Document:

<PAGE>
                                                                   EXHIBIT 10.26

                      Morgan Stanley Mortgage Capital Inc.

                                       and

                  Morgan Stanley Dean Witter Credit Corporation

                                   ----------

                   SECOND AMENDED AND RESTATED MASTER MORTGAGE
                             LOAN PURCHASE AGREEMENT

                          Dated as of February 1, 2004

                                   ----------

            Fixed, Adjustable Rate, and Pledged Asset Mortgage Loans
                          Seller Flow Delivery Program

<PAGE>

                                TABLE OF CONTENTS

<Table>
<S>               <C>                                                                                            <C>
SECTION 1.        DEFINITIONS.....................................................................................1
SECTION 2.        PURCHASE OF MORTGAGE LOANS.....................................................................12
SECTION 3.        DELIVERY REQUIREMENTS..........................................................................13
SECTION 4.        EXAMINATION OF MORTGAGE FILES..................................................................16
SECTION 5.        REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SELLER...........................................17
SECTION 6.        REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASER........................................27
SECTION 7.        SERVICING OBLIGATIONS OF SELLER................................................................29
SECTION 8.        ADDITIONAL INDEMNIFICATION BY THE SELLER; THIRD PARTY CLAIMS...................................29
SECTION 9.        INTENTION OF THE PARTIES.......................................................................29
SECTION 10.       COSTS..........................................................................................29
SECTION 11.       FURTHER AGREEMENTS OF SELLER...................................................................30
SECTION 12.       MANDATORY DELIVERY.............................................................................30
SECTION 13.       TERMINATION....................................................................................30
SECTION 14.       SELLER'S RIGHT OF FIRST REFUSAL................................................................30
SECTION 15.       SEVERABILITY CLAUSE............................................................................30
SECTION 16.       WAIVERS........................................................................................31
SECTION 17.       SURVIVAL.......................................................................................31
SECTION 18.       SUCCESSOR AND ASSIGNS:  ASSIGNMENT OF PURCHASE AGREEMENT.......................................31
SECTION 19.       NOTICES........................................................................................31
SECTION 20.       COUNTERPARTS...................................................................................31
SECTION 21.       ENTIRE AGREEMENT...............................................................................32
SECTION 22.       GOVERNING LAW AND AMENDMENTS...................................................................32
SECTION 23.       EXHIBITS.......................................................................................32
SECTION 24.       GENERAL INTERPRETIVE PRINCIPLES................................................................32
SECTION 25.       REPRODUCTION OF DOCUMENTS......................................................................33
SECTION 26.       ATTORNEY-IN-FACT...............................................................................33
SECTION 27.       CONFIDENTIALITY................................................................................33

EXHIBIT 1         CONTENTS OF EACH MORTGAGE FILE
EXHIBIT 2         FORM OF AMENDED AND RESTATED MASTER SERVICING AGREEMENT
EXHIBIT 3         FORM OF CUSTODIAL AGREEMENT
EXHIBIT 4         UNDERWRITING GUIDE OF SELLER
EXHIBIT 5         FORM OF CERTIFICATE OF SELLER
EXHIBIT 6         FORM OF ASSIGNMENT FOR ADDITIONAL COLLATERAL AGREEMENTS
EXHIBIT 7         FORM OF NOTICE OF ASSIGNMENT TO AND ACKNOWLEDGMENT BY
                  PURCHASER
EXHIBIT 8         FORM OF WARRANTY BILL OF SALE
EXHIBIT 9         FORM OF TRUST RECEIPT
EXHIBIT 10        FORM OF FINAL TRUST RECEIPT AND CERTIFICATION
</Table>

                                      -i-
<PAGE>

                SECOND AMENDED AND RESTATED MASTER MORTGAGE LOAN
                               PURCHASE AGREEMENT

         This is a SECOND AMENDED AND RESTATED MASTER MORTGAGE LOAN PURCHASE
AGREEMENT (this "Agreement"), dated as of February 1, 2004, by and between
Morgan Stanley Mortgage Capital Inc., a New York corporation having its
principal office at 1221 Avenue of the Americas, New York, New York 10020
("Purchaser"), and Morgan Stanley Dean Witter Credit Corporation, a Delaware
corporation having its principal office at 2500 Lake Cook Road, Riverwoods, IL
60015 ("Seller").

                              PRELIMINARY STATEMENT

         Seller and Purchaser are parties to that certain Amended and Restated
Master Mortgage Loan Purchase Agreement, dated as of March 1, 2000 (the
"Original Purchase Agreement"), pursuant to which Seller may sell, from time to
time, to Purchaser, and Purchaser may purchase, from time to time, from Seller,
certain groups of fixed- and adjustable-rate, residential first mortgage loans
(the "Mortgage Loans") as set forth therein (each date on which a closing of
such a sale occurs is referred to as a "Closing Date") on a servicing-retained
basis. In addition, Purchaser and Seller are parties to that certain Amended and
Restated Master Servicing Agreement, dated as of February 1, 2004 (the
"Servicing Agreement") pursuant to which Seller services and administers each
Mortgage Loan for Purchaser, its successors and assigns from and after the
respective Closing Date. At the present time, Purchaser and Seller desire to
amend and restate the Original Purchase Agreement as amended and restated by the
Amended and Restated Master Mortgage Loan Purchase Agreement dated as of March
1, 2000, to make certain modifications as set forth herein.

         NOW, THEREFORE, in consideration of the premises and mutual agreements
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Purchaser and Seller agree as
follows:

         SECTION 1. DEFINITIONS.

         For purposes of this Agreement, the following capitalized terms shall
have the respective meanings set forth below. Other capitalized terms used in
this Agreement and not defined herein shall have the respective meanings set
forth in the form of Amended and Restated Master Servicing Agreement.

         "Additional Collateral": With respect to any Additional Collateral
Mortgage Loan, the securities and other assets held in a Trading Account subject
to a security interest securing such Additional Collateral Mortgage Loan.

         "Additional Collateral Mortgage Loan": A Mortgage Loan secured by
Additional Collateral in the form of a security interest in the securities and
other assets held in a Trading

<PAGE>

Account and that is identified by Seller as an Additional Collateral Mortgage
Loan as to which the Additional Collateral is still required to be provided.

         "Additional Collateral Pledge Agreement": With respect to each
Additional Collateral Mortgage Loan, any pledge and security agreement and
account control agreement in favor of Seller granting a security interest and
other rights in a securities account to secure the related Mortgage Loan.

         "Adjustable Rate Mortgage Loan": A Mortgage Loan that provides for the
adjustment of the Mortgage Interest Rate payable with respect thereto in
accordance with the terms of the related Mortgage Note.

         "Affiliate": With respect to any specified Person, any other Person
controlling, controlled by or under common control with such specified Person.

         "Agreement": This Second Amended and Restated Master Mortgage Loan
Purchase Agreement and all exhibits hereto, amendments hereof and supplements
hereto.

         "Appraised Value": With respect to any Mortgage Loan, the value of the
related Mortgaged Property based upon the lesser of (i) the appraisal, made for
the originator at the time of the origination of the Mortgage Loan, and (ii) if
applicable, the sales price of the Mortgaged Property at such time of
origination.

         "Assignment": An assignment of the Mortgage, notice of transfer or
equivalent instrument, sufficient under the laws of the jurisdiction wherein the
related Mortgaged Property is located to reflect of record the sale or transfer
of the Mortgage Loan, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages securing Mortgaged Properties located in the same county, if permitted
by applicable law and acceptable for recording by the applicable recording
office. With respect to any Mortgage Loan registered with MERS, an Assignment
shall include a notice of transfer sufficient under the governing instruments of
MERS to reflect a transfer of the Mortgage Loan. An Assignment shall include, as
applicable, such instruments as are necessary and sufficient under the laws of
the jurisdiction where a Cooperative Apartment is located to reflect of record
the sale or transfer of the Mortgage Loan and security interest in the Mortgaged
Property affecting such Cooperative Apartment.

         "Assumed Principal Balance": With respect to any Mortgage Loan as of
any date of determination (i) the outstanding principal balance as of the
Cut-off Date, after application of principal payments due on or before such date
whether or not received, minus (ii) all amounts previously distributed to
Purchaser with respect to such Mortgage Loan representing (a) payments or other
recoveries of principal, or (b) advances of principal made pursuant to Section
5.03 of the Amended and Restated Master Servicing Agreement.

                                      -2-
<PAGE>

         "Balloon Mortgage Loan": Any Mortgage Loan which by its original terms
or any modifications thereof provides for amortization beyond its scheduled
maturity date.

         "Business Day": Any day other than (i) a Saturday or Sunday, or (ii) a
day on which banking or savings associations in the States of New York or
Illinois are authorized or obligated by law or executive order to be closed.

         "Certificate of Seller": A certificate signed by the Secretary or one
of the Assistant Secretaries of Seller, substantially in the form attached
hereto as Exhibit 5.

         "Closing Date": For each Transaction, the date on which Seller actually
sells to Purchaser, and Purchaser actually purchases from Seller, the Mortgage
Loans listed on the Final Mortgage Loan Schedule attached to the respective
Warranty Bill of Sale.

         "Closing Documents": (i) With respect to the Initial Closing Date, the
following documents:

         (A)      two counterparts of this Agreement;

         (B)      two counterparts of the Amended and Restated Master Servicing
                  Agreement;

         (C)      three counterparts of the Custodial Agreement;

         (D)      the Certificate of Seller, dated as of the Initial Closing
                  Date;

         (E)      the Initial Custody Receipt, dated the Initial Closing Date;
                  and

         (F)      ten (10) counterparts of a power of attorney in the form of
                  Exhibit A to the Amended and Restated Master Servicing
                  Agreement.

(ii) With respect to the Initial Closing Date and each subsequent Closing Date,
the following documents:

         (A)      the Final Mortgage Loan Schedule for the related Transaction;

         (B)      the initial Custody Receipt (as defined in the Custody
                  Agreement) for the related Transaction, dated the Closing
                  Date, with only such exceptions noted on Schedule B thereto as
                  shall be acceptable to Purchaser;

         (C)      the Warranty Bill of Sale with respect to the Mortgage Loans
                  for the related Transaction, dated the Closing Date:

                                      -3-
<PAGE>

         (D)      An original assignment in the form of Exhibit 6 attached
                  hereto of the Additional Collateral Pledge Agreements with
                  respect to the Additional Collateral Mortgage Loans; and

         (E)      The assignment and notice of transfer by Morgan Stanley Dean
                  Witter Credit Corporation of the security interest on the
                  Trading Accounts from Seller to Purchaser.

         "Converted Mortgage Loan": A Convertible Mortgage Loan with respect to
which the related Mortgagor has exercised its option to convert the related
Mortgage Note from a Mortgage Note with an adjustable interest rate to a
Mortgage Note with a fixed interest rate.

         "Convertible Mortgage Loan": An Adjustable Rate Mortgage Loan with a
Mortgage Note that contains an option of the Mortgagor to convert the related
Mortgage Note from a Mortgage Note with an adjustable interest rate to a
Mortgage Note with a fixed interest rate.

         "Cooperative Apartment": A dwelling unit in a multi-dwelling building
owned or leased by a cooperative housing corporation, which unit the Mortgagor
has an exclusive right to occupy pursuant to the terms of a proprietary lease in
accordance with the laws of the state in which the building is located.

         "Cooperative Loan": A Mortgage Loan evidenced by a Mortgage Note and
secured by a first lien against (i) shares issued by a cooperative housing
corporation and (ii) the related Mortgagors' leasehold interest in the
Mortgagor's Cooperative Apartment. The security interest created in the
Mortgagor's Cooperative Apartment and the proprietary lease shall include the
following documentation, as required by the applicable laws of the state in
which such Cooperative Apartment is located: (a) a security agreement, (b) the
related UCC-1 Financing Statement, (c) an assignment of the cooperative lease,
(d) the stock certificate evidencing ownership of such Cooperative Apartment,
appropriately endorsed, or an equivalent stock power, (e) a recognition
agreement, and (f) such other documents as are necessary and proper for the
perfection of a lien against such Cooperative Apartment, all as are required
under state law.

         "Custodial Account": The separate trust account or accounts created and
maintained pursuant to Section 4.04 of the Amended and Restated Master Servicing
Agreement which shall be entitled "Morgan Stanley Dean Witter Credit
Corporation, in trust for Morgan Stanley Mortgage Capital Inc.," or such other
title as is requested by Purchaser.

         "Custodial Agreement": The Custodial Agreement, among Seller, Purchaser
and the Custodian for the retention of each Mortgage Note, Mortgage, Assignment
and certain other portions of each Mortgage File, substantially in the form
attached to this Agreement as Exhibit 3, as the same may be amended, modified,
restated or supplemented from time to time.

         "Custodian": The Custodian under the Custodial Agreement, or its
successor.

                                      -4-
<PAGE>

         "Cut-off Date": With respect to each Mortgage Loan, the first day of
the month in which the related Closing Date occurs.

         "Deleted Mortgage Loan": A Mortgage Loan replaced or to be replaced by
a Qualified Substitute Mortgage Loan.

         "Due Date": As to any Mortgage Loan, the day each Monthly Payment is
due on such Mortgage Loan, exclusive of any days of grace.

         "Equity Refinanced Mortgage Loan": A Refinanced Mortgage Loan in which
the Mortgagor used less than the entire amount of the proceeds (net of any
closing costs, including discount and origination fees and prepaid items) to
refinance an existing mortgage loan and any junior lien that existed on the
related Mortgaged Property at the date of origination of the Refinanced Mortgage
Loan.

         "Fannie Mae": Fannie Mae, f/k/a the Federal National Mortgage
Association, or any successor organization.

         "Fannie Mae Guides": The Fannie Mae Sellers' Guide and the Fannie Mae
Servicers' Guide, and all amendments or additions thereto."

         "Final Mortgage Loan Schedule": The list of Mortgage Loans for a
Transaction, which list shall set forth the following information with respect
to each Mortgage Loan:

         (i)      the loan number;

         (ii)     the Mortgagor's name;

         (iii)    the street address of the Mortgaged Property, including city,
                  state and zip code;

         (iv)     the Mortgage Interest Rate at origination;

         (v)      for each Adjustable Rate Mortgage Loan, the first Interest
                  Rate Adjustment Date and the first Payment Adjustment Date;

         (vi)     for each Adjustable Rate Mortgage Loan, the Gross Margin;

         (vii)    for each Adjustable Rate Mortgage Loan, the Lifetime Rate Cap;

         (viii)   for each Adjustable Rate Mortgage Loan, the Periodic Rate Cap;

         (ix)     the original term to maturity;

         (x)      the original principal balance;

                                      -5-
<PAGE>

         (xi)     the first payment date;

         (xii)    the maturity date;

         (xiii)   the Monthly Payment in effect as of the related Cut-off Date;

         (xiv)    the principal balance as of the related Cut-off Date, after
                  giving effect to all payments of principal due on or before
                  such date, whether or not received;

         (xv)     the Loan-to-Value Ratio as of the date origination;

         (xvi)    a code indicating whether the Mortgaged Property is occupied
                  by Mortgagor;

         (xvii)   a code indicating the type of residential dwelling;

         (xviii)  a code indicating whether the Mortgage Loan is a purchase
                  mortgage loan, rate/term refinance loan, limited cash-out loan
                  or cash-out refinance loan;

         (xix)    a code indicating whether the Mortgage Loan is covered by a
                  Primary Mortgage Insurance Policy;

         (xx)     a code indicating whether the Mortgage Loan is a Limited
                  Documentation Mortgage Loan;

         (xxi)    a code indicating whether the Mortgage Loan is an Additional
                  Collateral Mortgage Loan;

         (xxii)   for each Adjustable Rate Mortgage Loan, a code indicating the
                  type of Index;

         (xxiii)  a code indicating whether the Mortgage Loan is a Balloon
                  Mortgage Loan;

         (xxv)    the Servicing Fee Rate applicable to such Mortgage Loan, and
                  if such Mortgage Loan is an Adjustable Rate Mortgage Loan
                  whose first Interest Rate Adjustment has not occurred, the
                  Servicing Fee Rate (if different) prior to the first Interest
                  Rate Adjustment Date;

         (xxvi)   a code indicating whether the Mortgage Loan is a Convertible
                  Mortgage Loan;

         (xxvii)  a code indicating whether the Mortgagor is self-employed;

         (xxviii) a code indicating the value of the Mortgagor's assets at
                  origination;

         (xxix)   Appraised Value; and

                                      -6-
<PAGE>

         (xxx)    a code indicating the Primary Mortgage Insurance Policy
                  provider and percent of coverage, if applicable.

Such schedule shall also set forth the weighted average of the amounts described
under (iv) above for all of the Mortgage Loans. Such list may be in the form of
more than one list, collectively setting forth all of the information required.

         "Fixed Rate Mortgage Loan": A Mortgage Loan that provides for a fixed
Mortgage Interest Rate over the term of the related Mortgage Note.

         "Freddie Mac": Freddie Mac, f/k/a the Federal Home Loan Mortgage
Corporation, or any successor organization.

         "Gross Margin": With respect to each Adjustable Rate Mortgage Loan, the
fixed number of basis points set forth in the Final Mortgage Loan Schedule that
is added to the Index on each Interest Rate Adjustment Due Date in accordance
with the terms of the related Mortgage Note to determine the Mortgage Interest
Rate for such Mortgage Loan, subject to any applicable Periodic Rate Cap and
Lifetime Rate Cap.

         "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
home," "threshold," "covered," "high risk home," "predatory" or similar loan
under any other applicable state, federal or local law (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage loans
having high interest rates, points and/or fees).

         "Index": With respect to each Adjustable Rate Mortgage Loan and each
Interest Rate Adjustment Date, the index used to determine the Mortgage Interest
Rate on such Adjustable Rate Mortgage Loan, as specified in the related Mortgage
Note, in each case as available the number of days prior to any Interest Rate
Adjustment Date set forth in the related Mortgage Note, which index may be (i)
the average of the London Interbank Offered Rates for one- or six-month U.S.
dollar deposits, as published in the "Money Rates" table of The Wall Street
Journal or elsewhere (as specified in the related Mortgage Note) on the date or
dates specified in such Mortgage Note for the determination of such rate, (ii)
the weekly average of the closing market bid yields on actively traded U.S.
Treasury securities adjusted to a constant maturity of one year, (iii) the
weekly average or the monthly average of weekly average auction rates on U.S.
Treasury bills with a maturity of six months, as published by the Board of
Governors of the Federal Reserve System in Federal Reserve Statistical Release
H.15. (519), (iv) the weekly average of the closing market bid yields on U.S.
Treasury securities adjusted to a constant maturity of one (1) year, as
published by the Board of Governors of the Federal Reserve System in Federal
Reserve Statistical Release H.15.

                                      -7-
<PAGE>

(519), (v) the weekly average of the closing market bid yields on U.S. Treasury
securities adjusted to a constant maturity of five (5) years, as published by
the Board of Governors of the Federal Reserve System in Federal Reserve
Statistical Release H.15. (519), (vi) the prime rate specified in the related
Mortgage Note, as published in the "Money Rates" table of The Wall Street
Journal, or elsewhere (as specified in such Mortgage Note), (vii) the monthly
weighted average cost of funds of members of the Federal Home Loan Bank of San
Francisco, (viii) such other standard for determining the change in the interest
rate as may be set forth in the related Mortgage Note, or (ix) if such index is
not so published or is otherwise unavailable, such comparable alternative index
selected by Seller in accordance with the terms of the Mortgage Notes and in
consultation with Purchaser.

         "Initial Closing Date": The first Closing Date to occur.

         "Initial Custody Receipt": For each Transaction, the initial Custody
Receipt, executed by the Purchaser or the Custodian with respect to the Mortgage
Loans for such Transaction, substantially in the form of Exhibit One to the
Custodial Agreement.

         "Interest Rate Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the date on which the Mortgage Interest Rate is adjusted in
accordance with the terms of the related Mortgage Note.

         "Lifetime Rate Cap": With respect to each Adjustable Rate Mortgage
Loan, the maximum Mortgage Interest Rate that may be borne thereby, as set forth
in the related Mortgage Note.

         "Limited Documentation Mortgage Loan": A Mortgage Loan that was
originated pursuant to a "limited documentation" or "easy qualifier"
underwriting program.

         "Loan-to-Value Ratio" or "LTV": With respect to any Mortgage Loan, as
of any date on which a determination thereof is made, the ratio on such date of
the outstanding principal balance of such Mortgage Loan to the Appraisal Value
of the related Mortgaged Property.

         "MERS": Mortgage Electronic Registration Systems, Inc.

         "Monthly Payment": The scheduled monthly payment of interest and, when
applicable, principal on a Mortgage Loan which is payable by a Mortgagor from
time to time under the related Mortgage Note on every Due Date.

         "Mortgage": The mortgage, trust deed or other instrument securing the
respective Mortgage Loan, as the same may be amended, modified, restated or
supplemented from time to time.

         "Mortgage File": As to any Mortgage Loan, the mortgage, any related
mortgage documents and, if the Mortgaged Property is a Cooperative Apartment,
all documents relating to the security interest in a Cooperative Apartment,
including but not limited to all paper, computer generated and microfiche
records, pertaining to a particular Mortgage Loan which are specified

                                      -8-
<PAGE>

in Exhibit 1 hereto and any additional documents required to be added to the
Mortgage File pursuant to the Program Documents.

         "Mortgage Interest Rate": The annual rate at which interest accrues on
any Mortgage Loan, net of any premium on any related Primary Mortgage Insurance
Policy and any continuing compensation paid to correspondent lenders; provided
that, with respect to any Adjustable Rate Mortgage Loan, the term "Mortgage
Interest Rate" shall mean the annual rate applicable thereto as the same may be
adjusted on any Interest Rate Adjustment Date and subject to the limitations on
such interest rate imposed by the Periodic Rate Cap and the Lifetime Rate Cap.

         "Mortgage Loan": An individual Mortgage Loan, including but not limited
to all documents included in the Mortgage File, Monthly Payments, principal
prepayments, insurance proceeds, condemnation proceeds, liquidation proceeds,
and any and all rights, benefits, proceeds and obligations arising therefrom or
in connection therewith, and which is the subject of this Agreement. Each
Mortgage Loan set forth on the Final Mortgage Loan schedule attached to a
Warranty Bill of Sale will initially be subject to this Agreement, commencing on
the respective Closing Date for the related Transaction.

         "Mortgage Loan Documents": With respect to each Mortgage Loan, the
documents specified in Section 3(b) of this Agreement, which documents Seller
shall deliver to the Purchaser or Custodian pursuant thereto.

         "Mortgage Loan Payments": With respect to each Mortgage Loan (i) all
scheduled principal due after the related Cut-off-Date, (ii) all other
recoveries of principal collected after the related Cut-off Date and collected
by Seller after the related Cut-off Date, and (iii) all payments of interest on
the Mortgage Loans at the Mortgage Loan Remittance Rate minus that portion of
any such payment that is allocable to the period prior to the related Cut-Off
Date; provided, however, that payments of scheduled principal and interest
prepaid for a due date beyond the related Cut-off Date shall not be applied to
the principal balance as of the related Cut-off Date and that such principal and
such prepaid amounts (minus interest at the Servicing Fee Rate) shall constitute
a part of the Mortgage Loan Payments, which prepaid amounts Seller shall deposit
into the related Custodial Account established for the benefit of Purchaser for
subsequent remittance by Seller to Purchaser pursuant to the Amended and
Restated Master Servicing Agreement.

         "Mortgage Loan Remittance Rate": With respect to each Mortgage Loan,
the related Mortgage Interest Rate minus the Servicing Fee Rate.

         "Mortgage Note": The note or other evidence of the indebtedness of a
Mortgagor secured by a Mortgage.

         "Mortgaged Property": The underlying real property securing repayment
of a Mortgage Note, consisting of a fee simple or leasehold interest in a single
parcel of real property improved by a residential dwelling or a single
Cooperative Apartment including the stock certificates

                                      -9-
<PAGE>

evidencing ownership in such Cooperative Apartment, the proprietary lease and
all attendant right, title and interest thereto.

         "Mortgagor": The obligor on a Mortgage Note.

         "Payment Adjustment Date": With respect to each Adjustable Rate
Mortgage Loan, the first date on which payments thereon may be adjusted and all
subsequent such dates of adjustment, as set forth in the related Final Mortgage
Loan Schedule and in the related Mortgage Note.

         "Periodic Rate Cap": With respect to each Adjustable Rate Mortgage Loan
as to which the related Final Mortgage Loan Schedule indicates the existence of
Periodic Rate Cap, the provision of the related Mortgage Note that provides for
a maximum amount by which the Mortgage Interest Rate may increase (or, if so
indicated on such Final Mortgage Loan Schedule, decrease) on an Interest Rate
Adjustment Date above the Mortgage Interest Rate immediately prior to such
Interest Rate Adjustment Date.

         "Person": Any individual, corporation, partnership, limited liability
company, joint venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.

         "Preliminary Mortgage Loan Schedule": The initial list of Mortgage
Loans for a proposed Transaction, which list shall set forth at least the
information with respect to each Mortgage Loan described in items (i), (ii),
(iv), (ix), (xii), (xiii), (xiv), (xvi), (xx), (xxi), (xxii) and (xxiii) of the
definition of "Final Mortgage Loan Schedule". The Preliminary Mortgage Loan
Schedule may be electronically delivered to Purchaser.

         "Primary Mortgage Insurance Policy": With respect to each Mortgage
Loan, the policy of primary mortgage insurance, if any, in effect as indicated
on the related Final Mortgage Loan Schedule, or any replacement policy therefor
obtained by Seller pursuant to the Amended and Restated Master Servicing
Agreement.

         "Program Documents": With respect to each Transaction, the related
Purchase Price and Terms Letter, the related Warranty Bill of Sale, the Amended
and Restated Master Servicing Agreement, the Custodial Agreement, this Agreement
and each other document or instrument executed or delivered by Seller in
connection with any of the foregoing.

         "Purchase Price": With respect to each Mortgage Loan listed on the
Final Mortgage Loan Schedule for a Transaction the price paid on the related
Closing Date by Purchaser to Seller in exchange for such Mortgage Loan, which
amount shall equal the sum of (i) the related Purchase Price Percentage
multiplied by the unpaid principal balance of such Mortgage Loan as of the
related Cut-off Date, after application of scheduled payments of principal due
on or before such Cut-off Date whether or not collected, and (ii) interest
scheduled to accrue on the unpaid

                                      -10-
<PAGE>

principal balance of such Mortgage Loan at the Mortgage Loan Remittance Rate,
from the related Cut-off Date to the day prior to the related Closing Date,
inclusive.

         "Purchase Price and Terms Letter": with respect to each Transaction,
the letter agreement or agreements setting forth the general terms and
conditions of such Transaction to be consummated as provided herein, with a copy
of the related Preliminary Mortgage Loan Schedule, if requested by Purchaser, by
and between Seller and Purchaser. The related Purchase Price and Terms Letter
shall set forth among other matters, (i) the approximate dollar amount of
Mortgage Loans for the related Transaction, (ii) the related Cut-off Date, (iii)
the proposed Closing Date, (iv) the related Purchase Price Percentage, (v) the
related Servicing Fee Rate, and (vi) the characteristics, including the
characteristics set forth in the related Warranty Bill of Sale, for the related
Mortgage Loans, both individually and in the aggregate. All of the individual
Purchase Price and Terms Letters shall be referred to, collectively, as the
"Purchase Price and Terms Letter".

         "Purchase Price Percentage": With respect to each Mortgage Loan, the
percentage of par set forth in the related Purchase Price and Terms Letter
(subject to adjustment as provided therein) at which Purchaser will purchase the
Mortgage Loan from Seller on the Closing Date.

         "Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by
Seller for a Deleted Mortgage Loan which must, on the date of such substitution
(i) have an outstanding principal balance, after deduction of all scheduled
payments due in the month of substitution (or in the case of a substitution of
more than one mortgage loan for a Deleted Mortgage Loan, an aggregate principal
balance), not in excess of the outstanding principal balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited into the Custodial
Account by Seller in the month of substitution pursuant to Section 4.04 (vii) of
the Amended and Restated Master Servicing Agreement), (ii) have a Mortgage
Interest Rate which is within one percent (1%) per annum of the Deleted Mortgage
Loan, (iii) have a remaining term to maturity not greater than (and not more
than one year less than) that of the Deleted Mortgage Loan, and (iv) comply with
each representation and warranty set forth Section 5(b) of this Agreement.

         "Refinanced Mortgage Loan": A Mortgage Loan that was made to a
Mortgagor who owned the Mortgaged Property prior to the origination of such
Mortgage Loan and the proceeds of which (net of any closing costs, including
discount and origination fees and prepaid items) were used in whole or part to
satisfy an existing mortgage.

         "Servicing Fee": With respect to any Mortgage Loan and any Remittance
Date, the fee payable monthly to Seller, as servicer, under Section 7.03 of the
Amended and Restated Master Servicing Agreement.

         "Servicing Fee Rate": With respect to each Mortgage Loan, the rate per
annum set forth in the related Final Mortgage Loan Schedule as the "Servicing
Fee Rate".

                                      -11-
<PAGE>

         "Subsequent Purchaser": Any Person that acquires an interest in a
Mortgage Loan from Purchaser.

         "Trading Account": With respect to any Additional Collateral Mortgage
Loan as to which a Additional Collateral Pledge Agreement was made, the account
in which is held the securities and other assets that are subject to such
Additional Collateral Pledge Agreement.

         "Surety Bond Issuer": Shall mean AMBAC Assurance Corporation or any
successor thereto.

         "Transaction": The sale by Seller to Purchaser, and the purchase by
Purchaser from Seller, of one or more Mortgage Loans on a Closing Date, as
evidenced by the execution and delivery by Seller to Morgan Stanley Mortgage
Capital, Inc. as the initial Purchaser, of the Warranty Bill of Sale.

         "Underwriting Guide": The Underwriting Guide of Seller attached hereto
as Exhibit 4, as amended, modified, restated or supplemented from time to time.

         "Warranty Bill of Sale": The warranty bill of sale executed and
delivered by Seller to Purchaser on a Closing Date, evidencing the sale of the
related Mortgage Loans by Seller to Purchaser and setting forth certain
representations and warranties of Seller with respect thereto, in the form
attached hereto as Exhibit 8.

         SECTION 2. PURCHASE OF MORTGAGE LOANS.

         (a) Sale and Conveyance of Mortgage Loans. From time to time Seller may
offer to sell to Purchaser, and Purchaser may elect to purchase form Seller,
Mortgage Loans in one or more Transactions pursuant to the terms and conditions
of the Program Documents. The agreement of Seller to sell to Purchaser and of
Purchaser to purchase from Seller, Mortgage Loans on a particular Closing Date
shall be evidenced by the execution of a Purchase Price and Terms Letter. The
obligation of Purchaser to purchase any Mortgage Loan from Seller on any
particular Closing Date shall be subject to the satisfaction of the conditions
precedent to Purchaser's obligation to purchase set forth in Section 2(b). The
sale of each Mortgage Loan shall be reflected in Seller's balance sheet and
other financial statements as a sale of assets by Seller.

         (b) Conditions of Closing. On each respective Closing Date (i) Seller
will sell, transfer, assign, set over and convey to purchaser without recourse,
all of the right, title and interest of Seller in and to the Mortgage Loans
included in such Transaction, including all Mortgage Loan Payments, and (ii)
Purchaser shall pay to Seller, by wire transfer of immediately available funds
to the account of Seller, the Purchase Price for each Mortgage Loan included in
such Transaction, subject to the satisfaction of the following conditions to
Purchaser's obligation to purchase the Mortgage Loans:

                                      -12-
<PAGE>

         (A)      All of the representation and warranties of Seller under the
                  Program Documents shall be true and correct in all material
                  respects as of the Closing Date, and no event shall have
                  occurred that, with notice or the passage of time, would
                  constitute a default under any Program Document, including an
                  Event of Default under the Amended and Restated Master
                  Servicing Agreement;

         (B)      Purchaser shall have received, or Purchaser's attorneys shall
                  have received in escrow, the Closing Documents, in such forms
                  as are agreed upon and as are acceptable to Purchaser, duly
                  executed by all signatories other than Purchaser required
                  pursuant to the respective terms thereof:

         (C)      Seller shall have delivered and released to Purchaser or the
                  Custodian all documents required under the Program Documents;
                  and

         (D)      Seller shall have complied with all other terms and conditions
                  of this Agreement.

         (c) Record Title and Possession of Mortgage Files. From and after the
sale of each Mortgage Loan, the contents of the related Mortgage File and all
rights, benefits, proceeds and obligations arising therefrom or in connection
therewith, shall be transferred to, and assumed by, Purchaser. All rights,
arising out of each Mortgage Loan, including, but not limited to, all funds
received on or in connection with such Mortgage Loans and all records or
documents with respect to such Mortgage Loan prepared by or which come into the
possession of Seller shall be received and held by Seller in trust for the
benefit of Purchaser as the owner of the Mortgage Loan. Any portion of the
Mortgage File held by Seller for servicing purposes shall be appropriately
marked to clearly reflect ownership of the Mortgage Loan by Purchaser and Seller
shall promptly release such portion of the Mortgage File to Purchaser, when
Seller's servicing needs no longer necessitate retaining such documents.

         SECTION 3. DELIVERY REQUIREMENTS.

         (a) Final Mortgage Loan Schedules. On or before the date on which
Seller and Purchaser execute a Purchase Price and Terms Letter, Seller shall
provide Purchaser with the respective Preliminary Mortgage Loan Schedule. Not
less than one (1) Business Day prior to the related Closing Date, Seller either
(i) shall deliver the related Final Mortgage Loan Schedule to Purchaser or (ii)
shall deliver to Purchaser all information with respect to the Mortgage Loans to
be sold to Purchaser on such Closing Date that is necessary to enable Purchaser
to prepare the related Final Mortgage Loan Schedule, which information shall be
delivered on a computer disk on a machine-readable tape or in such other format
as Purchaser may reasonably specify.

         (b) Delivery of Mortgage Loan Documents. Seller is currently in
possession of the following original Mortgage Loan Documents for each Mortgage
Loan:

                  (A) the original Mortgage Note bearing all intervening
endorsements, endorsed "Pay to the order of _________, without recourse" and
signed in the name of the Seller

                                      -13-
<PAGE>

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 custodian is so advised by the Seller that state
law so allows; and

                  (B) the original Mortgage with evidence of recording thereon.
If in connection with any Mortgage Loan, the Seller cannot deliver or cause to
be delivered the original Mortgage with evidence of recording thereon on or
prior to the Closing Date because of a delay caused by the public recording
office where such Mortgage has been delivered for recordation or because such
Mortgage has been lost or because such public recording office retains the
original recorded Mortgage, the Seller shall deliver or cause to be delivered to
the custodian, a photocopy of such Mortgage, together with (i) in the case of a
delay caused by the public recording office, an Officer's Certificate of the
Seller stating that such Mortgage has been dispatched to the appropriate public
recording office for recordation and that 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 will be promptly delivered to
the custodian upon receipt thereof by the Seller; 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 Seller to be a true and complete
copy of the original recorded Mortgage;

                  (D) The original policy of title insurance, if applicable (or
a preliminary title report if the original title insurance policy has not been
received from the title insurance company or if a preliminary title report is
the documentation required by Seller).

                  (E) the originals of all assumption, modification,
consolidation or extension agreements, if any, with evidence of recording
thereon;

                  (F) the original Assignment of Mortgage for each Mortgage
Loan, executed in blank and in form and substance acceptable for recording;

                  (G) the originals of all intervening assignments of mortgage
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, the Seller shall deliver or cause to be delivered to the custodian, a
photocopy of such intervening assignment, together with (i) in the case of a
delay caused by the public recording office, an Officers Certificate of the
Seller stating that such intervening assignment of mortgage has been dispatched
to the appropriate public recording office for recordation and that such
original recorded intervening assignment of mortgage or a copy of such
intervening assignment of mortgage certified by the appropriate public recording
office to be a true and complete copy of the original recorded intervening
assignment of mortgage will be promptly delivered to the custodian upon receipt
thereof by the Seller; or (ii) in the case of an intervening assignment where a
public recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after

                                      -14-
<PAGE>

recordation in a public recording office, a copy of such intervening assignment
certified by Seller to be a true and complete copy of the original recorded
intervening assignment;

                  (H) With respect to the Additional Collateral Mortgage Loan, a
copy of any related pledge, security or control agreement, as the case may be.

                  (I) With respect to the Additional Collateral Mortgage Loan, a
copy of any filed UCC-1 financing statements or, if the UCC-1 has not yet been
returned from the recording office, a copy of such UCC-1 which has been
delivered for recording and an original form UCC-3 assignment, if applicable.

                  If (1) the original Mortgage was not delivered pursuant to
clause (B) above, (2) any original intervening assignment was not delivered
pursuant to clause (F) above or (3) the original title insurance policy was not
delivered pursuant to clause (C) above, Seller shall use reasonable efforts to
promptly secure the delivery of such originals and shall cause such originals to
be delivered to Purchaser or the Custodian promptly upon receipt thereof. If any
such document is not so delivered to Purchaser or the Custodian within one
hundred eighty (180) days following the Closing Date (or such longer period of
time as may be necessitated solely as a result in delays caused by a party other
than the Seller), the related Mortgage Loan shall, upon the request of
Purchaser, (i) be repurchased by Seller at the price specified in Section 5(c),
or (ii) be replaced by a Qualified Substitute Mortgage Loan (the election of (i)
or (ii) being at the option of Purchaser), provided that the Purchaser gives the
Seller notice within ten (10) days of the expiration of such delivery period.

                  No Assignment of Mortgage evidencing the transactions
contemplated hereby shall be recorded by Seller unless required by law.
Purchaser may at its option and expense (including recordation fees) prepare and
record any Assignment of Mortgage.

                  From and after the related Closing Date, Seller, as bailee
(the "Bailee"), shall continue to hold the Mortgage Files as custodian and
bailee for the Purchaser, the owner of the related Mortgage Loans, and shall
issue in the name of the Purchaser or its designee, a trust receipt in the form
of Exhibit 9 hereto (the "Trust Receipt") evidencing the ownership of the
Mortgage Loans related thereto.

                  At the Purchaser's request, the Bailee shall issue, within 2
Business Days from such request, a final trust receipt and certification
evidencing the Purchaser's ownership of the related Mortgage Loans in the form
of Exhibit 10 hereto (the "Final Trust Receipt and Certification"), which Final
Trust Receipt and Certification shall have attached thereto a list of document
exceptions, if any, based upon the documents to be contained in the Mortgage
File as listed above.

                  Upon 3 Business Days prior written notice from the Purchaser
to the Bailee, the Bailee shall deliver or cause to be delivered to the
Purchaser or any party designated in such notice, the Mortgage Files, and shall
release them to the Purchaser or its designee in accordance

                                      -15-
<PAGE>

with the directions of the Purchaser. Such delivery date(s) shall herein be
known as release date(s) (each, a "Release Date").

                  In the event that the Bailee fails to deliver any Mortgage
File, or any component thereof, in connection with the Purchaser's instructions,
the Bailee shall indemnify the Purchaser for and hold the Purchaser harmless
against any and all liability, costs and expenses (including attorneys' fees)
arising out of such failure to deliver any Mortgage File.

                  From and after the Closing Date and until the applicable
Release Date, the Bailee shall maintain continuous custody and control of the
Mortgage Files as custodian and bailee for the Purchaser.

         (c) Purchaser hereby acknowledges that Seller may register the
Mortgages subject to this Agreement with MERS as a nominee for Seller, either
through the recordation of a mortgage or deed of trust which shows MERS as a
nominee for Seller or by the recordation of an Assignment which shows MERS as a
nominee for Seller, for purposes of facilitating the transfer of the Mortgage
Loan and/or Mortgage Loan Documents. Purchaser and Seller hereby acknowledge
that MERS will have no beneficial interest in the Mortgage Loan and that the
registration of the Mortgage Loan with MERS will not in any way affect the
rights, title, interest, obligations or responsibilities of Purchaser and Seller
under the terms of this Agreement. Purchaser and Seller agree to cooperate in
all ways necessary to effectuate the use of MERS for the purpose of facilitating
the transfer of applicable Mortgage Loan Documents, and withstanding any other
provisions in this Agreement to the contrary, agree to accept such documentation
and evidence of transfer provided by MERS under its operating documents to
accomplish the transfer of ownership in the Mortgage Loan.

         SECTION 4. EXAMINATION OF MORTGAGE FILES.

         Prior to the respective Closing Date, Seller, shall make available to
Purchaser, for examination, the Mortgage File pertaining to each related
Mortgage Loan at the offices of Seller, or such other location as Seller and
Purchaser shall mutually designate. Such examination may be made by Purchaser of
the related Mortgage Loan at any time before the related Closing Date and may be
made by Purchaser or any prospective Subsequent Purchaser of such Mortgagee Loan
at any time after such Closing Date. If Purchaser makes such examination prior
to the Closing Date and identifies any Mortgage Loan that does not conform to
the terms of the Purchase Price and Terms Letter, such Mortgage Loan shall be
deleted from the Final Mortgage Loan Schedule and may be replaced by a
substitute Mortgage Loan that conforms to the terms of the Purchase Price and
Terms Letter and that is reasonably acceptable to Purchaser. Purchaser may, at
its option and without notice to Seller, purchase all or part of the Mortgage
Loans for a Transaction without conducting any partial or complete examination.
The failure or omission by Purchaser or any Subsequent Purchaser of the Mortgage
Loans to conduct any partial or complete examination of the Mortgage Files shall
not affect Purchaser's rights to demand repurchase or other relief as provided
under any Program Document.

                                      -16-
<PAGE>

         SECTION 5. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF SELLER.

         (a) Seller represents and warrants to Purchaser that as of the date
hereof and as of each respective Closing Date (or as of such other date or dates
as may be expressly set forth below);

                  (i) Seller is duly incorporated, validly existing and in good
         standing as a corporation under the laws of the State of Delaware.
         Seller has full power and authority, corporate and otherwise, to own
         its properties and conduct its business as presently conducted by it,
         and to enter into and perform its obligations under the Program
         Documents and to sell each Mortgage Loan. To the extent material to
         Purchaser's rights hereunder, Seller holds all material licenses
         necessary to carry on its business as now being conducted and is
         licensed in, qualified to transact business in and is in good standing
         under the laws of each state in which any Mortgaged Property is located
         if the laws of such state require licensing or qualification in order
         to conduct business of the type conducted by Seller, and in any event
         Seller was and is in compliance with the laws of any such state to the
         extent necessary to ensure the enforceability of each Mortgage Loan.

                  (ii) This Agreement, the Amended and Restated Master Servicing
         Agreement and the Custodial Agreement have been duly authorized,
         executed and delivered by Seller, and assuming the due authorization,
         execution and delivery thereof by Purchaser and the enforceability
         thereof against Purchaser, constitutes the legal, valid and binding
         agreement of Seller, enforceable against Seller in accordance with its
         terms, except as the enforceability thereof may be limited by
         bankruptcy, insolvency, liquidation, moratorium, reorganization or
         other similar laws affecting the rights of creditors generally or by
         general principles of equity, regardless of whether enforcement is
         sought in a proceeding in equity or at law.

                  (iii) As of the respective Closing Date, the related Purchased
         Price and Terms Letter has been duly authorized, executed and delivered
         by Seller, and such Purchase Price and Terms letter, assuming the due
         authorization, execution and delivery thereof by Purchaser and the
         enforceability thereof against Purchaser, constitutes the legal, valid
         and binding agreement of Seller, enforceable against Seller in
         accordance with its terms, except as the enforceability thereof may be
         limited by bankruptcy, insolvency, liquidation, moratorium,
         reorganization or other similar laws affecting the rights of creditors
         generally or by general principles of equity, regardless of whether
         enforcement is sought in a proceeding in equity or at law.

                  (iv) As of the respective Closing Date, the related Warranty
         Bill of Sale has been duly authorized, executed and delivered by
         Seller, and such Warranty Bill of Sale constitutes the legal, valid and
         binding agreement of Seller, enforceable against Seller in accordance
         with its terms, except as the enforceability thereof may be limited by
         bankruptcy, insolvency, liquidation, moratorium, reorganization or
         other similar laws

                                      -17-
<PAGE>

         affecting the rights of creditors generally or by general principles of
         equity, regardless of whether enforcement is sought in a proceeding in
         equity or at law.

                  (v) the representations and warranties made by Seller under
         the Amended and Restated Master Servicing Agreement and the related
         Warranty Bill of Sale are true and correct in all material respects as
         of the respective Closing Date.

                  (vi) Neither the delivery of the Mortgage Loans to Purchaser,
         nor the sale of the Mortgage Loans to Purchaser, nor the execution or
         delivery of the Program Documents, nor the consummation of any of the
         Transactions herein or therein contemplated, nor the fulfillment of the
         terms hereof or thereof, will result in the breach of any term or
         provision of the certificate of incorporation or by-laws of Seller, or
         conflict with, result in a material breach or cause an acceleration of
         or constitute a default under any material term of any material
         indenture or other material agreement or instrument to which Seller is
         a party or by which Seller is bound, or any statute, order or
         regulation applicable to Seller of any court, regulatory body,
         administrative agency, government body or arbitrator having
         jurisdiction over Seller.

                  (vii) There are no actions, proceedings or investigations
         pending or, to Seller's knowledge, threatened against Seller that, in
         Seller's judgment, if determined adversely to Seller, would prevent the
         consummation of any of the Transactions or would materially and
         aversely affect the interests of Purchaser in the Mortgage Loans, taken
         as a whole, the validity or enforceability of any of the Program
         Documents or the ability of Seller to fulfill the terms of any of the
         Program Documents.

                  (viii) Seller has complied with all applicable anti-money
         laundering laws and regulations, including without limitation, the USA
         Patriot Act of 2001.

         (b) Seller hereby represents and warrants to Purchaser, as to each
Mortgage Loan as of each respective Closing Date or such other date as may be
specified below, that:

                  (i) The information set forth in the Final Mortgage Loan
         Schedule is true and correct in all material respects.

                  (ii) As of the related Closing Date, the Mortgage Loan is not
         delinquent in payment more than 29 days and the Mortgage Loan has not
         been dishonored; there are no material defaults under the terms of the
         Mortgage Loan; Seller has not advanced funds, or induced, solicited or
         knowingly received any advance of funds from a party other than the
         owner of the Mortgaged Property subject to the Mortgage, directly or
         indirectly, for the payment of any amount required by the Mortgage
         Loan.

                  (iii) With respect to those Mortgage Loans which are required
         to deposit funds into an escrow account for payment of taxes,
         assessments, insurance premiums and similar items as they become due,
         there are no delinquent taxes, ground rents, water

                                      -18-
<PAGE>

         charges, sewer rents, assessments or other outstanding charges which
         constitute a lien on the related Mortgaged Property, and all escrow
         deposits have been collected, are under the control of Seller, and have
         been applied to the payment of such items in a timely fashion, in
         accordance with such Mortgage. With respect to those Mortgage Loans for
         which escrow deposits are not required, to Seller's knowledge, there
         are no delinquent taxes or other outstanding charges affecting the
         related Mortgaged Property which constitute a lien on the related
         Mortgaged Property.

                  (iv) The terms of the Mortgage Note and the Mortgage have not
         been impaired, waived, altered or modified in any respect, except by
         written instruments contained in the Mortgage File, approved, if
         necessary, by the insurer under any Primary Mortgage Insurance Policy
         and recorded in all places necessary to maintain the first priority of
         the lien, the substance of which waiver, alteration or modification is
         reflected on the Final Mortgage Loan Schedule. No Mortgagor has been
         released, in whole or in part, except by operation of law or in
         connection with an assumption agreement which assumption agreement is
         part of the Mortgage File and the terms of which are reflected in the
         Final Mortgage Loan Schedule.

                  (v) Neither the Mortgage Note nor the Mortgage is subject to
         any right of rescission, set-off, counterclaim or defense, including
         the defense of usury, nor will the operation of any of the terms of the
         Mortgage Note and the Mortgage, or the exercise of any right
         thereunder, render the Mortgage unenforceable, in whole or in part, or
         subject to any right of rescission, set-off, counterclaim or defense,
         including the defense of usury and, to Seller's knowledge, no such
         right of rescission, set-off, counterclaim or defense has been asserted
         by any Person with respect thereto.

                  (vi) All buildings upon the Mortgaged Property are required to
         be insured by a generally acceptable insurer against loss by fire,
         hazards of extended coverage and such other hazards as are customarily
         included in extended coverage in the area where the Mortgaged Property
         is located, pursuant to standard property insurance policies in
         compliance with Seller's policies as from time to time in effect. To
         the best knowledge of Seller, all such property policies are in effect.
         On the date of origination, such standard property policies contained a
         standard mortgage clause naming Seller or the originator of the
         Mortgage Loan and their respective successors in interest as mortgagee
         and to the best knowledge of Seller, such clause is still in effect
         and, to Seller's knowledge, all premiums due thereon have been paid. If
         the Mortgaged Property is located in an area identified by the Federal
         Emergency Management Agency as having special flood hazards under the
         National Flood Insurance Act of 1994, as amended, such Mortgaged
         Property is covered by flood insurance in the amount required under the
         National Flood Insurance Act of 1994. The Mortgage obligates the
         Mortgagor to maintain such insurance, authorizes the holder of the
         Mortgage to maintain such insurance at Mortgagor's cost and expense
         should the Mortgagor fail to do so and to seek reimbursement therefor
         from the Mortgagor.

                                      -19-
<PAGE>

                  (vii) At the time of origination of such Mortgage Loan and
         thereafter, all requirements of any federal or state law, including,
         without limitation, usury, truth-in-lending, real estate settlement
         procedures, consumer credit protection, equal credit opportunity or
         disclosure laws required to be complied with by Seller as the
         originator of the Mortgage Loan and applicable to the Mortgage Loan
         have been complied with in all material respects.

                  (viii) The Mortgage has not been satisfied as of the Closing
         Date, canceled or subordinated, in whole, or rescinded, and the
         Mortgaged Property has not been released from the lien of the Mortgage,
         in whole or in part (except for a release that does not materially
         impair the security of the Mortgage Loan or release the effect of which
         is reflected in the loan-to-value ratio for the Mortgage Loan as set
         forth in the Final Mortgage Loan Schedule), nor to Seller's knowledge
         has any instrument been executed that would effect any such release,
         cancellation, subordination or rescission.

                  (ix) Ownership of the Mortgaged Property is held in fee simple
         or leasehold estate. With respect to Mortgage Loans that are secured by
         a leasehold estate, to Seller's knowledge: (i) the lease is valid, in
         full force and effect, and conforms to all of Fannie Mae's requirements
         for leasehold estates; (ii) all rents and other payments due under the
         lease have been paid; (iii) the lessee is not in default under any
         provision of the lease; (iv) the term of the lease exceeds the maturity
         date of the related Mortgage Loan by at least five (5) years; and (v)
         the terms of the lease provide a Mortgagee with an opportunity to cure
         any defaults. Except as permitted by the fifth sentence of this
         paragraph (ix), the Mortgage is a valid, subsisting and enforceable
         first lien on the Mortgaged Property, including all buildings on the
         Mortgaged Property and all installations and mechanical, electrical,
         plumbing, heating and air conditioning systems affixed to such
         buildings, and all additions, alterations and replacements made at any
         time with respect to the foregoing securing the Mortgage Note's
         original principal balance. The Mortgage and the Mortgage Note do not
         contain any evidence on their face of any security interest or other
         interest or right thereto. Such lien is free and clear of all adverse
         claims, liens and encumbrances having priority over the first lien of
         the Mortgage subject only to (1) the lien of non-delinquent current
         real property taxes and assessments not yet due and payable, (2)
         covenants, conditions and restrictions, rights of way, easements and
         other matters reflected in the public record as of the date of
         recording which are acceptable to mortgage lending institutions
         generally, or which are specifically referred to in the lender's title
         insurance policy delivered to the originator of the Mortgage Loan and
         either (A) which are referred to or otherwise considered in the
         appraisal made for the originator of the Mortgage Loan, or (B) which do
         not in the aggregate adversely affect the Appraised Value of the
         Mortgaged Property as set forth in such appraisal, and (3) other
         matters to which like properties are commonly subject which do not in
         the aggregate materially interfere with the benefits of the security
         intended to be provided by the Mortgage or the use, enjoyment, value or
         marketability of the related Mortgaged Property. Any security
         agreement, chattel mortgage or equivalent document related to and
         delivered in connection with the Mortgage Loan establishes and creates
         a valid, subsisting and

                                      -20-
<PAGE>

         enforceable first lien and first priority security interest on the
         property described therein. With respect to each Cooperative Loan, the
         security instruments create a valid, enforceable and subsisting first
         priority security interest in the Cooperative Apartment securing the
         related Mortgage Note subject only to (a) the lien of the related
         cooperative for unpaid assessments representing the Mortgagor's pro
         rata share of payments for a blanket mortgage, if any, current and
         future real property taxes, insurance premiums, maintenance fees and
         other assessments to which like collateral is commonly subject, and (b)
         other matters to which the collateral is commonly subject which do not
         materially interfere with the benefits of the security intended to be
         provided; provided, however, that the related proprietary lease for the
         Cooperative Apartment may be subordinated or otherwise subject to the
         lien of a Mortgage on the cooperative building.

                  (x) The Mortgage Note is not subject to a third party's
         security interest or other rights therein.

                  (xi) The Mortgage Note and the related Mortgage are genuine
         and, to Seller's knowledge, each is the legal, valid and binding
         obligation of the maker thereof, enforceable in accordance with its
         terms, subject to bankruptcy, insolvency and other laws of general
         application affecting the rights of creditors. To Seller's knowledge,
         all parties to the Mortgage Note and the Mortgage had the legal
         capacity to enter into the Mortgage Loan and to execute and deliver the
         Mortgage Note and the Mortgage. To Seller's knowledge, the Mortgage
         Note and the Mortgage have been duly and properly executed by such
         parties. To Seller's knowledge no fraud, error, omission,
         misrepresentation, negligence or similar occurrence with respect to a
         Mortgage Loan has taken place on the part of any Person, including
         without limitation, the Mortgagor, any appraiser, any builder or
         developer, or any other party involved in the origination of the
         Mortgage Loan. Seller has reviewed all of the documents constituting
         the Mortgage File and has made such inquiries as it deems necessary to
         make and confirm the accuracy of the representations set forth herein.
         An obligor of the debt evidenced by the Mortgage Note is a natural
         person. The proceeds of the Mortgage Loan have been fully disbursed and
         there is no requirement for future advances thereunder, and any and all
         requirements in the Mortgage as to completion of any on-site or
         off-site improvements and as to disbursements of any escrow funds
         therefor have been complied with.

                  (xii) Seller has good title to, and the full right to transfer
         and sell, the Mortgage Loan free and clear of any encumbrance, equity,
         lien, pledge, charge, claim or security interest including, to the best
         knowledge of Seller, any lien, claim or other interest arising by
         operation of law. Seller has full right and authority subject to no
         interest or participation of, or agreement with, any other party, to
         sell and assign each Mortgage Loan pursuant to this Agreement and
         following the sale of each Mortgage Loan, the Purchaser will own such
         Mortgage Loan free and clear of any encumbrance, equity, participation
         interest, lien, pledge, charge, claim or security interest.

                                      -21-
<PAGE>

                  (xiii) Each Mortgage Loan is covered by an ALTA lender's title
         insurance policy or other generally acceptable form of policy or
         insurance acceptable to Fannie Mae or Freddie Mac, issued by a title
         insurer acceptable to Fannie Mae or Freddie Mac and qualified to do
         business in the jurisdiction where the Mortgaged Property is located,
         insuring (subject to the exceptions contained in paragraph (ix) (1) (2)
         and (3) above) Seller, its successors and assigns, the first priority
         lien of the Mortgage in the original principal amount of the Mortgage
         Loan. Seller is the sole insured of such lender's title insurance
         policy, such title insurance policy has been duly and validly endorsed
         to Purchaser or the assignment to Purchaser of Seller's interest
         therein does not require the consent of or notification to the insurer
         and such lender's title insurance policy is in full force and effect
         and will be in full force and effect upon the consummation of the
         transactions contemplated by this Agreement. To Seller's knowledge, no
         claims have been made under such lender's title insurance policy, and
         no prior holder of the related Mortgage has done, by act or omission,
         anything which would impair the coverage of such lender's title
         insurance policy.

                  (xiv) To Seller's knowledge, there is no default, breach,
         violation or event of acceleration existing under the Mortgage or the
         related Mortgage Note and no event which, with the passage of time or
         with notice and the expiration of any grace or cure period, would
         constitute a default, breach, violation or event permitting
         acceleration, except for any Mortgage Loan Payment which is not late by
         more than 30 days, and Seller has not waived any default, breach,
         violation or event permitting acceleration.

                  (xv) To Seller's knowledge, there are no mechanics' or similar
         liens or claims which have been filed for work, labor or material (and,
         to Seller's knowledge, no rights are outstanding that under law could
         give rise to such lien) affecting the related Mortgaged Property which
         are or may be liens prior to, or equal or coordinate with, the lien of
         the related Mortgage.

                  (xvi) To Seller's knowledge, all material improvements subject
         to the Mortgage, lie wholly within the boundaries and building
         restrictions lines of the Mortgaged Property (and wholly within the
         project with respect to a condominium unit) and no improvements on
         adjoining properties materially encroach upon the Mortgaged Property,
         except those which are insured against by the title insurance policy
         referred to in paragraph (xiii) above and all improvements on the
         property comply with all applicable zoning and subdivision laws and
         ordinances.

                  (xvii) Each Mortgage Loan (except for any Mortgage Loan
         designated as originated by others on any Final Mortgage Loan Schedule)
         was originated by Seller, and at the time of each such origination of
         such Mortgage Loan Seller was (except for any Mortgage Loan designated
         as "originated prior to HUD approval" on any Final Mortgage Loan
         Schedule) a mortgagee approved by the Secretary of Housing and Urban
         Development (the "Secretary") pursuant to Sections 203 and 211 of the
         National Housing Act. Each Mortgage Loan was underwritten generally in
         accordance with the

                                      -22-
<PAGE>

         Underwriting Guide as in effect at the time of origination. The
         Mortgage contains the usual and customary provision of Seller, if any,
         in the applicable jurisdiction at the time of origination for the
         acceleration of the payment of the unpaid principal balance of the
         Mortgage Loan if the related Mortgaged Property is sold without the
         prior consent of the Mortgagee thereunder.

                  (xviii) The Mortgaged Property at origination or acquisition
         was and, to Seller's knowledge, is free of material damage and waste
         and at origination there was, and to Seller's knowledge there is, no
         proceeding pending for the total or partial condemnation thereof.

                  (xix) The related Mortgage contains customary and enforceable
         provisions such as to render the rights and remedies of the holder
         thereof adequate for the realization against the Mortgaged Property of
         the benefits of the security provided thereby, including, (1) in the
         case of a Mortgage designated as a deed of trust, by trustee's sale or
         judicial foreclosure, and (2) otherwise by judicial foreclosure. Seller
         has no knowledge of any homestead or other exemption available to the
         Mortgagor which would interfere with the right to sell the Mortgaged
         Property at a trustee's sale or the right to foreclose the Mortgage.

                  (xx) If the Mortgage constitutes a deed of trust, a trustee,
         duly qualified if required under applicable law to act as such, has
         been properly designated and currently so serves as named in the
         Mortgage, and no fees or expenses are or will become payable to the
         trustee under the deed of trust, except in connection with a trustee's
         sale or attempted sale after default by the Mortgagor.

                  (xxi) With respect to each Mortgage Loan, there is an
         appraisal on a Fannie Mae or Freddie Mac approved form (or a narrative
         residential appraisal) of the related Mortgaged Property that conforms
         to the applicable requirements of the Financial Institutions Reform
         Recovery and Enforcement Act and that was signed prior to the approval
         of such Mortgage Loan application by a qualified appraiser, appointed
         by Seller or the originator of such Mortgage Loan, as appropriate, who
         has no interest, direct or indirect, in the Mortgaged Property or in
         any loan made on the security thereof, and whose compensation is not
         affected by the approval or disapproval of such Mortgage Loan.

                  (xxii) No Mortgage Loan contains "subsidized buydown" or
         graduated payment features.

                  (xxiii) The Mortgaged Property has a single-family (one to
         four-unit) dwelling residence erected thereon, or is an individual
         condominium unit in a condominium, or a Cooperative Apartment or an
         individual unit in a planned unit development or in a de minimis
         planned unit development as defined by Fannie Mae. No such residence is
         a mobile home or a manufactured dwelling which is not permanently
         attached to the land.

                                      -23-
<PAGE>

                  (xxiv) Except as set forth on the Final Mortgage Loan Schedule
         no Mortgage Loan is a Converted Mortgage Loan. No Mortgage Loan
         provides for negative amortization.

                  (xxv) No Mortgage Loan has an original term in excess of
         thirty (30) years.

                  (xxvi) With respect to each Cooperative Loan, (a) there is no
         provision in any proprietary lease which requires the Mortgagor to
         offer for sale the cooperative shares owned by such Mortgagor first to
         the cooperative, (b) there is no prohibition in the proprietary lease
         against pledging the cooperative shares or assigning the proprietary
         lease, (c) to Seller's knowledge, the Cooperative Apartment is lawfully
         occupied under applicable law, and (d) to Seller's knowledge, all
         inspections, licenses and certificates required to be made or issued
         with respect to all occupied portions of the Cooperative Apartment and
         the related project have been made or obtained from the appropriate
         authorities.

                  (xxvii) There exists no circumstance or condition with respect
         to the Mortgage Loan, the Mortgaged Property or use thereof, the
         Mortgagor, the Mortgagor's credit standing or the documentation in the
         Mortgage File that can reasonably be expected to cause private
         institutional investors to regard the Mortgage Loan as an unacceptable
         investment, cause the Mortgage Loan to become delinquent, or adversely
         affect the value or marketability of the Mortgage Loan.

                  (xxviii) No Mortgage Loan is subject to a prepayment penalty;
         provided, however, that any Mortgage Loan that is subject to a
         prepayment penalty as provided in the related Mortgage Note (i) is
         identified on the related Final Mortgage Loan Schedule, (ii) with
         respect to Mortgage Loans originated prior to October 1, 2002, no such
         prepayment penalty may be imposed for a term in excess of five (5)
         years following origination and (iii) with respect to Mortgage Loans
         originated on or after October 1, 2002, no such prepayment penalty may
         be imposed for a term in excess of three (3) years following
         origination.

                  (xxix) No Mortgage Loan is a High Cost Loan. No Mortgage Loan
         is covered by the Home Ownership and Equity Protection Act of 1994 and
         no Mortgage Loan is in violation of any comparable state or local law.

                  (xxx) The Mortgage Loan is a "qualified mortgage under Section
         860G(a)(3) of the Internal Revenue Code of 1986, as amended.

                  (xxxi) There is no Mortgage Loan that was originated on or
         after October 1, 2002 and on or prior to March 7, 2003, which is
         secured by property located in the State of Georgia.

                                      -24-
<PAGE>

                  (xxxii) Seller has, in its capacity as servicer for each
         Mortgage Loan, caused to be fully furnished, 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.

                  (xxxiii) No Mortgagor was required to purchase any credit
         life, disability, accident or health insurance product as a condition
         of obtaining the extension of credit. No Mortgagor obtained a prepaid
         single premium credit life, disability, accident or health insurance
         policy in connection with the origination of the Mortgage Loan. In
         connection with the origination of any Mortgage Loan, no proceeds from
         such Mortgage Loan were used to finance or acquire a single premium
         credit insurance policy.

                  (xxxiv) The Mortgagor has not notified Seller, and Seller has
         no knowledge, of any relief requested or allowed to the Mortgagor under
         the Servicemembers Civil Relief Act, or other similar state statute.

         (c) The representations and warranties set forth in Sections 5(a) and
5(b) shall survive the sale of the Mortgage Loans and the delivery of the
Mortgage Files to Purchaser notwithstanding any restrictive or qualified
endorsement on any Mortgage Note or Assignment or the examination of any
Mortgage File. Upon discovery by either Seller or Purchaser of a breach of any
of the foregoing representations and warranties that materially and adversely
affects the interests of Purchaser in any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other. Seller shall have a
period of ninety (90) days from its discovery or its receipt of notice of any
such breach within which to correct or cure such breach. If any such breach
cannot be corrected or cured within such ninety-day period, Seller shall, not
later than ninety (90) days following discovery or its receipt of notice of such
breach, repurchase such Mortgage Loan. Notwithstanding the above sentence,
within ninety (90) days of its discovery or its receipt of notice of any breach
of the representations or warranties set forth in clause (xxviii), (xxix),
(xxx), (xxxi), (xxxii) and (xxxiii) of Section 5(b), Seller shall repurchase
such Mortgage Loan. Any such repurchase shall be at a price equal to (i) the
Assumed Principal Balance of the Mortgage Loan plus (ii) accrued interest on
such Assumed Principal Balance at the Mortgage Loan Remittance Rate from the
date to which interest on such Assumed Principal Balance at the Mortgage Loan
Remittance Rate has last been paid and distributed to Purchaser to the date of
repurchase. Any such repurchase shall be accomplished by deposit in the
Custodial Account of the amount of the repurchase price, after deducting
therefrom any amounts received in respect of such repurchased Mortgage Loan and
being held in the Custodial Account for future distribution in accordance with
the Amended and Restated Master Servicing Agreement.

         If Seller is required to repurchase any Mortgage Loan pursuant to the
preceding paragraph on or prior to the one hundred and twentieth (120th) day
following the related Closing Date, Seller may, at its option, substitute a
Qualified Substitute Mortgage Loan for such deficient Mortgage Loan within such
one hundred and twenty (120) day period, in lieu of repurchasing such deficient
Mortgage Loan. As to any Deleted Mortgage Loan for which Seller substitutes a

                                      -25-
<PAGE>

Qualified Substitute Mortgage Loan or Loans, Seller shall effect such
substitution by delivering to Purchaser for such Qualified Substitute Mortgage
Loan or Loans the Mortgage Note, the Mortgage, the Assignment and such other
documents and agreements as are required by Section 3(b). Seller shall deposit
in the Custodial Account the Monthly Payment less the Servicing Fee due on such
Qualified Substitute Mortgage Loan or Loans in the month following the date of
such substitution. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution will be retained by Seller. For the
month of substitution, distribution to Purchaser will include the Monthly
Payment due on such Deleted Mortgage Loan in the month of substitution, and
Seller shall thereafter be entitled to retain all amounts subsequently received
by Seller in respect of such Deleted Mortgage Loan. Seller shall give written
notice to Purchaser that such substitution has taken place and shall amend the
related Final Mortgage Loan Schedule to reflect the removal of such Deleted
Mortgage Loan from the terms of this Agreement and the substitution of the
Qualified Substitute Mortgage Loan. Upon such substitution, each Qualified
Substitute Mortgage Loan shall be subject to the terms of this Agreement in all
respects, and Seller shall be deemed to have made with respect to such Qualified
Substitute Mortgage Loan, as of the date of substitution, the covenants,
representations and warranties set forth in Section 5(a) and 5(b) hereof.
Purchaser shall promptly effect the reconveyance of such Deleted Mortgage Loan
to Seller.

         For any month in which Seller substitutes one or more Qualified
Substitute Mortgage Loans for one or more Deleted Mortgage Loans, Seller will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate outstanding principal balance of all such Deleted Mortgage
Loans (after application of scheduled principal payments due in the month of
substitution). The amount of such shortfall shall be distributed by Seller in
the month of substitution pursuant to Section 6.01 of the Amended and Restated
Master Servicing Agreement. Accordingly, on the date of such substitution,
Seller will deposit from its own funds into the Custodial Account an amount
equal to the amount of such shortfall in accordance with the Amended and
Restated Master Servicing Agreement.

         In addition to such cure, repurchase or substation obligation, Seller
shall indemnify Purchaser and hold it harmless against any loss, damages,
penalties, fines, forfeitures, legal fees and related costs, judgments, and
other costs and expenses resulting from any claim, demand, defense or assertion
based on or grounded upon, or resulting from, a breach of Seller's
representations and warranties contained in Sections 5(a) and 5(b) hereof.
Seller's obligation to cure a breach, or to repurchase or substitute a defective
Mortgage Loan and to indemnify Purchaser as provided in this Section 5(c),
constitute the sole remedies of Purchaser respecting a breach of the foregoing
representations and warranties.

         (d) Seller shall repurchase each Converted Mortgage Loan on or before
the first day of the month immediately following the date of such conversion at
a price equal to (i) the Assumed Principal Balance of the Mortgage Loan, plus
(ii) accrued interest on such Assumed Principal Balance at the Mortgage Interest
Rate from the date to which interest has last been paid and distributed to
Purchaser to the date of repurchase. Any such repurchase shall be

                                      -26-
<PAGE>

accomplished by deposit into the Custodial Account of the amount set forth in
the preceding sentence.

         (e) SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED,
AS TO THE COLLECTABILITY OF THE MORTGAGE LOANS, THE SECURITY THEREFOR OR THE
STATUS OF ANY MORTGAGOR. EXCEPT AS SPECIFICALLY SET FORTH IN THIS AGREEMENT,
SELLER MAKES NO REPRESENTATIONS OR WARRANTIES, EXPRESS OR IMPLIED, AS TO ANY
MATTER WHATSOEVER CONCERNING THE MORTGAGE LOANS OR THE MORTGAGE FILES,
INCLUDING, WITHOUT LIMITATION, ANY DOCUMENTS RELATED TO MORTGAGE LOANS OR THE
ORIGINATION OF THE MORTGAGE LOANS. THE MORTGAGE LOANS AND THE RELATED DOCUMENTS
SHALL BE CONSIDERED FOR ALL PURPOSES TO BE PURCHASED BY PURCHASER "AS-IS,
WHERE-IS, WITH ALL FAULTS" AND PURCHASED WITHOUT RECOURSE OF ANY KIND TO SELLER.
ANY PRIOR REPRESENTATION OR STATEMENTS, WHETHER ORAL OR WRITTEN, AS TO THE
MORTGAGE LOANS OR ANY MATTER RELATED THERETO ARE MERGED HEREIN AND ANY SUCH
REPRESENTATIONS OR STATEMENTS NOT SPECIFICALLY INCLUDED IN THIS AGREEMENT ARE
HEREBY WITHDRAWN BY SELLER, AND PURCHASER ACKNOWLEDGES THAT IS NOT RELYING ON
THEM.

         SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS OF PURCHASER.

         (a) Purchaser, without conceding that any Mortgage Loans are
securities, hereby make the following representations, warranties and
agreements, which shall have been deemed to have been made as of the respective
Closing Date:

                  (i) Purchaser is acquiring the Mortgage Loans for its own
         account only and not for any other Person.

                  (ii) Purchaser considers itself a substantial, sophisticated
         institutional investor having such knowledge and experience in
         financial and business matters that it is capable of evaluating the
         merits and risks of investment in the Mortgage Loans.

                  (iii) Purchaser has been furnished with all information
         regarding the Mortgage Loans which it has requested.

                  (iv) Neither Purchaser nor anyone acting on its behalf has
         offered, transferred, pledged, sold or otherwise disposed of any
         Mortgage Loan, any interest in any Mortgage Loan or any other similar
         security to, or solicited any offer to buy or accept a transfer, pledge
         or other disposition of any Mortgage Loan, any interest in any Mortgage
         Loan or any other similar security from, or otherwise approached or
         negotiated with respect to any Mortgage Loan, any interest in any
         Mortgage Loan or 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

                                      -27-
<PAGE>

         the Mortgage Loans under the Securities Act of 1933, as amended (the
         "Securities Act"), or that would render the disposition of any Mortgage
         Loan a violation of Section 5 of the Securities Act or require
         registration pursuant thereto, nor will it act, nor has it authorized
         or will it authorize any Person to act, in such manner with respect to
         the Mortgage Loans.

         (b) Purchaser represents and warrants to Seller that as of the date
hereof, as of the date of each respective Purchase Price and Terms Letter as of
each respective Closing Date (or as of such other date or dates as may be
expressly set forth below):

                  (i) Purchaser is duly organized, validly existing and in good
         standing as a corporation under the laws of the state of New York.
         Purchaser has full power and authority (corporate and otherwise) to
         enter into and perform its obligations under the Program Documents.

                  (ii) This Agreement, the Amended and Restated Master Servicing
         Agreement and the Custodial Agreement each has been duly authorized,
         executed and delivered by Purchaser, and each constitutes the legal,
         valid and binding agreement of Purchaser, enforceable against Purchaser
         in accordance with its terms.

                  (iii) As of the date of respective Purchase Price and Terms
         Letter and as of the respective Closing Date, the Purchase Price and
         Terms Letter has been duly authorized, executed and delivered by
         Purchaser, and the Purchase Price and Terms Letter constitutes the
         legal, valid and binding agreement of Purchaser, enforceable against
         Purchaser in accordance with its terms.

                  (iv) Neither the delivery of the related Purchase Price to
         Seller, nor the purchase of the Mortgage Loans by Purchaser, nor the
         execution or delivery of the related Program Documents, nor the
         consummation of any of the transactions herein or therein contemplated,
         nor the fulfillment of the terms hereof or thereof, will result in the
         breach of any term or provision of the charter or by-laws of Purchaser,
         or conflict with, result in a breach, violation or acceleration of or
         constitute a default under a material term of any indenture or other
         agreement or instrument to which Purchaser is a party or by which
         Purchaser is bound or any statute, order or regulation or any court,
         regulatory body, administrative agency, governmental body or
         arbitrator.

                  (v) There are no actions, proceedings or investigations
         pending or, to Purchaser's knowledge, threatened against Purchaser
         that, either in any one instance or in the aggregate, could draw into
         question the validity of any of the Program Documents or prevent the
         consummation of any of the Transactions.

                  (vi) No consent, approval, authorization or order of any
         court, regulatory body, administrative agency, governmental body or
         arbitrator is required for the execution or delivery by Purchaser of
         any of the Program documents, the performance by Purchaser of its
         obligations hereunder or the consummation by Purchaser of any of the
         Transactions.

                                      -28-
<PAGE>

                  (vii) Purchaser has not dealt with any broker, investment
         banker, agent or other person, except Seller, who may be entitled to
         any commission or compensation in connection with the purchase of the
         Mortgage Loans.

         SECTION 7. SERVICING OBLIGATIONS OF SELLER.

         From and after each Closing Date, Seller will service and administer
each Mortgage Loan purchased on such Closing Date pursuant to the terms of the
Amended and Restated Master Servicing Agreement for the benefit of Purchaser, as
the initial "Purchaser" thereof, and such Mortgage Loan will be deemed to be
added to the "MSA Mortgage Loan Schedule" under the Amended and Restated Master
Servicing Agreement.

         SECTION 8. ADDITIONAL INDEMNIFICATION BY THE SELLER; THIRD PARTY CLAIMS

         The Seller shall indemnify the Purchaser 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 the Purchaser may sustain in any way related to the failure of
the Seller to perform its duties and service the Mortgage Loans in strict
compliance with the terms of this Agreement. The Seller immediately shall notify
the Purchaser if a claim is made by a third party with respect to this Agreement
or the Mortgage Loans, assume (with the prior written consent of the Purchaser)
the defense of any such claim and pay all expenses in connection therewith,
including counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Purchaser in respect of such
claim. The Purchaser promptly shall reimburse the Seller for all amounts
advanced by it pursuant to the preceding sentence except when the claim is in
any way related to Seller's indemnification pursuant to Section 5 or the failure
of the Seller to service and administer the Mortgage Loans in strict compliance
with the terms of this Agreement.

         SECTION 9. INTENTION OF THE PARTIES.

         With respect to each Transaction, it is the intention of the parties
that Purchaser is purchasing, and Seller is selling, interests in the related
Mortgage Loans and not a debt instrument of Seller or any other security.
Accordingly, the parties each intend to treat each Transaction for federal
income tax purposes as a sale by Seller, and a purchase by Purchaser, of the
related Mortgage Loans.

         SECTION 10. COSTS.

         Seller shall pay any commissions due its salesmen and the legal fees
and expenses of its attorneys and those expenses incurred in connection with the
transfer and delivery by Seller of the Mortgage Loans pursuant hereto. The fees
and expenses due under the Amended and Restated Master Servicing Agreement and
those of the Custodian and Purchaser's brokers' and attorneys' fees and
expenses, shall be paid by Purchaser.

                                      -29-
<PAGE>

         SECTION 11. FURTHER AGREEMENTS OF SELLER.

         Seller and Purchaser each agree to execute and deliver to the other
such reasonable and appropriate additional documents, instruments or agreements,
and take such actions, as may be necessary or appropriate to effectuate the
purposes of this Agreement.

         SECTION 12. MANDATORY DELIVERY.

         The sale and delivery on any Closing Date of the Mortgage Loans
described on the related Final Mortgage Loan Schedule is mandatory from and
after the date of the execution of the related Purchase Price and Terms Letter.

         SECTION 13. TERMINATION.

         Either Seller or Purchaser may terminate this Agreement as to future
Transactions upon notice to the other party, but no such termination shall
affect any Transaction previously consummated or the rights and obligations of
Seller and Purchaser with respect thereto under the Program Documents.

         SECTION 14. SELLER'S RIGHT OF FIRST REFUSAL

         If Purchaser shall elect to sell any Mortgage Loans purchased under
this Agreement to any third party other than an Affiliate of Purchaser,
Purchaser hereby agrees that Seller will have a non-exclusive right to bid to
purchase such Mortgage Loans and, if Purchaser shall elect to seek from one or
more third parties bids to purchase such Mortgage Loans, Seller will have a
right to review such bids and to purchase such Mortgage Loan in the event that
Seller offers Purchaser equivalent or better terms than those actually offered
by any third party as part of a bona fide, independent offer.

         SECTION 15. SEVERABILITY CLAUSE.

         Any part, provision, representation or warranty of this Agreement that
is prohibited or unenforceable or is held to be void or unenforceable in any
jurisdiction shall be ineffective, as to such jurisdiction, to the extent of
such prohibition of unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction as to any Mortgage Loan shall not invalidate or render
unenforceable such provision in any other jurisdiction.

                                      -30-
<PAGE>

         SECTION 16. WAIVERS.

         No term or provision of this Agreement may be waived or modified unless
such waiver or modification is in writing and signed by the party against whom
such waiver or modification is sought to be enforced.

         SECTION 17. SURVIVAL.

         Each party agrees that the representations, warranties and agreements
made by such party herein and in any certificate or other instrument delivered
pursuant hereto shall be deemed to be relied upon by the other party,
notwithstanding any investigation heretofore or hereafter made by the other
party or on the other party's behalf.

         SECTION 18. SUCCESSOR AND ASSIGNS: ASSIGNMENT OF PURCHASE AGREEMENT.

         This Agreement shall bind and inure to the benefit of and be
enforceable by Seller and Purchaser and the respective successors and assigns of
Seller and Purchaser; provided that this Agreement cannot be assigned, pledged
or hypothecated by Seller or Purchaser to a third party without the consent of
the other party, which consent shall not be unreasonably withheld or delayed;
provided, however, that either party may assign this Agreement without the
consent of the other party to any Affiliate; further provided, however, that no
novation shall occur as a result of any such assignment (whether or not such
consent is received). Purchaser acknowledges that the assignment of any or all
of its rights under this Agreement without the consent of the Surety Bond Issuer
may affect, impair or eliminate the insurance provided by the Surety Bond to the
extent set forth therein. No assignment shall relieve the Assignor from any
liability hereunder without the consent of the other party hereto.

         SECTION 19. NOTICES.

         Any notices or other communications permitted or required hereunder
shall be in writing and shall be deemed conclusively to have been duly given if
personally delivered, sent by overnight courier, or mailed by registered mail,
postage prepaid, and return receipt requested, or transmitted by telex or
telegraph and confirmed by a similar mailed writing, or otherwise received, if
to Purchaser, addressed to Purchaser at Morgan Stanley Mortgage Capital Inc. at
1633 Broadway, New York, NY 10019, Attention: Whole Loan Operations Manager, or
to such other address as Purchaser may designate in writing to Seller, and, if
to Seller, addressed to Morgan Stanley Dean Witter Credit Corporation at 2500
Lake Cook Road, Riverwoods, IL 60015, Attention: Law Division, with a copy to
the Vice President, Secondary Marketing, at the same address, or to such other
address as Seller may have designated in writing to Purchaser.

                                      -31-
<PAGE>

         SECTION 20. COUNTERPARTS.

         This Agreement may be executed in several counterparts, each of which
shall constitute an original, but all of which together shall constitute one
instrument notwithstanding that all parties are not signatories to the same
counterparts.

         SECTION 21. ENTIRE AGREEMENT.

         This Agreement constitutes the entire agreement and understanding of
the parties with respect to the matters and transactions contemplated by this
Agreement and supersedes any prior agreement and understandings with respect to
those matters and transactions; provided, however, that this Agreement shall not
be deemed to supersede any other Program Document or any agreement, instrument
or other document executed in connection therewith.

         SECTION 22. GOVERNING LAW AND AMENDMENTS.

         This Agreement is to be governed by, and construed in accordance with,
the internal laws (as compared to conflicts of law provisions) of the State of
New York. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of the change, waiver, discharge or
termination is sought.

         SECTION 23. EXHIBITS.

         The exhibits to this Agreement are hereby incorporated and made a part
hereof and are an integral part of this Agreement.

         SECTION 24. GENERAL INTERPRETIVE PRINCIPLES.

         For purposes of this Agreement, except as otherwise expressly provided
or unless the context otherwise requires:

                  (i) the terms defined in this Agreement have the meanings
         assigned to them in this Agreement and include the plural as well as
         the singular, and the use of any gender herein shall be deemed to
         include the other gender;

                  (ii) accounting terms not otherwise defined herein have the
         meanings assigned to them in accordance with generally accepted
         accounting principles;

                  (iii) references herein to "Articles", "sections",
         "Subsections", Paragraphs", and other subdivisions without reference to
         a document are to be designated Articles, Sections, Subsections,
         Paragraphs and other subdivisions of this Agreement;

                  (iv) a reference to a Subsection without further reference to
         a Section is a reference to such Subsection as contained in the same
         Section in which the reference appears, and this rule shall also apply
         to Paragraphs and other subdivisions;

                                      -32-
<PAGE>

                  (v) the words "herein", "hereof", "hereunder" and other words
         of similar import refer to this Agreement as a whole and not to any
         particular provision; and

                  (vi) the terms "include" or "including" shall mean without
         limitation by reason of enumeration.

         SECTION 25. REPRODUCTION OF DOCUMENTS.

         This Agreement and all documents relating thereto, including, without
limitation, (a) consents, waivers, and modifications which may hereafter be
executed, (b) documents received by any party at the closing, and (c) financial
statements, certificates and other information previously or hereafter
furnished, may be reproduced by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process. The parties agree
that any such reproduction shall be admissible in evidence as the original
itself in any judicial or administrative proceeding, whether or not the original
is in existence and whether or not such reproduction was made by a party in the
regular course of business, and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence.

         SECTION 26. ATTORNEY-IN-FACT.

         Purchaser is hereby irrevocably appointed as Seller's attorney in fact
for the limited purpose of completing and recording Assignments of the
Mortgages, and is hereby granted express authority to complete such Assignments
in the name of Purchaser and to record the same at Purchaser's expense;
provided, however, that no such authority shall exist with respect to any
Mortgage which is repurchased or replaced by a Qualified Substitute Mortgage
Loan in accordance with the terms and conditions of this Agreement. In the event
that Purchaser has already recorded an Assignment with respect to a Mortgage
Loan which is subsequently repurchased or replaced by a Qualified Substitute
Mortgage Loan under this Agreement, Purchaser shall execute and record an
additional Assignment assigning such Mortgage Loan back to Seller. .

         SECTION 27. CONFIDENTIALITY.

         Purchaser and Seller will consult with each other regarding press
releases or other public announcements related to this Agreement and the
transactions contemplated hereby, and neither Purchaser nor Seller shall issue
any such press release or announcement without the prior written consent of the
other, except as otherwise required by applicable law. Purchaser and Seller
shall hold in confidence and shall not disclose to any Person the amount of the
Purchase Price, the terms of the Purchase Price and Terms Letter or the Purchase
Price Percentage, except (a) to any Governmental Authority with jurisdiction
over Purchaser or Seller or any Affiliate of Purchaser or Seller or as otherwise
required by applicable law, (b) as part of any filing to be made with any
Governmental Authority, (c) in response to any subpoena or other legal process,
(d) to any prospective successor or assign (subject to such Person entering into
a comparable confidentiality agreement in favor of Purchaser and Seller), or (e)
to legal counsel, accountants

                                      -33-
<PAGE>

and financial advisors of Purchaser or Seller or their Affiliates. Purchaser
agrees to treat all information provided to it by Seller regarding any Mortgagor
in a manner consistent with federal or state laws regulating a customers' right
to privacy.

                            [Signature Page Follows]

                                      -34-
<PAGE>

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first set forth above.

                                  Morgan Stanley Mortgage Capital Inc.

                                  By: /s/ Eric Kaplan
                                      ------------------------------------------
                                  Name: Eric Kaplan
                                  Title: Vice President

                                  Morgan Stanley Dean Witter Credit Corporation

                                  By: /s/ David L. Bianucci
                                      ------------------------------------------
                                  Name: David L. Bianucci
                                  Title: Vice President

<PAGE>

                                    EXHIBIT 1

                         CONTENTS OF EACH MORTGAGE FILE

         With respect to each Mortgage Loan, the Mortgage File shall include
each of the following items (in such format as may be agreed upon by both
parties):

         1. The documents specified in Section 3(b) of the Agreement.

         2. Copy of survey of the Mortgaged Property, if any.

         3. Copy of each instrument necessary to complete identification of any
         exception set forth in the exception schedule in the title policy,
         i.e., map or plat, restrictions, easements, sewer agreements, homes
         association declarations, etc.

         4. Evidence of property insurance policy and endorsement and, if
         required by law, evidence of flood insurance policy and endorsement.

         5. Closing statement.

         6. Loan application.

         7. Verification of acceptable evidence of source and amount of down
         payment.

         8. Credit report on the Mortgagor.

         9. Appraisal report.

         10. Photograph of the Mortgaged Property.

         11. Executed disclosure statement.

         12. All other papers and records received by Seller or to documents the
         Mortgage Loan.

         In addition to the above, with respect to each Cooperative Loan, the
Mortgage File shall contain each of the following items:

         1. a copy of the proprietary lease;

         2. a copy of the recognition agreement;

         3. a copy of the security agreement;

<PAGE>

         4. a copy of the assignment of proprietary lease;

         5. a copy of the cooperative stock certificate; and

         6. a copy of UCC-1 Financing Statements.

                                      -2-
<PAGE>

                                    EXHIBIT 2

             FORM OF MASTER AMENDED AND RESTATED SERVICING AGREEMENT

<PAGE>

                                    EXHIBIT 3

                           FORM OF CUSTODIAL AGREEMENT

<PAGE>

                                    EXHIBIT 4

                          UNDERWRITING GUIDE OF SELLER

<PAGE>

                                    EXHIBIT 5

                          FORM OF CERTIFICATE OF SELLER

         I, Thomas F. White, hereby certify that I am the duly elected Secretary
of Morgan Stanley Dean Witter Credit Corporation, a corporation organized under
the laws of the State of Delaware ("Seller"), and further as follows:

         1. Attached hereto as Exhibit A is a true and correct copy of the
certificate of incorporation of Seller which is in full force and effect on the
date hereof. There has been no amendments or modifications to the certificate of
incorporation since April 2, 1993. Attached hereto as Exhibit B is a true and
correct copy of the by-laws of Seller which are in full force and effect on the
date hereof. There have been no amendments or modifications of the by-laws since
June 10, 1993. No event has occurred that has affected the good standing of
Seller under the laws of the State of Delaware.

         2. Each person who, as an officer or representative of Seller, signed
(a) the Second Amended and Restated Master Mortgage Loan Purchase Agreement,
dated as of February 1, 2004 between Morgan Stanley Mortgage Capital Inc.
("Purchaser") and Seller (the "Master Mortgage Loan Purchase Agreement"), (b)
the Amended and Restated Master Servicing Agreement, Seller Flow Delivery
Program, dated as of February 1, 2004 between Seller and Purchaser (the "Master
Servicing Agreement"), (c) any Warranty Bill of Sale executed by Seller (a
"Warranty Bill of Sale"; the Master Mortgage Loan Purchase Agreement, the Master
Servicing Agreement, and each Warranty Bill of Sale are herein referred to,
collectively, as the "Agreements"), (d) any of the Assignments (as defined in
the Master Mortgage Loan Purchase Agreement) or (e) any other document delivered
prior hereto or on the date hereof in connection with the purchase described in
the Agreements, was, at the respective times of such signing and delivery, duly
elected or appointed, qualified and acting as such officer or representative,
and the signatures of such persons appearing on such documents are their genuine
signatures.

         3. The sale of the Mortgage Loans and the transactions contemplated by
the Agreements are in the ordinary course of Seller's business.

IN WITNESS WHEREOF, I have hereunto signed my name as of ________________ ___,
200__.

                                ------------------------------------------
                                Name:    Thomas F. White
                                Title:   Secretary of Morgan Stanley Dean Witter
                                         Credit Corporation

<PAGE>

                                    EXHIBIT 6

             FORM OF ASSIGNMENT FOR ADDITIONAL COLLATERAL AGREEMENTS

                                   ASSIGNMENT

         Reference is made to the Second Amended and Restated Master Mortgage
Loan Purchase Agreement (the "Purchase Agreement") dated as of February 1, 2004,
between Morgan Stanley Dean Witter Credit Corporation, as seller ("Seller"), and
Morgan Stanley Mortgage Capital Inc., as purchaser ("Purchaser"), pursuant to
which Seller is selling to Purchaser the Additional Collateral Mortgage Loans
listed on the Final Mortgage Loan Schedule. Capitalized terms used and not
defined shall have the meanings assigned in the Purchase Agreement.

         For good and valuable consideration, receipt of which is hereby
acknowledged, Seller hereby sells, transfers, assigns, sets over and conveys to
Purchaser without recourse all of Seller's right, title and interest in and to
each pledge agreement and control agreement securing any Additional Collateral
Mortgage Loan listed on such Final Mortgage Loan Schedule.

         IN WITNESS WHEREOF, the undersigned has caused this agreement to be
duly executed this _____ day of ___________________, 200_.

                                Morgan Stanley Dean Witter Credit Corporation

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

<PAGE>

                                    EXHIBIT 7

         FORM OF NOTICE OF ASSIGNMENT TO AND ACKNOWLEDGMENT BY

                      MORGAN STANLEY MORTGAGE CAPITAL INC.

                                                                 ______ __, 2000

TO:      Morgan Stanley Mortgage Capital Inc.

FROM:    Morgan Stanley Dean Witter Credit Corporation

RE:      Notice of Assignment

This shall serve as notice that Morgan Stanley Dean Witter Credit Corporation
("Seller") has sold, assigned, and transferred certain Additional Collateral
Mortgage Loans designated as such on the attached to Morgan Stanley Mortgage
Capital Inc. ("Purchaser") pursuant to that certain Second Amended and Restated
Master Loan Purchase Agreement dated as of February 1, 2004, executed by Seller
and Purchaser ("Agreement"). In connection with such sale, Seller has assigned
to Purchaser its security interest in the control agreements and collateral
subject thereto set forth in Schedule A attached hereto.

Morgan Stanley Dean Witter Credit Corporation

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

Acknowledged:

Morgan Stanley Mortgage Capital Inc.

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

<PAGE>

                                    EXHIBIT 8

                          FORM OF WARRANTY BILL OF SALE

         On this ___ day of _______, 200_, Morgan Stanley Dean Witter Credit
Corporation ("Seller") does hereby sell, transfer, assign, set over and convey
to Morgan Stanley Mortgage Capital Inc. ("Purchaser"), without recourse in
accordance with the terms of that certain Second Amended and Restated Master
Mortgage Loan Purchase Agreement dated as of February 1, 2004, between Seller
and Purchaser (as amended, modified, restated or supplemented from time to time,
the "Purchase Agreement"; all capitalized terms used herein and not otherwise
defined herein shall have the respective meanings set forth in the Amended and
Restated Master Servicing Agreement), all of the right, title and interest of
Seller in and to each Mortgage Loan set forth on the Final Mortgage Loan
Schedule attached hereto as Schedule I, including all interest and principal
received by Seller on or with respect to each such Mortgage Loan after the
Cut-off Date (other than payments of principal and interest due on such Mortgage
Loan on or before the Cut-off Date), any related Mortgage Loan Documents and the
related Mortgage Files. Each Mortgage Loan set forth on the attached Final
Mortgage Loan Schedule shall be subject to the Amended and Restated Master
Servicing Agreement, dated as of February 1, 2004, between Seller and Purchaser,
from the date hereof, and Seller hereafter shall service and administer each
such Mortgage Loan pursuant thereto for Purchaser as the "Owner" thereunder.

         This Warranty Bill of Sale shall be governed by, and construed in
accordance with the internal laws (as compared to conflicts of law provision) of
the State of Illinois.

                                   Morgan Stanley Dean Witter Credit Corporation

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

<PAGE>

                                    EXHIBIT 9

                                  TRUST RECEIPT

                                                            __________ ___, 200_

Morgan Stanley Mortgage Capital Inc.
1221 Avenue of the Americas, 27th Floor
New York, New York  10020

         Attention:  Mr. [Stephen C. Rudner]

                  Re:    Second Amended and Restated Agreement, dated as of
                         February 1, 2004 (the "Agreement"), between Morgan
                         Stanley Mortgage Capital Inc. (the "Purchaser") and
                         Morgan Stanley Dean Witter Credit Corporation
                         ("Seller").

Ladies and Gentlemen:

         Seller, as bailee pursuant to Section 3(b) of the above-referenced
Agreement, hereby certifies that the Purchaser is the holder of this Trust
Receipt. Pursuant to the Agreement, the Bailee is entitled to possession of the
Mortgage Loan Documents; provided, however, that in the event that the Purchaser
requests release of any Mortgage Loan Documents from the possession of the
Bailee, the related Mortgage Loan shall no longer be subject to or entitled to
the benefits of Section 3(b) of the Agreement.

         The Bailee hereby certifies that it has received the Mortgage Loan
Documents with respect to each Mortgage Loan identified on the Mortgage Loan
Schedule attached hereto and is holding all Mortgage Loan Documents as bailee
for the Purchaser.

                               Morgan Stanley Dean Witter Credit Corporation

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

<PAGE>

                                   EXHIBIT 10

                      FINAL TRUST RECEIPT AND CERTIFICATION

                                                            __________ ___, 200_

Morgan Stanley Mortgage Capital Inc.
1221 Avenue of the Americas, 27th Floor
New York, New York  10020

         Attention:  Mr. [Stephen C. Rudner]

                    Re:   Second Amended and Restated Agreement, dated as of
                          February 1, 2004 (the "Agreement"), between Morgan
                          Stanley Mortgage Capital Inc. (the "Purchaser") and
                          Morgan Stanley Dean Witter Credit Corporation
                          ("Seller").

Ladies and Gentlemen:

         In accordance with the provisions of Section 3(b) of the
above-referenced Agreement, the undersigned, as Bailee, hereby certifies that as
to each mortgage loan described in the Final Mortgage Loan Schedule attached to
the Agreement and a copy of which is attached as Exhibit A hereto (other than
any mortgage loan listed as Exhibit B attached hereto), it has reviewed the
related Mortgage Loan Documents and has determined that (i) all documents to be
delivered to the Bailee listed in Section 3(b) of the Agreement are in its
possession, (ii) such documents have been reviewed by it and appear regular on
their face and relate to such mortgage loan, and (iii) based on its examination,
the foregoing documents on their face satisfy the requirements set forth in
Section 3(b) of the Agreement.

         The Bailee hereby confirms that it is holding all Mortgage Loan
Documents as agent and bailee for the exclusive use and benefit of the Purchaser
pursuant to the terms of Section 3(b) the Agreement.

         All initially capitalized terms used herein shall have the meanings
ascribed to them in the above-referenced Agreement.

                               Morgan Stanley Dean Witter Credit Corporation

                               By:
                                   ----------------------------------
                               Name:
                                     --------------------------------
                               Title:
                                      -------------------------------<PAGE>
                                                                   EXHIBIT 10.27

                                 March 10, 2004

Sunset Financial Resources, Inc.
4231 Walnut Bend, Suite 1-A
Jacksonville, Florida 32257

Ladies and Gentlemen:

Bridge Capital (USVI), LLC ("Bridge") hereby agrees to sell to Sunset Financial
Resources, Inc. ("Purchaser") and Purchaser hereby agrees to purchase from
Bridge the undivided Participation Interests (herein so called) listed on
Exhibit A attached hereto and incorporated herein by reference, subject to the
following terms and conditions:

PURCHASE PRICE:            The purchase price for each Participation
                           Interest shall be equal to the outstanding principal
                           balance of the underlying loan on the date of closing
                           pro rated in accordance with Bridge's ownership
                           interest in such loan.

RECOURSE:                  The Participation Interests shall be conveyed to
                           Purchaser without recourse as to the future
                           performance of any borrower.

EXCEPTIONS FROM
CONVEYANCE:                Bridge shall reserve from the conveyance of each
                           Participation Interest all servicing rights on all
                           underlying loans and all rights to receive all
                           interest and fees realized on the underlying loans in
                           excess of interest at the rate of 10% per annum. All
                           conveyances of Participation Interests shall be
                           subject to any existing third party participation
                           agreements.

DUE DILIGENCE
DOCUMENTATION:             Within five (5) days of the date of this letter,
                           Bridge shall provide to Purchaser the following
                           documents:

                           1.       Copy of original note

                           2.       Copy of all collateral documents including
                                    original mortgage or deed of trust

                           3.       Amortization table

                           4.       Copy of mortgagee's title policy

                           5.       Copy of borrower's certificate of hazard
                                    insurance

                           6.       Payment history (affidavit form)

                           7.       Copies of all underlying notes, mortgages,
                                    deeds of trust, and/or other liens, along
                                    with payoff amounts for each.

                           8.       Copy of original closing statement

                           9.       Photos of real property (if any)

                           10.      Borrowing resolution
<PAGE>

                           11.      Copy of legal opinion

                           12.      Copy of any third party participation
                                    agreement.

DOCUMENTATION:             At Closing Bridge and Purchaser shall execute and
                           deliver a Master Acceptance Agreement and
                           Participation Agreements for each Participation
                           Interest in form and substance reasonably
                           satisfactory to Bridge and Purchaser. The obligations
                           of Bridge and Purchaser hereunder are subject to the
                           closing of the initial public offering of Purchaser's
                           common stock.

CLOSING:                   Unless this agreement shall be extended in writing by
                           Bridge and Purchaser, the Closing of the transactions
                           contemplated herein shall occur on or before March
                           31, 2004, at which time the obligations of the
                           parties hereunder shall terminate. In the event that
                           Purchaser fails to close on any Participation
                           Interest listed on Exhibit A and presented by Bridge
                           for conveyance, then Purchaser agrees to reimburse
                           Bridge for all costs and expenses incurred by Bridge
                           in connection with the documentation of such
                           Participation Interest, including, without
                           limitation, reasonable attorneys fees.

                                           BRIDGE CAPITAL (USVI), LLC

                                           By:     /s/ John K. Baldwin
                                               --------------------------------
                                           Title:  Manager

AGREED:

SUNSET FINANCIAL RESOURCES

By:      /s/ Thomas G. Manuel
   ------------------------------------------------
Title:   Secretary and Executive Vice President-
         Compliance and Operations

<PAGE>

                                   EXHIBIT "A"

<Table>
<Caption>
                                                    FACE AMOUNT
BORROWER/LOCATION/COLLATERAL                          OF LOAN                     BRIDGE INTEREST
----------------------------                          -------                     ---------------
<S>                                                 <C>              <C>
Pacific Islandia California, Inc., Anaheim,          $23,000,000     50%  Participation Interest, pari passu
CA, First Lien Deed of Trust in Hotel Property                       with all other participants

Rutter/KW Kohanaiki LLC, Kona, HI, First             $15,000,000     Existing loan; Purchase of entire loan by
Mortgage in Mixed Use Development                                    Bridge pending

RightStar International, Inc.,  HI, Mortgage in      $34,000,000     20.3% Second Loss Participation Interest
Cemetery                                                             pari passu with Vestin Mortgage, Inc.

North Idaho Resorts, LLC, Pend Oreille, ID,           $8,000,000     Pending loan to be 100% owned by Bridge
Deed of Trust Lien in Master Planned Community
</Table>

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