts relating to the Mortgage Loans with its officers, employees and
independent public accountants (and by this provision the Servicer hereby
authorizes said accountants to discuss with such representative such affairs,
finances and accounts), all at such reasonable times and as often as may be
reasonably requested. Any out-of-pocket expense of the Servicer incident to the
exercise by the Depositor, the Unaffiliated Seller, the Certificate Insurer or
the Trustee of any right under this Section 10.09 shall be borne by the
Servicer.

         Section 10.10 Certificates Nonassessable and Fully Paid.

         It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in
the Trust Fund represented by the Certificates shall be nonassessable for any
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.

         Section 10.11 The Certificate Insurer Default.

         Any right conferred to the Certificate Insurer shall be suspended
during any period in which a Certificate Insurer Default exists. At such time as
the Class A-1 Certificates are no longer outstanding hereunder, and no amounts
owed to the Certificate Insurer hereunder remain unpaid, the Certificate
Insurer's rights hereunder shall terminate.

         Section 10.12 Third Party Beneficiary.

         The parties agree that the Certificate Insurer is intended and shall
have all rights of a third-party beneficiary of this Agreement.

         Section 10.13 Waiver of Jury Trial.

         EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO
THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.

         Section 10.14 Limitation of Damages

         NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PARTIES
HERETO AGREE THAT NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY HERETO FOR
ANY SPECIAL, CONSEQUENTIAL OR

                                      129
<PAGE>

PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, TORT (INCLUDING NEGLIGENCE AND
STRICT LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE PRINCIPLES; PROVIDED THAT, THE
FOREGOING PROVISION SHALL NOT LIMIT OR RELIEVE ANY PARTY HERETO OF ANY
OBLIGATION UNDER THIS AGREEMENT TO INDEMNIFY ANY OTHER PARTY HERETO AGAINST (X)
ANY DAMAGES IMPOSED UPON SUCH PARTY BY ANY THIRD PARTY CLAIM OR ORDER, DECREE OR
ACTION OF ANY REGULATORY OR ADMINISTRATIVE BODY, OR (Y) WITH RESPECT TO ANY
LOSSES SUSTAINED OR EXPENSES INCURRED BY OR ON BEHALF OF THE TRUST (IT BEING
UNDERSTOOD THAT TRUST LOSSES CAUSED BY THE SERVICER'S FAILURE TO PERFORM ITS
DUTIES SHALL NOT BE CONSIDERED "CONSEQUENTIAL" OR "SPECIAL" DAMAGES FOR PURPOSES
OF THE LIMITATION PROVIDED ABOVE, AND SHALL BE COVERED BY THE INDEMNIFICATION
PROVIDED HEREIN).

                                  * * * * * * *

                                      130
<PAGE>

         IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated Seller
and the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.

                          MORGAN STANLEY ABS CAPITAL I INC.,
                                as Depositor

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

                          DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                solely as Trustee and not in its individual
                                capacity

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

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

                          OCWEN FEDERAL BANK FSB,
                               as Servicer

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

                          CDC MORTGAGE CAPITAL INC.,
                               as Unaffiliated Seller

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

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

<PAGE>

                                   SCHEDULE I

                             Mortgage Loan Schedule

                                       I-1
<PAGE>

                                   SCHEDULE I

                        Schedule of Ocwen Serviced Loans

                                      IA-1

<PAGE>

                                   SCHEDULE II

                       CDC MORTGAGE CAPITAL TRUST 2003-HE4

                       Mortgage Pass-Through Certificates,
                                 Series 2003-HE4

                 Representations and Warranties of the Servicer

         (1) The Servicer is a federally chartered savings bank duly organized,
validly existing and in good standing under the laws of the United States of
America and is duly authorized and qualified to transact any and all business
contemplated by this Pooling and Servicing Agreement to be conducted by the
Servicer in any state in which a Mortgaged Property is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement;

         (2) The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Pooling and Servicing Agreement
and has duly authorized by all necessary action on the part of the Servicer the
execution, delivery and performance of this Pooling and Servicing Agreement; and
this Pooling and Servicing Agreement, assuming the due authorization, execution
and delivery thereof by the other parties thereto, constitutes a legal, valid
and binding obligation of the Servicer, enforceable against the Servicer in
accordance with its terms, except to the extent that (a) the enforceability
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and
other similar laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be
subject to the equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought;

         (3) The execution and delivery of this Pooling and Servicing Agreement
by the Servicer, the servicing of the Mortgage Loans by the Servicer hereunder,
the consummation by the Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are in
the ordinary course of business of the Servicer and will not (A) result in a
breach of any term or provision of the organizational documents of the Servicer
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which the Servicer is a party or by which it may be bound, or any
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the
Servicer; and the Servicer is not a party to, bound by, or in breach or
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of

                                      II-1
<PAGE>

any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the
Servicer's knowledge, would in the future materially and adversely affect, (x)
the ability of the Servicer to perform its obligations under this Pooling and
Servicing Agreement or (y) the business, operations, financial condition,
properties or assets of the Servicer taken as a whole;

         (4) The Servicer is an approved seller/servicer for Fannie Mae or
Freddie Mac in good standing;

         (5) No litigation is pending against the Servicer that would materially
and adversely affect the execution, delivery or enforceability of this Pooling
and Servicing Agreement or the ability of the Servicer to service the Mortgage
Loans or to perform any of its other obligations hereunder in accordance with
the terms hereof;

         (6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by the Servicer of, or compliance by the Servicer with, this Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions
contemplated by this Pooling and Servicing Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date; and

         (7) The Servicer represents that its computer and other systems used in
servicing the Mortgage Loans operate in a manner such that the Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement.

                                      II-2
<PAGE>

                                  SCHEDULE IIA

             Further Representations and Warranties of the Servicer

         (1) Mortgage Loan Schedule. With respect to each Mortgage Loan, as of
the applicable Cut-off Date, each of (1) the last Due Date on which a payment
was actually applied to the outstanding principal balance of each Mortgage Loan;
(2) the Stated Principal Balance of each Mortgage Loan, after deduction of
payments of principal due and collected on or before the applicable Cut-off
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in each case,
as listed on the Mortgage Loan Schedule, is true and correct;

         (2) Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled Payment
is 30 days or more Delinquent as of the Cut-off Date nor has any Payment been 30
days or more Delinquent at any time from and after the Servicing Transfer Date;

         (3) Original Terms Unmodified. With respect to each Mortgage Loan, the
terms of the Mortgage Note and Mortgage have not been impaired, waived, altered
or modified by the Servicer (or to its knowledge by any other Person) in any
material respect from and after the Servicing Transfer Date;

         (4) No Satisfaction of Mortgage. With respect to each Mortgage Loan,
since the related Servicing Transfer Date and except for prepayments in full,
the Mortgage has not been satisfied, cancelled, subordinated or rescinded by the
Servicer (or to its knowledge by any other Person), in whole or in part, and the
Mortgaged Property has not been released from the lien of the Mortgage by the
Servicer (or to its knowledge by any other Person), in whole or in part, nor has
any instrument been executed by the Servicer (or to its knowledge by any other
Person) that would effect any such release, cancellation, subordination or
rescission. From and after the Servicing Transfer Date, the Servicer has not
waived the performance by the Mortgagor of any material action, if the
Mortgagor's failure to perform such action would cause the Mortgage Loan to be
in default, nor has the Servicer waived any material default resulting from any
action or inaction by the Mortgagor;

         (5) No Defaults. With respect to each Mortgage Loan, other than
payments due but not yet 30 days Delinquent, to the Servicer's knowledge, there
is no material default, breach, violation or event which would permit
acceleration existing under the Mortgage or the Mortgage Note;

         (6) Mortgaged Property Undamaged; No Condemnation Proceedings. With
respect to each Mortgage Loan, to the Servicer's knowledge, there is no
proceeding pending or threatened for the total or partial condemnation of the
Mortgaged Property. To the Servicer's knowledge, the related Mortgaged Property
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the related
Mortgaged Property as security for the Mortgage Loan or the use for which the
premises were intended and each related Mortgaged Property is in good repair;

         (7) Escrow Payments/Interest Rate Adjustments. With respect to each
Mortgage Loan, since the Servicing Transfer Date, the servicing and collection
practices used by

                                     II-A-1
<PAGE>

the Servicer with respect to such Mortgage Loan have been in
all material respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all material respects legal
and proper. With respect to escrow deposits and Escrow Payments, if any, all
such deposits and payments received by the Servicer are in the possession of, or
under the control of, the Servicer and there exist no deficiencies in connection
therewith for which customary arrangements for repayment thereof have not been
made. All Escrow Payments have been collected in full compliance with state and
federal law and the provisions of the related Mortgage Note and Mortgage. From
and after the Servicing Transfer Date, all Mortgage Rate adjustments (if any)
have been made in strict compliance with state and federal law and the terms of
the related Mortgage Note;

         (8) Other Insurance Policies. With respect to each Mortgage Loan, from
and after the Servicing Transfer Date, to the Servicer's knowledge, no action,
inaction or event has occurred and no state of facts exists or has existed that
has resulted or will result in the exclusion from, denial of, or defense to
coverage under any insurance policy related to such Mortgage Loan, irrespective
of the cause of such failure of coverage;

         (9) No Violation of Environmental Laws. With respect to each Mortgage
Loan, to the Servicer's knowledge, there is no pending action or proceeding
directly involving the related Mortgaged Property in which compliance with any
environmental law, rule or regulation is an issue; to the Servicer's knowledge,
there is no violation of any environmental law, rule or regulation with respect
to the related Mortgaged Property; and

         (10) Soldiers' and Sailors' Civil Relief Act. With respect to each
Mortgage Loan, no Mortgagor has notified the Servicer, and the Servicer has no
knowledge, of any relief requested or allowed to the Mortgagor under the
Soldiers' and Sailors' Civil Relief Act of 1940 or any similar state or local
law.

                                     II-A-2

<PAGE>

                                  SCHEDULE III

(a)      Due Organization and Authority. 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 wherein it owns or leases any
         material properties or where a Mortgaged Property is located, if the
         laws of such state require licensing or qualification in order to
         conduct business of the type conducted by the Unaffiliated Seller, and
         in any event the Unaffiliated Seller is in compliance with the laws of
         any such state to the extent necessary; the Unaffiliated Seller has the
         full corporate power, authority and legal right to execute and deliver
         this Agreement and to perform its obligations hereunder; the execution,
         delivery and performance of this Agreement by the Unaffiliated Seller
         and the consummation of the transactions contemplated hereby have been
         duly and validly authorized; this Agreement and all agreements
         contemplated hereby have been duly executed and delivered and
         constitute the valid, legal, binding and enforceable obligations of the
         Unaffiliated Seller, regardless of whether such enforcement is sought
         in a proceeding in equity or at law; and all requisite corporate action
         has been taken by the Unaffiliated Seller to make this Agreement and
         all agreements contemplated hereby valid and binding upon the
         Unaffiliated Seller in accordance with their terms;

(b)      No Conflicts. Neither the execution and delivery of this Agreement, the
         consummation of the transactions contemplated hereby, nor the
         fulfillment of or compliance with the terms and conditions of this
         Agreement, 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 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 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 creation or imposition of any lien, charge or encumbrance that
         would have an adverse effect upon any of its properties pursuant to the
         terms of any mortgage, contract, deed of trust or other instrument;

(c)      No Litigation Pending. There is no action, suit, proceeding or
         investigation pending nor, to the Unaffiliated Seller's knowledge,
         threatened against the Unaffiliated Seller, before any court,
         administrative agency or other tribunal asserting the invalidity of
         this Agreement, seeking to prevent the consummation of any of the
         transactions contemplated by this Agreement or 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 or of any action taken or to be taken in
         connection with the obligations of the Unaffiliated Seller contemplated
         herein, or

                                      III-1
<PAGE>

         which would be likely to impair materially the ability of the
         Unaffiliated Seller to perform under the terms of this Agreement;

(d)      No Consent Required. No consent, approval, authorization or order of,
         or registration or filing with, or notice to any court or governmental
         agency or body including HUD, the FHA or the VA is required for the
         execution, delivery and performance by the Unaffiliated Seller of or
         compliance by the Unaffiliated Seller with 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;

                                      III-2

<PAGE>

                                    EXHIBIT A

Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER
ASSETS.

Certificate No.                     :  [A-1-1/A-2-1/A-3-1/M-1-1/
                                       M-2-1/M-3-1/B-1-1/B-2-1/B-3-1]

Cut-off Date                        :  November 1, 2003

First Distribution Date             :  December 25, 2003

Initial Certificate Balance of this :  A-1 $200,000,000
Certificate ("Denomination")

                                                 A-2 $301,100,000

                                                 A-3 $122,316,000

                                                 M-1 $49,417,000

                                                 M-2 $38,013,000

                                                 M-3 $11,404,000

                                                 B-1 $11,404,000

                                                 B-2 $7,603,000

                                                 B-3 $8,743,000

                                      A-1
<PAGE>

Initial Certificate Balances of all   :          A-1 $200,000,000
Certificates of this Class

                                                 A-2 $301,100,000

                                                 A-3 $122,316,000

                                                 M-1 $49,417,000

                                                 M-2 $38,013,000

                                                 M-3 $11,404,000

                                                 B-1 $11,404,000

                                                 B-2 $7,603,000

                                                 B-3 $8,743,000

CUSIP                                 :          A-1 [___________]

                                                 A-2 [___________]

                                                 A-3 [___________]

                                                 M-1 [___________]

                                                 M-2 [___________]

                                                 M-3 [___________]

                                                 B-1 [___________]

                                                 B-2 [___________]

                                                 B-3 [___________]

                                      A-2
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.

                       CDC Mortgage Capital Trust 2003-HE4
                   Mortgage Pass-Through Certificates, Series
               2003-HE4 [Class A-1] [Class A-2] [Class A-3]
                             [Class M-1] [Class M-2]
                 [Class M-3] [Class B-1] [Class B-2] [Class B-3]

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class.

         Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Unaffiliated Seller, any Originator, the Servicer or the Trustee
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.

         This certifies that CEDE & CO., is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      * * *

                                      A-3
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        not in its individual capacity, but
                                        solely as Trustee

                                     By:
                                        ----------------------------------------

Countersigned:

By:
   ----------------------------------
   Authorized Signatory of
   DEUTSCHE BANK NATIONAL TRUST COMPANY,
   not in its individual capacity,
   but solely as Trustee

                                      A-4
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

         This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through
Certificates, Series 2003-HE4 (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the Business Date immediately preceding such Distribution Date; provided,
however, that for any Definitive Certificates, the Record Date shall be the last
Business Day of the month next preceding the month of such Distribution Date.

         Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes, or such other location specified in the notice to Certificateholders
of such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate
Insurer, with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement.

                                      A-5
<PAGE>

Any such consent by the Holder of this Certificate shall be conclusive and
binding on such Holder and upon all future Holders of this Certificate and of
any Certificate issued upon the transfer hereof or in exchange therefor or in
lieu hereof whether or not notation of such consent is made upon this
Certificate. The Agreement also permits the amendment thereof, in certain
limited circumstances, without the consent of the Holders of any of the
Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the offices designated by the Trustee for such purposes, accompanied
by a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and no such party shall be affected by any notice to the contrary.

                  On any Distribution Date on which the aggregate Stated
Principal Balance of the Mortgage Loans, as of the last day of the related Due
Period, is less than or equal to 10% of the Maximum Pool Principal Balance, the
Servicer and/or the Class X Certificateholders will have the option to
repurchase, in whole, from the Trust Fund all remaining Mortgage Loans and all
property acquired in respect of the Mortgage Loans at a purchase price
determined as provided in the Agreement. The obligations and responsibilities
created by the Agreement will terminate as provided in Section 9.01 of the
Agreement.

         Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                      A-6
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
                 ---------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:

-------------------------------------------------------------------------------.

Dated:

                                     -------------------------------------------
                                         Signature by or on behalf of assignor

                                      A-7
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________,

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                      A-8
<PAGE>

                                    EXHIBIT B

                                   [Reserved]

                                       B-1

<PAGE>

                                    EXHIBIT C

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE
CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER. ANY PURPORTED
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH
IN THE AGREEMENT SHALL BE VOID AND OF NO EFFECT.

Certificate No.                              :              1

Cut-off Date                                 :              November 1, 2003

First Distribution Date                      :              December 25, 2003

Percentage Interest of this Certificate
("Denomination")                             :              100%

Principal Balance                            :              $100

CUSIP                                        :              N/A

                                      C-1
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

                                     Class P

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class.

         Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Unaffiliated Seller,
the Servicer or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.

         This certifies that __________________, is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         This Certificate does not have a Pass-Through Rate and will be entitled
to distributions only to the extent set forth in the Agreement. In addition, any
distribution of the proceeds of any remaining assets of the Trust will be made
only upon presentment and surrender of this Certificate at the offices
designated by the Trustee for such purpose, or the office or agency maintained
by the Trustee.

         No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Agreement) and deliver
either (i) a Rule 144A Letter, in either case substantially in the form attached
to the Agreement, or (ii) a written Opinion of Counsel to the Trustee that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall be an expense of the transferor.

         Except as provided in the Agreement, no transfer of a Certificate of
this Class shall be made unless the Trustee shall have received a representation
letter from the transferee of

                                      C-2
<PAGE>

this Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Title I of ERISA, Section 4975 of the Code or any Similar
Law, and is not acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer. Any purported
transfer of a Certificate of this Class in violation of the transfer
restrictions set forth in the Agreement shall be void and of no effect.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      * * *

                                      C-3
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                       DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                          not in its individual capacity, but
                                          solely as Trustee

                                       By:
                                          --------------------------------------

Countersigned:

By:
   --------------------------------------
   Authorized Signatory of
   DEUTSCHE BANK NATIONAL TRUST COMPANY,
   not in its individual capacity,
   but solely as Trustee

                                      C-4
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

         This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through
Certificates, Series 2003-HE4 (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.

         Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., Certificate
Insurer with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the

                                      C-5
<PAGE>

transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York, accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and no such party shall be affected by any notice to the contrary.

         On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is
less than or equal to 10% of the Maximum Pool Principal Balance, the Servicer
and/or the Class X Certificateholders will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.

         Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                      C-6
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
                  --------------------------------------------------------------

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

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

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

--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:

-------------------------------------------------------------------------------.

Dated:

                                 -----------------------------------------------
                                       Signature by or on behalf of assignor

                                      C-7
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________,

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                       C-8

<PAGE>

                                    EXHIBIT D

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THREE
"RESIDUAL INTERESTS" IN THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR
ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE
FOREGOING PROVISIONS OF ERISA OR THE CODE, OR A PERSON ACTING ON BEHALF OF ANY
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO
EFFECT SUCH TRANSFER. ANY PURPORTED TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE TRANSFER RESTRICTIONS SET FORTH IN THE AGREEMENT SHALL BE VOID AND OF NO
EFFECT.

Certificate No.                              :          1
Cut-off Date                                 :          November 1, 2003
First Distribution Date                      :          December 25, 2003
Percentage Interest of this Certificate
("Denomination")                             :          100%
CUSIP                                        :          N/A

                                      D-1
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

                                     Class R

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class.

         Distributions in respect of this Certificate is distributable monthly
as set forth herein. This Class R Certificate has no Certificate Balance and is
not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Servicer, the Unaffiliated Seller or the
Trustee referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.

         This certifies that ____________________ is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS
Capital I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as
servicer (the "Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller
(the "Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California.

         No transfer of a Class R Certificate shall be made unless the Trustee
shall have received a representation letter from the transferee of this
Certificate, acceptable to and in form and substance satisfactory to the
Trustee, to the effect that such transferee is not an employee benefit plan or
arrangement subject to Title I of ERISA, Section 4975 of the Code or any Similar
Law, and is not acting on behalf of any such plan or arrangement or using the
assets of any such plan or arrangement to effect such transfer. Any purported
transfer of a Class R Certificate in violation of the transfer restrictions set
forth in the Agreement shall be void and of no effect.

         Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Trustee of any change or
impending change in its status as a Permitted Transferee, (ii) no Ownership
Interest in this Class R Certificate may be registered on the Closing Date or
thereafter transferred, and the Trustee shall not register the Transfer of this

                                       D-2
<PAGE>

Certificate unless, in addition to the certificates required to be delivered to
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit H to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate and (C) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is
not a Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      D-3
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                       DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                          not in its individual capacity, but
                                          solely as Trustee

                                       By:
                                          --------------------------------------

Countersigned:

By:
   --------------------------------------
   Authorized Signatory of
   DEUTSCHE BANK NATIONAL TRUST COMPANY,
   not in its individual capacity,
   but solely as Trustee

                                       D-4
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

         This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through
Certificates, Series 2003-HE4 (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date
pursuant to the Agreement. The Record Date applicable to each Distribution Date
is the last Business Day of the month next preceding the month of such
Distribution Date.

         Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate
Insurer with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the

                                      D-5
<PAGE>

transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in California, accompanied by a
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and no such party shall be affected by any notice to the contrary.

         On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is
less than or equal to 10% of the Maximum Pool Principal Balance, the Servicer
and/or the Class X Certificateholder will have the option to repurchase, in
whole, from the Trust Fund all remaining Mortgage Loans and all property
acquired in respect of the Mortgage Loans at a purchase price determined as
provided in the Agreement. The obligations and responsibilities created by the
Agreement will terminate as provided in Section 9.01 of the Agreement.

         Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                       D-6

<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
                 ---------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Trustee to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:

-------------------------------------------------------------------------------.

Dated:

                                  ----------------------------------------------
                                       Signature by or on behalf of assignor

                                      D-7
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________,

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                       D-8

<PAGE>

                                    EXHIBIT E

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
OWNERSHIP OF TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.

EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL, STATE OR LOCAL LAW
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE
CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER. ANY PURPORTED
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH
IN THE AGREEMENT SHALL BE VOID AND OF NO EFFECT.

Certificate No.                              :                1

Cut-off Date                                 :                November 1, 2003

First Distribution Date                      :                December 25, 2003

Percentage Interest of this Certificate
("Denomination")                             :                100%

CUSIP                                        :                N/A

                                       E-1
<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.

                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

                                     Class X

         evidencing a percentage interest in the distributions allocable to the
         Certificates of the above-referenced Class.

         Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or an
interest in, and is not guaranteed by the Depositor, the Servicer, the
Unaffiliated Seller or the Trustee referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.

         This certifies that _____________________, is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.

         This Certificate will be entitled to distributions only to the extent
set forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender
of this Certificate at the offices designated by the Trustee for such purposes
or the office or agency maintained by the Trustee.

         No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "1933 Act"), and any applicable state securities laws
or is made in accordance with the 1933 Act and such laws. In the event of any
such transfer, the Trustee shall require the transferor to execute a transferor
certificate (in substantially the form attached to the Agreement) and deliver
either (i) a Rule 144A Letter, in either case substantially in the form attached
to the Agreement, or (ii) a written Opinion of Counsel to the Trustee that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall be an expense of the transferor.

         Except as provided in the Agreement, no transfer of a Certificate of
this Class shall be made unless the Trustee shall have received a representation
letter from the transferee of this Certificate, acceptable to and in form and
substance satisfactory to the Trustee, to the effect

                                       E-2
<PAGE>

that such transferee is not an employee benefit plan or arrangement subject to
Title I of ERISA, Section 4975 of the Code or any Similar Law, and is not acting
on behalf of any such plan or arrangement or using the assets of any such plan
or arrangement to effect such transfer. Any purported transfer of a Certificate
of this Class in violation of the transfer restrictions set forth in the
Agreement shall be void and of no effect.

         Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.

         This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an
authorized signatory of the Trustee.

                                      * * *

                                       E-3
<PAGE>

         IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

Dated:

                                      DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                        not in its individual capacity, but
                                        solely as Trustee

                                       By:
                                          -------------------------------------

Countersigned:

By:
   -------------------------------------
   Authorized Signatory of
   DEUTSCHE BANK NATIONAL TRUST COMPANY,
   not in its individual capacity,
   but solely as Trustee

                                      E-4

<PAGE>

                        MORGAN STANLEY ABS CAPITAL I INC.
                       CDC Mortgage Capital Trust 2003-HE4
               Mortgage Pass-Through Certificates, Series 2003-HE4

         This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through
Certificates, Series 2003-HE4 (herein collectively called the "Certificates"),
and representing a beneficial ownership interest in the Trust Fund created by
the Agreement.

         The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.

         This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.

         Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.

         Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Trustee in writing at least five Business Days prior
to the related Record Date and such Certificateholder shall satisfy the
conditions to receive such form of payment set forth in the Agreement, or, if
not, by check mailed by first class mail to the address of such
Certificateholder appearing in the Certificate Register. The final distribution
on each Certificate will be made in like manner, but only upon presentment and
surrender of such Certificate at the offices designated by the Trustee for such
purposes or such other location specified in the notice to Certificateholders of
such final distribution.

         The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate
Insurer with the consent of the Holders of Certificates affected by such
amendment evidencing the requisite Percentage Interest, as provided in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the

                                       E-5
<PAGE>

transfer hereof or in exchange therefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register of the Trustee upon surrender of this Certificate for registration of
transfer at the offices designated by the Trustee for such purposes or the
office or agency maintained by the Trustee in New York, New York, accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the holder hereof or such holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of the same Class in authorized denominations and evidencing the same aggregate
Percentage Interest in the Trust Fund will be issued to the designated
transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations
and evidencing the same aggregate Percentage Interest, as requested by the
Holder surrendering the same.

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.

         The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in
whose name this Certificate is registered as the owner hereof for all purposes,
and no such party shall be affected by any notice to the contrary.

         On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is
less than or equal to 10% of the Maximum Principal Balance, the Servicer and/or
the Class X Certificateholders will have the option to repurchase, in whole,
from the Trust Fund all remaining Mortgage Loans and all property acquired in
respect of the Mortgage Loans at a purchase price determined as provided in the
Agreement. The obligations and responsibilities created by the Agreement will
terminate as provided in Section 9.01 of the Agreement.

         Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.

                                       E-6
<PAGE>

                                   ASSIGNMENT

         FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
                 ---------------------------------------------------------------

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

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

--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee)

the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.

         I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:

-------------------------------------------------------------------------------.

Dated:

                                 -----------------------------------------------
                                       Signature by or on behalf of assignor

                                      E-7
<PAGE>

                            DISTRIBUTION INSTRUCTIONS

                  The assignee should include the following for purposes of
distribution:

         Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________,

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.

                                       E-8

<PAGE>

                                    EXHIBIT F

                    FORM OF INITIAL CERTIFICATION OF TRUSTEE

                                     [date]

Morgan Stanley ABS Capital I Inc.
1585 Broadway
New York, New York 10036

Ocwen Federal Bank FSB
1675 Palm Beach Lakes Blvd.
West Palm Beach, Florida 33401

CDC Mortgage Capital Inc.
9 West 57th Street, 36th Floor
New York, New York 10019

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

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

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

         Re:  Pooling and Servicing Agreement dated as of November 1, 2003 among
              Morgan Stanley ABS Capital I Inc., as Depositor, Ocwen Federal
              Bank FSB, as Servicer, CDC Mortgage Capital Inc., as Unaffiliated
              Seller and Deutsche Bank National Trust Company, as Trustee, CDC
              Mortgage Capital Trust Series 2003-HE4

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed
in the attached schedule), it has received:

         (i) the original Mortgage Note, endorsed as provided in the following
    form: "Pay to the order of ________, without recourse"; and

         (ii) a duly executed assignment of the Mortgage.

         Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.

                                      F-1
<PAGE>

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, perfection, priority, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has
made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                       as Trustee

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

                                       F-2
<PAGE>

                                    EXHIBIT G

                     FORM OF FINAL CERTIFICATION OF TRUSTEE

                                     [date]

Morgan Stanley ABS Capital I Inc.
1585 Broadway
New York, New York 10036

Ocwen Federal Bank FSB
1675 Palm Beach Lakes Blvd.
West Palm Beach, Florida 33401

CDC Mortgage Capital Inc.
9 West 57th Street, 36th Floor
New York, New York 10019

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

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

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

         Re:  Pooling and Servicing Agreement dated as of November 1, 2003 among
              Morgan Stanley ABS Capital I Inc., as Depositor, Ocwen Federal
              Bank FSB, as Servicer, CDC Mortgage Capital Inc., as Unaffiliated
              Seller and Deutsche Bank National Trust Company, as Trustee, CDC
              Mortgage Capital Trust Series 2003-HE4

Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) it has received:

         (i) The original Mortgage Note, endorsed in the form provided in
    Section 2.01 of the Pooling and Servicing Agreement, with all intervening
    endorsements showing a complete chain of endorsement from the originator to
    the last endorsee.

         (ii) The original recorded Mortgage.

         (iii) A duly executed assignment of the Mortgage in the form provided
    in Section 2.01 of the Pooling and Servicing Agreement; or, if the
    Unaffiliated Seller has certified or the Trustee otherwise knows that the
    related Mortgage has not been returned

                                      G-1
<PAGE>

    from the applicable recording office, a copy of the assignment of the
    Mortgage (excluding information to be provided by the recording office).

         (iv) The original or duplicate original recorded assignment or
    assignments of the Mortgage showing a complete chain of assignment from the
    originator to the last endorsee.

         (v) The original or duplicate lender's title policy and all riders
    thereto or, if such original is unavailable, any one of an original title
    binder, either an original title binder or an original or copy of the title
    commitment, and if copies then certified to be true and complete by the
    title company.

         Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2) and (18) of
the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.

         The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Trustee makes
no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, perfection, priority, effectiveness or
suitability of any such Mortgage Loan. Notwithstanding anything herein to the
contrary, the Trustee has made no determination and makes no representations as
to whether (i) any endorsement is sufficient to transfer all right, title and
interest of the party so endorsing, as Noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the
Mortgage to which the assignment relates.

         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.

                                     DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                       as Trustee

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

                                      G-2
<PAGE>
                                    EXHIBIT H

                               TRANSFER AFFIDAVIT

                MORGAN STANLEY ABS CAPITAL I INC. Trust 2003-HE4,
                       Mortgage Pass-Through Certificates,
                                 Series 2003-HE4

STATE OF                            )
                                    ) ss.:
COUNTY OF                           )

         The undersigned, being first duly sworn, deposes and says as follows:

         1. The undersigned is an officer of ___________________, the proposed
Transferee of an Ownership Interest in a Class R Certificate (the "Certificate")
issued pursuant to the Pooling and Servicing Agreement, (the "Agreement"),
relating to the above-referenced Series, by and among Morgan Stanley ABS Capital
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer, CDC
Mortgage Capital Inc., as unaffiliated seller (the "Unaffiliated Seller") and
Deutsche Bank National Trust Company, as Trustee. Capitalized terms used, but
not defined herein or in Exhibit 1 hereto, shall have the meanings ascribed to
such terms in the Agreement. The Transferee has authorized the undersigned to
make this affidavit on behalf of the Transferee for the benefit of the Depositor
and the Trustee.

         2. The Transferee is not, as of the date hereof, and will not be, as of
the date of the Transfer, a "disqualified organization" within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986. The Transferee will
endeavor to remain other than a disqualified organization for so long as it
retains its Ownership Interest in the Certificate.

         3. The Transferee has historically paid its debts as they came due and
will continue to pay its debts as they come due in the future.

         4. The Transferee has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it or become insolvent or
subject to a bankruptcy proceeding for so long as the Certificate remains
outstanding.

         5. The Transferee has been advised of, and understands that as the
holder of a noneconomic residual interest it may incur tax liabilities in excess
of any cash flows generated by the interest. The Transferee intends to pay such
taxes associated with holding the Certificate as they become due.

         6. The Transferee will not cause income from the Certificate to be
attributable to a foreign permanent establishment or fixed base (within the
meaning of an applicable income tax treaty) of the Transferee or another U.S.
taxpayer.

                                       H-1
<PAGE>

      (1)7. [A. Formula Test] The Transferee agrees that the present value of
the anticipated tax liabilities associated with holding the Certificate does not
exceed the sum of the present value of any consideration given to the Transferee
to acquire the Certificate, the present value of the expected future
distributions on the Certificate, and the present value of the anticipated tax
savings associated with holding the interest as the REMIC generates losses. The
Transferee agrees that it complied with U.S. Treasury Regulations Section
1.860E-1(c)(8) in making such representation.

         The Transferee agrees that it is not a foreign permanent establishment
or fixed base (within the meaning of an applicable income tax treaty) of the
Transferor or another U.S. taxpayer.

         [B. Asset Test] The Transferee, at the time of the transfer, and at the
close of the Transferee's two fiscal years preceding the year of the transfer,
had gross assets for financial reporting purposes in excess of $100 million and
net assets in excess of $10 million (excluding any obligation of a person
related to the Transferee within the meaning of U.S. Treasury Regulations
Section 1.860E-1(c)(6)(ii) or any other asset if a principle purpose for holding
or acquiring the other asset was to permit the Transferee to satisfy the above
stated minimum asset requirements).

         The Transferee is an "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i). The Transferee agrees, in
connection with any subsequent transfer of its Ownership Interest in the
Certificate, to transfer its Ownership Interest only to another "eligible
corporation," as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i),
and to honor the restrictions on subsequent transfers of the Certificate by
transferring its Ownership Interest only in a transaction that satisfies the
requirements of U.S. Treasury Regulations Section 1.860E-1(c)(4)(i), (ii) (iii)
and U.S. Treasury Regulations Section 1.860E-1(c)(5).

         The Transferee determined the consideration paid to it to acquire the
Certificate in good faith and based on reasonable market assumptions (including,
but not limited to, borrowing and investment rates, prepayment and loss
assumptions, expense and reinvestment assumptions, tax rates and other factors
specific to the Transferee).

         8. The Transferee is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includable in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.

         9. The Transferee's taxpayer identification number is ____________.

------------------------
1 Insert either section 7A or 7B.

                                       H-2
<PAGE>

         10. The Transferee is not an employee benefit plan or arrangement
subject to Title I of ERISA, Section 4975 of the Code or any Similar Law, and is
not acting on behalf of any such plan or arrangement or using the assets of any
such plan or arrangement to effect the Transfer.

         11. The Transferee has reviewed the provisions of Section 5.02(c) of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate, including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02(c) of the Agreement and the
restrictions noted on the face of the Certificate. The Transferee understands
and agrees that any breach of any of the representations included herein shall
render the Transfer to the Transferee contemplated hereby null and void.

         12. The Transferee consents to any additional restrictions or
arrangements that shall be deemed necessary upon advice of counsel to constitute
a reasonable arrangement to ensure that the Certificate will only be owned,
directly or indirectly, by a Transferee that is not a disqualified organization.

         13. The Transferee will not transfer its interest in the Certificate
for the purpose of impeding the assessment or collection of any tax.

         14. The Transferee will not transfer such Certificate unless (i) it has
received from any subsequent transferee an affidavit in substantially the same
form as this affidavit containing the same representations set forth herein, and
(ii) as of the time of the transfer, it does not have actual knowledge that such
affidavit is false. The Transferee will deliver such affidavit to the Trustee
upon receipt.

                                      * * *

                                       H-3
<PAGE>

         IN WITNESS WHEREOF, the Transferee has caused this instrument to be
executed on its behalf, pursuant to authority of its Board of Directors, by its
duly authorized officer and its corporate seal to be hereunto affixed, duly
attested, this __ day of ________, 20__.

                                      ------------------------------------------
                                      Print Name of Transferee

                                      By:
                                         ---------------------------------------
                                         Name:
                                         Title:
[Corporate Seal]

ATTEST:

------------------------------------------
[Assistant] Secretary

         Personally appeared before me the above-named __________, known or
proved to me to be the same person who executed the foregoing instrument and to
be the ___________ of the Transferee, and acknowledged that he executed the same
as his free act and deed and the free act and deed of the Transferee.

         Subscribed and sworn before me this __ day of ________, 20__.

                                  ------------------------------------------
                                  NOTARY PUBLIC

                                  My Commission expires the __ day
                                  of _________, 20__

                                      H-4
<PAGE>

                                    EXHIBIT I

                         FORM OF TRANSFEROR CERTIFICATE

                                                                __________, 20__

Morgan Stanley ABS Capital I Inc.
1585 Broadway
New York, New York 10036
Attention:  Michelle Wilke

Deutsche Bank National Trust Company,
as Trustee,
1761 East St. Andrew Place
Santa Ana, California 92705

         Re:  CDC Mortgage Capital Trust, Series 2003-HE4, Mortgage Pass-Through
              Certificates, Series 2003-HE4, Class ___

Ladies and Gentlemen:

         In connection with our disposition of the above Certificates we certify
that (a) we understand that the Certificates have not been registered under the
Securities Act of 1933, as amended (the "Act"), and are being disposed by us in
a transaction that is exempt from the registration requirements of the Act, (b)
we have not offered or sold any Certificates to, or solicited offers to buy any
Certificates from, any person, or otherwise approached or negotiated with any
person with respect thereto, in a manner that would be deemed, or taken any
other action which would result in, a violation of Section 5 of the Act and (c)
to the extent we are disposing of a Residual Certificate, we have no knowledge
the Transferee is not a Permitted Transferee.

                                      Very truly yours,

                                      ------------------------------------------
                                      Print Name of Transferor

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

                                      I-1
<PAGE>
                                    EXHIBIT J

                            FORM OF RULE 144A LETTER

                                                              ____________, 20__

Morgan Stanley ABS Capital I Inc.
1585 Broadway
New York, New York 10036
Attention:  Michelle Wilke

Deutsche Bank National Trust Company,
as Trustee,
1761 East St. Andrew Place
Santa Ana, California 92705

         Re:  CDC Mortgage Capital Trust, Series 2003-HE4, Mortgage Pass-Through
              Certificates, Series 2003-HE4, Class____

Ladies and Gentlemen:

         In connection with our acquisition of the above Certificates we certify
that (a) we understand that the Certificates are not being registered under the
Securities Act of 1933, as amended (the "Act"), or any state securities laws and
are being transferred to us in a transaction that is exempt from the
registration requirements of the Act and any such laws, (b) we have such
knowledge and experience in financial and business matters that we are capable
of evaluating the merits and risks of investments in the Certificates, (c) we
have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating
thereto or any additional information deemed necessary to our decision to
purchase the Certificates, (d) we are not an employee benefit plan or
arrangement that is subject to Title I of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any federal, state or local law
materially similar to the foregoing provisions of ERISA or the Code, and we are
not acting on behalf of any such plan or arrangement or using the assets of any
such plan or arrangement to effect our purchase of the Certificates or, with
respect to any Certificates other than Class P, Class R and Class X
Certificates, we are an insurance company and are purchasing the Certificates
with funds contained in an "insurance company general account" (as defined term
is defined in Section V(e) of Prohibited Transaction Class Exemption 95-60
("PTCE 95-60")), and the purchase and holding of such Certificates are covered
under Sections I and III of PTCE 95-60, (e) we have not, nor has anyone acting
on our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the

                                      J-1
<PAGE>

Certificates, any interest in the Certificates or any other similar security
from, or otherwise approached or negotiated with respect to the Certificates,
any interest in the Certificates or any other similar security with, any person
in any manner, or made any general solicitation by means of general advertising
or in any other manner, or taken any other action, that would constitute a
distribution of the Certificates under the Securities Act or that would render
the disposition of the Certificates a violation of Section 5 of the Securities
Act or require registration pursuant thereto, nor will act, nor has authorized
or will authorize any person to act, in such manner with respect to the
Certificates, (f) to the extent that the Certificate transferred is a Class X
Certificate, we are a bankruptcy-remote entity and (g) we are a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act and have completed either of the forms of certification to that effect
attached hereto as Annex 1 or Annex 2. We are aware that the sale to us is being
made in reliance on Rule 144A. We are acquiring the Certificates for our own
account or for resale pursuant to Rule 144A and further, understand that such
Certificates may be resold, pledged or transferred only (i) to a person
reasonably believed to be a qualified institutional buyer that purchases for its
own account or for the account of a qualified institutional buyer to whom notice
is given that the resale, pledge or transfer is being made in reliance on Rule
144A, or (ii) pursuant to another exemption from registration under the
Securities Act.

                                       J-2
<PAGE>

                                                            ANNEX 1 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

          [For Transferees Other Than Registered Investment Companies]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.

         2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned and/or
invested on a discretionary basis $_________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A and (ii)
the Buyer satisfies the criteria in the category marked below.

                ___________   Corporation, etc. The Buyer is a corporation
                              (other than a bank, savings and loan association
                              or similar institution), Massachusetts or similar
                              business trust, partnership, or charitable
                              organization described in Section 501(c)(3) of the
                              Internal Revenue Code of 1986, as amended.

                ___________   Bank. The Buyer (a) is a national bank or banking
                              institution organized under the laws of any State,
                              territory or the District of Columbia, the
                              business of which is substantially confined to
                              banking and is supervised by the State or
                              territorial banking commission or similar official
                              or is a foreign bank or equivalent institution,
                              and (b) has an audited net worth of at least
                              $25,000,000 as demonstrated in its latest annual
                              financial statements, a copy of which is attached
                              hereto.

                ___________   Savings and Loan. The Buyer (a) is a savings and
                              loan association, building and loan association,
                              cooperative bank, homestead association or similar
                              institution, which is supervised and examined by a
                              State or Federal authority having supervision over
                              any such institutions or is a foreign savings and
                              loan association or equivalent institution and (b)
                              has an audited net worth of at least $25,000,000
                              as demonstrated in its latest annual financial
                              statements, a copy of which is attached hereto.

                ___________   Broker-dealer. The Buyer is a dealer registered
                              pursuant to Section 15 of the Securities Exchange
                              Act of 1934.

                                      J-3
<PAGE>

                ___________   Insurance Company. The Buyer is an insurance
                              company whose primary and predominant business
                              activity is the writing of insurance or the
                              reinsuring of risks underwritten by insurance
                              companies and which is subject to supervision by
                              the insurance commissioner or a similar official
                              or agency of a State, territory or the District of
                              Columbia.

                ___________   State or Local Plan. The Buyer is a plan
                              established and maintained by a State, its
                              political subdivisions, or any agency or
                              instrumentality of the State or its political
                              subdivisions, for the benefit of its employees.

                ___________   ERISA Plan. The Buyer is an employee benefit plan
                              within the meaning of Title I of the Employee
                              Retirement Income Security Act of 1974.

                ___________   Investment Advisor. The Buyer is an investment
                              advisor registered under the Investment Advisors
                              Act of 1940.

                ___________   Small Business Investment Company. Buyer is a
                              small business investment company licensed by the
                              U.S. Small Business Administration under Section
                              301(c) or (d) of the Small Business Investment Act
                              of 1958.

                ___________   Business Development Company. Buyer is a business
                              development company as defined in Section
                              202(a)(22) of the Investment Advisors Act of 1940.

         3. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer, (ii) securities that are part of
an unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) securities issued or guaranteed by the U.S. or any instrumentality
thereof, (iv) bank deposit notes and certificates of deposit, (v) loan
participations, (vi) repurchase agreements, (vii) securities owned but subject
to a repurchase agreement and (viii) currency, interest rate and commodity
swaps.

         4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph, except (i) where the Buyer reports its
securities holdings in its financial statements on the basis of their market
value, and (ii) no current information with respect to the cost of those
securities has been published. If clause (ii) in the preceding sentence applies,
the securities may be valued at market. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934, as
amended.

                                       J-4
<PAGE>

         5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.

         6. Until the date of purchase of the Rule 144A Securities, the Buyer
will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.

                                      ------------------------------------------
                                      Print Name of Transferor

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

                                      Date:
                                           -------------------------------------

                                      J-5
<PAGE>

                                                            ANNEX 2 TO EXHIBIT J

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

           [For Transferees That are Registered Investment Companies]

         The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:

         1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.

         2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, as
amended and (ii) as marked below, the Buyer alone, or the Buyer's Family of
Investment Companies, owned at least $100,000,000 in securities (other than the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year. For purposes of determining the amount of securities owned by the
Buyer or the Buyer's Family of Investment Companies, the cost of such securities
was used, except (i) where the Buyer or the Buyer's Family of Investment
Companies reports its securities holdings in its financial statements on the
basis of their market value, and (ii) no current information with respect to the
cost of those securities has been published. If clause (ii) in the preceding
sentence applies, the securities may be valued at market.

                ___________   The Buyer owned $______ in securities (other than
                              the excluded securities referred to below) as of
                              the end of the Buyer's most recent fiscal year
                              (such amount being calculated in accordance with
                              Rule 144A).

                ___________   The Buyer is part of a Family of Investment
                              Companies which owned in the aggregate $ ________
                              in securities (other than the excluded securities
                              referred to below) as of the end of the Buyer's
                              most recent fiscal year (such amount being
                              calculated in accordance with Rule 144A).

         3. The term "Family of Investment Companies" as used herein means two
or more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).

         4. The term "securities" as used herein does not include (i) securities
of issuers that are affiliated with the Buyer or are part of the Buyer's Family
of Investment Companies, (ii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iii) bank deposit notes and certificates of deposit,
(iv) loan participations, (v) repurchase agreements,

                                      J-6
<PAGE>

(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.

         5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.

         6. Until the date of purchase of the Certificates, the undersigned will
notify the parties listed in the Rule 144A Transferee Certificate to which this
certification relates of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of the Certificates will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.

                                      ------------------------------------------
                                      Print Name of Transferor

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

                                      IF AN ADVISER:

                                      ------------------------------------------
                                                 Print Name of Buyer

                                      Date:
                                            ------------------------------------

                                       J-7
<PAGE>

                                    EXHIBIT K

                               REQUEST FOR RELEASE
                                  (for Trustee)

To:      [Address]

         Re:

         In connection with the administration of the Mortgage Loans held by you
as the Trustee on behalf of the Certificateholders, we request the release, and
acknowledge receipt, of the (Custodial File/[specify documents]) for the
Mortgage Loan described below, for the reason indicated.

Mortgagor's Name, Address & Zip Code:

Mortgage Loan Number:

Send Custodial File to:

Reason for Requesting Documents (check one)

                ___________   1. Mortgage Loan Paid in Full. (The Company hereby
                              certifies that all amounts received in connection
                              therewith have been credited to the Collection
                              Account as provided in the Pooling and Servicing
                              Agreement.)

                ___________   2. Mortgage Loan Repurchase Pursuant to Subsection
                              2.03 of the Pooling and Servicing Agreement. (The
                              Company hereby certifies that the repurchase price
                              has been credited to the Collection Account as
                              provided in the Pooling and Servicing Agreement.)

                ___________   3. Mortgage Loan Liquidated By _________________.
                              (The Company hereby certifies that all proceeds of
                              foreclosure, insurance, condemnation or other
                              liquidation have been finally received and
                              credited to the Collection Account pursuant to the
                              Pooling and Servicing Agreement.)

                ___________   4. Mortgage Loan in Foreclosure.

                ___________   5. Other (explain).

         If box 1, 2 or 3 above is checked, and if all or part of the Custodial
File was previously released to us, please release to us our previous request
and receipt on file with you, as well as any additional documents in your
possession relating to the specified Mortgage Loan.

                                       K-1
<PAGE>

         If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Trustee, please acknowledge your receipt by signing in
the space indicated below, and returning this form.

                                       OCWEN FEDERAL BANK FSB

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

                                       K-2

<PAGE>
                                    EXHIBIT L

                      FORM OF SUBSEQUENT TRANSFER AGREEMENT

                       CDC MORTGAGE CAPITAL TRUST 2003-HE4

         Pursuant to separate Mortgage Loan Purchase Agreements, Encore Credit
Corp. ("Encore"), People's Choice Home Loan, Inc., ("People's Choice"),
Accredited Home Lenders, Inc. ("Accredited"), The CIT Group/Consumer Finance,
Inc. (and its affiliates) (collectively, "CIT"), Master Financial Corporation
("Master Financial"), Chapel Mortgage Corporation ("Chapel"), First Guaranty
Mortgage Corporation ("FGMC"), SIB Mortgage Corp. ("SIB"), IMPAC Funding
Corporation (and its affiliate, Novelle Financial Services, Inc. ("Novelle")),
"IFC"), First Banc Mortgage, Inc. ("First Banc"), Ameriquest Mortgage Company
("Ameriquest"), BNC Mortgage, Inc. ("BNC"), Aegis Mortgage Corporation
("Aegis"), and Lenders Direct Capital Corporation ("Lenders Direct" (and
together with Encore, People's Choice, Accredited, CIT, Master Financial, CIT,
FGMC, SIB, IFC, First Banc, Ameriquest, BNC, and Aegis, the "Originators") have
agreed to sell to CDC Mortgage Capital Inc. (the "Unaffiliated Seller") certain
mortgage loans (each, a "Mortgage Loan"). These Mortgage Loans may in turn be
sold by the Unaffiliated Seller to MORGAN STANLEY ABS CAPITAL I INC. (the
"Depositor") and then sold by the Depositor to the CDC Mortgage Capital Trust
2003-HE4 (the "Trust Fund"). The Trust Fund was established pursuant to a
Pooling and Servicing Agreement, dated as of November 1, 2003 (the "Pooling and
Servicing Agreement") among the Unaffiliated Seller, the Depositor, Ocwen
Federal Bank FSB, as servicer (the "Servicer") and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). The Pooling and Servicing Agreement permits
a pre-funding feature, allowing for the acquisition by the Trust Fund of
Subsequent Mortgage Loans during the Pre-Funding Period. Representations and
warranties with respect to the Mortgage Loans have been made by the Originators
pursuant to separate Assignment and Recognition Agreements.

         Capitalized terms used herein and not defined herein have their
respective meanings as set forth in the Pooling and Servicing Agreement.

         Conveyance of Subsequent Mortgage Loans.

         The Unaffiliated Seller does hereby irrevocably sell, transfer, assign,
set over and otherwise convey to the Depositor, without recourse (except as
otherwise explicitly provided for herein) all of its right, title and interest
in and to the Subsequent Mortgage Loans, exclusive of the obligations of the
Unaffiliated Seller or any other Person with respect to the Subsequent Mortgage
Loans but including specifically, without limitation, the Mortgages, the
Custodial Files and all other documents, materials and properties appurtenant
thereto and the Mortgage Notes, including all interest and principal collected
by the Unaffiliated Seller on or with respect to the Subsequent Mortgage Loans
after the related Subsequent Cut-off Date, together with all of its right, title
and interest in and to the proceeds received after such Subsequent Cut-off Date
of any related insurance policies on behalf of the Depositor.

         The Depositor does hereby irrevocably sell, transfer, assign, set over
and otherwise convey to the Trust Fund, without recourse (except as otherwise
explicitly provided

                                      L-1
<PAGE>

for herein) all of its right, title and interest in and to the Subsequent
Mortgage Loans, exclusive of the obligations of the Depositor or any other
Person with respect to the Subsequent Mortgage Loans but including specifically,
without limitation, the Mortgages, the Custodial Files and all other documents,
materials and properties appurtenant thereto and the Mortgage Notes, including
all interest and principal collected by the Depositor on or with respect to the
Subsequent Mortgage Loans after the related Subsequent Cut-off Date, together
with all of its right, title and interest in and to the proceeds received after
such Subsequent Cut-off Date of any related insurance policies on behalf of the
Trust Fund.

         The expenses and costs relating to the delivery of the Subsequent
Mortgage Loans specified in this Subsequent Transfer Agreement and the Pooling
and Servicing Agreement shall be borne by the Unaffiliated Seller.

         The Unaffiliated Seller hereby affirms the representation and warranty
set forth in Sections 3.01(f), 3.01(h) and 3.03 of the Unaffiliated Seller's
Agreement with respect to the Subsequent Mortgage Loans as of the date hereof.
The Unaffiliated Seller hereby delivers notice and confirms that each of the
conditions set forth in Section 2.01(c) of the Pooling and Servicing Agreement
are satisfied as of the date hereof.

         The Servicer hereby affirms the representations and warranties set
forth in Schedule IIA to the Pooling and Servicing Agreement with respect to the
Subsequent Mortgage Loans as of the date hereof.

         Additional terms of the sale are attached hereto as Attachment A.

         To the extent permitted by applicable law, this Subsequent Transfer
Agreement, or a memorandum thereof if permitted under applicable law, is subject
to recordation in all appropriate public offices for real property records in
all counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Servicer at the Unaffiliated Seller's expense, but only when accompanied by an
opinion of counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders or is necessary for
the administration or servicing of the Mortgage Loans.

         This Agreement shall be construed in accordance with the laws of the
State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving
effect to the principles of conflicts of laws.

         This Agreement may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same Agreement.

         All terms and conditions of the Pooling and Servicing Agreement are
hereby ratified, confirmed and incorporated herein; provided, that in the event
of any conflict the provisions of this Subsequent Transfer Agreement shall
control over the conflicting provisions of the Pooling and Servicing Agreement.

                  [Remainder of Page Intentionally Left Blank]

                                       L-2
<PAGE>

                                           CDC MORTGAGE CAPITAL INC.,
                                                as Unaffiliated Seller

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

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

                                           MORGAN STANLEY ABS CAPITAL I INC.,
                                                as Depositor

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

                                           OCWEN FEDERAL BANK FSB,
                                                as Servicer

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

                                           DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                                as Trustee

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

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

                                       L-3
<PAGE>
                                    EXHIBIT M

                           FORM OF CERTIFICATION TO BE
                              PROVIDED TO DEPOSITOR

Re:      CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through Certificates,
         Series 2003-HE4, issued pursuant to the Pooling and Servicing
         Agreement, dated as of November 1, 2003 (the "Pooling and Servicing
         Agreement"), among Morgan Stanley ABS Capital I Inc., as depositor (the
         "Depositor", CDC Mortgage Capital Inc., as unaffiliated seller,
         Deutsche Bank National Trust Company, as trustee (the "Trustee"), and
         Ocwen Federal Bank FSB, as servicer (the "Servicer").

I, [identify the certifying individual], certify that:

         1.   I have reviewed this annual report on Form 10-K ("Annual Report"),
              and all reports on Form 8-K containing distribution or servicing
              reports (collectively with this Annual Report, the "Reports")
              filed in respect of periods included in the year covered by this
              Annual Report of the Depositor relating to the above-referenced
              trust and series of certificates;

         2.   Based on my knowledge, the information in the Reports, taken as a
              whole, does not contain any untrue statement of a material fact or
              omit to state a material fact necessary to make the statements
              made, in light of the circumstances under which such statements
              were made, not misleading as of the last day of the period covered
              by this Annual Report;

         3.   Based on my knowledge, the distribution or servicing information
              required to be provided to the Trustee by the Servicer under the
              Pooling and Servicing Agreement for inclusion in the Reports is
              included in these Reports;

         4.   Based on my knowledge and upon the annual compliance statement
              included in this Annual Report and required to be delivered to the
              Trustee in accordance with the terms of the Pooling and Servicing
              Agreement, and except as disclosed in the Reports, the Servicer
              has fulfilled its obligations under the Pooling and Servicing
              Agreement; and

                                       M-1

<PAGE>

         5.   The Reports disclose all significant deficiencies relating to the
              Servicer's compliance with the minimum servicing standards based
              upon the report provided by an independent public accountant,
              after conducting a review in compliance with the Uniform Single
              Attestation Program for Mortgage Bankers or similar procedure, as
              set forth in the Pooling and Servicing Agreement, that is included
              in the Reports.

In giving the certifications above, I have reasonably relied on information
provided to me by the following unaffiliated parties: the Trustee and the
Servicer.

Date:
     -------------------------------

------------------------------------
[Signature]
[Title]

                                       M-2

<PAGE>

                                    EXHIBIT N

                              Annual Certifications

Re: CDC Mortgage Capital Trust 2003-HE4 Mortgage Pass-Through Certificates,
Series 2003-HE4, issued pursuant to the Pooling and Servicing Agreement, dated
as of November 1, 2003 (the "Pooling and Servicing Agreement"), among Morgan
Stanley ABS Capital I Inc., as depositor (the "Depositor," CDC Mortgage Capital
Inc., as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), and Ocwen Federal Bank FSB, as
servicer (the "Servicer").

I, [identify the certifying individual], certify to the Depositor and the
Trustee, if applicable, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

         1.   [To be certified by the Trustee] I have reviewed the annual report
              on Form 10-K for the fiscal year 20__ (the "Annual Report"), and
              all reports on Form 8-K containing distribution date reports filed
              in respect of periods included in the year covered by the Annual
              Report (collectively with this Annual Report, the "Reports"), of
              the Depositor relating to the above-referenced trust;

         2.   [To be certified by the Trustee] Based on my knowledge, the
              information in the Reports, taken as a whole, does not contain any
              untrue statement of a material fact or omit to state a material
              fact necessary to make the statements made, in light of the
              circumstances under which such statements were made, not
              misleading as of the last day of the period covered by the Annual
              Report;

         3.   [To be certified by the Trustee] Based on my knowledge, the
              distribution or servicing information required to be provided to
              the Trustee by the Servicer under the Pooling and Servicing
              Agreement for inclusion in the Reports is included in the Reports;

         4.   [To be certified by the Servicer] I am responsible for reviewing
              the activities performed by the Servicer under the Pooling and
              Servicing Agreement during the calendar year immediately preceding
              the date of this certificate (the "Relevant Year"). Based upon the
              review required by the Pooling and Servicing Agreement and except
              as disclosed in the annual compliance statement or the
              accountant's statement provided pursuant to Section 3.23 of the
              Pooling and Servicing Agreement, to the best of my knowledge, the
              Servicer has fulfilled its obligations under the Pooling and
              Servicing Agreement throughout the Relevant Year; and

         5.   [To be certified by the Servicer] All significant deficiencies
              relating to the Servicer's compliance with the minimum servicing
              standards for purposes of the report provided by an independent
              public accountant, after conducting a review conducted in
              compliance with the Uniform Single Attestation Program for
              Mortgage Bankers or similar procedure, as set forth in the Pooling
              and Servicing

                                       N-1
<PAGE>

              Agreement, have been disclosed to such accountant and are included
              in such reports.

Date:
     -------------------------------

------------------------------------
[Signature]
[Title]

                                       N-1

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