Document:

EXHIBIT 10.1

                              ENDORSEMENT NO. 1 TO
                       FINANCIAL GUARANTY INSURANCE POLICY

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

TRUST:               The Trust created by the Pooling and  Servicing  Agreement,
                     dated as of April 1, 2002 among Morgan  Stanley ABS Capital
                     I  Inc.,  as  Depositor,  CDC  Mortgage  Capital  Inc.,  as
                     Unaffiliated  Seller,  Ocwen  Federal Bank FSB, as Servicer
                     and Deutsche Bank National  Trust  Company  (f/k/a  Bankers
                     Trust Company of California, N.A.), as Trustee

CERTIFICATES:        $449,238,000  CDC Mortgage  Capital Trust Series  2002-HE1,
                     Mortgage Pass-Through

Certificates,        Series 2002-HE1, Class A Certificates Policy No.: 51276-N

Date of Issuance:    April 30, 2002

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

         "BUSINESS DAY" means any day other than (i) Saturday or Sunday, or (ii)
a day on which  banking and savings and loan  institutions,  in (a) the State of
New  York,  New  Jersey  and  Florida,  (b) the  state in which  the  Servicer's
servicing  operations  are  located,  or (c) the  State in which  the  Trustee's
operations are located,  are authorized or obligated by law,  executive order or
government decree to be closed.

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

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

<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

         "POOLING  AND  SERVICING  AGREEMENT"  means the Pooling  and  Servicing
Agreement  dated as of April 1, 2002 among Morgan Stanley ABS Capital I Inc., as
Depositor, CDC Mortgage Capital Inc., as Unaffiliated Seller, Ocwen Federal Bank
FSB, as Servicer and Deutsche Bank National  Trust Company  (f/k/a Bankers Trust
Company of California,  N.A.), as Trustee, as amended from time to time with the
consent of Financial Security.

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

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

         "TRUSTEE"  means  Deutsche Bank National  Trust Company  (f/k/a Bankers
Trust Company of California, N.A.), in its capacity as Trustee under the Pooling
and Servicing Agreement and any successor in such capacity.

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

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

                                      -2-
<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

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

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

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

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

                                      -3-
<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

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

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

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

                           Financial Security Assurance Inc.
                           350 Park Avenue
                           New York, NY 10022
                           Attention: Managing Director - Transaction Oversight
                           Re:  CDC Mortgage Capital Trust Series 2002-HE1
                           Policy No.: 51276-N
                           Telecopy No.: (212) 339-3518
                           Confirmation: (212) 826-0100

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

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

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

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

                                      -4-
<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

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

                                          FINANCIAL SECURITY ASSURANCE INC.

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

                                      -5-
<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

                                                                       EXHIBIT A
                                                                TO ENDORSEMENT 1

                         NOTICE OF CLAIM AND CERTIFICATE

                             (Letterhead of Trustee)

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

         Re:  CDC  Mortgage   Capital  Trust  2002-HE1   Mortgage   Pass-Through
Certificates, Series 2002-HE1

         The  undersigned,  a duly authorized  officer of Deutsche Bank National
Trust Company (f/k/a Bankers Trust Company of California, N.A.) (the "Trustee"),
hereby certifies to Financial  Security Assurance Inc.  ("Financial  Security"),
with reference to Financial  Guaranty  Insurance  Policy No. 51276-N dated April
30,  2002 (the  "Policy")  issued by  Financial  Security  in respect of the CDC
Mortgage  Capital Trust  2002-HE1  Mortgage  Pass-Through  Certificates,  Series
2002-HE1 (the "Certificates"), that:

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

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

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

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

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

<PAGE>

Policy No.: 51276-N                             Date of Issuance: April 30, 2002

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

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

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

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

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

                                DEUTSCHE BANK NATIONAL TRUST COMPANY, as Trustee

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

For Financial Security or Fiscal Agent Use Only

Wire transfer sent on                      by
                      --------------------    -----------------------
Confirmation Number
                    ---------------------FIRST AMENDMENT
                                     TO THE
                           LILLIAN VERNON CORPORATION
                              PROFIT SHARING PLAN

     FIRST AMENDMENT, dated as of February 28, 2002, to the Lillian Vernon
Corporation Profit Sharing Plan, by Lillian Vernon Corporation (the "Company").

     The Company maintains the Lillian Vernon Corporation Profit Sharing Plan,
amended and restated generally effective as of October 1, 1997, and now wishes
to amend the Plan.

     NOW, THEREFORE, the Plan is amended as follows:

     I.   Section 1.10 is amended by adding the following sentence to the end
          thereof:

     Notwithstanding the foregoing, for Plan Years beginning on or after January
     1, 2001, Compensation shall also include elective amounts that are not
     includible in the gross income of the employee by reason of section
     132(f)(4).

     II.  Section 1.24 is amended by adding the following sentence to the end
          thereof:

     Notwithstanding the foregoing, for Plan Years beginning on or after
     January 1, 2001, Limitation Compensation shall also include elective
     amounts that are not includible in the gross income of the employee by
     reason of section 132(f)(4).

     III. This Amendment shall be effective as of January 1, 2001.

     IV.  In all respects not amended, the Plan is hereby ratified and
          confirmed.

                                  * * * * * *

     To record the adoption of the First Amendment as set forth above, the
Company has caused this document to be signed on this 28th day of February,
2002.

                                                      LILLIAN VERNON CORPORATION

                                                      By: /s/ SUSAN HANDLER
                                                         -----------------------

<PAGE>

                                SECOND AMENDMENT
                                     TO THE
                           LILLIAN VERNON CORPORATION
                              PROFIT SHARING PLAN

     SECOND AMENDMENT, dated as of May 1, 2002, to the Lillian Vernon
Corporation Profit Sharing Plan, by Lillian Vernon Corporation (the "Company").

     The Company maintains the Lillian Vernon Corporation Profit Sharing Plan,
as amended and restated effective October 1, 1997 (the "Plan"). Pursuant to its
authority under Article X of the Plan, the Company now wishes to amend the Plan.

     NOW, THEREFORE, the Plan is amended as follows:

     I.   Section 3.1(a) is amended by replacing "ten percent (10%)" with "fifty
          percent (50%)" wherever such term appears.

     II.  Section 4.1(b) is amended by replacing "five percent (5%)" with "one
          percent (1%)" wherever such term appears.

     III. This Second Amendment shall be effective as of May 1, 2002.

     IV.  In all respects not amended, the Plan is hereby ratified and
          confirmed.

                                  * * * * * *

     To record the adoption of the Second Amendment as set forth above, the
Company has caused this document to be signed on this 12th day of April, 2002.

                                                      LILLIAN VERNON CORPORATION

                                                      By: /s/ SUSAN HANDLER
                                                         -----------------------
                                                         Secretary

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00039-of-00352.parquet"}]]