Morgan Stanley ABS Capital I Inc CDC Mor Cap Tr 2003-HE3 – ‘8-K’ for 8/25/03 – EX-4.1

On:  Tuesday, 9/9/03, at 5:06pm ET   ·   For:  8/25/03   ·   Accession #:  1019056-3-894   ·   File #:  333-104046-09

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Current Report   —   Form 8-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 8-K         Current Report                                         5     17K 
 2: EX-1.1      Underwriting Agreement                                18     67K 
 3: EX-1.2      Exhibit 1.1                                            8     34K 
 4: EX-4.1      Instrument Defining the Rights of Security Holders   206    710K 
 5: EX-8.1      Opinion re: Tax Matters                                4     18K 

EX-4.1   —   Instrument Defining the Rights of Security Holders
Exhibit Table of Contents

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                                                                     Exhibit 4.1

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

MORGAN STANLEY ABS CAPITAL I INC.,

 as Depositor,

 OCWEN FEDERAL BANK FSB,

as Servicer,

CDC MORTGAGE CAPITAL INC.,

 as Unaffiliated Seller,

 and

 DEUTSCHE BANK NATIONAL TRUST COMPANY,

 as Trustee,

 POOLING AND SERVICING AGREEMENT

Dated as of August 1, 2003

 CDC MORTGAGE CAPITAL TRUST 2003-HE3

 MORTGAGE PASS-THROUGH CERTIFICATES,
 SERIES 2003-HE3

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

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 TABLE OF CONTENTS

                                                                            Page
                                                                            ----

ARTICLE I DEFINITIONS..........................................................8

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND                    
                  WARRANTIES..................................................49

   Section 2.01      Conveyance of Mortgage Loans.............................49
   Section 2.02      Acceptance by the Trustee of the Mortgage Loans..........55
Section 2.03      Representations, Warranties and Covenants of the        
                     Unaffiliated Seller and the Servicer.....................56
   Section 2.04      The Depositor and the Mortgage Loans.....................59
Section 2.05      Delivery of Opinion of Counsel in Connection with       
                     Substitutions and Non-Qualified Mortgages................59
   Section 2.06      Execution and Delivery of Certificates...................59
   Section 2.07      REMIC Matters............................................59
   Section 2.08      Representations and Warranties of the Depositor..........59

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................61

   Section 3.01      Servicer to Service Mortgage Loans.......................61
Section 3.02      Subservicing Agreements Between the Servicer and        
                     Subservicers.............................................63
   Section 3.03      Successor Subservicers...................................64
   Section 3.04      Liability of the Servicer................................64
Section 3.05      No Contractual Relationship Between Subservicers        
                     and the Trustee..........................................64
Section 3.06      Assumption or Termination of Subservicing Agreements    
                     by Trustee...............................................64
Section 3.07      Collection of Certain Mortgage Loan Payments;           
                     Establishment of Certain Accounts........................65
   Section 3.08      Subservicing Accounts....................................68
Section 3.09      Collection of Taxes, Assessments and Similar Items;     
                     Escrow Accounts..........................................68
   Section 3.10      Collection Account.......................................69
   Section 3.11      Withdrawals from the Collection Account..................70
   Section 3.12      Investment of Funds in the Account.......................71
Section 3.13      Maintenance of Hazard Insurance and Errors and          
                     Omissions and Fidelity Coverage..........................73
Section 3.14      Enforcement of Due-On-Sale Clauses Assumption           
                     Agreements...............................................74
   Section 3.15      Realization Upon Defaulted Mortgage Loans................75
   Section 3.16      Release of Mortgage Files................................77
   Section 3.17      Title, Conservation and Disposition of REO Property......78
   Section 3.18      Notification of Adjustments..............................80
Section 3.19      Access to Certain Documentation and Information         
                     Regarding the Mortgage Loans.............................80
Section 3.20      Documents, Records and Funds in Possession of the       
                     Servicer to be Held for the Trustee......................80
   Section 3.21      Servicing Compensation...................................81
   Section 3.22      Annual Statement as to Compliance........................81

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Section 3.23      Annual Independent Public Accountants' Servicing        
                     Statement; Financial Statements..........................81
   Section 3.24      Trustee to Act as Servicer...............................82
   Section 3.25      Compensating Interest....................................83
   Section 3.26      Credit Reporting; Gramm-Leach-Bliley Act.................83
   Section 3.27      Advance Facilities.......................................83

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER.........................85

   Section 4.01      Advances.................................................85
   Section 4.02      Priorities of Distribution...............................86
   Section 4.03      Monthly Statements to Certificateholders.................92
   Section 4.04      Certain Matters Relating to the Determination of LIBOR...96
   Section 4.05      The Certificate Insurance Policy.........................96
Section 4.06      Effect of Payments by the Certificate Insurer;          
                     Subrogation..............................................98

ARTICLE V THE CERTIFICATES....................................................99

   Section 5.01      The Certificates.........................................99
Section 5.02      Certificate Register; Registration of Transfer and      
                     Exchange of Certificates.................................99
   Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates.......104
   Section 5.04      Persons Deemed Owners...................................104
Section 5.05      Access to List of Certificateholders' Names and         
                     Addresses...............................................104
   Section 5.06      Maintenance of Office or Agency.........................105
Section 5.07      Rights of the Certificate Insurer to Exercise Rights    
                     of Class A-1 and Class A-3 Certificateholders...........105
Section 5.08      Trustee To Act Solely with Consent of the Certificate   
                     Insurer.................................................106
Section 5.09      Mortgage Loans, Trust Fund and Accounts Held for        
                     Benefit of the Certificate Insurer......................106
   Section 5.10      Certificate Insurer Default.............................106

ARTICLE VI THE DEPOSITOR AND THE SERVICER....................................107

Section 6.01      Respective Liabilities of the Depositor and the         
                     Servicer................................................107
Section 6.02      Merger or Consolidation of the Depositor or the         
                     Servicer................................................107
Section 6.03      Limitation on Liability of the Depositor, the Servicer  
                     and Others..............................................107
   Section 6.04      Limitation on Resignation of the Servicer...............109
Section 6.05      Additional Indemnification by the Servicer; Third       
                     Party Claims............................................109

ARTICLE VII DEFAULT..........................................................109

   Section 7.01      Events of Default.......................................109
   Section 7.02      Trustee to Act; Appointment of Successor................112
   Section 7.03      Notification to Certificateholders......................113

ARTICLE VIII CONCERNING THE TRUSTEE..........................................113

   Section 8.01      Duties of the Trustee...................................113
   Section 8.02      Certain Matters Affecting the Trustee...................114
   Section 8.03      Trustee Not Liable for Certificates or Mortgage Loans...115
   Section 8.04      Trustee May Own Certificates............................116
   Section 8.05      Trustee's Fees and Expenses.............................116

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   Section 8.06      Eligibility Requirements for the Trustee................116
   Section 8.07      Resignation and Removal of the Trustee..................116
   Section 8.08      Successor Trustee.......................................117
   Section 8.09      Merger or Consolidation of the Trustee..................118
   Section 8.10      Appointment of Co-Trustee or Separate Trustee...........118
   Section 8.11      Tax Matters.............................................119
   Section 8.12      Periodic Filings........................................121
   Section 8.13      Tax Classification of the Excess Reserve Fund Account...123
   Section 8.14      Cap Agreement...........................................124

ARTICLE IX TERMINATION.......................................................124

Section 9.01      Termination upon Liquidation or Purchase of the         
                     Mortgage Loans..........................................124
   Section 9.02      Final Distribution on the Certificates..................125
   Section 9.03      Additional Termination Requirements.....................126

ARTICLE X MISCELLANEOUS PROVISIONS...........................................126

   Section 10.01     Amendment...............................................126
   Section 10.02     Recordation of Agreement; Counterparts..................128
   Section 10.03     Governing Law...........................................129
   Section 10.04     Intention of Parties....................................129
   Section 10.05     Notices.................................................129
   Section 10.06     Severability of Provisions..............................130
   Section 10.07     Assignment..............................................130
   Section 10.08     Limitation on Rights of Certificateholders..............131
   Section 10.09     Inspection and Audit Rights.............................131
   Section 10.10     Certificates Nonassessable and Fully Paid...............132
   Section 10.11     The Certificate Insurer Default.........................132
   Section 10.12     Third Party Beneficiary.................................132
   Section 10.13     Waiver of Jury Trial....................................132
   Section 10.14     Limitation of Damages...................................132

SCHEDULES                                                                       
---------                                                                       

Schedule I        Mortgage Loan Schedule                                        
Schedule IA       Mortgage Loan Schedule - Group I                              
Schedule IB       Mortgage Loan Schedule - Group II                             
Schedule II       Representations and Warranties of the Servicer                
Schedule IIA      Further Representations and Warranties of the Servicer        
Schedule III      Representations and Warranties as to the Unaffiliated Seller  

EXHIBITS                                                                        
--------                                                                        

Exhibit A         Form of Class A-1, Class A-2, Class A-3, Class A-4, Class     
                  A-5, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 Certificate                       
Exhibit B         [Reserved]                                                    
Exhibit C         Form of Class P Certificate                                   

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

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

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

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

 PRELIMINARY STATEMENT

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

                 The Upper Tier REMIC shall hold as assets the several classes
of uncertificated Middle Tier Regular Interests. Each such Middle Tier Regular  
Interest is hereby designated as a regular interest in the Middle Tier REMIC.   
Class MT-A-1, Class MT-A-2, Class MT-A-3, Class MT-A-4, Class MT-A-5, Class     
MT-M-1, Class MT-M-2, Class MT-M-3, Class MT-B-1, Class MT-B-2 and Class MT-B-3 
are hereby designated the MT Accretion Directed Classes. The Class P Certificate
represents beneficial ownership of the Prepayment Charges, which portion of the 
Trust Fund shall be treated as a grantor trust.                                 

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

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

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                                                        [Enlarge/Download Table]

Lower Tier Class  Tier Interest  Initial Tier Principal                               
   Designation         Rate              Amount          Latest Possible Maturity Date
----------------  -------------  ----------------------  -----------------------------

                                                                                      
Class LT-C             (1)            $558,949,180             November 25, 2033      

Class LT-N             (2)                 (3)                 November 25, 2033      

Class LT-PO            (4)            $154,608,415             November 25, 2033      

Class LT-R             (5)                 (5)                 November 25, 2033      

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

(2)      The interest rate with respect to any Distribution Date for the Class  
LT-N is (i) during the Pre-Funding Period, all interest on the
 Subsequent Mortgage Loans for such Distribution Date divided by
$154,608,415, and (ii) thereafter, 0.00%.                     

(3)      The Class LT-N will have a notional principal balance equal to         
$154,608,415.                                                 

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

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

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

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

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

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                     Tier                                                               
Middle Tier Class  Interest    Initial Tier Principal   Corresponding   Latest Possible 
   Designation       Rate              Amount               Class        Maturity Date  
-----------------  --------  -------------------------  -------------  -----------------
                                                                                        
Class MT-A-1          (1)    1/2 of the                   Class A-1    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-A-2          (1)    1/2 of the                   Class A-2    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-A-3          (1)    1/2 of the                   Class A-3    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-A-4          (1)    1/2 of the                   Class A-4    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-A-5          (1)    1/2 of the                   Class A-5    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-M-1          (1)    1/2 of the                   Class M-1    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-M-2          (1)    1/2 of the                   Class M-2    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-M-3          (1)    1/2 of the                   Class M-3    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-B-1          (1)    1/2 of the                   Class B-1    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-B-2          (1)    1/2 of the                   Class B-2    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-B-3          (1)    1/2 of the                   Class B-3    November 25, 2033
                             Corresponding Class                                        
                             initial principal balance                                  

Class MT-             (1)    1/2 of the sum of the                     November 25, 2033
Accrual                      Pool Stated Principal                                      
                             Balance, the                                               
                             Subordinated Amount                                        
                             and the Pre-Funding                                        
                             Amount, minus $100.                                        

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                     Tier                                                               
Middle Tier Class  Interest    Initial Tier Principal   Corresponding   Latest Possible 
   Designation       Rate              Amount               Class        Maturity Date  
-----------------  --------  -------------------------  -------------  -----------------
                                                                                        
Class MT-N            (2)                (3)                           November 25, 2033

Class MT-R            (4)                (4)                           November 25, 2033

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

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

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

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

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

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

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the principal balance of its Corresponding Class, and (ii) the MT-Accrual Class 
is equal to 50% of the sum of (1) the Pool Stated Principal Balance, (2) the    
Subordinated Amount, and (3) the Pre-Funding Amount, minus $100.                

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

                                                        [Enlarge/Download Table]

Upper Tier Class   Upper Tier    Initial Upper Tier  Corresponding   Latest Possible 
   Designation    Interest Rate   Principal Amount       Class        Maturity Date  
----------------  -------------  ------------------  -------------  -----------------
                                                                                     
   Class A-1           (1)          $200,000,000     Class A-1(17)  November 25, 2033

   Class A-2           (2)          $110,000,000     Class A-2(17)  November 25, 2033

   Class A-3           (3)          $145,000,000     Class A-3(17)  November 25, 2033

   Class A-4           (4)          $ 80,000,000     Class A-4(17)  November 25, 2033

   Class A-5           (5)          $ 44,765,000     Class A-5(17)  November 25, 2033

   Class M-1           (6)          $ 45,311,000     Class M-1(17)  November 25, 2033

   Class M-2           (7)          $ 35,321,000     Class M-2(17)  November 25, 2033

   Class M-3           (8)          $  7,849,000     Class M-3(17)  November 25, 2033

   Class B-1           (9)          $  9,276,000     Class B-1(17)  November 25, 2033

   Class B-2          (10)          $  9,276,000     Class B-2(17)  November 25, 2033

   Class B-3          (11)          $ 13,202,000     Class B-3(17)  November 25, 2033

   Class X-1(16)      (12)               (12)                       November 25, 2033

   Class X-2(16)      (13)               (14)        Class X        November 25, 2033

   Class UT-R         (15)          $                Class R        November 25, 2033

(1)      The Class A-1 Certificates will bear interest during each Interest     
        Accrual Period at a per annum rate equal to the least of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.300% or
       (y) after the Optional Termination Date, 0.600%, (b) the Adjusted WAC
Cap and (c) the Loan Group I Cap.                             

(2)      The Class A-2 Certificates will bear interest during each Interest     
        Accrual Period at a per annum rate equal to the least of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.360% or
       (y) after the Optional Termination Date, 0.720%, (b) the Adjusted WAC
Cap and (c) the Loan Group II Cap.                            

(3)      The Class A-3 Certificates will bear interest during each Interest     
        Accrual Period at a per annum rate equal to the least of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.300% or
       (y) after the Optional Termination Date, 0.600%, (b) the Adjusted WAC
Cap and (c) the Loan Group II Cap.                            

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(4)      The Class A-4 Certificates will bear interest during each Interest     
        Accrual Period at a per annum rate equal to the least of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.190% or
       (y) after the Optional Termination Date, 0.380%, (b) the Adjusted WAC
Cap and (c) the Loan Group II Cap.                            

(5)      The Class A-5 Certificates will bear interest during each Interest     
        Accrual Period at a per annum rate equal to the least of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.500% or
       (y) after the Optional Termination Date, 1.000%, (b) the Adjusted WAC
Cap and (c) the Loan Group II Cap.                            

(6)      The Class M-1 Certificates will bear interest during each Interest     
         Accrual Period at a per annum rate equal to the lesser of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 0.700% or
      (y) after the Optional Termination Date, 1.050% and (b) the Adjusted
WAC Cap.                                                      

(7)      The Class M-2 Certificates will bear interest during each Interest     
         Accrual Period at a per annum rate equal to the lesser of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 1.750% or
      (y) after the Optional Termination Date, 2.625% and (b) the Adjusted
WAC Cap.                                                      

(8)      The Class M-3 Certificates will bear interest during each Interest     
         Accrual Period at a per annum rate equal to the lesser of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 2.100% or
      (y) after the Optional Termination Date, 3.150% and (b) the Adjusted
WAC Cap.                                                      

(9)      The Class B-1 Certificates will bear interest during each Interest     
         Accrual Period at a per annum rate equal to the lesser of (a) one-month
        LIBOR plus (x) on or prior to the Optional Termination Date, 3.400% or
      (y) after the Optional Termination Date, 5.100% and (b) the Adjusted
WAC Cap.                                                      

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

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

(12)     The Class X has an initial principal balance of $13,557,494, but it    
        will not accrue interest on such balance but will accrue interest on a
        notional principal balance. As of any Distribution Date, the Class X-1
  shall have a notional principal balance equal to the Pool Stated
       Principal Balance as of the first day of the related Interest Accrual
    Period. With respect to any Interest Accrual Period, the Class X-1
       shall bear interest at a rate equal to the excess, if any, of the WAC
Cap over the product of (i) 2 and (ii) the weighted average   
       Pass-Through Rate of the Middle Tier Regular Interests, where each MT
       Accretion Directed Class is subject to a cap and a floor equal to the
        Pass-Through Rate on its Corresponding Class, and the MT-Accrual Class

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     is subject to a cap of zero. With respect to any Distribution Date,
         interest that so accrues on the notional principal balance of the Class
 X-1 shall be deferred in an amount equal to any increase in the
       Subordinated Amount on such Distribution Date. Such deferred interest
shall not itself bear interest.                               

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

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

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

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

(17)     Each of these Certificates will represent not only the ownership of the
       Corresponding Class of Upper Tier Regular Interest but also the right
        to receive payments from the Excess Reserve Fund Account in respect of
       any Basis Risk CarryForward Amounts. For federal income tax purposes,
        the Trustee will treat a Certificateholder's right to receive payments
     from the Excess Reserve Fund Account as payments made pursuant to a
       notional principal contract written by the Class X Certificateholder.

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

                  Set forth below are designations of Classes of Certificates to
the categories used herein:                                                     

Book-Entry Certificates....................  All Classes of Certificates other  
                                         than the Physical Certificates.

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

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

ERISA-Restricted Certificates..............  Class R Certificates, Class P      
                                 Certificate and Class X
                                             Certificate; any certificate with a
                                            rating below the lowest applicable
                                    permitted rating under the
                                  Underwriters' Exemption.

Floating Rate Certificates.................  Class A-1, Class A-2, Class A-3,   
                                  Class A-4, Class A-5 and
                                    Subordinated Certificates.

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LIBOR Certificates.........................  Class A-1, Class A-2, Class A-3,   
                                  Class A-4, Class A-5 and
                                    Subordinated Certificates.

Non-Delay Certificates.....................  Class A-1, Class A-2, Class A-3,   
                                           Class A-4, Class A-5, Class X and
                                    Subordinated Certificates.

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

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

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

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

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

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

 ARTICLE I

 DEFINITIONS

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

               60+ Day Delinquent Loan: Each Mortgage Loan with respect to
which any portion of a Scheduled Payment is, as of the last day of the prior Due
Period, two months or more past due (without giving effect to any grace period),
each Mortgage Loan in foreclosure, all REO Property and each Mortgage Loan for  
which the Mortgagor has filed for bankruptcy.                                   

               Aames: Aames Capital Corporation, a California corporation.

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

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

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            Aames Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of June 23, 2003, as amended to date, by and     
between the Unaffiliated Seller and Aames.                                      

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

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

                  Accrued Certificate Interest: With respect to any Distribution
Date for each Class of Certificates (other than the Class P, Class R and Class X
Certificates), the amount of interest accrued during the related Interest       
Accrual Period at the applicable Pass-Through Rate on the related Class         
Certificate Balance immediately prior to such Distribution Date, as reduced by  
such Class's share of Net Prepayment Interest Shortfalls and Relief Act         
Shortfalls for the related Due Period allocated to such Class pursuant to       
Section 4.02.                                                                   

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

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

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

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

               Adjusted WAC Cap: The weighted average Pass-Through Rate of
the Middle Tier Regular Interests (other than the Class MT-N) minus, in the case
of each of the Class A-1 and Class A-3 Certificates, the Premium Rate, in       
respect of the Class A-1 or Class A-3 Certificates, respectively.               

                 Adjustment Date: As to any Adjustable Rate Mortgage Loan, the
first Due Date on which the related Mortgage Rate adjusts as set forth in the   
related Mortgage Note and each Due Date thereafter on which the Mortgage Rate   
adjusts as set forth in the related Mortgage Note.                              

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

 Advance Facility: As defined in Section 3.27.

         Advance Facility Trustee: As defined in Section 3.27.

             Advance Reimbursement Amount: As defined in Section 3.27.

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 Advancing Person: As defined in Section 3.27.

              Aegis: Aegis Mortgage Corporation, a Delaware corporation.

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

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

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

           Affiliate: With respect to any Person, any other Person
controlling, controlled by or under common control with such first Person. For  
the purposes of this definition, "control" means the power to direct the        
management and policies of such Person, directly or indirectly, whether through 
the ownership of voting securities, by contract or otherwise; and the terms     
"controlling" and "controlled" have meanings correlative to the foregoing.      

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

       Ameriquest: Ameriquest Mortgage Company, a Delaware
corporation.                                                                    

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

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

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

                  Amount Held for Future Distribution: As to the Certificates on
any Distribution Date, the aggregate amount held in the Collection Account at   
the close of business on the related Determination Date on account of (i)       
Principal Prepayments and Liquidation Proceeds on the Mortgage Loans received   
after the end of the related Prepayment Period and (ii) all Scheduled Payments  
on the Mortgage Loans due after the end of the related Due Period.              

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                  Applied Realized Loss Amount: With respect to any Distribution
Date, the amount, if any, by which the aggregate Class Certificate Balance of   
the Regular Certificates after distributions of principal on such Distribution  
Date exceeds the aggregate Stated Principal Balance of the Mortgage Loans for   
such Distribution Date.                                                         

                Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.                                                             

              Assignment and Recognition Agreement: The Aames Assignment
Agreement, the Aegis Assignment Agreement, the Ameriquest Assignment Agreement, 
the BNC Assignment Agreement, the Chapel Mortgage Assignment Agreement, the     
Encore Assignment Agreement, the First Banc Assignment Agreement, the First NLC 
Assignment Agreement, the Impac Assignment Agreement, the Master Financial      
Assignment Agreement, the Novelle Assignment Agreement, the People's Choice     
Assignment Agreement or the SIB Mortgage Assignment Agreement, as applicable.   

                 Assignment of Mortgage: An assignment of the Mortgage, notice
of transfer or equivalent instrument in recordable form (other than the         
assignee's name and recording information not yet returned from the recording   
office), reflecting the sale of the Mortgage to the Trustee.                    

         Average Net Proceeds: As defined in Exhibit M hereto.

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

            Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such   
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such    
Distribution Date.                                                              

                 Basis Risk CarryForward Amount: With respect to each Class of
Regular Certificates, as of any Distribution Date, the sum of (A) if on such    
Distribution Date the Pass-Through Rate for any Class of Regular Certificates is
based upon the Adjusted WAC Cap, or the Loan Group I Cap or the Loan Group II   
Cap, as applicable, the excess of (i) the amount of interest such Class of      
Certificates would otherwise be entitled to receive on such Distribution Date   
had such rate been calculated as the sum of LIBOR and the applicable            
Pass-Through Margin on such Class of Certificates for such Distribution Date,   
over (ii) the amount of interest payable on such Class of Certificates          
calculated at the Adjusted WAC Cap, the Loan Group I Cap or the Loan Group II   
Cap, as applicable, for such Distribution Date and (B) the Basis Risk           
CarryForward Amount for such Class of Certificates for all previous Distribution
Dates not previously paid, together with interest thereon at a rate equal to the
sum of LIBOR and the applicable Pass-Through Margin for such Class of           
Certificates for such Distribution Date.                                        

                  Basis Risk Payment: For any Distribution Date, an amount equal
to any Basis Risk CarryForward Amount; provided, however, that with respect to  
any Distribution Date, the payment cannot exceed the amounts otherwise          
distributable on the Class X Certificates plus any Interest Rate Cap Payment    
with respect to such Distribution Date.                                         

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

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

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

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

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

            Book-Entry Certificates: As specified in the Preliminary
Statement.                                                                      

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

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

          Cap Provider: CDC Financial Products, Inc., a Delaware
corporation, and any successor thereto.                                         

               Capitalized Interest Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 3.07(e) in the name of
the Trustee for the benefit of the Offered Certificateholders and designated    
"Deutsche Bank National Trust Company, in trust for registered holders of CDC   
Mortgage Capital Trust 2003-HE3, Mortgage Pass-Through Certificates, Series     
2003-HE3".                                                                      

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

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

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     Certificate Balance: With respect to any Class of
Certificates, other than the Class R Certificate, at any date, the maximum      
dollar amount of principal to which the Holder thereof is then entitled         
hereunder, such amount being equal to the Denomination thereof minus all        
distributions of principal previously made with respect thereto and in the case 
of any Subordinated Certificates, reduced by any Applied Realized Loss Amounts  
applicable to such Class of Subordinated Certificates. The Class R Certificate  
has no Certificate Balance.                                                     

                  Certificate Insurance Policy: The Financial Guaranty Insurance
Policy No. 51439-N, and all endorsements thereto dated the Closing Date, issued 
by the Certificate Insurer for the benefit of the Class A-1 and Class A-3       
Certificateholders.                                                             

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

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

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

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

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

                Certificate Owner: With respect to a Book-Entry Certificate,
the Person who is the beneficial owner of such Book-Entry Certificate.          

             Certificate Register: The register maintained pursuant to
Section 5.02.                                                                   

           Certificateholder or Holder: The person in whose name a
Certificate is registered in the Certificate Register, except that, solely for  
the purpose of giving any consent pursuant to this Agreement, any Certificate   
registered in the name of the Depositor or any Affiliate of the Depositor shall 
be deemed not to be Outstanding and the Percentage Interest evidenced thereby   
shall not be taken into account in determining whether the requisite amount of  
Percentage Interests necessary to effect such consent has been obtained;        
provided, however, that if any such Person (including the Depositor) owns 100%  

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

 Certification: As defined in Section 8.12(b).

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

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

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

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

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

               Class A Certificates: The Class A-1 Certificates, the Class
A-2 Certificates, the Class A-3 Certificates, the Class A-4 Certificates and the
Class A-5 Certificates.                                                         

              Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)  
the lesser of (A) the product of 62.50% of the Current Maximum Amount and (B)   
the excess, if any, of the Current Maximum Amount over $3,567,788.              

        Class A-1 Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, (i) the numerator of
which is the Group I Principal Remittance Amount for such Distribution Date and 
(ii) the denominator of which is the Principal Remittance Amount for such       
Distribution Date.                                                              

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

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

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

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

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

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

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

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

               Class A-3 Deficiency: With respect to any Distribution Date
and the Class A-3 Certificates, an amount equal to the sum of:                  

        (i)      the Class A-3 Interest Deficit Amount; plus

               (ii)     the Class A-3 Principal Parity Amount, if any, for
such Distribution Date.                                       

          Class A-3 Interest Deficit Amount: With respect to any
Distribution Date and the Class A-3 Certificates, the product of (i) the        
Interest Deficit Amount and (ii) a fraction, the numerator of which is the      
outstanding Class Certificate Balance of the Class A-3 Certificates on such     
Distribution Date, and the denominator of which is the aggregate outstanding    
Class Certificate Balances of all Class A Certificates on such Distribution     
Date, in each case, without taking into account any reduction of principal on   
such Certificates on such Distribution Date.                                    

          Class A-3 Principal Parity Amount: With respect to any
Distribution Date, the product of (i) the Principal Parity Deficit and (ii) a   
fraction, the numerator of which is the initial Class Certificate Balance of the
Class A-3 Certificates, and the denominator of which is the initial aggregate   
Class Certificate Balances of all Class A Certificates.                         

              Class A-4 Certificates: All Certificates bearing the class
designation of "Class A-4 Certificates."                                        

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              Class A-5 Certificates: All Certificates bearing the class
designation of "Class A-5 Certificates."                                        

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

                Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after   
taking into account distribution of the Class M-1 Principal Distribution Amount 
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2  
Certificates (after taking into account distribution of the Class M-2 Principal 
Distribution Amount on such Distribution Date), (D) the Class Certificate       
Balance of the Class M-3 Certificates (after taking into account distribution of
the Class M-3 Principal Distribution Amount on such Distribution Date), and (E) 
the Class Certificate Balance of the Class B-1 Certificates immediately prior to
such Distribution Date over (ii) the lesser of (A) 89.90% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over           
$3,567,788.                                                                     

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

                Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after   
taking into account distribution of the Class M-1 Principal Distribution Amount 
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2  
Certificates (after taking into account distribution of the Class M-2 Principal 
Distribution Amount on such Distribution Date), (D) the Class Certificate       
Balance of the Class M-3 Certificates (after taking into account distribution of
the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the 
Class Certificate Balance of the Class B-1 Certificates (after taking into      
account distribution of the Class B-1 Principal Distribution Amount on such     
Distribution Date), and (F) the Class Certificate Balance of the Class B-2      
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 92.50% of the Current Maximum Amount and (B) the excess, if any, of the     
Current Maximum Amount over $3,567,788.                                         

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

                Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after   
taking into account distribution of the Class M-1 Principal Distribution Amount 
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2  
Certificates (after taking into account distribution of the Class M-2 Principal 
Distribution Amount on such Distribution Date), (D) the Class Certificate       
Balance of the Class M-3 Certificates (after taking into account distribution of
the Class M-3 Principal Distribution Amount on such Distribution Date), (E) the 

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Class Certificate Balance of the Class B-1 Certificates (after taking into      
account distribution of the Class B-1 Principal Distribution Amount on such     
Distribution Date), (F) the Class Certificate Balance of the Class B-2          
Certificates (after taking into account distribution of the Class B-2 Principal 
Distribution Amount on such Distribution Date) and (G) the Class Certificate    
Balance of the Class B-3 Certificates immediately prior to such Distribution    
Date over (ii) the lesser of (A) 96.20% of the Current Maximum Amount and (B)   
the excess, if any, of the Current Maximum Amount over $3,567,788.              

                  Class Certificate Balance: With respect to any Class and as to
any date of determination, the aggregate of the Certificate Balances of all     
Certificates of such Class as of such date.                                     

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

                Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates      
immediately prior to such Distribution Date over (ii) the lesser of (A) 75.20%  
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $3,567,788.                                                         

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

                Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after   
taking into account distribution of the Class M-1 Principal Distribution Amount 
on such Distribution Date), and (C) the Class Certificate Balance of the Class  
M-2 Certificates immediately prior to such Distribution Date over (ii) the      
lesser of (A) 85.10% of the Current Maximum Amount and (B) the excess, if any,  
of the Current Maximum Amount over $3,567,788.                                  

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

                Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class         
Certificate Balances of the Class A Certificates (after taking into account     
distribution of the Class A Principal Distribution Amount on such Distribution  
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after   

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taking into account distribution of the Class M-1 Principal Distribution Amount 
on such Distribution Date), (C) the Class Certificate Balance of the Class M-2  
Certificates (after taking into account distribution of the Class M-2 Principal 
Distribution Amount on such Distribution Date), and (D) the Class Certificate   
Balance of the Class M-3 Certificates immediately prior to such Distribution    
Date over (ii) the lesser of (A) 87.30% of the Current Maximum Amount and (B)   
the excess, if any, of the Current Maximum Amount over $3,567,788.              

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

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

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

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

Closing Date: August 25, 2003.              

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

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

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

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

                Corporate Trust Office: The designated office of the Trustee
in the State of California at which at any particular time its corporate trust  
business with respect to this Agreement is administered, which office at the    
date of the execution of this Agreement is located at 1761 East St. Andrew      
Place, Santa Ana, California 92705, Attn: Trust Administration DC03M3, facsimile
no. (714) 247-6478 and which is the address to which notices to and             
correspondence with the Trustee should be directed.                             

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

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   Middle Tier                Upper Tier             Corresponding
Class Designation              Interest               Certificate 
-----------------             ----------             -------------

Class MT-A-1                 Class A-1              Class A-1 
Class MT -A-2                Class A-2              Class A-2 
Class MT -A-3                Class A-3              Class A-3 
Class MT -A-4                Class A-4              Class A-4 
Class MT -A-5                Class A-5              Class A-5 
Class MT -M-1                Class M-1              Class M-1 
Class MT -M-2                Class M-2              Class M-2 
Class MT -M-3                Class M-3              Class M-3 
Class MT -B-1                Class B-1              Class B-1 
Class MT -B-2                Class B-2              Class B-2 
Class MT -B-3                Class B-3              Class B-3 

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

                  Current Maximum Amount: With respect to any Distribution Date,
the sum of (i) the aggregate of the Stated Principal Balances of the Mortgage   
Loans in the Trust at such time, and (ii) with respect to each Distribution Date
on or prior to November 25, 2003, the Pre-Funding Amount immediately prior to   
such Distribution Date, net of investment earnings on deposit therein.          

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

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

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

                Cut-off Date Principal Balance: As to any Mortgage Loan, the
Stated Principal Balance thereof as of the close of business on the Cut-off     
Date.                                                                           

          Data Tape Information: The information provided by the
Unaffiliated Seller as of August 1, 2003 to the Depositor setting forth the     
following information with respect to each Mortgage Loan: (1) the Mortgagor's   
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the   
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating   
whether the Mortgaged Property is owner-occupied; (6) the type of Mortgaged     

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Property; (7) the first date on which the Monthly Payment was due on the        
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received   
from the related Mortgagor; (9) the original principal amount of the Mortgage   
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage 
Rate; (11) the type of Mortgage Loan (i.e., fixed or adjustable); (12) a code   
indicating the purpose of the loan (i.e., purchase, rate and term refinance,    
equity take-out refinance); (13) a code indicating the documentation style      
(i.e., full, asset verification, income verification and no documentation); (14)
the credit risk score (FICO score); (15) the loan credit grade classification   
(as described in the Underwriting Guidelines); (16) with respect to each        
Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17) the Mortgage Rate
at origination; (18) with respect to each Adjustable Rate Mortgage Loan, the    
first Adjustment Date immediately following the Cut-off Date; (19) the Value of 
the Mortgaged Property; (20) a code indicating the type and term of Prepayment  
Charges applicable to such Mortgage Loan, if any; and (21) with respect to each 
Adjustable Rate Mortgage Loan, the Periodic Mortgage Rate Cap. With respect to  
the Mortgage Loans in the aggregate, the Data Tape Information shall set forth  
the following information, as of the Cut-off Date: (1) the number of Mortgage   
Loans; (2) the current aggregate outstanding principal balance of the Mortgage  
Loans; (3) the weighted average Mortgage Rate of the Mortgage Loans; and (4) the
weighted average maturity of the Mortgage Loans.                                

                Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the        
Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which became    
final and non-appealable, except such a reduction resulting from a Deficient    
Valuation or any reduction that results in a permanent forgiveness of principal.

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

           Definitive Certificates: Any Certificate evidenced by a
Physical Certificate and any Certificate issued in lieu of a Book-Entry         
Certificate pursuant to Section 5.02(e).                                        

                  Delay Certificates: As specified in the Preliminary Statement.

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

                  Delinquency Trigger Event: With respect to a Distribution Date
after the Stepdown Date, the event that is in effect if the quotient (expressed 
as a percentage) of (x) the three-month rolling daily average of the Stated     
Principal Balance of 60+ Day Delinquent Loans as of the last day of the related 
Due Period, over (y) the Pool Stated Principal Balance of the Mortgage Loans as 
of the last day of the related Due Period exceeds 37.50% of the prior period's  
Senior Enhancement Percentage.                                                  

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

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

                  Denomination: With respect to each Certificate, the amount set
forth on the face thereof as the "Initial Certificate Balance of this           
Certificate" or the Percentage Interest appearing on the face thereof.          

            Depositor: Morgan Stanley ABS Capital I Inc., a Delaware
corporation, or its successor in interest.                                      

              Depository: The initial Depository shall be The Depository
Trust Company, the nominee of which is CEDE & Co., as the registered Holder of  
the Book-Entry Certificates. The Depository shall at all times be a "clearing   
corporation" as defined in Section 8-102(a)(5) of the Uniform Commercial Code of
the State of New York.                                                          

           Depository Participant: A broker, dealer, bank or other
financial institution or other Person for whom from time to time a Depository   
effects book-entry transfers and pledges of securities deposited with the       
Depository.                                                                     

                 Determination Date: With respect to each Remittance Date, the
Business Day immediately preceding such Remittance Date.                        

               Distribution Account: The separate Eligible Account created
and maintained by the Trustee pursuant to Section 3.07(d) in the name of the    
Trustee for the benefit of the Certificateholders and designated "Deutsche Bank 
National Trust Company, in trust for registered holders of CDC Mortgage Capital 
Trust 2003-HE3, Mortgage Pass-Through Certificates, Series 2003-HE3".           

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

               Document Exception Report: The report attached to Exhibit G
hereto.                                                                         

                 Due Date: The day of the month on which the Scheduled Payment
is due on a Mortgage Loan, exclusive of any days of grace.                      

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                  Due Period: With respect to each Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which 
such Distribution Date occurs and ending on the first day of the calendar month 
in which such Distribution Date occurs.                                         

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

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

                Encore: Encore Credit Corporation, a California corporation.

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

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

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

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

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

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

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

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 Event of Default: As defined in Section 7.01.

              Excess Reserve Fund Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Sections 3.07(b) and 3.07(c)  
in the name of the Trustee for the benefit of the Offered Certificateholders and
designated "Deutsche Bank National Trust Company, in trust for registered       
holders of CDC Mortgage Capital Trust 2003-HE3, Mortgage Pass-Through           
Certificates, Series 2003-HE3".                                                 

                Excess Subordinated Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Subordinated Amount on such Distribution   
Date over (b) the Specified Subordinated Amount for such Distribution Date.     

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

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

               Extra Principal Distribution Amount: As of any Distribution
Date, the lesser of (x) the related Total Monthly Excess Spread for such        
Distribution Date and (y) the Subordination Deficiency for such Distribution    
Date.                                                                           

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

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

           FDIC: The Federal Deposit Insurance Corporation, or any
successor thereto.                                                              

                  FHLMC: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.       

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

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

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

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                                                               Final Scheduled
                                                               Distribution Date
                                                               -----------------
Class A-1 Certificates.....................................    November 25, 2033
Class A-2 Certificates.....................................    November 25, 2033
Class A-3 Certificates.....................................    November 25, 2033
Class A-4 Certificates.....................................    November 25, 2033
Class A-5 Certificates.....................................    November 25, 2033
Class M-1 Certificates.....................................    November 25, 2033
Class M-2 Certificates.....................................    November 25, 2033
Class M-3 Certificates.....................................    November 25, 2033
Class B-1 Certificates.....................................    November 25, 2033
Class B-2 Certificates.....................................    November 25, 2033
Class B-3 Certificates.....................................    November 25, 2033
Class X Certificates.......................................    November 25, 2033
Class P Certificates.......................................    November 25, 2033
Class R Certificates.......................................    November 25, 2033

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

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

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

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

           First NLC: First NLC Financial Services, LLC, a Florida
limited liability company.                                                      

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

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

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                First NLC Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of October 14, 2002, as amended to date, by and  
between the Unaffiliated Seller and First NLC.                                  

                Fitch: Fitch, Inc. If Fitch is designated as a Rating Agency
in the Preliminary Statement, for purposes of Section 10.05(b) the address for  
notices to Fitch shall be Fitch, Inc., One State St. Plaza, New York, New York  
10004, Attention: Residential Mortgage Surveillance Group - Morgan Stanley ABS  
Capital I Inc. 2003-HE3, or such other address as Fitch may hereafter furnish to
the Depositor and the Servicer.                                                 

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

               Floating Rate Certificates: As specified in the Preliminary
Statement.                                                                      

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

               Gross Margin: With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage amount set forth in the related Mortgage Note to be  
added to the applicable Index to determine the Mortgage Rate.                   

                Group I Basic Principal Distribution Amount: With respect to
any Distribution Date, the excess of (i) the Group I Principal Remittance Amount
for such Distribution Date over (ii) the product of (a) the Excess Subordinated 
Amount, if any, for such Distribution Date and (b) the Class A-1 Allocation     
Percentage.                                                                     

           Group I Interest Remittance Amount: With respect to any
Distribution Date, the portion of the Interest Remittance Amount that was       
collected or advanced on the Group I Mortgage Loans.                            

                 Group I Mortgage Loans: The Mortgage Loans allocated to Group
I which primarily support the Class A-1 Certificates, as initially set forth on 
Schedule IA hereto.                                                             

              Group I Pre-Funding Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 3.07(f) in the name of
the Trustee for the benefit of the Certificateholders, and designated "Deutsche 
Bank National Trust Company, in trust for registered holders of CDC Mortgage    
Capital Trust 2003-HE3, Mortgage Pass-Through Certificates, Series 2003-HE3,"   
the funds of which, during the Pre-Funding Period, shall be applied solely to   
the purchase of Group I Subsequent Mortgage Loans.                              

              Group I Principal Distribution Amount: With respect to any
Distribution Date, the sum of (i) the Group I Basic Principal Distribution      
Amount for such Distribution Date and (ii) the product of (a) the Extra         
Principal Distribution Amount for such Distribution Date and (b) the Class A-1  
Allocation Percentage.                                                          

            Group I Principal Remittance Amount: With respect to any
Distribution Date, that portion of the Principal Remittance Amount for such     
Distribution Date that was collected or advanced on the Group I Mortgage Loans. 

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                 Group II Basic Principal Distribution Amount: With respect to
any Distribution Date, the excess of (i) the Group II Principal Remittance      
Amount for such Distribution Date over (ii) the product of (a) the Excess       
Subordinated Amount, if any, for such Distribution Date and (b) the Group II    
Class A Allocation Percentage.                                                  

               Group II Class A Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, (i) the numerator of
which is the Group II Principal Remittance Amount for such Distribution Date and
(ii) the denominator of which is the Principal Remittance Amount for such       
Distribution Date.                                                              

                  Group II Class A Certificates: The Class A-2, Class A-3, Class
A-4 and Class A-5 Certificates.                                                 

            Group II Interest Remittance Amount: With respect to any
Distribution Date, the portion of the Interest Remittance Amount that was       
collected or advanced on the Group II Mortgage Loans.                           

                  Group II Mortgage Loans: The Mortgage Loans allocated to Group
II which primarily support the Group II Class A Certificates, as initially set  
forth on Schedule IB hereto.                                                    

               Group II Pre-Funding Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 3.07(f) in the name of
the Trustee for the benefit of the Certificateholders, and designated "Deutsche 
Bank National Trust Company, in trust for registered holders of CDC Mortgage    
Capital Trust 2003-HE3, Mortgage Pass-Through Certificates, Series 2003-HE3,"   
the funds of which, during the Pre-Funding Period, shall be applied solely to   
the purchase of Group II Subsequent Mortgage Loans.                             

               Group II Principal Distribution Amount: With respect to any
Distribution Date, the sum of (i) the Group II Basic Principal Distribution     
Amount for such Distribution Date and (ii) the product of (a) the Extra         
Principal Distribution Amount for such Distribution Date and (b) the Group II   
Class A Allocation Percentage.                                                  

             Group II Principal Remittance Amount: With respect to any
Distribution Date, that portion of the Principal Remittance Amount for such     
Distribution Date that was collected or advanced on the Group II Mortgage Loans.

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

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

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

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

               Impac: Impac Funding Corporation, a California corporation.

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

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

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

              Index: As to each Adjustable Rate Mortgage Loan, the index
from time to time in effect for the adjustment of the Mortgage Rate set forth as
such on the related Mortgage Note.                                              

Initial Cut-off Date: August 1, 2003.       

                 Initial Group I Pre-Funded Amount: The amount of $52,273,158.

                  Initial Group II Pre-Funded Amount: The amount of $99,054,546.

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

             Initial Pre-Funded Amount: The sum of the Initial Group I
Pre-Funded Amount and the Initial Group II Pre-Funded Amount.                   

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

            Insurance Payment Account: The separate Eligible Account
created and maintained by the Trustee pursuant to Section 4.05(c) in the name of
the Trustee for the benefit of the Class A-1 and Class A-3 Certificateholders   
and the Certificate Insurer, and designated "Deutsche Bank National Trust       
Company, in trust for Financial Security Assurance Inc. and the registered      
holders of CDC Mortgage Capital Trust 2003-HE3, Mortgage Pass-Through           
Certificates, Series 2003-HE3."                                                 

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                Insurance Policy: With respect to any Mortgage Loan included
in the Trust Fund, any insurance policy, including all riders and endorsements  
thereto in effect, including any replacement policy or policies for any         
Insurance Policies.                                                             

           Insurance Proceeds: With respect to each Mortgage Loan,
proceeds of insurance policies insuring the Mortgage Loan or the related        
Mortgaged Property.                                                             

               Insured Payment: With respect to any Distribution Date, the
sum of the Class A-1 Deficiency and the Class A-3 Deficiency for that           
Distribution Date.                                                              

             Interest Accrual Period: With respect to any Distribution
Date, the period beginning with the immediately preceding Distribution Date (or 
in the case of the first Distribution Date, the period from and including the   
Closing Date to but excluding such first Distribution Date) and ending on the   
day prior to the current Distribution Date (on an actual/360 day count basis).  

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

                  Interest Rate Adjustment Date: With respect to each Adjustable
Rate Mortgage Loan, the date, specified in the related Mortgage Note and the    
Mortgage Loan Schedule, on which the Mortgage Rate is adjusted.                 

                  Interest Rate Cap Payment: Beginning on the first Distribution
Date, and continuing through the 20 Distribution Dates thereafter, the amount,  
if any, equal to the product of (a) the number of basis points by which LIBOR   
exceeds 6.75% (up to a maximum excess of 200 basis points) and (b) the amount   
set forth on the notional balance and multiplier schedule attached to the Cap   
Agreement as applicable to that Distribution Date, based on an "actual/360"     
accrual. Commencing June 24, 2005 until and including February 24, 2006 (subject
to adjustment in accordance with ISDA's "Preceding Business Day Convention"),   
the Interest Rate Cap Payment will be the amount, if any, equal to the product  
of (a) the number of basis points by which LIBOR exceeds 7.75% (up to a maximum 
excess of 100 basis points) and (b) the amount set forth on the notional balance
and multiplier schedule attached to the Cap Agreement as applicable to that     
Distribution Date, based on an "actual/360" accrual.                            

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

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

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

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

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

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

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

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

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

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

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

              LIBOR: With respect to any Interest Accrual Period for the
LIBOR Certificates, the rate determined by the Trustee on the related LIBOR     
Determination Date on the basis of the offered rate for one-month U.S. dollar   
deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m. (London    
time) on such date; provided that if such rate does not appear on Telerate Page 
3750, the rate for such date will be determined on the basis of the rates at    
which one-month U.S. dollar deposits are offered by the Reference Banks at      
approximately 11:00 a.m. (London time) on such date to prime banks in the London
interbank market. In such event, the Trustee will request the principal London  
office of each of the Reference Banks to provide a quotation of its rate. If at 
least two such quotations are provided, the rate for that date will be the      
arithmetic mean of the quotations (rounded upwards if necessary to the nearest  
whole multiple of 1/16%). If fewer than two quotations are provided as          
requested, the rate for that date will be the arithmetic mean of the rates      
quoted by major banks in New York City, selected by the Servicer, at            
approximately 11:00 a.m. (New York City time) on such date for one-month U.S.   
dollar loan to leading European banks.                                          

                  LIBOR Certificates: As specified in the Preliminary Statement.

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                  LIBOR Determination Date: With respect to any Interest Accrual
Period (other than the initial Interest Accrual Period) for the LIBOR           
Certificates, the second London Business Day preceding the commencement of such 
Interest Accrual Period.                                                        

              Liquidated Mortgage Loan: With respect to any Distribution
Date, a defaulted Mortgage Loan (including any REO Property) which was          
liquidated in the calendar month preceding the month of such Distribution Date  
and as to which the Servicer has certified (in accordance with this Agreement)  
that it has received all amounts it expects to receive in connection with the   
liquidation of such Mortgage Loan including the final disposition of an REO     
Property.                                                                       

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

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

              Loan Group I Cap: The per annum rate equal to the weighted
average gross rate of the Group I Mortgage Loans then in effect on the beginning
of the related Due Period, less the applicable Expense Fee Rate and further     
reduced by the Premium Rate in respect of the Class A-1 Certificates.           

               Loan Group II Cap: The per annum rate equal to the weighted
average gross rate of the Group II Mortgage Loans then in effect on the         
beginning of the related Due Period, less the applicable Expense Fee Rate and,  
in the case of the Class A-3 Certificates only, further reduced by the Premium  
Rate in respect of the Class A-3 Certificates.                                  

                  Loan-to-Value Ratio or LTV: With respect to any Mortgage Loan,
the ratio (expressed as a percentage) of the original outstanding principal     
amount of the Mortgage Loan as of the Cut-off Date (unless otherwise indicated),
to the lesser of (a) the Appraised Value of the Mortgaged Property at           
origination, and (b) if the Mortgage Loan was made to finance the acquisition of
the related Mortgaged Property, the purchase price of the Mortgaged Property.   

                 London Business Day: Any day on which dealings in deposits of
United States dollars are transacted in the London interbank market.            

                  Loss Trigger Event: With respect to any Distribution Date, the
event that is in effect if the aggregate amount of Realized Losses incurred     
since the related Cut-off Date through the last day of the related Prepayment   
Period divided by the Maximum Pool Principal Balance exceeds the applicable     
percentage as follows with respect to such Distribution Date: (a) 3.00% for the 
Distribution Dates occurring from September 2005 to August 2006; (b) 4.25% for  
the Distribution Dates occurring from September 2006 to August 2007; (c) 5.25%  

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for Distribution Dates occurring from September 2007 to August 2008; and (d)    
6.00% for Distribution Dates occurring in September 2008 and thereafter.        

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

               Lower Tier REMIC: As described in the Preliminary Statement

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

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

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

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

               Maximum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in 
the related Mortgage Note and (ii) is the maximum interest rate to which the    
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the 
lifetime of such Mortgage Loan.                                                 

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

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

                 Middle Tier REMIC: As described in the Preliminary Statement.

               Minimum Mortgage Rate: With respect to each Adjustable Rate
Mortgage Loan, a rate that (i) is set forth on the Data Tape Information and in 
the related Mortgage Note and (ii) is the minimum interest rate to which the    
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the 
lifetime of such Mortgage Loan.                                                 

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

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

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             Mortgage: The mortgage, deed of trust or other instrument
identified on the Mortgage Loan Schedule as securing a Mortgage Note.           

                Mortgage File: The items pertaining to a particular Mortgage
Loan contained in either the Servicing File or Custodial File.                  

        Mortgage Loan Purchase Agreement: The Aames Purchase
Agreement, the Aegis Purchase Agreement, the Ameriquest Purchase Agreement, the 
BNC Purchase Agreement, the Chapel Mortgage Purchase Agreement, the Encore      
Purchase Agreement, the First Banc Purchase Agreement, the First NLC Purchase   
Agreement, the Impac Purchase agreement, the Master Financial Purchase          
Agreement, the Novelle Purchase Agreement, the People's Choice Purchase         
Agreement and the SIB Purchase Agreement, as applicable.                        

            Mortgage Loans: An individual Mortgage Loan which is the
subject of this Agreement, each Mortgage Loan originally sold and subject to    
this Agreement being identified on the Mortgage Loan Schedule, which Mortgage   
Loan includes, without limitation, the Mortgage File, the Scheduled Payments,   
Principal Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance   
Proceeds, REO Disposition proceeds, and all other rights, benefits, proceeds and
obligations arising from or in connection with such Mortgage Loan, excluding    
replaced or repurchased Mortgage Loans. As applicable, "Mortgage Loan" shall be 
deemed to refer to REO Property.                                                

                Mortgage Loan Schedule: A schedule of Mortgage Loans annexed
hereto as Schedule I, such schedule setting forth the following information with
respect to each Mortgage Loan: (1) the Originator's Mortgage Loan number; (2)   
the city, state and zip code of the Mortgaged Property; (3) a code indicating   
whether the Mortgaged Property is a single family residence, two-family         
residence, three-family residence, four-family residence, PUD or condominium;   
(4) the current Mortgage Interest Rate; (5) the current net Mortgage Rate; (6)  
the current Monthly Payment; (7) the Gross Margin; (8) the original term to     
maturity; (9) the scheduled maturity date; (10) the principal balance of the    
Mortgage Loan as of the Cut-off Date after deduction of payments of principal   
due on or before the Cut-off Date whether or not collected; (11) the            
Loan-to-Value Ratio; (12) the next Interest Rate Adjustment Date; (13) the      
lifetime Mortgage Interest Rate Cap; (14) whether the Mortgage Loan is          
convertible or not; (15) a code indicating the mortgage guaranty insurance      
company; (16) the Servicing Fee; (17) the identity of the related Originator of 
such Mortgage Loan; (18) the Mortgagor's name; (19) the "paid-through" date     
(based on payments received from the related Mortgagor) as of the Cut-off Date; 
and (20) the Servicing Transfer Date.                                           

                 Mortgage Note: The note or other evidence of the indebtedness
of a Mortgagor under a Mortgage Loan.                                           

                  Mortgage Rate: The annual rate of interest borne on a Mortgage
Note, which shall be adjusted from time to time with respect to Adjustable Rate 
Mortgage Loans.                                                                 

          Mortgage Rate Caps: With respect to an Adjustable Rate
Mortgage Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and   
the Minimum Mortgage Rate for such Mortgage Loan.                               

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

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

               Net Interest Margin Securities: As defined in Section 9.01.

               Net Monthly Excess Cash Flow: For any Distribution Date the
amount remaining for distribution pursuant to subsection 4.02(a)(iii) (before   
giving effect to distributions pursuant to such subsection).                    

                 Net Prepayment Interest Shortfall: For any Distribution Date,
the amount by which the sum of the Prepayment Interest Shortfalls exceeds the   
sum of the Compensating Interest payments made on such Distribution Date.       

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

                NIMs Trust: CDC Mortgage Capital Inc. NIM Trust 2003-HE3N, a
Delaware business trust.                                                        

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

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

                  Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the  
good faith business judgment of the Servicer, will not or, in the case of a     
proposed P&I Advance, would not be ultimately recoverable from related late     
payments, Insurance Proceeds or Liquidation Proceeds on such Mortgage Loan or   
REO Property as provided herein.                                                

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

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

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

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

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

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

         Offered Certificates: As specified in the Preliminary
Statement.                                                                      

                Officer's Certificate: A certificate signed by an officer of
the Servicer with responsibility for the servicing of the Mortgage Loans and    
listed on a list delivered to the Trustee pursuant to this Agreement.           

                Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for the Servicer or the Subservicer, reasonably acceptable to  
the Trustee and to the Certificate Insurer; provided that any Opinion of Counsel
relating to (a) qualification of the Mortgage Loans in a REMIC or (b) compliance
with the REMIC Provisions, must be (unless otherwise stated in such Opinion of  
Counsel) an opinion of counsel who (i) is in fact independent of the Servicer of
the Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in the Servicer of the Mortgage Loans or in an affiliate of either and 
(iii) is not connected with the Servicer of the Mortgage Loans as an officer,   
employee, director or person performing similar functions.                      

Optional Termination Date: means:           

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

            (ii)     If the Class X Certificates are not 100% owned,
  either directly or indirectly, by the Unaffiliated Seller or any
        Affiliate thereof, then the Holders of a majority in Class Certificate
        Balance of the Class X Certificates may cause the Optional Termination
  Date to occur on any Distribution Date when the aggregate Stated
  Principal Balance of the Mortgage Loans is 10.00% or less of the
         Maximum Pool Principal Balance, and, if such Class X Certificateholders
do not do so, then the Servicer shall also have such right.   

                Originator: The party that originated or acquired a Mortgage
Loan and, more specifically, (i) with respect to any Aames Mortgage Loan, Aames,
(ii) with respect to any Aegis Mortgage Loan, Aegis, (iii) with respect to any  
Ameriquest Mortgage Loan, Ameriquest, (iv) with respect to any BNC Mortgage     
Loan, BNC, (v) with respect to any Chapel Mortgage Loan, Chapel Mortgage, (vi)  

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with respect to any Encore Mortgage Loan, Encore, (vii) with respect to any     
First Banc Mortgage Loan, First Banc, (viii) with respect to any First NLC      
Mortgage Loan, First NLC, (ix) with respect to any Impac Mortgage Loan or       
Novelle Mortgage Loan, Impac or Novelle, as applicable, (x) with respect to any 
Master Financial Mortgage Loan, Master Financial, (xi) with respect to any      
People's Choice Mortgage Loan, People's Choice and (xii) with respect to any SIB
Mortgage Loan, SIB Mortgage.                                                    

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

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

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

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

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

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

             P&I Advance: As to any Mortgage Loan or REO Property, any
advance made by the Servicer in respect of any Remittance Date with respect to  
any Mortgage Loan representing the aggregate of all payments of principal and   
interest on such Mortgage Loan, net of the related Servicing Fee, that were due,
and that were delinquent or unpaid on the related Determination Date, plus      
certain amounts representing assumed payments not covered by any current net    
income on the Mortgaged Properties acquired by foreclosure or deed in lieu of   
foreclosure as determined pursuant to Section 4.01.                             

              Pass-Through Margin: With respect to each Class of Regular
Certificates, on or prior to the Optional Termination Date the following        
percentages: Class A-1 Certificates, 0.300%, Class A-2 Certificates, 0.360%,    
Class A-3 Certificates, 0.300%, Class A-4 Certificates, 0.190%, Class A-5       
Certificates, 0.500%, Class M-1 Certificates, 0.700%, Class M-2 Certificates,   
1.750%, Class M-3 Certificates, 2.100%, Class B-1 Certificates, 3.400%, Class   
B-2 Certificates, 3.750% and Class B-3 Certificates, 3.750%. Commencing on the  
first Distribution Date after the Optional Termination Date, the Pass-Through   
Margins shall increase to: Class A-1 Certificates, 0.600%, Class A-2            
Certificates, 0.720%, Class A-3 Certificates, 0.600%, Class A-4 Certificates,   
0.380%, Class A-5 Certificates, 1.000%, Class M-1 Certificates, 1.050%, Class   
M-2 Certificates, 2.625%, Class M-3 Certificates, 3.150%, Class B-1             
Certificates, 5.100%, Class B-2 Certificates, 5.625% and Class B-3 Certificates,
5.625%.                                                                         

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

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

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

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

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

              Percentage Interest: As to any Certificate, the percentage
interest evidenced thereby in distributions required to be made on the related  
Class, such percentage interest being set forth on the face thereof or equal to 
the percentage obtained by dividing the Denomination of such Certificate by the 
aggregate of the Denominations of all Certificates of the same Class.           

                  Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth 
in the related Mortgage Note.                                                   

           Permitted Investments: Any one or more of the following
obligations or securities acquired at a purchase price of not greater than par, 
regardless of whether issued by the Servicer, the Trustee or any of their       
respective Affiliates:                                                          

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

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

                (iii)    repurchase obligations with respect to any security
         described in clause (i) above entered into with an Eligible Institution
(acting as principal);                                        

              (iv)     securities bearing interest or sold at a discount
       that are issued by any corporation incorporated under the laws of the
     United States of America or any state thereof and that are rated by
        each Rating Agency that rates such securities in its highest long-term

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unsecured rating categories at the time of such investment or 
contractual commitment providing for such investment;         

                  (v)      commercial paper (including both non-interest-bearing
         discount obligations and interest-bearing obligations payable on demand
or on a specified date not more than 30 days after the date of
     acquisition thereof) that is rated by each Rating Agency that rates
 such securities in its highest short-term unsecured debt rating
available at the time of such investment;                     

                (vi)     units of money market funds, including money market
        funds advised by the Depositor or an Affiliate thereof, that have been
        rated "Aaa" by Moody's, "AAA" by Fitch and "AAA" by Standard & Poor's;
and                                                           

                  (vii)    if previously confirmed in writing to the Trustee and
    to the Certificate Insurer, any other demand, money market or time
     deposit, or any other obligation, security or investment, as may be
      acceptable to the Rating Agencies as a permitted investment of funds
backing "Aaa" or "AAA" rated securities;                      

provided, however, that no instrument described hereunder shall evidence either 
the right to receive (a) only interest with respect to the obligations          
underlying such instrument or (b) both principal and interest payments derived  
from obligations underlying such instrument and the interest and principal      
payments with respect to such instrument provide a yield to maturity at par     
greater than 120% of the yield to maturity at par of the underlying obligations.

              Permitted Transferee: Any person other than (i) the United
States, any State or political subdivision thereof, or any agency or            
instrumentality of any of the foregoing, (ii) a foreign government,             
International Organization or any agency or instrumentality of either of the    
foregoing, (iii) an organization (except certain farmers' cooperatives described
in section 521 of the Code) which is exempt from tax imposed by Chapter 1 of the
Code (including the tax imposed by section 511 of the Code on unrelated business
taxable income) on any excess inclusions (as defined in section 860E(c)(1) of   
the Code) with respect to any Residual Certificate, (iv) rural electric and     
telephone cooperatives described in section 1381(a)(2)(C) of the Code, (v) a    
Person that is not a U.S. Person, (vi) an "electing large partnership" within   
the meaning of section 775 of the Code and (vii) any other Person so designated 
by the Depositor based upon an Opinion of Counsel that the Transfer of an       
Ownership Interest in a Residual Certificate to such Person may cause any REMIC 
created hereunder to fail to qualify as a REMIC at any time that the            
Certificates are outstanding. The terms "United States," "State" and            
"International Organization" shall have the meanings set forth in section 7701  
of the Code or successor provisions. A corporation will not be treated as an    
instrumentality of the United States or of any State or political subdivision   
thereof for these purposes if all of its activities are subject to tax and, with
the exception of the Federal Home Loan Mortgage Corporation, a majority of its  
board of directors is not selected by such government unit.                     

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

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          Physical Certificates: As specified in the Preliminary
Statement.                                                                      

               Pool Stated Principal Balance: As to any Distribution Date,
the aggregate of the Stated Principal Balances of the Mortgage Loans for such   
Distribution Date which were Outstanding Mortgage Loans as of the last day of   
the related Due Period.                                                         

                Preference Amount: Any amounts distributed in respect of the
Class A-1 Certificates or Class A-3 Certificates that are recovered from any    
Holder of such Certificates as a voidable preference by a trustee in bankruptcy 
pursuant to the United States Bankruptcy Code or other similar law in accordance
with a final, nonappealable order of a court having competent jurisdiction and  
which have not theretofore been repaid to such Holder.                          

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

                 Pre-Funding Accounts: The Group I Pre-Funding Account and the
Group II Pre-Funding Account.                                                   

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

                Pre-Funding Earnings: With respect to a Pre-Funding Account,
the actual investment earnings realized on amounts deposited in such Pre-Funding
Account.                                                                        

                 Pre-Funding Period: The period commencing on the Startup Date
and ending on the earliest to occur of (i) the date on which the amount on      
deposit in the Pre-Funding Account (exclusive of any investment earnings) is    
less than $100,000, (ii) the date on which any Event of Default occurs and (iii)
November 24, 2003.                                                              

                Premium Amount: The product of (i) the Premium Rate and (ii)
the sum of the Certificate Balances of the Class A-1 Certificates and the Class 
A-3 Certificates immediately prior to such Distribution Date.                   

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

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

                 Prepayment Interest Shortfall: With respect to any Remittance
Date, the sum of, for each Mortgage Loan that was during the related Prepayment 
Period the subject of a Principal Prepayment in Full, that was applied by the   
Servicer to reduce the outstanding principal balance of such Mortgage Loan on a 
date preceding the Due Date in the succeeding Prepayment Period, an amount equal
to the product of (a) the Mortgage Rate net of the Servicing Fee Rate for such  
Mortgage Loan, (b) the amount of the Principal Prepayment for such Mortgage     
Loan, (c) 1/360 and (d) the number of days commencing on the date on which such 
Principal Prepayment was applied and ending on the last day of the related      
Prepayment Period.                                                              

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

                 Principal Distribution Amount: For any Distribution Date, the
sum of (i) the Basic Principal Distribution Amount for such Distribution Date   
and (ii) the Extra Principal Distribution Amount for such Distribution Date.    

              Principal Parity Deficit: With respect to any Distribution
Date, the excess of (i) the aggregate Class Certificate Balances of the Class A 
Certificates on that Distribution Date, after taking into account any reduction 
(other than, with respect to the Class A-1 and Class A-3 Certificates,          
reductions due to payments from the Certificate Insurance Policy on that        
Distribution Date), of those Class Certificate Balances on that Distribution    
Date, less the excess of (a) any Principal Parity Deficits for all prior        
Distribution Dates over (b) any Class A-1 or Class A-3 Principal Parity Amounts 
for all prior Distribution Dates over (ii) the Current Maximum Amount for that  
Distribution Date. For the first Distribution Date, the Principal Parity Deficit
will equal zero.                                                                

              Principal Prepayment: Any full or partial payment or other
recovery of principal on a Mortgage Loan (including upon liquidation of a       
Mortgage Loan) which is received in advance of its scheduled Due Date, excluding
any prepayment penalty or premium thereon and which is not accompanied by an    
amount of interest representing scheduled interest due on any date or dates in  
any month or months subsequent to the month of prepayment.                      

                  Principal Prepayment in Full: Any Principal Prepayment made by
a Mortgagor of the entire principal balance of a Mortgage Loan.                 

               Principal Remittance Amount: With respect to any Remittance
Date, the sum, without duplication, of: (i) all scheduled installments of       
principal due on the Mortgage Loans during the related Due Period and received  
or advanced by the Servicer on or prior to the related Remittance Date; (ii) the
principal component of all Condemnation Proceeds, Insurance Proceeds and        
Liquidation Proceeds during the related Due Period (in each case, net of        
remaining (i.e., not deducted from the Interest Remittance Amount) unreimbursed 
expenses incurred in connection with a liquidation or foreclosure and           
unreimbursed Advances, if any); (iii) all partial or full prepayments on the    
Mortgage Loans received during the related Prepayment Period; (iv) the principal
component of all Substitution Adjustment Amounts and Repurchase Prices received 
by the Servicer during the related Due Period; and (v) the principal component  
of the proceeds of any termination of the Trust Fund; reduced by remaining      
amounts (i.e., not deducted from the Interest Remittance Amount) in             
reimbursement for Advances previously made with respect to the Mortgage Loans   
and other amounts as to which the Servicer is entitled to be reimbursed pursuant
to this Agreement.                                                              

         Private Certificates: As specified in the Preliminary
Statement.                                                                      

                  Prospectus Supplement: The Prospectus Supplement, dated August
22, 2003, relating to the Offered Certificates.                                 

PUD: Planned Unit Development.              

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

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

                 Record Date: With respect to any Distribution Date, the close
of business on the Business Day immediately preceding such Distribution Date;   
provided, however, that for any Certificate issued in Definitive Form, the      
Record Date shall be the close of business on the last Business Day of the month
immediately preceding such applicable Distribution Date.                        

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

Reference Bank: As defined in Section 4.04. 

         Regular Certificates: As specified in the Preliminary
Statement.                                                                      

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

               Relief Act Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest or principal     
collectible on such Mortgage Loan for the most recently ended Due Period as a   

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result of the application of the Soldiers' and Sailors' Civil Relief Act of     
1940, as amended, and similar state laws.                                       

 Remainder Amount: As defined in Section 9.01.

                 REMIC: A "real estate mortgage investment conduit" within the
meaning of section 860D of the Code.                                            

              REMIC Provisions: Provisions of the federal income tax law
relating to REMICs, which appear at sections 860A through 860G of Subchapter M  
of Chapter 1 of the Code, and related provisions, and regulations promulgated   
thereunder, as the foregoing may be in effect from time to time as well as      
provisions of applicable state laws.                                            

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

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

              REO Disposition: The final sale by the Servicer of any REO
Property.                                                                       

                 REO Imputed Interest: As to any REO Property, for any period,
an amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee 
Rate that would have been applicable to the related Mortgage Loan had it been   
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by  
any income from the REO Property treated as a recovery of principal).           

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

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

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

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

          Residual Certificates: As specified in the Preliminary
Statement.                                                                      

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

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

                  Scheduled Payment: The scheduled monthly payment on a Mortgage
Loan due on any Due Date allocable to principal and/or interest on such Mortgage
Loan which, unless otherwise specified herein, shall give effect to any related 
Debt Service Reduction and any Deficient Valuation that affects the amount of   
the monthly payment due on such Mortgage Loan.                                  

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

SEC: As defined in Section 8.12(a).         

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

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

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distributions of the Principal Distribution Amount for such Distribution Date)  
by (y) the Current Maximum Amount for that Distribution Date.                   

              Senior Specified Enhancement Percentage: As of any date of
determination, 37.50%.                                                          

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

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

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

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

                Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the Servicer in the performance of  
its servicing obligations in connection with a default, delinquency or other    
unanticipated event, including, but not limited to, the cost of (i) the         
preservation, restoration and protection of a Mortgaged Property, (ii) any      
enforcement or judicial proceedings, including foreclosures and litigation, in  
respect of a particular Mortgage Loan, (iii) the management (including          
reasonable fees in connection therewith) and liquidation of any REO Property and
(iv) the performance of its obligations under Section 3.01, Section 3.09,       
Section 3.13 and Section 3.15 hereof. Servicing advances also include any       
reasonable "out-of-pocket" costs and expenses (including legal fees) incurred by
the Servicer in connection with executing and recording instruments of          
satisfaction, deeds of reconveyance or Assignments of Mortgage in connection    
with any satisfaction or foreclosure in respect of any Mortgage Loan to the     
extent not recovered from the Mortgagor or otherwise payable under this         
Agreement. The Servicer shall not be required to make any Nonrecoverable        
Advances.                                                                       

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

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3.11) of such Monthly Payment collected by the Servicer, or as otherwise        
provided under Section 3.11.                                                    

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

                Servicing File: With respect to each Mortgage Loan, the file
retained by the Servicer consisting of originals or copies of all documents in  
the Mortgage File which are not delivered to the Trustee in the Custodial File  
and copies of each of the other Mortgage Loan documents required to be delivered
by the related Originator pursuant to the terms of the related Mortgage Loan    
Purchase Agreement.                                                             

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

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

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

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

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

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

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

      Specified Subordinated Amount: With respect to any
Distribution Date prior to the Stepdown Date, an amount equal to 1.90% of the   
Maximum Pool Principal Balance; and with respect to any Distribution Date on and
after the Stepdown Date, an amount equal to 3.80% of the Current Maximum Amount 
for that Distribution Date subject to a minimum amount equal to 0.50% of the    
Maximum Pool Principal Balance; provided, however, that if, on any Distribution 
Date, a Delinquency Trigger Event has occurred, the Specified Subordinated      
Amount shall not be reduced to the applicable percentage of the Current Maximum 
Amount, but instead remain the same as the prior period's Specified Subordinated
Amount until the distribution date on which a Delinquency Trigger Event is no   
longer occurring; provided, further, that if, on any Distribution Date, a Loss  
Trigger Event exists, the Specified Subordinated Amount shall equal 2.40% of the
Maximum Pool Principal Balance until the Distribution Date on which a Loss      

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Trigger Event no longer exists. When the Class Certificate Balance of each Class
of Offered Certificates has been reduced to zero, the Specified Subordinated    
Amount shall thereafter equal zero.                                             

            Standard & Poor's: Standard & Poor's Ratings Services, a
division of the McGraw-Hill Companies, Inc. If Standard & Poor's is designated  
as a Rating Agency in the Preliminary Statement, for purposes of Section        
10.05(b) the address for notices to Standard & Poor's shall be Standard &       
Poor's, 55 Water, New York, New York 10041, Attention: Residential Mortgage     
Surveillance Group - Morgan Stanley ABS Capital I Inc. 2003-HE3, or such other  
address as Standard & Poor's may hereafter furnish to the Depositor and the     
Servicer.                                                                       

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

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

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

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

              Subordinated Certificates: As specified in the Preliminary
Statement.                                                                      

              Subordination Deficiency: With respect to any Distribution
Date, the excess, if any, of (a) the Specified Subordinated Amount applicable to
such Distribution Date over (b) the Subordinated Amount applicable to such      
Distribution Date.                                                              

       Subordination Reduction Amount: With respect to any
Distribution Date, an amount equal to the lesser of (a) the Excess Subordinated 
Amount and (b) the Total Monthly Excess Spread.                                 

Subservicer: As defined in Section 3.02(a). 

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     Subservicing Account: As defined in Section 3.08.

       Subservicing Agreement: As defined in Section 3.02.

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

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

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

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

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

                Substitute Mortgage Loan: A Mortgage Loan substituted by the
Unaffiliated Seller or an Originator for a Deleted Mortgage Loan in accordance  
with the terms of this Agreement or the related Mortgage Loan Purchase          
Agreement, which must, on the date of such substitution, as confirmed in a      
Request for Release, substantially in the form of Exhibit K, (i) have a Stated  
Principal Balance, after deduction of the principal portion of the Scheduled    
Payment due in the month of substitution, not in excess of, and not more than   
10% less than, the Stated Principal Balance of the Deleted Mortgage Loan; (ii)  
be accruing interest at a rate no lower than and not more than 1% per annum     
higher than, that of the Deleted Mortgage Loan; (iii) have a Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (iv) have a remaining term to 
maturity no greater than (and not more than one year less than that of) the     
Deleted Mortgage Loan; and (v) comply with each representation and warranty set 
forth in Sections 3.01(f), 3.01(h) and 3.03 of the Unaffiliated Seller's        
Agreement and each representation and warranty set forth in the applicable      
Mortgage Loan Purchase Agreement.                                               

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

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

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

  Termination Price: As defined in Section 9.01.

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

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

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

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

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

         Trust Fund: The corpus of the trust created hereunder
consisting of (i) the Mortgage Loans and all interest and principal received on 
or with respect thereto after the related Cut-off Date, other than such amounts 
which were due on the Mortgage Loans on or before the related Cut-off Date; (ii)
each Account, and all amounts deposited therein pursuant to the applicable      
provisions of this Agreement; (iii) property that secured a Mortgage Loan and   
has been acquired by foreclosure, deed-in-lieu of foreclosure or otherwise; (iv)
all rights of the Depositor against the Unaffiliated Seller under the           
Unaffiliated Seller's Agreement; (v) all rights of the Depositor against each   
Originator under the related Assignment and Recognition Agreement and the       
related Mortgage Loan Purchase Agreement; (vi) the Certificate Insurance Policy;
(vii) the Cap Agreement, for the benefit of the Holders of the Offered          
Certificates (other than the Class A-1 Certificateholders); and (viii) all      
proceeds of the conversion, voluntary or involuntary, of any of the foregoing.  

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

                Trustee Fee: As to any Distribution Date, an amount equal to
the sum of (a) the product of one-twelfth of the Trustee Fee Rate times the sum 
of (i) the aggregate Stated Principal Balances of the Mortgage Loans at the end 
of the prior Due Period, and (ii) the amount on deposit in the Pre-Funding      
Account at the end of such prior Due Period and (b) any reasonable compensation 
and expenses of a separate trustee or co-trustee to be paid pursuant to Section 
8.10(d).                                                                        

                 Trustee Fee Rate: With respect to each Mortgage Loan, 0.0042%
per annum.                                                                      

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

                Unpaid Interest Amounts: As of any Distribution Date and any
Class of Certificates, the sum of (a) the excess of (i) the sum of the Accrued  
Certificate Interest for such Distribution Date and any portion of such Accrued 
Certificate Interest from prior Distribution Dates remaining unpaid over (ii)   

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the amount in respect of interest on such Class of Certificates actually        
distributed on that Distribution Date and (b) 30 days' interest on such excess  
at the applicable Pass-Through Rate (to the extent permitted by applicable law).

             Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i) 
Applied Realized Loss Amounts with respect to such Class over (ii) the sum of   
all distributions in reduction of such Applied Realized Loss Amounts on all     
previous Distribution Dates. Any amounts distributed to a Class of Subordinated 
Certificates in respect of any Unpaid Realized Loss Amount will not be applied  
to reduce the Class Certificate Balance of such Class.                          

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

                Upper Tier REMIC: As described in the Preliminary Statement.

            U.S. Person: Shall mean (i) a citizen or resident of the
United States; (ii) a corporation (or entity treated as a corporation for tax   
purposes) created or organized in the United States or under the laws of the    
United States or of any state thereof, including, for this purpose, the District
of Columbia; (iii) a partnership (or entity treated as a partnership for tax    
purposes) organized in the United States or under the laws of the United States 
or of any state thereof, including, for this purpose, the District of Columbia  
(unless provided otherwise by future Treasury regulations); (iv) an estate whose
income is includible in gross income for United States income tax purposes      
regardless of its source; or (v) a trust, if a court within the United States is
able to exercise primary supervision over the administration of the trust and   
one or more U.S. Persons have authority to control all substantial decisions of 
the trust. Notwithstanding the last clause of the preceding sentence, to the    
extent provided in Treasury regulations, certain trusts in existence on August  
20, 1996, and treated as U.S. Persons prior to such date, may elect to continue 
to be U.S. Persons.                                                             

                 Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of           
determination, (a) 1% of all Voting Rights shall be allocated to the Class X    
Certificates, if any (such Voting Rights to be allocated among the holders of   
Certificates of each such Class in accordance with their respective Percentage  
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P       
Certificates, if any, and (c) the remaining Voting Rights shall be allocated    
among Holders of the remaining Classes of Certificates in proportion to the     
Certificate Balances of their respective Certificates on such date.             

         WAC Cap: With respect to the Mortgage Loans as of any
Distribution Date, the product of (i) the weighted average of the Adjusted Net  
Mortgage Rates then in effect on the beginning of the related Due Period on the 
Mortgage Loans, in the case of each of the Class A-1 and Class A-3 Certificates,
minus the Premium Rate in respect of the Class A-1 or Class A-3 Certificates,   
respectively, and (ii) a fraction, the numerator of which is 30 and the         
denominator of which is the actual number of days in the Interest Accrual Period
related to such Distribution Date.                                              

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ARTICLE II

 CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES

   Section 2.01      Conveyance of Mortgage Loans.
                    ----------------------------

               (a)      The Depositor, concurrently with the execution and
delivery hereof, hereby sells, transfers, assigns, sets over and otherwise      
conveys to the Trustee for the benefit of the Certificateholders, without       
recourse, all the right, title and interest of the Depositor in and to the Trust
Fund, other than any Subsequent Mortgage Loans, which will be so sold,          
transferred, assigned, set-over and conveyed on the related Subsequent Transfer 
Date.                                                                           

              (b)      In connection with the transfer and assignment of
each Mortgage Loan, the Unaffiliated Seller has delivered or caused to be       
delivered to the Trustee for the benefit of the Certificateholders the following
documents or instruments with respect to each Mortgage Loan so assigned (to the 
extent such documents or instruments are required to be delivered by the related
Originator under each Mortgage Loan Purchase Agreement):                        

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

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

             (iii)    the original Mortgage with evidence of recording
         thereon. If in connection with any Mortgage Loan, the original Mortgage
        with evidence of recording thereon can not be delivered on or prior to
   the related Delivery Date because of a delay caused by the public
         recording office where such Mortgage has been delivered for recordation
         or because such Mortgage has been lost or because such public recording
 office retains the original recorded Mortgage, then the related
   Originator, as required by the terms of the related Mortgage Loan
  Purchase Agreement, will be required to deliver to the Trustee a
        photocopy of such Mortgage and (i) the original recorded Mortgage or a
         copy of such Mortgage certified by such public recording office to be a
        true and complete copy of the original recorded Mortgage promptly upon
        receipt thereof by the related Originator (but in any event within 360
         days from the related Delivery Date); or (ii) in the case of a Mortgage
        where a public recording office retains the original recorded Mortgage
       or in the case where a Mortgage is lost after recordation in a public
    recording office, a copy of such Mortgage certified by such public
 recording office to be a true and complete copy of the original
recorded Mortgage;                                            

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

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

            (vi)     the originals of all intervening assignments of
         mortgage, evidencing a complete chain of assignment from the originator
         to the related Originator, with evidence of recording thereon or if any
       such intervening assignment has not been returned from the applicable
      recording office or has been lost or if such public recording office
retains the original recorded assignments of mortgage;        

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

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

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

              On or prior to the related Delivery Date, the Unaffiliated
Seller shall deliver, or cause the related Originator to deliver, to the Trustee
Assignments of Mortgage, in blank, for each Mortgage Loan. If an Assignment of  
Mortgage is required to be recorded pursuant to the terms hereof, the Trustee   
shall promptly forward such Assignment of Mortgage to the Servicer for          
recording. No later than thirty (30) Business Days following the date of receipt
by the Servicer of all necessary recording information for a Mortgage, the      
Servicer shall promptly submit or cause to be submitted for recording, at the   
expense of the Unaffiliated Seller (the Unaffiliated Seller to seek             
reimbursement from the related Originator under the applicable Mortgage Loan    
Purchase Agreement) in the appropriate public office for real property records, 
each Assignment of Mortgage referred to in Section 2.01(b)(v). Notwithstanding  
the foregoing, however, for administrative convenience and facilitation of      
servicing and to reduce closing costs, the Assignment of Mortgage shall not be  
required to be completed and submitted for recording with respect to any        
Mortgage Loan (other than any Mortgage Loan where the Mortgaged Property is     
located in any state where recordation is required by any Rating Agency to      
obtain the initial ratings on the Certificates, which states as of the date     
hereof, are Florida and Maryland) until the earliest to occur of (i) direction  
by the Certificate Insurer or (ii) upon a determination by the Servicer that    
recordation is necessary for the enforcement of rights under, or satisfaction or
assignment of, the related Mortgage, at which time, the Servicer shall record   
any such Assignment of Mortgage in accordance with the terms hereof. If any     

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Assignment of Mortgage is required to be recorded pursuant to the terms hereof, 
the Mortgage shall be assigned from the related Originator, to "Deutsche Bank   
National Trust Company, as trustee under the Pooling and Servicing Agreement    
dated as of August 1, 2003, Morgan Stanley ABS Capital I Inc. Trust 2003-HE3."  
In the event that any such assignment is lost or returned unrecorded because of 
a defect therein, the Unaffiliated Seller shall cause the related Originator to 
promptly prepare a substitute assignment to cure such defect and thereafter     
cause each such assignment to be duly recorded. In the event the Unaffiliated   
Seller does not pay or otherwise reimburse the Servicer for any of the foregoing
costs of recording any such Assignment of Mortgage, the Servicer shall be       
entitled to be reimbursed from the Trust Fund from amounts on deposit in the    
Collection Account. In the event the related Originator fails to reimburse the  
Unaffiliated Seller for the recording costs described above, upon receipt of    
written direction from the Unaffiliated Seller, the Trustee shall assign its    
rights under the applicable Mortgage Loan Purchase Agreement solely with respect
to payment of such expenses to the Unaffiliated Seller.                         

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

                  On or prior to the Closing Date, the Unaffiliated Seller shall
deliver to the Trustee and the Servicer a copy of the Data Tape Information in  
electronic, machine readable medium in a form mutually acceptable to the Trustee
and the Servicer. Within ten days of the Closing Date, the Unaffiliated Seller  
shall deliver a copy of the complete Mortgage Loan Schedule to the Trustee and  
the Servicer.                                                                   

           In the event that such original or copy of any document
submitted for recordation to the appropriate public recording office is not so  
delivered to the Trustee within 90 days following the related Delivery Date, and
in the event that the Originator does not cure such failure within 30 days of   
discovery or receipt of written notification of such failure from the Depositor,
the Trustee or the Certificate Insurer, the Trustee shall notify the related    
Originator to repurchase the Mortgage Loan pursuant to the related Mortgage Loan
Purchase Agreement, upon the request of the Depositor, the Trustee or the       
Certificate Insurer, at the Repurchase Price and in the manner specified in     
Section 2.03. The foregoing repurchase provision shall not apply in the event   
that the related Originator cannot deliver such original or copy of any document
submitted for recordation to the appropriate public recording office within the 
specified period due to a delay caused by the recording office in the applicable
jurisdiction; provided that the related Originator shall instead be required to 
deliver a recording receipt of such recording office or, if such recording      
receipt is not available, an officer's certificate of a servicing officer of the
Originator confirming that such document has been accepted for recording.       

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            (c)      Purchase and Sale of Subsequent Mortgage Loans.

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

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

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

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

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

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

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

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

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

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

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

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

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

                      (a)      none may be second lien mortgage loans;

                          (b)      no more than 21.25% and no less than 19.00%
may be Fixed Rate Mortgage Loans;           

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

                       (d)      the weighted average gross Mortgage Rate
    must not be less than 7.88%, or more than 8.23%;

                       (e)      the weighted average LTV must not exceed
                  81.00%, and no more than 52.00% of the Mortgage Loans may have
LTVs in excess of 80.00%;                   

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

                         (g)      at least 84.00% of the Mortgage Loans must
have prepayment penalties;                  

                        (h)      the weighted average Gross Margin for the
          Adjustable Rate Mortgage Loans must be at least 6.40%;

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                      (i)      the weighted average credit score (FICO
               Score) must be at least 604, and none of the Mortgage Loans
may have credit scores below 500; and       

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

             (iv)     The obligation of the Trust Fund to purchase the
       Subsequent Mortgage Loans on a Subsequent Transfer Date is subject to
  the requirements that, following the purchase of such Subsequent
Mortgage Loans, with respect to Group II:                     

                    (a)      no more than 4.00% may be second lien
mortgage loans;                             

                          (b)      no more than 33.00% and no less than 29.00%
may be Fixed Rate Mortgage Loans;           

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

                       (d)      the weighted average gross Mortgage Rate
    must not be less than 7.90%, or more than 8.25%;

                       (e)      the weighted average LTV must not exceed
                  80.59%, and no more than 52.00% of the Mortgage Loans may have
LTVs in excess of 80.00%;                   

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

                         (g)      at least 85.00% of the Mortgage Loans must
have prepayment penalties;                  

                        (h)      the weighted average Gross Margin for the
          Adjustable Rate Mortgage Loans must be at least 6.30%;

                      (i)      the weighted average credit score (FICO
               score) must be at least 609, and none of the mortgage loans
may have credit scores below 500; and       

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

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

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

               Section 2.02      Acceptance by the Trustee of the Mortgage
                                 -----------------------------------------
Loans.                                                                          
-----                                                                           

                 The Trustee shall acknowledge, on each Delivery Date, receipt
of the documents identified in the Initial Certification in the form annexed    
hereto as Exhibit F, and declares that it holds and will hold such documents and
the other documents delivered to it pursuant to Section 2.01, and that it holds 
or will hold such other assets as are included in the Trust Fund, in trust for  
the exclusive use and benefit of all present and future Certificateholders and  
the Certificate Insurer. The Trustee acknowledges that it will maintain         
possession of the related Mortgage Notes in the State of California, unless     
otherwise permitted by the Rating Agencies and the Certificate Insurer.         

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

                Within 120 days after the related Delivery Date, the Trustee
shall ascertain that all documents required to be reviewed by it are in its     
possession, and shall deliver to the Depositor, the Unaffiliated Seller, the    
Servicer and the Certificate Insurer a Final Certification to the effect that,  
as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any   
Mortgage Loan paid in full or any Mortgage Loan specifically identified in such 
certification as an exception and not covered by such certification): (i) all   
documents required to be delivered to it are in its possession; (ii) such       
documents have been reviewed by it and appear regular on their face and relate  
to such Mortgage Loan; (iii) based on its examination and only as to the        
foregoing documents, the information set forth in items (1), (2) and (18) of the
Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape Information 
respecting such Mortgage Loan is correct; and (iv) each Mortgage Note has been  
endorsed as provided in Section 2.01 of this Agreement. The Trustee shall not be
responsible to verify the validity, sufficiency or genuineness of any document  
in any Custodial File. Upon receipt of such Final Certification, if the         
Depositor, the Unaffiliated Seller or the Certificate Insurer determines that   
any noncompliance identified by the Trustee is a breach of a representation or  
warranty relating to such Mortgage Loan, such party shall give written notice to
the Trustee thereof.                                                            

           The Trustee shall retain possession and custody of each
Custodial File in accordance with and subject to the terms and conditions set   
forth herein. The Servicer shall promptly deliver to the Trustee, upon the      
execution or receipt thereof, the originals of such other documents or          
instruments constituting the Custodial File as come into the possession of the  
Servicer from time to time.                                                     

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

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

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

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

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

              With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Trustee for the benefit of the         
Certificateholders the Mortgage Note, the Mortgage, the related Assignment of   
the Mortgage, and such other documents and agreements as are required by Section
2.01, with the Mortgage Note endorsed and the Mortgage assigned as required by  
Section 2.01. No substitution is permitted to be made in any calendar month     

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after the Determination Date for such month. Scheduled Payments due with respect
to Substitute Mortgage Loans in the Due Period of substitution shall not be part
of the Trust Fund and will be retained by the related Originator on the next    
succeeding Distribution Date. For the Due Period of substitution, distributions 
to Certificateholders will include the monthly payment due on any Deleted       
Mortgage Loan for such Due Period and thereafter the related Originator shall be
entitled to retain all amounts received in respect of such Deleted Mortgage     
Loan.                                                                           

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

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

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

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

             (g)      In the event that the Unaffiliated Seller or the
related Originator, as applicable, shall have repurchased a Mortgage Loan, the  
Repurchase Price therefor shall be deposited in the Collection Account pursuant 
to Section 3.10 on or before the Remittance Date for the Distribution Date in   
the month following the month during which the Unaffiliated Seller or the       
related Originator, as applicable, became obligated hereunder to repurchase or  
replace such Mortgage Loan and upon such deposit of the Repurchase Price, the   
delivery of the Opinion of Counsel required by Section 2.05 and receipt of a    
Request for Release in the form of Exhibit K hereto, the Trustee shall release  
the related Custodial File to such Person as directed by the Servicer, and the  
Trustee shall execute and deliver at such Person's direction such instruments of
transfer or assignment prepared by such Person, in each case without recourse,  
as shall be necessary to transfer title from the Trustee. It is understood and  
agreed that the obligation under this Agreement of any Person to cure,          
repurchase or replace any Mortgage Loan as to which a breach has occurred and is
continuing shall constitute the sole remedy against such Persons respecting such
breach available to Certificateholders, the Depositor, the Unaffiliated Seller, 
the Certificate Insurer or the Trustee on their behalf. In the event such       
required repurchase or replacement does not occur, the Trustee shall take such  
actions as directed upon written direction from the Depositor or the Certificate
Insurer and the provision of reasonable indemnity satisfactory to the Trustee in
accordance with Sections 6.03 and 8.02.                                         

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

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

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           Section 2.04      The Depositor and the Mortgage Loans.
                            ------------------------------------

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

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

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

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

             Section 2.06      Execution and Delivery of Certificates.
                              --------------------------------------

                 The Trustee acknowledges the transfer and assignment to it of
the Trust Fund and, concurrently with such transfer and assignment, has executed
and delivered to or upon the order of the Depositor, the Certificates in        
authorized denominations evidencing directly or indirectly the entire ownership 
of the Trust Fund. The Trustee agrees to hold the Trust Fund and exercise the   
rights referred to above for the benefit of all present and future Holders of   
the Certificates, and for the benefit of the Certificate Insurer.               

Section 2.07      REMIC Matters.            
     -------------

             The Preliminary Statement sets forth the designations for
federal income tax purposes of all interests created hereby. The "Startup Day"  
for purposes of the REMIC Provisions shall be the Closing Date. The "latest     
possible maturity date" is November 25, 2033, which is the sixth Distribution   
Date following the latest Mortgage Loan maturity date.                          

           Section 2.08      Representations and Warranties of the
                             -------------------------------------
Depositor.                                                                      
---------                                                                       

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

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           (a)      The Depositor is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware;  

                (b)      The Depositor has the corporate power and authority
to convey the Mortgage Loans and to execute, deliver and perform, and to enter  
into and consummate the transactions contemplated by, this Agreement;           

                 (c)      This Agreement has been duly and validly authorized,
executed and delivered by the Depositor, all requisite corporate action having  
been taken, and, assuming the due authorization, execution and delivery hereof  
by the other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in        
accordance with its terms, except as such enforcement may be limited by         
bankruptcy, insolvency, reorganization, moratorium or other similar laws        
relating to or affecting the rights of creditors generally, and by general      
equity principles (regardless of whether such enforcement is considered in a    
proceeding in equity or at law);                                                

               (d)      No consent, approval, authorization or order of or
registration or filing with, or notice to, any governmental authority or court  
is required for the execution, delivery and performance of or compliance by the 
Depositor with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the   
Closing Date;                                                                   

                  (e)      None of the execution and delivery of this Agreement,
the consummation of the transactions contemplated hereby or thereby, or the     
fulfillment of or compliance with the terms and conditions of this Agreement,   
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an        
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any    
term, condition or provision of any material indenture, deed of trust, contract 
or other agreement or instrument to which the Depositor or any of its           
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,      
judgment or decree applicable to the Depositor of any court or governmental     
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)  
results in the creation or imposition of any lien, charge or encumbrance which  
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;                          

                 (f)      There are no actions, suits or proceedings before or
against or investigations of, the Depositor pending, or to the knowledge of the 
Depositor, threatened, before any court, administrative agency or other         
tribunal, and no notice of any such action, which, in the Depositor's reasonable
judgment, might materially and adversely affect the performance by the Depositor
of its obligations under this Agreement, or the validity or enforceability of   
this Agreement;                                                                 

                (g)      The Depositor is not in default with respect to any
order or decree of any court or any order, regulation or demand of any federal, 
state, municipal or governmental agency that may materially and adversely affect
its performance hereunder; and                                                  

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                (h)      Immediately prior to the transfer and assignment by
the Depositor to the Trustee, the Depositor had, or, with respect to the        
subsequent Mortgage Loans, will have, good title to, and was, or will be, the   
sole owner of each Mortgage Loan, free of any interest of any other Person, and 
the Depositor has transferred, or shall transfer, all right, title and interest 
in each Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the 
Mortgage as and in the manner contemplated by this Agreement is sufficient      
either (i) fully to transfer to the Trustee, for the benefit of the             
Certificateholders and for the benefit of the Certificate Insurer, all right,   
title, and interest of the Depositor thereto as note holder and mortgagee or    
(ii) to grant to the Trustee, for the benefit of the Certificateholders and for 
the benefit of the Certificate Insurer, the security interest referred to in    
Section 10.04.                                                                  

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

 ARTICLE III

ADMINISTRATION AND SERVICING
 OF MORTGAGE LOANS

         Section 3.01      Servicer to Service Mortgage Loans.
                          ----------------------------------

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

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

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

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

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

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

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

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

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

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

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                  Section 3.02      Subservicing Agreements Between the Servicer
                                    --------------------------------------------
and Subservicers.                                                               
----------------                                                                

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

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

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

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Section 3.03      Successor Subservicers.   
              ----------------------

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

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

Section 3.04      Liability of the Servicer.
                 -------------------------

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

         Section 3.05      No Contractual Relationship Between
                           -----------------------------------
Subservicers and the Trustee.                                                   
----------------------------                                                    

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

               Section 3.06      Assumption or Termination of Subservicing
                                 -----------------------------------------
Agreements by Trustee.                                                          
---------------------                                                           

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

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

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

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

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

                  (a)      The Servicer shall make reasonable efforts to collect
all payments called for under the terms and provisions of the Mortgage Loans,   
and shall, to the extent such procedures shall be consistent with this Agreement
and the terms and provisions of any applicable insurance policies, follow such  
collection procedures as it would follow with respect to mortgage loans         
comparable to the Mortgage Loans and held for its own account. Consistent with  
the foregoing, the Servicer may (i) waive any late payment charge or, if        
applicable, any penalty interest, or (ii) extend the due dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;      
provided that any extension pursuant to clause (ii) above shall not affect the  
amortization schedule of any Mortgage Loan for purposes of any computation      
hereunder, except as provided below. In the event of any such arrangement       
pursuant to clause (ii) above, the Servicer shall make timely advances on such  
Mortgage Loan during such extension pursuant to Section 4.01 and in accordance  
with the amortization schedule of such Mortgage Loan without modification       
thereof by reason of such arrangements, subject to Section 4.01(d) pursuant to  
which the Servicer shall not be required to make any such advances that are     
Nonrecoverable P&I Advances. Notwithstanding the foregoing, the Servicer may not
waive, in whole or in part, a Prepayment Charge, except under the following     
circumstances: (i) such waiver relates to a default or a reasonably foreseeable 
default and would, in the reasonable judgment of the Servicer, maximize recovery
of total proceeds taking into account the value of such Prepayment Charge and   
the related Mortgage Loan, and doing so is standard and customary in servicing  
mortgage loans similar to the Mortgage Loans (including any waiver of a         
Prepayment Charge in connection with a refinancing of a Mortgage Loan that is   
related to a default or a reasonably foreseeable default), and in no event will 
the Servicer waive a Prepayment Charge in connection with a refinancing of a    
Mortgage Loan that is not related to a default or a reasonably foreseeable      
default or (ii) such Prepayment Charge is not permitted to be collected by      
applicable law. If a Prepayment Charge is waived other than as permitted by the 
prior sentence, then the Servicer is required to pay the amount of such waived  

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Prepayment Charge, for the benefit of the Holders of the Class P Certificates,  
by depositing such amount into the Collection Account together with and at the  
time that the amount prepaid on the related Mortgage Loan is required to be     
deposited into the Collection Account. Notwithstanding any provision in this    
Agreement to the contrary, in the event the Prepayment Charge payable under the 
terms of the Mortgage Note is less than the amount of the Prepayment Charge set 
forth in the Mortgage Loan Schedule or other information provided to the        
Servicer, the Servicer shall not have any liability or obligation with respect  
to such difference, and in addition shall not have any liability or obligation  
to pay the amount of any uncollected Prepayment Charge if the failure to collect
such amount is the direct result of inaccurate or incomplete information on the 
Mortgage Loan Schedule.                                                         

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

                 (ii)     On each Distribution Date, the Trustee shall deposit
  the amount of any Basis Risk Payment made for the benefit of the
   Certificateholders and any Interest Rate Cap Payment made for the
benefit of the Offered Certificates other than the Class A-1  
  Certificates for such date into the Excess Reserve Fund Account.

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

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

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

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

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

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

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

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

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

         (e)      The Trustee shall establish and maintain the
Capitalized Interest Account, on behalf of the Certificateholders. On the       
Closing Date, the Trustee shall deposit $669,588 into the Capitalized Interest  
Account from the proceeds of the sale of the Offered Certificates. Withdrawals  
from the Capitalized Interest Account shall be made in accordance with Sections 
4.02(c) and (d). The Trustee shall account for the Capitalized Interest Account 
as an outside reserve fund within the meaning of Treasury Regulation 1.860G-2(h)
and not as an asset of any REMIC created pursuant to this Agreement. The        
beneficial owner of the Capitalized Interest Account shall be the Unaffiliated  
Seller.                                                                         

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

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

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

Section 3.08      Subservicing Accounts.    
             ---------------------

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

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

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

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

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

Section 3.10      Collection Account.       
          ------------------

         (a)      On behalf of the Trustee, the Servicer shall
establish and maintain, or cause to be established and maintained, one or more  
Eligible Accounts (such account or accounts, the "Collection Account"), held in 
trust for the benefit of the Trustee. On behalf of the Trustee, the Servicer    
shall deposit or cause to be deposited in the clearing account (which account   
must be an Eligible Account) in which it customarily deposits payments and      
collections on mortgage loans in connection with its mortgage loan servicing    
activities on a daily basis, and in no event more than one Business Day after   
the Servicer's receipt thereof, and shall thereafter deposit in the Collection  
Account, in no event more than two Business Days after the deposit of such funds
into the clearing account, as and when received or as otherwise required        
hereunder, the following payments and collections received or made by it        
subsequent to the related Cut-off Date (other than in respect of principal or   
interest on the related Mortgage Loans due on or before the related Cut-off     
Date, and except for $9,370.42 in interest, which is being retained by the      
Unaffiliated Seller), or payments (other than Principal Prepayments) received by
it on or prior to the related Cut-off Date but allocable to a Due Period        
subsequent thereto:                                                             

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

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

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

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

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

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

              (vii)    all Prepayment Charges collected by the Servicer.

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

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

              Section 3.11      Withdrawals from the Collection Account.
                               ---------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

         Section 3.12      Investment of Funds in the Account.
                          ----------------------------------

               (a)      The Servicer may direct the investment of funds in
the Collection Account and may direct the Trustee to invest funds in the        
Distribution Account, and the Unaffiliated Seller may direct the Trustee to     

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

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

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

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

                (ii)     All income and gain realized from the investment of
 funds deposited in the Pre-Funding Accounts and the Capitalized
        Interest Account held by or on behalf of the Unaffiliated Seller shall
  be retained in such Investment Account, subject to withdrawal as
         provided in Section 4.02. Whether in regard to a Pre-Funding Account or
         the Capitalized Interest Account, the Unaffiliated Seller shall deposit
     in such Pre-Funding Account or the Capitalized Interest Account, as
        applicable, the amount of any loss of principal incurred in respect of
any such Permitted Investment made with funds in such accounts
immediately upon realization of such loss.                    

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

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

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

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

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shall be in an amount equal to the lesser of (i) the unpaid principal balance of
the related Mortgage Loan and (ii) the maximum amount of such insurance         
available for the related Mortgaged Property under the national flood insurance 
program (assuming that the area in which such Mortgaged Property is located is  
participating in such program).                                                 

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

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

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

            The Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance of any Mortgaged Property by any Mortgagor 
(whether by absolute conveyance or by contract of sale, and whether or not the  
Mortgagor remains or is to remain liable under the Mortgage Note and/or the     
Mortgage), exercise its rights to accelerate the maturity of such Mortgage Loan 
under the "due-on-sale" clause, if any, applicable thereto; provided, however,  
that the Servicer shall not be required to take such action if, in its sole     
business judgment, the Servicer believes it is not in the best interests of the 
Trust Fund and shall not exercise any such rights if prohibited by law from     
doing so. If the Servicer reasonably believes it is unable under applicable law 
to enforce such "due-on-sale" clause or if any of the other conditions set forth

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

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

                Section 3.15      Realization Upon Defaulted Mortgage Loans.
                                 -----------------------------------------

            The Servicer shall use its best efforts, consistent with
customary servicing practices as described in Section 3.01, to foreclose upon or
otherwise comparably convert (which may include an acquisition of REO Property) 
the ownership of properties securing such of the Mortgage Loans as come into and
continue in default and as to which no satisfactory arrangements can be made for
collection of delinquent payments pursuant to Section 3.07, and which are not   
released from this Agreement pursuant to any other provision hereof. The        
Servicer shall use reasonable efforts to realize upon such defaulted Mortgage   
Loans in such manner as will maximize the receipt of principal and interest by  
the Trustee, taking into account, among other things, the timing of foreclosure 
proceedings. The foregoing is subject to the provisions that, in any case in    

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which Mortgaged Property shall have suffered damage from an uninsured cause, the
Servicer shall not be required to expend its own funds toward the restoration of
such property unless it shall determine in its sole discretion (i) that such    
restoration will increase the net proceeds of liquidation of the related        
Mortgage Loan to the Trustee, after reimbursement to itself for such expenses,  
and (ii) that such expenses will be recoverable by the Servicer through         
Insurance Proceeds or Liquidation Proceeds from the related Mortgaged Property, 
as contemplated in Section 3.11. The Servicer shall be responsible for all other
costs and expenses incurred by it in any such proceedings; provided, however,   
that it shall be entitled to reimbursement thereof from the related property, as
contemplated in Section 3.11.                                                   

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

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

            After reviewing the environmental inspection report, the
Servicer shall determine how to proceed with respect to the Mortgaged Property. 
In the event (a) the environmental inspection report indicates that the         
Mortgaged Property is contaminated by hazardous or toxic substances or wastes   
and (b) the Servicer determines to proceed with foreclosure or acceptance of a  
deed in lieu of foreclosure, the Servicer shall be reimbursed for all reasonable
costs associated with such foreclosure or acceptance of a deed in lieu of       
foreclosure and any related environmental clean-up costs, as applicable, from   
the related Liquidation Proceeds, or if the Liquidation Proceeds are            
insufficient to fully reimburse the Servicer, the Servicer shall be entitled to 
be reimbursed from amounts in the Collection Account pursuant to Section 3.11   

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hereof. In the event the Servicer determines not to proceed with foreclosure or 
acceptance of a deed in lieu of foreclosure, the Servicer shall be reimbursed   
from general collections for all Servicing Advances made with respect to the    
related Mortgaged Property from the Collection Account pursuant to Section 3.11 
hereof.                                                                         

Section 3.16      Release of Mortgage Files.
                 -------------------------

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

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

                  Upon written certification of a Servicing Officer, the Trustee
shall execute and deliver to the Servicer any court pleadings, requests for     
trustee's sale or other documents reasonably necessary to the foreclosure or    
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to 
obtain a deficiency judgment, or to enforce any other remedies or rights        
provided by the Mortgage Note or Mortgage or otherwise available at law or in   
equity, or shall exercise and deliver to the Servicer a power of attorney       
sufficient to authorize the Servicer to execute such documents on its behalf.   

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Each such certification shall include a request that such pleadings or documents
be executed by the Trustee and a statement as to the reason such documents or   
pleadings are required and that the execution and delivery thereof by the       
Trustee will not invalidate or otherwise affect the lien of the Mortgage, except
for the termination of such a lien upon completion of the foreclosure or        
trustee's sale.                                                                 

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

                Section 3.17      Title, Conservation and Disposition of REO
                                  ------------------------------------------
Property.                                                                       
--------                                                                        

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

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

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

(d)      [Reserved].                        

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

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

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

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

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

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  Section 3.18      Notification of Adjustments.
                   ---------------------------

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

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

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

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

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

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Section 3.21      Servicing Compensation.   
              ----------------------

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

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

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

        Section 3.22      Annual Statement as to Compliance.
                         ---------------------------------

             The Servicer will deliver or cause to be delivered to the
Depositor, the Rating Agencies, the Unaffiliated Seller, the Certificate        
Insurer, and the Trustee on or before March 15th of each calendar year,         
commencing in 2004, an Officers' Certificate stating, as to each signatory      
thereof, that (i) a review of the activities of the Servicer during the         
preceding calendar year and of performance under this Agreement has been made   
under such officers' supervision, and (ii) to the best of such officers'        
knowledge, based on such review, the Servicer has fulfilled all of its          
obligations under this Agreement throughout such year, or, if there has been a  
default in the fulfillment of any such obligation, specifying each such default 
known to such officers and the nature and status thereof.                       

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

                 Not later than March 15th of each calendar year commencing in
2004, the Servicer, at its expense, shall cause a nationally recognized firm of 
independent certified public accountants to furnish to the Depositor, the       
Unaffiliated Seller, the Certificate Insurer, the Rating Agencies and the       
Trustee a report stating that (i) it has obtained a letter of representation    
regarding certain matters from the management of the Servicer which includes an 
assertion that the Servicer has complied with certain minimum residential       

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

 Section 3.24      Trustee to Act as Servicer.
                  --------------------------

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

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

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

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

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Section 3.25      Compensating Interest.    
             ---------------------

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

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

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

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

Section 3.27      Advance Facilities.       
          ------------------

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

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

            The Servicer shall maintain and provide to any successor
Servicer a detailed accounting on a loan-by-loan basis as to amounts advanced   
by, pledged or assigned to, and reimbursed to any Advancing Person. The         
successor Servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor Servicer shall not be liable for any
errors in such information.                                                     

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

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

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

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ARTICLE IV

 DISTRIBUTIONS AND
ADVANCES BY THE SERVICER

Section 4.01      Advances.                 
--------

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

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

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

                (d)      Notwithstanding anything herein to the contrary, no
P&I Advance or Servicing Advance shall be required to be made hereunder by the  
Servicer if such P&I Advance or Servicing Advance would, if made, constitute a  
Nonrecoverable P&I Advance or Nonrecoverable Advance. The determination by the  
Servicer that it has made a Nonrecoverable P&I Advance or a Nonrecoverable      
Advance or that any proposed P&I Advance or Servicing Advance, if made, would   
constitute a Nonrecoverable P&I Advance or a Nonrecoverable Advance,            

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respectively, shall be evidenced by an Officers' Certificate of the Servicer    
delivered to the Trustee.                                                       

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

 Section 4.02      Priorities of Distribution.
                  --------------------------

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

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

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

          (B)      concurrently, with equal priority of payment:

                       (1)      payable solely from the Group I Interest
                               Remittance Amount for that Distribution
                             Date, to the holders of the Class A-1
                             Certificates, the Accrued Certificate
                                    Interest and any Unpaid Interest Amounts for
                              the Class A-1 Certificates, and to the
                                   extent that the Group I Interest Remittance
                                   Amount is less than the Accrued Certificate
                                    Interest and any Unpaid Interest Amounts for
                                    the Class A-1 Certificates, payable from any
                                    Group II Interest Remittance Amount for that
                                    Distribution Date remaining after payment of
                                    the Accrued Certificate Interest, any Unpaid
                                   Interest Amounts and related administrative
                                 fees with respect to the Group II Class A
                                 Certificates, to the holders of the Class
                                   A-1 Certificates, the unpaid portion of the
                                   Accrued Certificate Interest and any Unpaid
                          Interest Amounts for the Class A-1
         Certificates; and

                        (2)      payable solely from the Group II Interest
                               Remittance Amount for that Distribution
                                    Date, to the holders of the Group II Class A
                           Certificates, pro rata, the Accrued
                                    Certificate Interest and any Unpaid Interest
                        Amounts for the Group II Class A
                                Certificates, and to the extent that the
                                   Group II Interest Remittance Amount is less
                                 than the Accrued Certificate Interest and
                                    any Unpaid Interest Amounts for the Group II
                                    Class A Certificates, payable from any Group
                             I Interest Remittance Amount for that
                                    Distribution Date remaining after payment of
                                    the Accrued Certificate Interest, any Unpaid
                                   Interest Amounts and related administrative
                          fees with respect to the Class A-1
                                  Certificates, to the holders of each Class
                                 of the Group II Class A Certificates, pro
                               rata, the unpaid portion of the Accrued

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                                    Certificate Interest and any Unpaid Interest
                        Amounts for the Group II Class A
     Certificates;

                 (C)      from both the Group I Interest Remittance Amount and
                    the Group II Interest Remittance Amount to the
                          Certificate Insurer, the amount of any Reimbursement
                        Amount then owing to it on account of a prior draw
                        relating to interest on the Class A-1 or Class A-3
Certificates;             

                 (D)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        M-1 Certificates, the Accrued Certificate Interest
               for such Class on such Distribution Date;

                 (E)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        M-2 Certificates, the Accrued Certificate Interest
               for such class on such Distribution Date;

                 (F)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        M-3 Certificates, the Accrued Certificate Interest
               for such Class on such Distribution Date;

                 (G)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        B-1 Certificates, the Accrued Certificate Interest
               for such Class on such Distribution Date;

                 (H)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        B-2 Certificates, the Accrued Certificate Interest
                   for such Class on such Distribution Date; and

                 (I)      from both the Group I Interest Remittance Amount and
                          the Group II Interest Remittance Amount to the Class
                        B-3 Certificates, the Accrued Certificate Interest
               for such Class on such Distribution Date;

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

          (A)      concurrently, with equal priority of payment:

                               (1) to the holders of the Class A-1 Certificates,
                the Class A-1 Allocation Percentage of the Principal
                    Distribution Amount, until the Class Certificate Balance
                   of the Class A-1 Certificates has been reduced to zero;
and                                 

                        (2) to the holders of the Group II Class A
                  Certificates pro rata, the Group II Class A Allocation
                      Percentage of the Principal Distribution Amount, until the
                   Class Certificate Balance of each Class of the Group II
                      Class A Certificates has been reduced to zero, such amount

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                    to be allocated pro rata to the Class A-2, Class A-3 and
                  Group II Class A Sequential Certificates, with amounts
                     allocated to the Group II Class A Sequential Certificates
                 further allocated first to the Class A-4 Certificates
                    until those Certificates are reduced to zero and then to
                   the Class A-5 Certificates until those Certificates are
reduced to zero;                    

          (B)      to the Certificate Insurer, the amount of any
                        Reimbursement Amount then owing to the Certificate
                    Insurer on account of a prior draw relating to
                           principal on the Class A-1 or Class A-3 Certificates;

          (C)      concurrently, with equal priority of payment:

                               (1) if the Class Certificate Balance of the Class
                  A-1 Certificates has been reduced to zero, then to the
                      Holders of the Group II Class A Certificates pro rata, the
                  amount of any remaining Principal Distribution Amount,
                    until the Class Certificate Balance of each Class of the
                   Group II Class A Certificates has been reduced to zero,
                  such amount to be allocated pro rata to the Class A-2,
                   Class A-3 and Group II Class A Sequential Certificates,
                     with amounts allocated to the Group II Class A Sequential
                 Certificates further allocated first to the Class A-4
                     Certificates until those Certificates are reduced to zero
              and then to the Class A-5 Certificates until those
Certificates are reduced to zero; or

                          (2) if the Class Certificate Balance of each
               Class of the Group II Class A Certificates has been
                 reduced to zero, then to the Holders of the Class A-1
               Certificates, the amount of any remaining Principal
                    Distribution Amount, until the Class Certificate Balance
                   of the Class A-1 Certificates has been reduced to zero;

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

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

          (A)      concurrently, with equal priority of payment:

                               (1) to the holders of the Class A-1 Certificates,
                    the Class A-1 Allocation Percentage of the lesser of the
                   Principal Distribution Amount and the Class A Principal
                    Distribution Amount, until the Class Certificate Balance
                   of the Class A-1 Certificates has been reduced to zero;
and                                 

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                        (2) to the holders of the Group II Class A
                    Certificates, the Group II Class A Allocation Percentage
                      of the lesser of the Principal Distribution Amount and the
                  Class A Principal Distribution Amount, until the Class
                     Certificate Balance of each Class of the Group II Class A
                    Certificates has been reduced to zero, such amount to be
                    allocated pro rata to the Class A-2, Class A-3 and Group
                      II Class A Sequential Certificates, with amounts allocated
                   to the Group II Class A Sequential Certificates further
                     allocated first to the Class A-4 Certificates until those
                      Certificates are reduced to zero and then to the Class A-5
                      Certificates until those Certificates are reduced to zero;

          (B)      to the Certificate Insurer, the amount of any
                        Reimbursement Amount then owing to the Certificate
                    Insurer on account of a prior draw relating to
                           principal on the Class A-1 or Class A-3 Certificates;

          (C)      concurrently, with equal priority of payment:

                               (1) if the Class Certificate Balance of the Class
                  A-1 Certificates has been reduced to zero, then to the
                      holders of the Group II Class A Certificates pro rata, any
              remaining amounts allocable but not required to be
                 distributed pursuant to clauses (A)(1) or (B) of this
                  subsection (y), until the Class Certificate Balance of
                    each Class of the Group II Class A Certificates has been
                    reduced to zero, such amount to be allocated pro rata to
                    the Class A-2, Class A-3 and Group II Class A Sequential
                      Certificates, with amounts allocated to the Group II Class
                    A Sequential Certificates further allocated first to the
               Class A-4 Certificates until those Certificates are
                  reduced to zero and then to the Class A-5 Certificates
            until those Certificates are reduced to zero; or

                          (2) if the Class Certificate Balance of each
               Class of the Group II Class A Certificates has been
                 reduced to zero, then to the holders of the Class A-1
                 Certificates, any remaining amounts allocable but not
                    required to be distributed pursuant to clauses (A)(2) or
                   (B) of this subsection (y), until the Class Certificate
                     Balance of the Class A-1 Certificates has been reduced to
zero;                               

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

                 (P)      from any Interest Rate Cap Payment on deposit in the
                      Excess Reserve Fund Account with respect to that
                      Distribution Date, an amount equal to any unpaid
                           remaining Basis Risk CarryForward Amount with respect
                  to the Certificates other than the Class A-1
                     Certificates, for that Distribution Date (after
                           giving effect to distributions pursuant to clause (O)
                    above) in the same order and priority in which
                           Accrued Certificate Interest is allocated among those
Classes of Certificates;  

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

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

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

                  (c)      On the September 2003, October 2003 and November 2003
Distribution Dates, the Trustee shall transfer from the Capitalized Interest    
Account to the Distribution Account the Capitalized Interest Requirement, if    
any, for such Distribution Date.                                                

                (d)      On the Distribution Date following either the final
Subsequent Transfer Date or November 24, 2003, whichever date is earlier, any   
amounts remaining in the Capitalized Interest Account and all Pre-Funding       
Earnings in the Pre-Funding Accounts, after taking into account the transfers in

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respect of the Distribution Date described in clause (c) above, shall be paid by
the Trustee to the Unaffiliated Seller.                                         

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

          (f)      If the Pre-Funding Amount available in either
Pre-Funding Account (exclusive of Pre-Funding Earnings) has been reduced to     
$100,000 or less by the close of business on October 1, 2003 then, on the       
October 27, 2003 Distribution Date, after giving effect to any reductions in    
such Pre-Funding Amount on such date, the Trustee shall withdraw from the       
related Pre-Funding Account on such date and deposit in the Distribution Account
the amount on deposit in such Pre-Funding Account other than any Pre-Funding    
Earnings; if the Pre-Funding Amount available in either Pre-Funding Account has 
not been reduced to zero by the close of business on November 24, 2003, the     
Trustee shall withdraw from each Pre-Funding Account the amount on deposit      
therein, other than the Pre-Funding Earnings, and deposit such amount on the    
November 25, 2003 Distribution Date into the Distribution Account. Each amount  
deposited into the Distribution Account pursuant to the preceding sentence from 
the Group I Pre-Funding Account shall be distributed to the Holders of the Class
A-1, Class M and Class B Certificates, pro rata; each amount deposited into the 
Distribution Account pursuant to the preceding sentence from the Group II       
Pre-Funding Account shall be distributed to the Holders of the Group II Class A,
Class M and Class B Certificates, pro rata, in each case, based on their        
relative Class Certificate Balances immediately prior to the related            
Distribution Date, as a separate payment of principal, on the related           
Distribution Date.                                                              

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

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

            (2)      Second, pro rata, as a reduction of the Accrued
     Certificate Interest for the Class A-1, Class A-2, Class A-3, Class
       A-4, Class A-5, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2
      and Class B-3 Certificates, based on the amount of interest to which
such Classes would otherwise be entitled.                     

               Section 4.03      Monthly Statements to Certificateholders.
                                ----------------------------------------

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

              (xvi)    the Subordinated Amount and Required Subordinated
Amount;                                                       

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

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

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

               (xx)     the Class A-1 Deficiency, the Class A-3 Deficiency
and the Insured Payment for such Distribution Date;           

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

            (xxii)   the Interest Rate Cap Payment, if any, for such
Distribution Date.                                            

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

                (c)      Within a reasonable period of time after the end of
each calendar year, the Trustee shall cause to be furnished to each Person who  
at any time during the calendar year was a Certificateholder, a statement       
containing the information set forth in clauses (a)(i), (a)(ii) and (a)(vii) of 
this Section 4.03 aggregated for such calendar year or applicable portion       

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thereof during which such Person was a Certificateholder. Such obligation of the
Trustee shall be deemed to have been satisfied to the extent that substantially 
comparable information shall be provided by the Trustee pursuant to any         
requirements of the Code as from time to time in effect.                        

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

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

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

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

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

                  (iv)     the individual and aggregate Stated Principal Balance
       of the Mortgage Loans (combined and for each of the Group I and Group
II Mortgage Loans);                                           

             (v)      the individual and aggregate Scheduled Principal
      Balances of the Mortgage Loans (combined and for each of the Group I
and Group II Mortgage Loans);                                 

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

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

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

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     Section 4.04      Certain Matters Relating to the
                       -------------------------------
Determination of LIBOR.                                                         
----------------------                                                          

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

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

       Section 4.05      The Certificate Insurance Policy.
                        --------------------------------

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

             (b)      If on any Distribution Date there is a Class A-1
Deficiency and/or Class A-3 Deficiency, the Trustee shall complete a Notice in  
the form of Exhibit A to the Certificate Insurance Policy and submit such notice
to the Certificate Insurer no later than 12:00 noon New York City time on the   
second Business Day preceding such Distribution Date as a claim for an Insured  
Payment in an amount equal to such Class A-1 Deficiency and/or Class A-3        
Deficiency.                                                                     

            (c)      The Trustee shall establish a separate Eligible
Account for the benefit of Holders of the Class A-1 Certificates, the Class A-3 
Certificates and the Certificate Insurer, referred to herein as the "Insurance  
Payment Account," over which the Trustee shall have exclusive control and sole  
right of withdrawal. The Trustee shall deposit upon receipt any amount paid     

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under the Certificate Insurance Policy in the Insurance Payment Account and     
distribute such amount only for purposes of payment to the Class A-1            
Certificateholders and/or Class A-3 Certificateholders, as applicable, of the   
Insured Amount and such amount may not be applied to satisfy any costs, expenses
or liabilities of the Servicer, the Trustee or the Trust Fund. Amounts paid     
under the Certificate Insurance Policy, to the extent needed to pay the Insured 
Amount, shall be transferred to the Distribution Account on the related         
Distribution Date and disbursed by the Trustee to the Class A-1                 
Certificateholders and Class A-3 Certificateholders in accordance with Section  
4.02. It shall not be necessary for such payments to be made by checks or wire  
transfers separate from the checks or wire transfers used to pay other          
distributions to the Class A-1 Certificateholders and Class A-3                 
Certificateholders with other funds available to make such payment. However, the
amount of any payment of principal or of interest on the Class A-1 Certificates 
or Class A-3 Certificates to be paid from funds transferred from the Insurance  
Payment Account shall be noted as provided in paragraph (d) below in the        
Certificate Register and in the statement to be furnished to Holders of such    
Certificates pursuant to Section 4.03(a). Funds held in the Insurance Payment   
Account shall not be invested. Any funds remaining in the Insurance Payment     
Account on the first Business Day following a Distribution Date shall be        
returned to the Certificate Insurer pursuant to the written instructions of the 
Certificate Insurer by the end of such Business Day.                            

                  (d)      The Trustee shall keep a complete and accurate record
of the amount of interest and principal paid in respect of any Class A-1        
Certificate or Class A-3 Certificate from moneys received under the Certificate 
Insurance Policy. The Certificate Insurer shall have the right to inspect such  
records at reasonable times during normal business hours upon one Business Day's
prior notice to the Trustee.                                                    

         (e)      In the event that the Trustee has received a
certified copy of an order of the appropriate court that any Insured Payment has
been voided in whole or in part as a preference payment under applicable        
bankruptcy law, the Trustee shall so notify the Certificate Insurer, shall      
comply with the provisions of the Certificate Insurance Policy to obtain payment
by the Certificate Insurer of such voided Insured Payment, and shall, at the    
time it provides notice to the Certificate Insurer, notify, by mail to the Class
A-1 and Class A-3 Certificateholders of the affected Certificates that, in the  
event any Class A-1 or Class A-3 Certificateholder's Insured Payment is so      
recovered, such Class A-1 or Class A-3 Certificateholder, as applicable, will be
entitled to payment pursuant to the Certificate Insurance Policy, a copy of     
which shall be made available through the Trustee, the Certificate Insurer or   
the Certificate Insurer's fiscal agent, if any, and the Trustee shall furnish to
the Certificate Insurer or its fiscal agent, if any, its records evidencing the 
payments which have been made by the Trustee and subsequently recovered from the
Class A-1 or Class A-3 Certificateholders, and dates on which such payments were
made.                                                                           

              (f)      The Trustee shall promptly notify the Certificate
Insurer of any proceeding or the institution of any action, of which a          
Responsible Officer of the Trustee has actual knowledge, seeking the avoidance  
as a preferential transfer under applicable bankruptcy, insolvency, receivership
or similar law (a "Preference Claim") of any distribution made with respect to  
the Class A-1 or Class A-3 Certificates. Each Class A-1 and Class A-3           
Certificateholder, by its purchase of Class A-1 or Class A-3 Certificates, the  
Servicer and the Trustee agree that the Certificate Insurer (so long as no      
Certificate Insurer Default exists) may at any time during the continuation of  

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any proceeding relating to a Preference Claim direct all matters relating to    
such Preference Claim, including, without limitation, (i) the direction of any  
appeal of any order relating to such Preference Claim and (ii) the posting of   
any surety, supersedes or performance bond pending any such appeal. In addition 
and without limitation of the foregoing, the Certificate Insurer shall be       
subrogated to, and each Class A-1 and Class A-3 Certificateholder, the Servicer 
and the Trustee hereby delegate and assign to the Certificate Insurer, to the   
fullest extent permitted by law, the rights of the Trustee, the Servicer and    
each Class A-1 and Class A-3 Certificateholder in the conduct of any such       
Preference Claim, including, without limitation, all rights of any party to any 
adversary proceeding or action with respect to any court order issued in        
connection with any such Preference Claim.                                      

                (g)      The Trustee shall, upon retirement of the Class A-1
and Class A-3 Certificates, furnish to the Certificate Insurer a notice of such 
retirement, and, upon retirement of the Class A-1 and Class A-3 Certificates and
the expiration of the term of the Certificate Insurance Policy, surrender the   
Certificate Insurance Policy to the Certificate Insurer for cancellation.       

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

                Anything herein to the contrary notwithstanding, any payment
with respect to principal of or interest on the Class A-1 or Class A-3          
Certificates which is made with moneys received pursuant to the terms of the    
Certificate Insurance Policy shall not be considered payment of the Class A-1 or
Class A-3 Certificates from the Trust Fund. The Depositor, the Servicer and the 
Trustee acknowledge, and each Holder by its acceptance of a Class A-1 or Class  
A-3 Certificate agrees, that without the need for any further action on the part
of the Certificate Insurer, the Depositor, the Servicer, the Trustee or the     
Certificate Registrar (a) to the extent the Certificate Insurer makes payments, 
directly or indirectly, on account of principal of or interest on the Class A-1 
or Class A-3 Certificates to the Holders of such Class A-1 or Class A-3         
Certificates, the Certificate Insurer will be fully subrogated to, and each     
Class A-1 and Class A-3 Certificateholder, the Servicer and the Trustee hereby  
delegate and assign to the Certificate Insurer, to the fullest extent permitted 
by law, the rights of such Holders to receive such principal and interest from  
the Trust Fund, including, without limitation, any amounts due to the Class A-1 
or Class A-3 Certificateholders in respect of securities law violations arising 
from the offer and sale of the Class A-1 or Class A-3 Certificates, and (b) the 
Certificate Insurer shall be paid such amounts from the sources and in the      
manner provided herein for the payment of such amounts and as provided in the   
Insurance and Indemnity Agreement. The Trustee and the Servicer shall cooperate 
in all respects with any reasonable request by the Certificate Insurer for      
action to preserve or enforce the Certificate Insurer's rights or interests     
under this Agreement without limiting the rights or affecting the interests of  
the Holders as otherwise set forth herein.                                      

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 ARTICLE V

THE CERTIFICATES

Section 5.01      The Certificates.                           
----------------          

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

      The Depositor hereby directs the Trustee to register the Class X and
the Class P Certificates initially to "CDC Mortgage Capital Inc." and then on   
the Closing Date as follows: "Deutsche Bank National Trust Company, as Indenture
Trustee on behalf of the Noteholders of the CDC Mortgage Capital Inc. NIM Trust 
2003-HE3N", and to deliver such Class X and Class P Certificates on the NIM     
Closing Date to Deutsche Bank National Trust Company, as trustee of the NIM     
Trust.                                                                          

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

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

         The Depositor shall provide, or cause to be provided, to the Trustee on
a continuous basis, an adequate inventory of Certificates to facilitate         
transfers.                                                                      

      Section 5.02      Certificate Register; Registration of Transfer and
                        --------------------------------------------------
Exchange of Certificates.                                                       
------------------------                                                        

   (a)      The Trustee shall maintain, or cause to be maintained in
accordance with the provisions of Section 5.06, a Certificate Register for the  
Trust Fund in which, subject to the provisions of subsections (b) and (c)       

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below and to such reasonable regulations as it may prescribe, the Trustee shall 
provide for the registration of Certificates and of transfers and exchanges of  
Certificates as herein provided. Upon surrender for registration of transfer of 
any Certificate, the Trustee shall execute and deliver, in the name of the      
designated transferee or transferees, one or more new Certificates of the same  
Class and aggregate Percentage Interest.                                        

         At the option of a Certificateholder, Certificates may be exchanged for
other Certificates of the same Class in authorized denominations and evidencing 
the same aggregate Percentage Interest upon surrender of the Certificates to be 
exchanged at the office or agency of the Trustee. Whenever any Certificates are 
so surrendered for exchange, the Trustee shall execute, authenticate, and       
deliver the Certificates which the Certificateholder making the exchange is     
entitled to receive. Every Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
in form satisfactory to the Trustee duly executed by the holder thereof or his  
attorney duly authorized in writing.                                            

   No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum      
sufficient to cover any tax or governmental charge that may be imposed in       
connection with any transfer or exchange of Certificates may be required.       

       All Certificates surrendered for registration of transfer or exchange
shall be cancelled and subsequently destroyed by the Trustee in accordance with 
the Trustee's customary procedures.                                             

         (b)      No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the      
Securities Act and any applicable state securities laws or is exempt from the   
registration requirements under said Act and such state securities laws. Except 
with respect to the transfer of the Class X and Class P Certificates to the NIMs
Trust on the Closing Date, in the event that a transfer is to be made in        
reliance upon an exemption from the Securities Act and such laws, in order to   
assure compliance with the Securities Act and such laws, the Certificateholder  
desiring to effect such transfer shall certify to the Trustee in writing the    
facts surrounding the transfer in substantially the form set forth in Exhibit I 
(the "Transferor Certificate") and either (i) there shall be delivered to the   
Trustee a letter in substantially the form of Exhibit J (the "Rule 144A Letter")
or (ii) there shall be delivered to the Trustee at the expense of the transferor
an Opinion of Counsel that such transfer may be made without registration under 
the Securities Act. The Depositor shall provide to any Holder of a Private      
Certificate and any prospective transferee designated by any such Holder,       
information regarding the related Certificates and the Mortgage Loans and such  
other information as shall be necessary to satisfy the condition to eligibility 
set forth in Rule 144A(d)(4) for transfer of any such Certificate without       
registration thereof under the Securities Act pursuant to the registration      
exemption provided by Rule 144A. The Trustee and the Servicer shall cooperate   
with the Depositor in providing the Rule 144A information referenced in the     
preceding sentence, including providing to the Depositor such information       
regarding the Certificates, the Mortgage Loans and other matters regarding the  
Trust Fund as the Depositor shall reasonably request to meet its obligation     
under the preceding sentence. Each Holder of a Private Certificate desiring to  
effect such transfer shall, and does hereby agree to, indemnify the Trustee and 

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the Depositor and the Servicer against any liability that may result if the     
transfer is not so exempt or is not made in accordance with such federal and    
state laws.                                                                     

Except with respect to the transfer of the Class X and Class P
Certificates to the NIMs Trust on the Closing Date, no transfer of an           
ERISA-Restricted Certificate shall be made unless the Trustee shall have        
received a representation letter from the transferee in substantially the form  
of Exhibit J, to the effect that such transferee is not an employee benefit plan
or arrangement subject to Title I of ERISA, Section 4975 of the Code or any     
Federal, state or local law ("Similar Law") materially similar to the foregoing 
provisions of ERISA or the Code, nor a person acting on behalf of any such plan 
or arrangement nor using the assets of any such plan or arrangement to effect   
such transfer. For purposes of the preceding sentence, with respect to an       
ERISA-Restricted Certificate that is not a Private Certificate, in the event the
representation letter referred to in the preceding sentence is not furnished,   
such representation shall be deemed to have been made to the Trustee by the     
transferee's (including an initial acquiror's) acceptance of the                
ERISA-Restricted Certificates. In the event that such representation is         
violated, such attempted transfer or acquisition shall be void and of no effect.

  To the extent permitted under applicable law (including, but not
limited to, ERISA), the Trustee shall be under no liability to any Person for   
any registration of transfer of any ERISA-Restricted Certificate that is in fact
not permitted by this Section 5.02(b) or for making any payments due on such    
Certificate to the Holder thereof or taking any other action with respect to    
such Holder under the provisions of this Agreement so long as the transfer was  
registered by the Trustee in accordance with the foregoing requirements.        

        (c)      Each Person who has or who acquires any Ownership Interest in
a Residual Certificate shall be deemed by the acceptance or acquisition of such 
Ownership Interest to have agreed to be bound by the following provisions, and  
the rights of each Person acquiring any Ownership Interest in a Residual        
Certificate are expressly subject to the following provisions:                  

           (i)      Each Person holding or acquiring any Ownership
        Interest in a Residual Certificate shall be a Permitted Transferee and
        shall promptly notify the Trustee of any change or impending change in
its status as a Permitted Transferee.                         

                (ii)     No Ownership Interest in a Residual Certificate may
      be registered on the Closing Date or thereafter transferred, and the
     Trustee shall not register the Transfer of any Residual Certificate
         unless, in addition to the certificates required to be delivered to the
   Trustee under subparagraph (b) above, the Trustee shall have been
     furnished with an affidavit (a "Transfer Affidavit") of the initial
         owner or the proposed transferee in the form attached hereto as Exhibit
H.                                                            

           (iii)    Each Person holding or acquiring any Ownership
         Interest in a Residual Certificate shall agree (A) to obtain a Transfer
 Affidavit from any other Person to whom such Person attempts to
   Transfer its Ownership Interest in a Residual Certificate, (B) to
     obtain a Transfer Affidavit from any Person for whom such Person is
        acting as nominee, trustee or agent in connection with any Transfer of
         a Residual Certificate, (C) not to Transfer its Ownership Interest in a
        Residual Certificate or to cause the Transfer of an Ownership Interest
in a Residual Certificate to any other Person if              

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 it has actual knowledge that such Person (i) is not a Permitted
   Transferee or that such Transfer Affidavit is false, (ii) if such
         transfer is for the purpose of impeding the assessment or collection of
  tax, (iii) if it has actual knowledge or reason to know that the
proposed transferee would be unwilling or unable to pay taxes 
 attributed to the Residual Certificate or (iv) if it has actual
         knowledge or reason to know that the proposed transferee will not honor
      the restrictions on subsequent transfers of the Residual Certificate
         set forth in this Section 5.02(c) and in the Transfer Affidavit, (D) to
      conduct a reasonable investigation of the financial condition of the
         proposed transferee and transfer its Ownership Interest in the Residual
      Certificate only if, as a result of such investigation, it concludes
      that the proposed transferee has historically paid its debts as they
     came due and will continue to pay its debts as they come due in the
      future, and (E) not to cause income from its Ownership Interest in a
Residual Certificate to be attributable to a foreign permanent
         establishment or fixed base (within the meaning of an applicable income
tax treaty) of the Person or another U.S. taxpayer.           

                 (iv)     Any attempted or purported Transfer of any Ownership
      Interest in a Residual Certificate in violation of the provisions of
       this Section 5.02(c) shall be absolutely null and void and shall vest
    no rights in the purported Transferee. If any purported transferee
     shall become a Holder of a Residual Certificate in violation of the
       provisions of this Section 5.02(c), then the last preceding Permitted
Transferee shall be restored to all rights as Holder thereof  
      retroactive to the date of registration of Transfer of such Residual
        Certificate. The Trustee shall be under no liability to any Person for
        any registration of Transfer of a Residual Certificate that is in fact
         not permitted by Section 5.02(b) and this Section 5.02(c) or for making
      any payments due on such Certificate to the Holder thereof or taking
      any other action with respect to such Holder under the provisions of
        this Agreement so long as the Transfer was registered after receipt of
     the related Transfer Affidavit, Transferor Certificate and the Rule
         144A Letter. The Trustee shall be entitled but not obligated to recover
  from any Holder of a Residual Certificate that was in fact not a
 Permitted Transferee at the time it became a Holder or, at such
     subsequent time as it became other than a Permitted Transferee, all
     payments made on such Residual Certificate at and after either such
       time. Any such payments so recovered by the Trustee shall be paid and
        delivered by the Trustee to the last preceding Permitted Transferee of
such Certificate.                                             

             (v)      The Depositor shall use its best efforts to make
  available, upon receipt of written request from the Trustee, all
        information necessary to compute any tax imposed under Section 860E(e)
     of the Code as a result of a Transfer of an Ownership Interest in a
       Residual Certificate to any Holder who is not a Permitted Transferee.

      The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the   
legend on a Residual Certificate may be deleted) with respect to Transfers      
occurring after delivery to the Trustee of an Opinion of Counsel, which Opinion 
of Counsel shall not be an expense of the Trust Fund, the Trustee, the          
Unaffiliated Seller or the Servicer, to the effect that the elimination of such 
restrictions will not cause the transfer to be disregarded under Treasury       
Regulation 1.860E-1(c), cause the Trust Fund hereunder to fail to qualify as a  
REMIC at any time that the Certificates are outstanding or result in the        

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imposition of any tax on the Trust Fund, a Certificateholder or another Person. 
Each Person holding or acquiring any Ownership Interest in a Residual           
Certificate hereby consents to any amendment of this Agreement which, based on  
an Opinion of Counsel furnished to the Trustee, is reasonably necessary (a) to  
ensure that the record ownership of, or any beneficial interest in, a Residual  
Certificate is not transferred, directly or indirectly, to a Person that is not 
a Permitted Transferee and (b) to provide for a means to compel the Transfer of 
a Residual Certificate which is held by a Person that is not a Permitted        
Transferee to a Holder that is a Permitted Transferee.                          

        (d)      The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at  
the expense of the parties to such transfers.                                   

         (e)      Except as provided below, the Book-Entry Certificates shall at
all times remain registered in the name of the Depository or its nominee and at 
all times: (i) registration of the Certificates may not be transferred by the   
Trustee except to another Depository; (ii) the Depository shall maintain        
book-entry records with respect to the Certificate Owners and with respect to   
ownership and transfers of such Book-Entry Certificates; (iii) ownership and    
transfers of registration of the Book-Entry Certificates on the books of the    
Depository shall be governed by applicable rules established by the Depository; 
(iv) the Depository may collect its usual and customary fees, charges and       
expenses from its Depository Participants; (v) the Trustee shall deal with the  
Depository, Depository Participants and indirect participating firms as         
representatives of the Certificate Owners of the Book-Entry Certificates for    
purposes of exercising the rights of holders under this Agreement, and requests 
and directions for and votes of such representatives shall not be deemed to be  
inconsistent if they are made with respect to different Certificate Owners; and 
(vi) the Trustee may rely and shall be fully protected in relying upon          
information furnished by the Depository with respect to its Depository          
Participants and furnished by the Depository Participants with respect to       
indirect participating firms and persons shown on the books of such indirect    
participating firms as direct or indirect Certificate Owners.                   

         All transfers by Certificate Owners of Book-Entry Certificates shall be
made in accordance with the procedures established by the Depository Participant
or brokerage firm representing such Certificate Owner. Each Depository          
Participant shall only transfer Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with  
the Depository's normal procedures.                                             

   If (x) (i) the Depository or the Depositor advises the Trustee in
writing that the Depository is no longer willing or able to properly discharge  
its responsibilities as Depository, and (ii) the Trustee or the Depositor is    
unable to locate a qualified successor, (y) the Depositor at its option advises 
the Trustee in writing that it elects to terminate the book-entry system through
the Depository or (z) after the occurrence of an Event of Default, Certificate  
Owners representing at least 51% of the Certificate Balance of the Book-Entry   
Certificates together advise the Trustee and the Depository through the         
Depository Participants in writing that the continuation of a book-entry system 
through the Depository is no longer in the best interests of the Certificate    
Owners, the Trustee shall notify all Certificate Owners, through the Depository,
of the occurrence of any such event and of the availability of definitive,      
fully-registered Certificates (the "Definitive Certificates") to Certificate    
Owners requesting the same. Upon surrender to the Trustee of the related Class  

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of Certificates by the Depository, accompanied by the instructions from the     
Depository for registration, the Trustee shall issue the Definitive             
Certificates. Neither the Servicer, the Depositor nor the Trustee shall be      
liable for any delay in delivery of such instruction and each may conclusively  
rely on, and shall be protected in relying on, such instructions. The Depositor 
shall provide the Trustee with an adequate inventory of certificates to         
facilitate the issuance and transfer of Definitive Certificates. Upon the       
issuance of Definitive Certificates all references herein to obligations imposed
upon or to be performed by the Depository shall be deemed to be imposed upon and
performed by the Trustee, to the extent applicable with respect to such         
Definitive Certificates and the Trustee shall recognize the Holders of the      
Definitive Certificates as Certificateholders hereunder; provided, that the     
Trustee shall not by virtue of its assumption of such obligations become liable 
to any party for any act or failure to act of the Depository.                   

      Section 5.03      Mutilated, Destroyed, Lost or Stolen Certificates.
                       -------------------------------------------------

        If (a) any mutilated Certificate is surrendered to the Trustee, or the
Trustee receives evidence to its satisfaction of the destruction, loss or theft 
of any Certificate and (b) there is delivered to the Depositor, the Servicer,   
the Certificate Insurer and the Trustee such security or indemnity as may be    
required by them to hold each of them harmless, then, in the absence of notice  
to the Trustee that such Certificate has been acquired by a bona fide purchaser,
the Trustee shall execute, countersign and deliver, in exchange for or in lieu  
of any such mutilated, destroyed, lost or stolen Certificate, a new Certificate 
of like Class, tenor and Percentage Interest. In connection with the issuance of
any new Certificate under this Section 5.03, the Trustee may require the payment
of a sum sufficient to cover any tax or other governmental charge that may be   
imposed in relation thereto and any other expenses (including the fees and      
expenses of the Trustee) connected therewith. Any replacement Certificate issued
pursuant to this Section 5.03 shall constitute complete and indefeasible        
evidence of ownership, as if originally issued, whether or not the lost, stolen 
or destroyed Certificate shall be found at any time.                            

Section 5.04      Persons Deemed Owners.                      
---------------------     

       The Servicer, the Trustee, the Depositor, the Certificate Insurer and
any agent of the Servicer, the Depositor, the Certificate Insurer or the Trustee
may treat the Person in whose name any Certificate is registered as the owner of
such Certificate for the purpose of receiving distributions as provided in this 
Agreement and for all other purposes whatsoever, and neither the Servicer, the  
Trustee, the Depositor, the Certificate Insurer nor any agent of the Servicer,  
the Depositor, the Certificate Insurer or the Trustee shall be affected by any  
notice to the contrary.                                                         

   Section 5.05      Access to List of Certificateholders' Names and
                     -----------------------------------------------
Addresses.                                                                      
---------                                                                       

     If three or more Certificateholders (a) request such information in
writing from the Trustee, (b) state that such Certificateholders desire to      
communicate with other Certificateholders with respect to their rights under    
this Agreement or under the Certificates, and (c) provide a copy of the         
communication which such Certificateholders propose to transmit, or if the      
Depositor or Servicer shall request such information in writing from the        
Trustee, then the Trustee shall, within ten Business Days after the receipt of  
such request, provide the Depositor, the Servicer or such Certificateholders at 

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such recipients' expense the most recent list of the Certificateholders of such 
Trust Fund held by the Trustee, if any. The Depositor and every                 
Certificateholder, by receiving and holding a Certificate, agree that the       
Trustee shall not be held accountable by reason of the disclosure of any such   
information as to the list of the Certificateholders hereunder, regardless of   
the source from which such information was derived.                             

Section 5.06      Maintenance of Office or Agency.            
     -------------------------------

       The Trustee will maintain or cause to be maintained at its expense an
office or offices or agency or agencies in New York City where Certificates may 
be surrendered for registration of transfer or exchange. The Trustee initially  
designates the offices of its agent for such purposes located at c/o DTC        
Transfer Agent Services, 55 Water Street, Jeanette Park Entrance, New York, New 
York 10041. The Trustee will give prompt written notice to the                  
Certificateholders of any change in such location of any such office or agency. 

        Section 5.07      Rights of the Certificate Insurer to Exercise Rights
                          ----------------------------------------------------
of Class A-1 and Class A-3 Certificateholders.                                
----------------------------------------------                                  

         By accepting its Class A-1 or Class A-3 Certificate, each Class A-1 and
Class A-3 Certificateholder agrees that unless a Certificate Insurer Default    
exists, the Certificate Insurer shall be deemed to be the Class A-1 and Class   
A-3 Certificateholders for all purposes (other than with respect to the receipt 
of payment on the Class A-1 and Class A-3 Certificates) and shall have the right
to exercise all rights of the Class A-1 and Class A-3 Certificateholders under  
this Agreement and under the Class A-1 and Class A-3 Certificates without any   
further consent of the Class A-1 or Class A-3 Certificateholders, including,    
without limitation:                                                             

     (a)      the right to require the Unaffiliated Seller to repurchase
Mortgage Loans pursuant to Section 2.03 to the extent set forth in such Section;

         (b)      the right to give notices of breach or to terminate the rights
and obligations of the Servicer as servicer pursuant to Section 7.01;           

    (c)      the right to direct the actions of the Trustee during the
continuance of a Servicer default pursuant to Sections 3.24, 7.01 and 7.02;     

  (d)      the right to institute proceedings against the Servicer
pursuant to Section 7.01;                                                       

         (e)      the right to direct the Trustee to investigate certain matters
pursuant to Sections 8.01 and 8.02;                                             

        (f)      the right to remove the Trustee pursuant to Section 8.07; and

        (g)      any rights or remedies expressly given the Class A-1 or Class
A-3 Certificateholders.                                                         

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     In addition, each Certificateholder agrees that, subject to Section
10.11, unless a Certificate Insurer Default exists, the rights specifically     
enumerated above may only be exercised by the Certificateholders with the prior 
written consent of the Certificate Insurer.                                     

         Section 5.08      Trustee To Act Solely with Consent of the Certificate
                           -----------------------------------------------------
Insurer.                                                                        
-------                                                                         

     Unless a Certificate Insurer Default exists, the Trustee shall not,
without the Certificate Insurer's consent or unless directed by the Certificate 
Insurer:                                                                        

  (a)      terminate the rights and obligations of the Servicer as
Servicer pursuant to Section 7.01;                                              

(b)      agree to any amendment pursuant to Section 10.01; or 

(c)      undertake any litigation.                            

    The Certificate Insurer may, in writing and in its sole discretion
renounce all or any of its rights under this Agreement or any requirement for   
the Certificate Insurer's consent for any period of time.                       

    Section 5.09      Mortgage Loans, Trust Fund and Accounts Held for
                      ------------------------------------------------
Benefit of the Certificate Insurer.                                             
----------------------------------                                              

        (a)      The Trustee shall hold the Trust Fund and the Custodial Files
for the benefit of the Certificateholders and the Certificate Insurer and all   
references in this Agreement and in the Certificates to the benefit of Holders  
of the Certificates shall be deemed to include the Certificate Insurer. The     
Trustee shall follow all reasonable instructions and requests of the Certificate
Insurer to assist it to take action to preserve or enforce the Certificate      
Insurer's rights or interests under this Agreement unless a Certificate Insurer 
Default exists.                                                                 

    (b)      The Servicer hereby acknowledges and agrees that it shall
service the Mortgage Loans for the benefit of the Certificateholders and for the
benefit of the Certificate Insurer, and all references in this Agreement to the 
benefit of or actions on behalf of the Certificateholders shall be deemed to    
include the Certificate Insurer.                                                

Section 5.10      Certificate Insurer Default.                
 ---------------------------

Notwithstanding anything elsewhere in this Agreement or in the
Certificates to the contrary, if a Certificate Insurer Default exists, or if and
to the extent the Certificate Insurer has delivered its written renunciation of 
all of its rights under this Agreement, all provisions of this Agreement which  
(a) permit the Certificate Insurer to exercise rights of the Class A-1 or Class 
A-3 Certificateholders, (b) restrict the ability of the Certificateholders, the 
Servicer or the Trustee to act without the consent or approval of the           
Certificate Insurer, (c) provide that a particular act or thing must be         
acceptable to the Certificate Insurer, (d) permit the Certificate Insurer to    
direct (or otherwise to require) the actions of the Trustee, the Servicer or the
Certificateholders, (e) provide that any action or omission taken with the      
consent, approval or authorization of the Certificate Insurer shall be          
authorized hereunder or shall not subject the party taking or omitting to take  
such action to any liability hereunder or (f) which have a similar effect, shall

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be of no further force and effect and the Trustee shall administer the Trust    
Fund and perform its obligations hereunder solely for the benefit of the Holders
of the Certificates. Nothing in the foregoing sentence, nor any action taken    
pursuant thereto or in compliance therewith, shall be deemed to have released   
the Certificate Insurer from any obligation or liability it may have to any     
party or to the Class A-1 or Class A-3 Certificateholders hereunder, under any  
other agreement, instrument or document (including, without limitation, the     
Certificate Insurance Policy) or under applicable law.                          

ARTICLE VI

THE DEPOSITOR AND THE SERVICER

   Section 6.01      Respective Liabilities of the Depositor and the
                      ------------------------------------------------
Servicer.                                                                       
--------                                                                        

   The Depositor and the Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively    
imposed upon and undertaken by them herein.                                     

   Section 6.02      Merger or Consolidation of the Depositor or the
                     -----------------------------------------------
Servicer.                                                                       
--------                                                                        

  The Depositor and the Servicer will each keep in full effect its
existence, rights and franchises as a corporation or federal savings bank, as   
the case may be, under the laws of the United States or under the laws of one of
the states thereof and will each obtain and preserve its qualification to do    
business as a foreign corporation in each jurisdiction in which such            
qualification is or shall be necessary to protect the validity and              
enforceability of this Agreement, or any of the Mortgage Loans and to perform   
its respective duties under this Agreement.                                     

      Any Person into which the Depositor or the Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which 
the Depositor or the Servicer shall be a party, or any person succeeding to the 
business of the Depositor or the Servicer, shall be the successor of the        
Depositor or the Servicer, as the case may be, hereunder, without the execution 
or filing of any paper or any further act on the part of any of the parties     
hereto, anything herein to the contrary notwithstanding; provided, however, that
the successor or surviving Person to the Servicer shall be qualified to sell    
mortgage loans to, and to service mortgage loans on behalf of, Fannie Mae or    
FHLMC.                                                                          

    The Servicer is and shall continue to be an institution which is a
Fannie Mae and FHLMC approved seller/servicer in good standing and shall        
maintain a net worth of at least $30,000,000.                                   

 Section 6.03      Limitation on Liability of the Depositor, the
                    ----------------------------------------------
Servicer and Others.                                                            
-------------------                                                             

   Neither the Depositor, the Servicer, the Trustee nor any of their
respective directors, officers, employees or agents shall be under any liability
to the Certificateholders for any action taken or for refraining from the taking
of any action in good faith pursuant to this Agreement, or for errors in        
judgment; provided, however, that this provision shall not protect the          
Depositor, the Servicer, the Trustee or any such Person against any breach of   

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representations or warranties made by it herein or protect the Depositor, the   
Servicer, the Trustee or any such Person from any liability which would         
otherwise be imposed by reasons of willful misfeasance, bad faith or gross      
negligence (or with respect to the Servicer or the Trustee, negligence) in the  
performance of duties or by reason of reckless disregard of obligations and     
duties hereunder. The Depositor and any director, officer, employee or agent of 
the Depositor may rely in good faith on any document of any kind prima facie    
properly executed and submitted by any Person respecting any matters arising    
hereunder. The Depositor, the Servicer, the Trustee and any director, officer,  
employee or agent of the Depositor, the Servicer or the Trustee shall be        
indemnified by the Trust Fund and held harmless against any loss, liability or  
expense incurred in connection with any audit, controversy or judicial          
proceeding relating to a governmental taxing authority or any legal action      
relating to this Agreement or the Certificates (including, as to the Trustee,   
the undertaking of actions as directed by the Unaffiliated Seller or the        
Certificate Insurer pursuant to Section 2.03), other than any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
(or with respect to the Servicer or the Trustee, negligence) in the performance 
of their respective duties hereunder or by reason of reckless disregard of their
respective obligations and duties hereunder. The Depositor shall not be under   
any obligation to appear in, prosecute or defend any legal action that is not   
incidental to its respective duties hereunder and which in its opinion may      
involve it in any expense or liability; provided, however, that the Depositor   
may in its discretion undertake any such action (or direct the Trustee to       
undertake any such actions pursuant to Section 2.03 hereof for the benefit of   
the Certificateholders) that it may deem necessary or desirable in respect of   
this Agreement and the rights and duties of the parties hereto and interests of 
the Trustee and the Certificateholders hereunder. In such event, the legal      
expenses and costs of such action and any liability resulting therefrom shall be
expenses, costs and liabilities of the Trust Fund, and the Depositor shall be   
entitled to be reimbursed therefor out of the Collection Account.               

      Neither the Servicer nor any of the officers, employees or agents of
the Servicer shall be under any liability to the Trustee or the Depositor for   
any action taken or for refraining from the taking of any action in good faith  
pursuant to this Agreement; provided, however, that this provision shall not    
protect the Servicer or any such person against any breach of warranties or     
representations made herein, or failure to perform its obligations in compliance
with the terms of this Agreement, or any liability which would otherwise be     
imposed by reason of any breach of the terms and conditions of this Agreement.  
The Servicer and any officer, employee or agent of the Servicer may rely in good
faith on any document of any kind prima facie properly executed and submitted by
any Person respecting any matters arising hereunder. The Servicer shall not be  
under any obligation to appear in, prosecute or defend any legal action which is
not incidental to its duties to service the Mortgage Loans in accordance with   
this Agreement and which in its opinion may involve it in any expenses or       
liability; provided, however, that the Servicer may undertake any such action   
which it may deem necessary or desirable in respect to this Agreement and the   
rights and duties of the parties hereto. In such event, the legal expenses and  
costs of such action and any liability resulting therefrom shall be expenses,   
costs and liabilities of the Trust Fund, and the Servicer shall be entitled to  
be reimbursed therefor out of the Collection Account. In the event the Servicer 
agrees, at the request of the Depositor, to act on behalf of the Depositor in   
any litigation relating to the origination of a Mortgage Loan, the Depositor    
shall pay all expenses associated with the defense and management of such claim 
(without reimbursement from the Trust Fund).                                    

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Section 6.04      Limitation on Resignation of the Servicer.  
               -----------------------------------------

 The Servicer shall not assign this Agreement or resign from the
obligations and duties hereby imposed on it except by mutual consent of the     
Servicer, the Certificate Insurer, the Depositor and the Trustee or upon the    
determination that its duties hereunder are no longer permissible under         
applicable law and such incapacity cannot be cured by the Servicer. Any such    
determination permitting the resignation of the Servicer shall be evidenced by  
an Opinion of Counsel to such effect delivered to the Depositor and the Trustee 
which Opinion of Counsel shall be in form and substance acceptable to the       
Depositor and the Trustee. No such resignation shall become effective until a   
successor shall have assumed the Servicer's responsibilities and obligations    
hereunder. Notwithstanding anything to the contrary herein, the Servicer may    
pledge or assign as collateral all its rights, title and interest under this    
Agreement to a lender (the "Lender"); provided that the Lender may only         
terminate the Servicer under this Agreement if there has been an Event of       
Default under this Agreement, in which event the Lender may replace the Servicer
in the same manner and subject to the same conditions applicable in the event   
the Servicer is appointing a successor Servicer upon a servicer termination     
pursuant to Section 7.02.                                                       

     Section 6.05      Additional Indemnification by the Servicer; Third
                       -------------------------------------------------
Party Claims.                                                                   
------------                                                                    

         The Servicer shall indemnify the Depositor, the Unaffiliated Seller and
the Trustee and hold them harmless against any and all claims, losses, damages, 
penalties, fines, forfeitures, reasonable and necessary legal fees and related  
costs, judgments, and any other costs, fees and expenses that any of them may   
sustain in any way related to any breach by the Servicer, of any of its         
representations and warranties referred to in Section 2.03(a)(i) or the failure 
of the Servicer to perform its duties and service the Mortgage Loans in         
compliance with the terms of this Agreement. The Servicer shall indemnify the   
Unaffiliated Seller and the Trust Fund and hold it harmless against any and all 
claims, losses, damages, penalties, fines, forfeitures, reasonable and necessary
legal fees and related costs, judgments, and any other costs, fees and expenses 
that it may sustain in any way related to any breach by the Servicer, of any of 
its representations and warranties referred to in Section 2.03(a)(ii). The      
Servicer immediately shall notify the Depositor, the Unaffiliated Seller and the
Trustee if a claim is made by a third party with respect to any such breach or  
failure by the Servicer under this Agreement, assume (with the prior written    
consent of the Depositor, the Unaffiliated Seller and the Trustee) the defense  
of any such claim and pay all expenses in connection therewith, including       
reasonable counsel fees, and promptly pay, discharge and satisfy any judgment or
decree which may be entered against it or the Depositor, the Unaffiliated Seller
or the Trustee in respect of such claim; provided, that if it is determined that
the Servicer is not obligated to indemnify such parties in accordance with this 
Section 6.05, each such party (or the Trust Fund, if applicable) shall promptly 
reimburse the Servicer in connection with each of the foregoing payments made to
such party by the Servicer.                                                     

ARTICLE VII 

 DEFAULT

Section 7.01      Events of Default.                          
-----------------         

"Event of Default," wherever used herein, means any one of the
following events:                                                               

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  (a)      any failure by the Servicer to remit to the Trustee any
payment required to be made under the terms of this Agreement which continues   
unremedied for a period of one Business Day after the date upon which written   
notice of such failure, requiring the same to be remedied, shall have been given
to the Servicer by the Depositor, by the Certificate Insurer or by the Trustee  
or to the Trustee by Certificateholders evidencing percentage interests of at   
least 25% in the Certificates; or                                               

         (b)      failure on the part of the Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of 
the Servicer set forth in this Agreement which continues unremedied for a period
of forty-five days (except that such number of days shall be fifteen in the case
of a failure to pay any premium for any insurance policy required to be         
maintained under this Agreement) after the earlier of (i) the date on which     
written notice of such failure, requiring the same to be remedied, shall have   
been given to the Servicer by the Depositor, by the Certificate Insurer, or by  
the Trustee, or to the Trustee by Certificateholders of Certificates evidencing 
percentage interests of at least 25% in the Certificates and (ii) actual        
knowledge of such failure by a Servicing Officer of the Servicer; or            

(c)      a decree or order of a court or agency or supervisory
authority having jurisdiction for the appointment of a conservator or receiver  
or liquidator in any insolvency, bankruptcy, readjustment of debt, marshalling  
of assets and liabilities or similar proceedings, or for the winding-up or      
liquidation of its affairs, shall have been entered against the Servicer and    
such decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or                                                        

         (d)      the Servicer shall consent to the appointment of a conservator
or receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,  
marshalling of assets and liabilities or similar proceedings of or relating to  
the Servicer or of or relating to all or substantially all of its property; or  

       (e)      the Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of any    
applicable insolvency or reorganization statute, make an assignment for the     
benefit of its creditors, or voluntarily suspend payment of its obligations; or 

        (f)      any failure by the Servicer of the Servicer Termination Test;
or                                                                              

     (g)      any failure of the Servicer to make any P&I Advance on any
Remittance Date required to be made from its own funds pursuant to Section 4.01 
which continues unremedied for one Business Day immediately following the       
Remittance Date; or                                                             

      (h)      a breach of any representation and warranty of the Servicer
referred to in Section 2.03(a), which materially and adversely affects the      
interests of the Certificateholders or the Certificate Insurer and which        
continues unremedied for a period of thirty days after the earlier of (i) the   
date upon which written notice of such breach is given to the Servicer by the   
Trustee or the Depositor, or to the Servicer, the Depositor, the Certificate    
Insurer and the Trustee by any Certificateholders entitled to at least 25% of   
the Voting Rights in the Certificates or by the Certificate Insurer and (ii)    
actual knowledge of such breach by a Servicing Officer of the Servicer; or      

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       (i)      any reduction, withdrawal or qualification of the Servicer's
servicer rating by any Rating Agency which results in the Servicer being deemed 
unacceptable by any Rating Agency to act as a primary servicer for this         
transaction or a primary servicer or a special servicer for any other           
mortgage-backed or asset-backed transaction rated or to be rated by any such    
Rating Agency; or                                                               

         (j)      the Certificate Insurer notifies the Trustee in writing of any
uncured "event of default" (as such term is used in the Insurance and Indemnity 
Agreement) by the Servicer under the Insurance and Indemnity Agreement.         

      If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, the Trustee
may, subject to Section 5.08(a), or at the direction of the Certificate Insurer,
or of Holders holding at least 51% of the Voting Rights, the Trustee shall, by  
notice in writing to the Servicer (with a copy to each Rating Agency), terminate
all of the rights and obligations of the Servicer under this Agreement and in   
and to the Mortgage Loans and the proceeds thereof, other than its rights as a  
Certificateholder hereunder; provided, however, that the Trustee shall not be   
required to give written notice to the Servicer of the occurrence of an Event of
Default described in clauses (b) through (i) of this Section 7.01 unless and    
until a Responsible Officer of the Trustee has actual knowledge of the          
occurrence of such an Event of Default. On and after the receipt by the Servicer
of such written notice, all authority and power of the Servicer hereunder,      
whether with respect to the Mortgage Loans or otherwise, shall pass to and be   
vested in the Trustee. The Trustee shall make any P&I Advance which the Servicer
failed to make subject to Section 4.01, whether or not the obligations of the   
Servicer have been terminated pursuant to this Section. The Trustee is hereby   
authorized and empowered to execute and deliver, on behalf of the Servicer, as  
attorney-in-fact or otherwise, any and all documents and other instruments, and 
to do or accomplish all other acts or things necessary or appropriate to effect 
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or       
otherwise. Unless expressly provided in such written notice, no such termination
shall affect any obligation of the Servicer to pay amounts owed pursuant to     
Article VIII. The Servicer agrees to cooperate with the Trustee in effecting the
termination of the Servicer's responsibilities and rights hereunder, including, 
without limitation, the transfer to the Trustee of all cash amounts which shall 
at the time be credited to the Collection Account, or thereafter be received    
with respect to the Mortgage Loans.                                             

   Notwithstanding any termination of the activities of the Servicer
hereunder, the Servicer shall be entitled to receive, out of any late collection
of a Scheduled Payment on a Mortgage Loan which was due prior to the notice     
terminating such Servicer's rights and obligations as Servicer hereunder and    
received after such notice, that portion thereof to which such Servicer would   
have been entitled pursuant to Section 3.11, and any other amounts payable to   
such Servicer hereunder the entitlement to which arose prior to the termination 
of its activities hereunder in accordance with Section 3.11 and in the time     
period specified in Section 3.11. The Servicer shall continue to be entitled to 
the benefits of Section 6.03, notwithstanding any termination hereunder, with   
respect to events occurring prior to such termination.                          

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Section 7.02      Trustee to Act; Appointment of Successor.   
              ----------------------------------------

     On and after the time the Servicer receives a notice of termination
pursuant to Section 3.24 or Section 7.01, subject to the third paragraph of this
Section 7.02, the Trustee shall, unless the Certificate Insurer shall have named
an alternative successor Servicer and given written notice thereof to the       
Trustee of at least 30 days prior to the effective date of the transfer of      
servicing to such successor, subject to and to the extent provided in Section   
3.05, be the successor to the Servicer in its capacity as servicer under this   
Agreement and the transactions set forth or provided for herein and shall be    
subject to all the responsibilities, duties and liabilities relating thereto    
placed on the Servicer by the terms and provisions hereof and applicable law    
including the obligation to make P&I Advances or Servicing Advances pursuant to 
Section 4.01. As compensation therefor, the Trustee shall be entitled to all    
funds relating to the Mortgage Loans that the Servicer would have been entitled 
to charge to the Collection Account or Distribution Account if the Servicer had 
continued to act hereunder including, if the Servicer was receiving the         
Servicing Fee, the Servicing Fee and the income on investments or gain related  
to the Collection Account and Distribution Account.                             

        Notwithstanding the foregoing, if the Trustee has become the successor
to the Servicer in accordance with Section 7.01, the Trustee may, if it shall be
unwilling to so act, or shall, if it is prohibited by applicable law from making
P&I Advances and Servicing Advances pursuant to Section 4.01 or if it is        
otherwise unable to so act, appoint, or petition a court of competent           
jurisdiction to appoint, any established mortgage loan servicing institution the
appointment of which does not adversely affect the then current rating of the   
Certificates by each Rating Agency, as the successor to the Servicer hereunder  
in the assumption of all or any part of the responsibilities, duties or         
liabilities of the Servicer hereunder. Any successor to the Servicer shall be an
institution which is a Fannie Mae and FHLMC approved seller/servicer in good    
standing, which has a net worth of at least $30,000,000, which is willing to    
service the Mortgage Loans and which executes and delivers to the Depositor and 
the Trustee an agreement accepting such delegation and assignment, containing an
assumption by such Person of the rights, powers, duties, responsibilities,      
obligations and liabilities of the Servicer (other than liabilities of the      
Servicer under Section 6.03 incurred prior to termination of the Servicer under 
Section 7.01), with like effect as if originally named as a party to this       
Agreement; provided that each Rating Agency acknowledges that its rating of the 
Certificates in effect immediately prior to such assignment and delegation will 
not be qualified or reduced, as a result of such assignment and delegation.     
Pending appointment of a successor to the Servicer hereunder, the Trustee,      
unless the Trustee is prohibited by law from so acting, shall, subject to       
Section 3.05, act in such capacity as hereinabove provided. In connection with  
such appointment and assumption, the Trustee may make such arrangements for the 
compensation of such successor out of payments on Mortgage Loans as it and such 
successor shall agree; provided, however, that no such compensation shall be in 
excess of the Servicing Fee Rate and amounts paid to the Servicer from          
investments. The Trustee and such successor shall take such action, consistent  
with this Agreement, as shall be necessary to effectuate any such succession.   
Neither the Trustee nor any other successor servicer shall be deemed to be in   
default hereunder by reason of any failure to make, or any delay in making, any 
distribution hereunder or any portion thereof or any failure to perform, or any 
delay in performing, any duties or responsibilities hereunder, in either case   
caused by the failure of the Servicer to deliver or provide, or any delay in    
delivering or providing, any cash, information, documents or records to it.     

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        Notwithstanding any provision in this Agreement to the contrary, prior
to the 20th day following the notice of termination of the Servicer and with the
consent of the Certificate Insurer (such consent not to be unreasonably         
withheld, delayed or conditioned), the terminated Servicer may appoint a        
successor Servicer that satisfies the eligibility criteria of a successor       
Servicer set forth in this Section 7.02; provided such successor Servicer agrees
to fully effect the servicing transfer within 90 days following the termination 
of the Servicer and to make all P&I Advances and Servicing Advances that would  
otherwise be made by the Trustee under this Section 7.02 as of the date of such 
appointment and prior thereto, the terminated Servicer makes all P&I Advances   
and Servicing Advances; otherwise the Trustee shall appoint a successor Servicer
as otherwise set forth in this Section 7.02. Any proceeds received in connection
with the appointment of such successor Servicer shall be the property of the    
terminated Servicer or its designee.                                            

    Any successor to the Servicer as servicer shall give notice to the
Mortgagors of such change of servicer and shall, during the term of its service 
as servicer, maintain in force the policy or policies that the Servicer is      
required to maintain pursuant to Section 6.05.                                  

Section 7.03      Notification to Certificateholders.         
        ----------------------------------

       (a)      Upon any termination of or appointment of a successor to the
Servicer, the Trustee shall give prompt written notice thereof to               
Certificateholders, the Certificate Insurer, the Unaffiliated Seller and to each
Rating Agency.                                                                  

       (b)      Within 60 days after the occurrence of any Event of Default,
the Trustee shall transmit by mail to all Certificateholders, the Certificate   
Insurer, the Unaffiliated Seller and each Rating Agency notice of each such     
Event of Default hereunder known to the Trustee, unless such Event of Default   
shall have been cured or waived.                                                

ARTICLE VIII

CONCERNING THE TRUSTEE

Section 8.01      Duties of the Trustee.                      
---------------------     

         The Trustee, before the occurrence of an Event of Default and after the
curing of all Events of Default that may have occurred, shall undertake to      
perform such duties and only such duties as are specifically set forth in this  
Agreement. In case an Event of Default has occurred and remains uncured, the    
Trustee shall exercise such of the rights and powers vested in it by this       
Agreement, and use the same degree of care and skill in their exercise as a     
prudent person would exercise or use under the circumstances in the conduct of  
such person's own affairs.                                                      

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the      
Trustee that are specifically required to be furnished pursuant to any provision
of this Agreement shall examine them to determine whether they are in the form  
required by this Agreement. The Trustee shall not be responsible for the        
accuracy or content of any resolution, certificate, statement, opinion, report, 
document, order, or other instrument.                                           

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  No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure  
to act or its own willful misconduct.                                           

     Unless an Event of Default known to the Trustee has occurred and is
continuing,                                                                     

        (a)      the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be    
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into 
this Agreement against the Trustee, and the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed       
therein, upon any certificates or opinions furnished to the Trustee and         
conforming to the requirements of this Agreement which it believed in good faith
to be genuine and to have been duly executed by the proper authorities          
respecting any matters arising hereunder;                                       

        (b)      the Trustee shall not be liable for an error of judgment made
in good faith by a Responsible Officer or Responsible Officers of the Trustee,  
unless it is finally proven that the Trustee was negligent in ascertaining the  
pertinent facts; and                                                            

     (c)      the Trustee shall not be liable with respect to any action
taken, suffered, or omitted to be taken by it in good faith in accordance with  
the direction of the Certificate Insurer, or of Holders of Certificates         
evidencing not less than 25% of the Voting Rights of Certificates relating to   
the time, method, and place of conducting any proceeding for any remedy         
available to the Trustee, or exercising any trust or power conferred upon the   
Trustee under this Agreement.                                                   

Section 8.02      Certain Matters Affecting the Trustee.      
           -------------------------------------

Except as otherwise provided in Section 8.01:                 

       (a)      the Trustee may request and rely upon and shall be protected
in acting or refraining from acting upon any resolution, Officer's Certificate, 
certificate of auditors or any other certificate, statement, instrument,        
opinion, report, notice, request, consent, order, appraisal, bond or other paper
or document believed by it to be genuine and to have been signed or presented by
the proper party or parties and the Trustee shall have no responsibility to     
ascertain or confirm the genuineness of any signature of any such party or      
parties;                                                                        

      (b)      the Trustee may consult with counsel, financial advisers or
accountants and the advice of any such counsel, financial advisers or           
accountants and any Opinion of Counsel shall be full and complete authorization 
and protection in respect of any action taken or suffered or omitted by it      
hereunder in good faith and in accordance with such Opinion of Counsel;         

         (c)      the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Agreement;             

        (d)      the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,          
instrument, opinion, report, notice, request, consent, order, approval, bond or 

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other paper or document, unless requested in writing so to do by the Certificate
Insurer, or by Holders of Certificates evidencing not less than 25% of the      
Voting Rights allocated to each Class of Certificates;                          

        (e)      the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents,        
accountants or attorneys and the Trustee shall not be responsible for any       
misconduct or negligence on the part of any agents, accountants or attorneys    
appointed with due care by it hereunder;                                        

      (f)      the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of   
its duties or in the exercise of any of its rights or powers hereunder if it    
shall have reasonable grounds for believing that repayment of such funds or     
adequate indemnity against such risk or liability is not assured to it;         

         (g)      the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement (other than as issuer of the investment     
security);                                                                      

        (h)      the Trustee shall not be deemed to have knowledge of an Event
of Default until a Responsible Officer of the Trustee shall have received       
written notice thereof; and                                                     

      (i)      the Trustee shall be under no obligation to exercise any of
the trusts, rights or powers vested in it by this Agreement or to institute,    
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable     
security or indemnity satisfactory to the Trustee against the costs, expenses   
and liabilities which may be incurred therein or thereby.                       

   Section 8.03      Trustee Not Liable for Certificates or Mortgage
                     -----------------------------------------------
Loans.                                                                          
-----                                                                           

         The recitals contained herein and in the Certificates shall be taken as
the statements of the Depositor and the Trustee assumes no responsibility for   
their correctness. The Trustee makes no representations as to the validity or   
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or 
related document other than with respect to the Trustee's execution and         
countersignature of the Certificates. The Trustee shall not be accountable for  
the use or application by the Depositor or the Servicer of any funds paid to the
Depositor or the Servicer in respect of the Mortgage Loans or deposited in or   
withdrawn from the Collection Account by the Depositor or the Servicer.         

      The Trustee shall have no responsibility for filing or recording any
financing or continuation statement in any public office at any time or to      
otherwise perfect or maintain the perfection of any security interest or lien   
granted to it hereunder (unless the Trustee shall have become the successor     
Servicer).                                                                      

      The Trustee executes the Certificates not in its individual capacity
but solely as Trustee of the Trust Fund created by this Agreement, in the       
exercise of the powers and authority conferred and vested in it by this         
Agreement. Each of the undertakings and agreements made on the part of the      
Trustee on behalf of the Trust Fund in the Certificates is made and intended not
as a personal undertaking or agreement by the Trustee but is made and intended  
for the purpose of binding only the Trust Fund.                                 

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Section 8.04      Trustee May Own Certificates.               
  ----------------------------

    The Trustee in its individual or any other capacity may become the
owner or pledgee of Certificates with the same rights as it would have if it    
were not the Trustee.                                                           

Section 8.05      Trustee's Fees and Expenses.                
 ---------------------------

       (a)      As compensation for its activities under this Agreement, the
Trustee may withdraw from the Distribution Account on each Distribution Date the
Trustee Fee for the Distribution Date. The Trustee and any director, officer,   
employee, or agent of the Trustee shall be indemnified by the Servicer against  
any loss, liability, or expense (including reasonable attorney's fees) resulting
from any failure by the Servicer to perform its obligations under this          
Agreement. This indemnity shall survive the termination of this Agreement or the
resignation or removal of the Trustee under this Agreement.                     

        The Trustee shall not be entitled to payment or reimbursement from the
Unaffiliated Seller for any routine ongoing expenses incurred by the Trustee in 
the ordinary course of its duties as Trustee, Registrar, or paying agent under  
this Agreement or for any other expenses, including indemnification payments,   
except as set forth herein.                                                     

Section 8.06      Eligibility Requirements for the Trustee.   
              ----------------------------------------

The Trustee hereunder shall at all times be a corporation or  
association organized and doing business under the laws of a state or the United
States of America, authorized under such laws to exercise corporate trust       
powers, having a combined capital and surplus of at least $50,000,000, subject  
to supervision or examination by federal or state authority and with a credit   
rating which would not cause either of the Rating Agencies to reduce their      
respective then current ratings of the Certificates (or having provided such    
security from time to time as is sufficient to avoid such reduction) as         
evidenced in writing by each Rating Agency. If such corporation or association  
publishes reports of condition at least annually, pursuant to law or to the     
requirements of the aforesaid supervising or examining authority, then for the  
purposes of this Section 8.06 the combined capital and surplus of such          
corporation or association shall be deemed to be its combined capital and       
surplus as set forth in its most recent report of condition so published. In    
case at any time the Trustee shall cease to be eligible in accordance with this 
Section 8.06, the Trustee shall resign immediately in the manner and with the   
effect specified in Section 8.07. The entity serving as Trustee may have normal 
banking and trust relationships with the Depositor and its affiliates or the    
Servicer and its affiliates; provided, however, that such entity cannot be an   
affiliate of the Depositor, the Unaffiliated Seller or the Servicer other than  
the Trustee in its role as successor to the Servicer.                           

Section 8.07      Resignation and Removal of the Trustee.     
            --------------------------------------

      The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice of resignation to the Depositor, the    
Servicer, the Certificate Insurer, the Unaffiliated Seller, each Rating Agency  
not less than 60 days before the date specified in such notice, when, subject to

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Section 8.08, such resignation is to take effect, and acceptance by a successor 
trustee in accordance with Section 8.08 meeting the qualifications set forth in 
Section 8.06. If no successor trustee meeting such qualifications shall have    
been so appointed and have accepted appointment within 30 days after the giving 
of such notice or resignation, the resigning Trustee may petition any court of  
competent jurisdiction for the appointment of a successor trustee.              

     If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the 
Depositor, or if at any time the Trustee shall become incapable of acting, or   
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of  
its property shall be appointed, or any public officer shall take charge or     
control of the Trustee or of its property or affairs for the purpose of         
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located   
and the imposition of such tax would be avoided by the appointment of a         
different trustee, then the Depositor or the Servicer may remove the Trustee and
appoint a successor trustee reasonably acceptable to the Certificate Insurer by 
written instrument, in triplicate, one copy of which shall be delivered to the  
Trustee, one copy to the Servicer and one copy to the successor trustee.        

       The Certificate Insurer or the Holders of Certificates entitled to at
least 51% of the Voting Rights may at any time remove the Trustee and appoint a 
successor trustee by written instrument or instruments, in triplicate, signed by
such Holders or their attorneys-in-fact duly authorized, one complete set of    
which shall be delivered by the successor Trustee to the Servicer, one complete 
set to the Trustee so removed and one complete set to the successor so          
appointed. The successor trustee shall notify each Rating Agency of any removal 
of the Trustee.                                                                 

Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon     
acceptance of appointment by the successor trustee as provided in Section 8.08. 

Section 8.08      Successor Trustee.                          
-----------------         

   Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
and the Servicer an instrument accepting such appointment hereunder and         
thereupon the resignation or removal of the predecessor trustee shall become    
effective and such successor trustee, without any further act, deed or          
conveyance, shall become fully vested with all the rights, powers, duties and   
obligations of its predecessor hereunder, with the like effect as if originally 
named as trustee herein. The Depositor, the Certificate Insurer, the Servicer   
and the predecessor trustee shall execute and deliver such instruments and do   
such other things as may reasonably be required for more fully and certainly    
vesting and confirming in the successor trustee all such rights, powers, duties,
and obligations.                                                                

   No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is     
eligible under Section 8.06 and its appointment does not adversely affect the   
then current rating of the Certificates.                                        

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      Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such    
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor     
trustee, the successor trustee shall cause such notice to be mailed at the      
expense of the Depositor.                                                       

Section 8.09      Merger or Consolidation of the Trustee.     
            --------------------------------------

      Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated or any corporation resulting from any merger, 
conversion or consolidation to which the Trustee shall be a party, or any       
corporation succeeding to the business of the Trustee, shall be the successor of
the Trustee hereunder; provided that such corporation shall be eligible under   
Section 8.06 without the execution or filing of any paper or further act on the 
part of any of the parties hereto, anything herein to the contrary              
notwithstanding.                                                                

  Section 8.10      Appointment of Co-Trustee or Separate Trustee.
                   ---------------------------------------------

      Notwithstanding any other provisions of this Agreement, at any time,
for the purpose of meeting any legal requirements of any jurisdiction in which  
any part of the Trust Fund or property securing any Mortgage Note may at the    
time be located, the Servicer and the Trustee acting jointly shall have the     
power and shall execute and deliver all instruments to appoint one or more      
Persons approved by the Trustee to act as co-trustee or co-trustees jointly with
the Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity and for the 
benefit of the Certificateholders, such title to the Trust Fund or any part     
thereof, whichever is applicable, and, subject to the other provisions of this  
Section 8.10, such powers, duties, obligations, rights and trusts as the        
Servicer and the Trustee may consider appropriate. If the Servicer shall not    
have joined in such appointment within 15 days after the receipt by it of a     
request to do so, or in the case an Event of Default shall have occurred and be 
continuing, the Trustee alone shall have the power to make such appointment. No 
co-trustee or separate trustee hereunder shall be required to meet the terms of 
eligibility as a successor trustee under Section 8.06 and no notice to          
Certificateholders of the appointment of any co-trustee or separate trustee     
shall be required under Section 8.08.                                           

         Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:   

     (a)      To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed   
upon the Trustee, except for the obligation of the Trustee under this Agreement 
to advance funds on behalf of the Servicer, shall be conferred or imposed upon  
and exercised or performed by the Trustee and such separate trustee or          
co-trustee jointly (it being understood that such separate trustee or co-trustee
is not authorized to act separately without the Trustee joining in such act),   
except to the extent that under any law of any jurisdiction in which any        
particular act or acts are to be performed (whether as Trustee hereunder or as  
successor to the Servicer hereunder), the Trustee shall be incompetent or       
unqualified to perform such act or acts, in which event such rights, powers,    
duties and obligations (including the holding of title to the applicable Trust  
Fund or any portion thereof in any such jurisdiction) shall be exercised and    

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performed singly by such separate trustee or co-trustee, but solely at the      
direction of the Trustee;                                                       

       (b)      No trustee hereunder shall be held personally liable because
of any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or        
co-trustee as agent of the Trustee;                                             

   (c)      The Trustee may at any time accept the resignation of or
remove any separate trustee or co-trustee; and                                  

     (d)      The Trustee, and not the Servicer, shall be liable for the
payment of reasonable compensation and expenses to any such separate trustee or 
co-trustee from the Trustee Fee payable to the Trustee on each Distribution     
Date.                                                                           

    Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the separate trustees and co-trustees, when
and as effectively as if given to each of them. Every instrument appointing any 
separate trustee or co-trustee shall refer to this Agreement and the conditions 
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance 
of the trusts conferred, shall be vested with the estates or property specified 
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,    
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection and indemnity to, the   
Trustee. Every such instrument shall be filed with the Trustee and a copy       
thereof given to the Servicer and the Depositor.                                

     Any separate trustee or co-trustee may, at any time, constitute the
Trustee its agent or attorney-in-fact, with full power and authority, to the    
extent not prohibited by law, to do any lawful act under or in respect of this  
Agreement on its behalf and in its name. If any separate trustee or co-trustee  
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the   
Trustee, to the extent permitted by law, without the appointment of a new or    
successor trustee.                                                              

Section 8.11      Tax Matters.                                
-----------               

        As set forth in the Preliminary Statement, the assets within the Trust
Fund for which any REMIC election is to be made shall constitute, and the       
conduct of matters relating to such assets shall be consistent with the         
treatment of such assets as, a REMIC. To this end, the Trustee covenants and    
agrees to act as agent (and the Trustee is hereby appointed to act as agent) on 
behalf of any REMIC created hereunder, and that in such capacity it shall:      

  (a)      prepare and file in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit Income Tax Return (Form 1066 or any successor form  
adopted by the Internal Revenue Service) and prepare and file with the Internal 
Revenue Service and applicable state or local tax authorities income tax or     
information returns for each taxable year with respect to any REMIC described in
the Preliminary Statement containing such information and at the times and in   
the manner as may be required by the Code or state or local tax laws,           
regulations, or rules, and furnish to Certificateholders the schedules,         
statements or information at such times and in such manner as may be required   
thereby;                                                                        

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 (b)      within thirty days of the Closing Date, furnish to the
Internal Revenue Service on Form 8811 or as otherwise may be required by the    
Code, the name, title, address, and telephone number of the person that the     
holders of the Certificates may contact for tax information relating thereto,   
together with such additional information as may be required by such Form, and  
update such information at the time or times in the manner required by the Code;

         (c)      make an election that each of the Lower Tier REMIC, the Middle
Tier REMIC and the Upper Tier REMIC be treated as a REMIC on the federal tax    
return for its first taxable year (and, if necessary, under applicable state    
law);                                                                           

   (d)      prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all          
information returns and reports as and when required to be provided to them in  
accordance with the REMIC Provisions, including the calculation of any original 
issue discount using the Prepayment Assumption (as defined in the Prospectus    
Supplement);                                                                    

   (e)      provide information necessary for the computation of tax
imposed on the transfer of a Residual Certificate to a Person that is not a     
Permitted Transferee, or an agent (including a broker, nominee or other         
middleman) of a Non-Permitted Transferee, or a pass-through entity in which a   
Non-Permitted Transferee is the record holder of an interest (the reasonable    
cost of computing and furnishing such information may be charged to the Person  
liable for such tax);                                                           

         (f)      to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are outstanding so as
to maintain the status as a REMIC under the REMIC Provisions;                   

         (g)      not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any REMIC    
created hereunder;                                                              

        (h)      pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited      
transaction taxes as described below, imposed on any REMIC created hereunder    
before its termination when and as the same shall be due and payable (but such  
obligation shall not prevent the Trustee or any other appropriate Person from   
contesting any such tax in appropriate proceedings and shall not prevent the    
Trustee from withholding payment of such tax, if permitted by law, pending the  
outcome of such proceedings);                                                   

  (i)      cause federal, state or local income tax or information
returns to be signed by the Trustee or such other person as may be required to  
sign such returns by the Code or state or local laws, regulations or rules;     

     (j)      maintain records relating to each REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar   
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by 
the Code, as may be necessary to prepare the foregoing returns, schedules,      
statements or information; and                                                  

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      (k)      as and when necessary and appropriate, represent each REMIC
created hereunder in any administrative or judicial proceedings relating to an  
examination or audit by any governmental taxing authority, request an           
administrative adjustment as to any taxable year of each REMIC created          
hereunder, enter into settlement agreements with any governmental taxing agency,
extend any statute of limitations relating to any tax item of any REMIC created 
hereunder, and otherwise act on behalf of the REMIC in relation to any tax      
matter or controversy involving it.                                             

         The Trustee shall treat the rights of the Class P Certificateholders to
Prepayment Charges as the beneficial ownership of interests in a grantor trust, 
and not as an obligation of any REMIC created hereunder, for federal income tax 
purposes.                                                                       

       To enable the Trustee to perform its duties under this Agreement, the
Depositor shall provide to the Trustee within ten days after the Closing Date   
all information or data that the Trustee requests in writing and determines to  
be relevant for tax purposes to the valuations and offering prices of the       
Certificates, including the price, yield, prepayment assumption, and projected  
cash flows of the Certificates and the Mortgage Loans. Moreover, the Depositor  
shall provide information to the Trustee concerning the value to each Class of  
Certificates of the right to receive Basis Risk CarryForward Amounts from the   
Excess Reserve Fund Account. Thereafter, the Depositor shall provide to the     
Trustee promptly upon written request therefor any additional information or    
data that the Trustee may, from time to time, reasonably request to enable the  
Trustee to perform its duties under this Agreement. The Depositor hereby        
indemnifies the Trustee for any losses, liabilities, damages, claims, or        
expenses of the Trustee arising from any errors or miscalculations of the       
Trustee that result from any failure of the Depositor to provide, or to cause to
be provided, accurate information or data to the Trustee on a timely basis.     

         If any tax is imposed on "prohibited transactions" of any REMIC created
hereunder as defined in Section 860F(a)(2) of the Code, on the "net income from 
foreclosure property" of such REMIC as defined in Section 860G(c) of the Code,  
on any contribution to the REMIC after the Startup Day pursuant to Section      
860G(d) of the Code, or any other tax is imposed, including any minimum tax     
imposed on the REMIC pursuant to Sections 23153 and 24874 of the California     
Revenue and Taxation Code, if not paid as otherwise provided for herein, the tax
shall be paid by (i) the Trustee if such tax arises out of or results from      
negligence of the Trustee in the performance of any of its obligations under    
this Agreement, (ii) the Servicer if such tax arises out of or results from a   
breach by the Servicer of any of its obligations under this Agreement, (iii) the
Unaffiliated Seller shall pay if such tax arises out of or results from the     
Unaffiliated Seller's obligation to repurchase a Mortgage Loan pursuant to      
Section 2.03, or (iv) in all other cases, or if the Trustee, the Servicer or the
Unaffiliated Seller fails to honor its obligations under the preceding clauses  
(i) or (ii), any such tax will be paid with amounts otherwise to be distributed 
to the Certificateholders, as provided in Section 4.02(a).                      

Section 8.12      Periodic Filings.                           
----------------          

       (a)      The Trustee and the Servicer shall reasonably cooperate with
the Depositor in connection with the Trust's satisfying the reporting           
requirements under the Securities Exchange Act of 1934, as amended. The Trustee 
shall prepare on behalf of the Trust any Forms 8-K and 10-K customary for       

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similar securities as required by the Exchange Act and the Rules and Regulations
of the Securities and Exchange Commission (the "SEC") thereunder, and the       
Trustee shall file (via the SEC's Electronic Data Gathering and Retrieval       
System) such Forms with the SEC on behalf of the Depositor. The Depositor hereby
grants to the Trustee a limited power of attorney to execute and file each such 
Form 8-K but only to the extent no accompanying certification is required to be 
filed on behalf of the Depositor. Such power of attorney shall continue until   
either the earlier of (i) receipt by the Trustee from the Depositor of written  
termination of such power of attorney and (ii) the termination of the Trust. The
Depositor shall execute the Form 10-K. The Trustee shall have no liability with 
respect to any failure to properly prepare or file such periodic reports        
resulting from or relating to the Trustee's inability or failure to obtain any  
information not resulting from its own negligence or willful misconduct.        

   (b)      Each Form 8-K shall be filed by the Trustee with the SEC
within 15 days after each Distribution Date, including a Form 8-K with a copy of
the statement to the Certificateholders for such Distribution Date as an exhibit
thereto. Prior to March 30th of each year (or such earlier date as may be       
required by the Exchange Act and the Rules and Regulations of the SEC), the     
Trustee shall file a Form 10-K, in substance as required by applicable law or   
the SEC's staff interpretations. Such Form 10-K shall include as exhibits the   
Servicer's annual statement of compliance described under Section 3.22 (upon    
which the Trustee may rely) and the accountant's report described under Section 
3.23, in each case to the extent they have been timely delivered to the Trustee.
If they are not so timely delivered, the Trustee shall file an amended Form 10-K
including such documents as exhibits reasonably promptly after they are         
delivered to the Trustee. The Form 10-K shall also include a certification in   
the form attached hereto as Exhibit M (the "Certification"), which shall be     
signed by the senior officer of the Depositor in charge of securitization. The  
Trustee shall prepare and deliver each Form 10-K to the Depositor for execution 
no later than March 20th (or if such day is not a Business Day, the immediately 
preceding Business Day) of each year. The Depositor shall return the executed   
Form 10-K to the Trustee for filing no later than March 25th (or if such day is 
not a Business Day, the immediately preceding Business Day) of each year.       

       (c)      Notwithstanding that the Certification is to be signed by an
officer of the Depositor, a Responsible Officer of the Trustee shall sign a     
certification, in the form attached hereto as Exhibit N for the benefit of the  
Depositor and its officers, directors and Affiliates in respect of items 1      
through 3 thereof of the Certification (provided, however, that the Trustee     
shall not undertake an analysis of the accountant's report attached as an       
exhibit to the Form 10-K), and a Servicing Officer of the Servicer who is       
responsible for the servicing and administration of the Mortgage Loans shall    
sign a certification in the form attached hereto as Exhibit N for the benefit of
the Depositor, the Trustee and their respective officers, directors and         
Affiliates in respect of items 4 and 5 of the Certification. Each such          
certification shall be delivered to the Depositor and the Trustee (as           
applicable), no later than March 15th of each year (or if such day is not a     
Business Day, the immediately preceding Business Day) and the Depositor shall   
deliver the Certification to be filed to the Trustee no later than March 20th of
each year (or if such day is not a Business Day, the immediately preceding      
Business Day). In the event that prior to the filing date of the Form 10-K in   
March of each year, the Trustee or the Servicer has actual knowledge of         
information material to the Certification, that party shall promptly notify the 
Depositor and each of the other parties signing the certifications. In addition,

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(i) the Trustee shall indemnify and hold harmless the Depositor and its         
officers, directors and Affiliates from and against any losses, damages,        
penalties, fines, forfeitures, reasonable and necessary legal fees and related  
costs, judgments and other costs and expenses arising out of or based upon any  
breach of the Trustee's obligations under this Section 8.12(c) or the Trustee's 
negligence, bad faith or willful misconduct in connection therewith and (ii) the
Servicer shall indemnify and hold harmless the Depositor, the Trustee and their 
respective officers, directors and Affiliates from and against any losses,      
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and 
related costs, judgments and other costs and expenses arising out of or based   
upon any breach of the Servicer's obligations under this Section 8.12(c) or the 
Servicer's negligence, bad faith or willful misconduct in connection therewith. 
If the indemnification provided for herein is unavailable or insufficient to    
hold harmless the indemnified party then (i) the Trustee agrees in connection   
with a breach of the Trustee's obligations under this Section 8.12(c) or the    
Trustee's negligence, bad faith or willful misconduct in connection therewith   
that it shall contribute to the amount paid or payable by the Depositor as a    
result of the losses, claims, damages or liabilities of the Depositor in such   
proportion as is appropriate to reflect the relative fault of the Depositor on  
the one hand and the Trustee on the other and (ii) the Servicer agrees that it  
shall contribute to the amount paid or payable by the Depositor and/or the      
Trustee as a result of the losses, claims, damages or liabilities of the        
Depositor and/or the Trustee in such proportion as is appropriate to reflect the
relative fault of the Depositor and the Trustee, as the case may be, on the one 
hand and the Servicer on the other in connection with a breach of the Servicer's
obligations under this Section 8.12(c) or the Servicer's negligence, bad faith  
or willful misconduct in connection therewith.                                  

       (d)      Upon any filing with the Securities and Exchange Commission,
the Trustee shall promptly deliver to the Depositor a copy of any such executed 
report, statement or information.                                               

        (e)      Prior to January 30 of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall, in accordance with       
applicable law, file a Form 15D Suspension Notification with respect to the     
Trust Fund in a timely manner.                                                  

 Section 8.13      Tax Classification of the Excess Reserve Fund
                   ---------------------------------------------
Account.                                                                        
-------                                                                         

     For federal income tax purposes, the Trustee shall treat the Excess
Reserve Fund Account as an outside reserve fund, within the meaning of Treasury 
Regulation ss. 1.860G-2(h), that is beneficially owned by the holder of the     
Class X Certificate. The Trustee shall treat the rights that each Class of      
Certificates has to receive payments of Basis Risk CarryForward Amounts from the
Excess Reserve Fund Account as rights to receive payments under an interest rate
cap contract written by the Class X Certificateholder in favor of each Class.   
Accordingly, each Class of Certificates (excluding the Class X, Class P and     
Class R Certificates) will comprise two components - an Upper Tier Regular      
Interest and an interest in a notional principal contract. The Trustee shall    
allocate the issue price for a Class of Certificates between such two components
for purposes of determining the issue price of the Upper Tier Regular Interest  
component based on information received from the Depositor.                     

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Section 8.14      Cap Agreement.                              
-------------             

      The Trustee is hereby authorized and directed to execute and deliver
the Cap Agreement and to acknowledge the provisions thereof.                    

ARTICLE IX

 TERMINATION

   Section 9.01      Termination upon Liquidation or Purchase of the
                     -----------------------------------------------
Mortgage Loans.                                                                 
--------------                                                                  

      Subject to Section 9.03, the obligations and responsibilities of the
Depositor, the Servicer and the Trustee created hereby with respect to the Trust
Fund shall terminate upon the earlier of (a) the purchase, on or after the      
applicable Optional Termination Date, by the Servicer or the Class X            
Certificateholders of all Mortgage Loans (and REO Properties) at the price equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan    
(other than in respect of REO Property) plus accrued interest thereon at the    
applicable Adjusted Mortgage Rate, (ii) the lesser of (x) the appraised value of
any REO Property as determined by the higher of two appraisals completed by two 
independent appraisers selected by the Servicer at the expense of the Servicer  
and (y) the Stated Principal Balance of each Mortgage Loan related to any REO   
Property, in each case plus accrued and unpaid interest thereon at the          
applicable Adjusted Net Mortgage Rate and (iii) all costs and expenses incurred 
by, or on behalf of, the Trust Fund, of which the Trustee has actual knowledge, 
in connection with any violation by such Mortgage Loan of any predatory or      
abusive-lending law (the "Termination Price") and (b) the later of (i) the      
maturity or other liquidation (or any Advance with respect thereto) of the last 
Mortgage Loan remaining in the Trust Fund and the disposition of all REO        
Property and (ii) the distribution to Certificateholders of all amounts required
to be distributed to them pursuant to this Agreement. In no event shall the     
trusts created hereby continue beyond the expiration of 21 years from the death 
of the survivor of the descendants of Joseph P. Kennedy, the late Ambassador of 
the United States to the Court of St. James's, living on the date hereof.       

       Notwithstanding the foregoing, if Standard & Poor's has rated a class
of debt securities ("Net Interest Margin Securities") that are backed by the    
Class X Certificates and Class P Certificates and that are outstanding on any   
date on which the Servicer intends to exercise its option to purchase the       
Mortgage Loans, the Servicer will be permitted to exercise such option only if  
one of the following additional conditions is met: (i) after distribution of the
Termination Price to the Certificateholders (other than the Holders of the Class
X Certificates, Class P Certificates and Class R Certificates) to redeem the    
related Certificates, the remainder of the Termination Price (the "Remainder    
Amount") is distributed to the Holders of the Class X Certificates and Class P  
Certificates and is sufficient to pay the outstanding principal amount of and   
accrued and unpaid interest on the Net Interest Margin Securities; or (ii) (A)  
at the same time that the Servicer remits the Termination Price to the Trustee, 
it also remits to the Trustee an additional amount which, in combination with   
the Remainder Amount, is sufficient to pay the outstanding principal amount of  
and accrued and unpaid interest on the Net Interest Margin Securities, and (B)  
the Trustee remits the Remainder Amount to the Holders of the Class X           
Certificates and Class P Certificates and remits that additional amount directly
to the indenture trustee (plus any outstanding fees and expenses due and owing  

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to the indenture trustee) under the indenture creating the Net Interest Margin  
Securities.                                                                     

No such purchase will be permitted without the consent of the 
Certificate Insurer, unless no draw on the Certificate Insurance Policy would be
made and no amounts due to the Certificate Insurer would remain unreimbursed on 
the final Distribution Date.                                                    

Section 9.02      Final Distribution on the Certificates.     
            --------------------------------------

         If on any Determination Date, the Servicer determines that there are no
Outstanding Mortgage Loans and no other funds or assets in the Trust Fund other 
than the funds in the Collection Account, the Servicer shall direct the Trustee 
promptly to send a Notice of Final Distribution each Certificateholder. If the  
Servicer or the Class X Certificateholder elects to terminate the Trust Fund    
pursuant to clause (a) of Section 9.01, at least 20 days prior to the date the  
Notice of Final Distribution is to be mailed to the affected Certificateholders 
such electing party shall notify the Depositor and the Trustee of the date the  
Servicer or the Class X Certificateholder intends to terminate the Trust Fund   
and of the applicable repurchase price of the Mortgage Loans and REO Properties.

     A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the    
final distribution and cancellation, shall be given promptly by the Trustee by  
letter to Certificateholders mailed not earlier than the 10th day and not later 
than the 15th day of the month next preceding the month of such final           
distribution. Any such Notice of Final Distribution shall specify (a) the       
Distribution Date upon which final distribution on the Certificates will be made
upon presentation and surrender of Certificates at the office therein           
designated, (b) the amount of such final distribution, (c) the location of the  
office or agency at which such presentation and surrender must be made, and (d) 
that the Record Date otherwise applicable to such Distribution Date is not      
applicable, distributions being made only upon presentation and surrender of the
Certificates at the office therein specified. The Trustee will give such Notice 
of Final Distribution to each Rating Agency at the time such Notice of Final    
Distribution is given to Certificateholders.                                    

       In the event such Notice of Final Distribution is given, the Servicer
shall cause all funds in the Collection Account to be remitted to the Trustee   
for deposit in the Distribution Account on the Business Day prior to the        
applicable Distribution Date in an amount equal to the final distribution in    
respect of the Certificates. Upon such final deposit with respect to the Trust  
Fund and the receipt by the Trustee of a Request for Release therefor, the      
Trustee shall promptly release to the Servicer the Custodial Files for the      
Mortgage Loans.                                                                 

        Upon presentation and surrender of the Certificates, the Trustee shall
cause to be distributed to the Certificateholders of each Class, in each case on
the final Distribution Date and in the order set forth in Section 4.02, in      
proportion to their respective Percentage Interests, with respect to            
Certificateholders of the same Class, an amount equal to (i) as to each Class of
Regular Certificates (except the Class X Certificate), the Certificate Balance  
thereof plus for each such Class and the Class X Certificate accrued interest   
thereon in the case of an interest-bearing Certificate and (ii) as to the       
Residual Certificates, the amount, if any, which remains on deposit in the      

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Distribution Account (other than the amounts retained to meet claims) after     
application pursuant to clause (i) above.                                       

       In the event that any affected Certificateholders shall not surrender
Certificates for cancellation within six months after the date specified in the 
above mentioned written notice, the Trustee shall give a second written notice  
to the remaining Certificateholders to surrender their Certificates for         
cancellation and receive the final distribution with respect thereto. If within 
six months after the second notice all the applicable Certificates shall not    
have been surrendered for cancellation, the Trustee may take appropriate steps, 
or may appoint an agent to take appropriate steps, to contact the remaining     
Certificateholders concerning surrender of their Certificates, and the cost     
thereof shall be paid out of the funds and other assets which remain a part of  
the Trust Fund. If within one year after the second notice all Certificates     
shall not have been surrendered for cancellation, the Class R Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund     
which remain subject hereto.                                                    

Section 9.03      Additional Termination Requirements.        
         -----------------------------------

In the event the Servicer or the Class X Certificateholder, as
applicable, exercises its purchase option with respect to the Mortgage Loans as 
provided in Section 9.01, the Trust Fund shall be terminated in accordance with 
the following additional requirements, unless the Trustee has been supplied with
an Opinion of Counsel, at the expense of the Servicer or the Class X            
Certificateholder, as applicable, to the effect that the failure to comply with 
the requirements of this Section 9.03 will not (i) result in the imposition of  
taxes on "prohibited transactions" on either REMIC as defined in Section 860F of
the Code, or (ii) cause either the Lower Tier REMIC, the Middle Tier REMIC or   
the Upper Tier REMIC to fail to qualify as a REMIC at any time that any         
Certificates are outstanding:                                                   

        (a)      The Trustee shall sell all of the assets of the Trust Fund to
the Servicer or the Class X Certificateholder, as applicable, and, within 90    
days of such sale, shall distribute to the Certificateholders the proceeds of   
such sale in complete liquidation of each of the Lower Tier REMIC, the Middle   
Tier REMIC and the Upper Tier REMIC.                                            

    (b)      The Trustee shall attach a statement to the final federal
income tax return for each of the Lower Tier REMIC, the Middle Tier REMIC and   
the Upper Tier REMIC stating that pursuant to Treasury Regulation ss. 1.860F-1, 
the first day of the 90-day liquidation period for each such REMIC was the date 
on which the Trustee sold the assets of the Trust Fund to the Servicer or the   
Class X Certificateholder, as applicable.                                       

 ARTICLE X

MISCELLANEOUS PROVISIONS

Section 10.01     Amendment.                                  
---------                 

       This Agreement may be amended from time to time (x) by the Depositor,
the Servicer and the Trustee, with the prior written consent of the Certificate 
Insurer, (y) with the consent of the Unaffiliated Seller unless the Trustee     
receives an Opinion of Counsel (which Opinion of Counsel shall not be an expense
of the Trustee or the Trust Fund) stating that the amendment will not adversely 

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affect the Unaffiliated Seller, but (z) without the consent of any of the       
Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct any    
defective provision herein or to supplement any provision herein which may be   
inconsistent with any other provision herein, (iii) to add to the duties of the 
Depositor or the Servicer, (iv) to add any other provisions with respect to     
matters or questions arising hereunder or (v) to modify, alter, amend, add to or
rescind any of the terms or provisions contained in this Agreement; provided,   
that any action pursuant to clauses (iv) or (v) above shall not, as evidenced by
an Opinion of Counsel (which Opinion of Counsel shall not be an expense of the  
Trustee or the Trust Fund), adversely affect in any material respect the        
interests of any Certificateholder; and provided, further, that the amendment   
shall not be deemed to adversely affect in any material respect the interests of
the Certificateholders if the Person requesting the amendment obtains a letter  
from each Rating Agency stating that the amendment would not result in the      
downgrading or withdrawal of the respective ratings then assigned to the        
Certificates; it being understood and agreed that any such letter in and of     
itself will not represent a determination as to the materiality of any such     
amendment and will represent a determination only as to the credit issues       
affecting any such rating.                                                      

       In addition, this Agreement may also be amended from time to time (x)
by the Trustee, the Depositor and the Servicer, with the prior written consent  
of the Certificate Insurer, and (y) with the consent of the Unaffiliated Seller 
unless the Trustee receives an Opinion of Counsel (which Opinion of Counsel     
shall not be an expense of the Trustee or the Trust Fund) stating that the      
amendment will not adversely affect the Unaffiliated Seller, but (z) without the
consent of the Certificateholders, to modify, eliminate or add to any of its    
provisions to such extent as shall be necessary or helpful to (i) maintain the  
qualification of the Lower Tier REMIC, the Middle Tier REMIC and the Upper Tier 
REMIC under the Code, (ii) avoid or minimize the risk of the imposition of any  
tax on the Lower Tier REMIC, the Middle Tier REMIC or the Upper Tier REMIC      
pursuant to the Code that would be a claim at any time prior to the final       
redemption of the Certificates or (iii) comply with any other requirements of   
the Code; provided, that the Trustee has been provided an Opinion of Counsel,   
which opinion shall be an expense of the party requesting such opinion but in   
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such   
qualification, (ii) avoid or minimize the risk of the imposition of such a tax  
or (iii) comply with any such requirements of the Code.                         

 This Agreement may also be amended from time to time (x) by the
Depositor, the Servicer and the Trustee, with the prior written consent of the  
Certificate Insurer, (y) with the consent of the Unaffiliated Seller unless the 
Trustee receives an Opinion of Counsel (which Opinion of Counsel shall not be an
expense of the Trustee or the Trust Fund) stating that the amendment will not   
adversely affect the Unaffiliated Seller, and (z), except as set forth in       
Section 3.27, with the consent of the Holders of Certificates evidencing        
Percentage Interests aggregating not less than 66-2/3% of each Class of         
Certificates (based on the aggregate outstanding principal balance of such class
at such time) affected thereby, for the purpose of adding any provisions to or  
changing in any manner or eliminating any of the provisions of this Agreement or
of modifying in any manner the rights of the Holders of Certificates; provided, 
however, that no such amendment shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate     
without the consent of the Holder of such Certificate, (ii) adversely affect in 
any material respect the interests of the Holders of any Class of Certificates  

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in a manner other than as described in (i), without the consent of the Holders  
of Certificates of such Class evidencing, as to such Class, Percentage Interests
aggregating not less than 66-2/3%, or (iii) reduce the aforesaid percentages of 
Certificates the Holders of which are required to consent to any such amendment,
without the consent of the Holders of all such Certificates then outstanding.   

       Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first 
received an Opinion of Counsel, which opinion shall not be an expense of the    
Trustee or the Trust Fund, to the effect that such amendment will not cause the 
imposition of any tax on any REMIC or the Certificateholders or cause any REMIC 
to fail to qualify as a REMIC at any time that any Certificates are outstanding.

      Notwithstanding the foregoing provisions of this Section 10.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicer, any Certificate beneficially owned by the          
Depositor, the Unaffiliated Seller or any of their respective Affiliates shall  
be deemed not to be outstanding (and shall not be considered when determining   
the percentage of Certificateholders consenting or when calculating the total   
number of Certificates entitled to consent) for purposes of determining if the  
requisite consents of Certificateholders under this Section 10.01 have been     
obtained.                                                                       

 Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written  
notification of the substance or a copy of such amendment to each               
Certificateholder and each Rating Agency.                                       

       It shall not be necessary for the consent of Certificateholders under
this Section 10.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The 
manner of obtaining such consents and of evidencing the authorization of the    
execution thereof by Certificateholders shall be subject to such reasonable     
regulations as the Trustee may prescribe.                                       

      Nothing in this Agreement shall require the Trustee to enter into an
amendment without receiving an Opinion of Counsel (which Opinion shall not be an
expense of the Trustee or the Trust Fund), satisfactory to the Trustee that (i) 
such amendment is permitted and is not prohibited by this Agreement and that all
requirements for amending this Agreement have been complied with; and (ii)      
either (A) the amendment does not adversely affect in any material respect the  
interests of any Certificateholder or (B) the conclusion set forth in the       
immediately preceding clause (A) is not required to be reached pursuant to this 
Section 10.01.                                                                  

Section 10.02     Recordation of Agreement; Counterparts.     
            --------------------------------------

    This Agreement is subject to recordation in all appropriate public
offices for real property records in all the counties or other comparable       
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,    
such recordation to be effected by the Servicer at its expense, but only upon   
receipt of an Opinion of Counsel to the effect that such recordation materially 
and beneficially affects the interests of the Certificateholders.               

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      For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed          
simultaneously in any number of counterparts, each of which counterparts shall  
be deemed to be an original, and such counterparts shall constitute but one and 
the same instrument.                                                            

Section 10.03     Governing Law.                              
-------------             

      THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY
THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND 
TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND        
REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN
ACCORDANCE WITH SUCH LAWS.                                                      

Section 10.04     Intention of Parties.                       
--------------------      

        It is the express intent of the parties hereto that the conveyance (i)
of the Mortgage Loans by the Depositor and (ii) of the Trust Fund by the        
Depositor to the Trustee each be, and be construed as, an absolute sale thereof.
It is, further, not the intention of the parties that such conveyances be deemed
a pledge thereof. However, in the event that, notwithstanding the intent of the 
parties, such assets are held to be the property of the Depositor, as the case  
may be, or if for any other reason this Agreement is held or deemed to create a 
security interest in either such assets, then (i) this Agreement shall be deemed
to be a security agreement within the meaning of the Uniform Commercial Code of 
the State of New York and (ii) the conveyances provided for in this Agreement   
shall be deemed to be an assignment and a grant by the Depositor to the Trustee,
for the benefit of the Certificateholders, of a security interest in all of the 
assets transferred, whether now owned or hereafter acquired.                    

    The Depositor for the benefit of the Certificateholders and of the
Certificate Insurer shall, to the extent consistent with this Agreement, take   
such actions as may be necessary to ensure that, if this Agreement were deemed  
to create a security interest in the Trust Fund, such security interest would be
deemed to be a perfected security interest of first priority under applicable   
law and will be maintained as such throughout the term of the Agreement. The    
Depositor shall arrange for filing any Uniform Commercial Code continuation     
statements in connection with any security interest granted or assigned to the  
Trustee for the benefit of the Certificateholders.                              

Section 10.05     Notices.                                    
-------                   

     (a)      The Trustee shall use its best efforts to promptly provide
notice to each Rating Agency with respect to each of the following of which it  
has actual knowledge:                                                           

                1.       Any material change or amendment to this Agreement;

                2.       The occurrence of any Event of Default that has not
been cured;                                                   

                  3.       The resignation or termination of the Servicer or the
Trustee and the appointment of any successor;                 

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             4.       The repurchase or substitution of Mortgage Loans
pursuant to Section 2.03; and                                 

     5.       The final payment to Certificateholders.

         (b)      In addition, the Trustee shall promptly furnish to each Rating
Agency copies of the following:                                                 

           1.       Each report to Certificateholders described in
Section 4.03; and                                             

                 2.       Any notice of a purchase of a Mortgage Loan pursuant
to Section 2.02, 2.03 or 3.11.                                

       All directions, demands and notices hereunder shall be in writing and
shall be deemed to have been duly given when delivered to (a) in the case of the
Depositor or the Representative, Morgan Stanley ABS Capital I Inc. or Morgan    
Stanley & Co. Incorporated, 1585 Broadway, New York, New York 10036, Attention: 
Michelle Wilke, Esq., (b) in the case of the Servicer, Ocwen Federal Bank FSB,  
1675 Palm Beach Lakes Blvd., Suite 10A, West Palm Beach, Florida 33401,         
Attention: Secretary, or such other address as may be hereafter furnished to the
parties hereto in writing, (c) in the case of the Trustee to the Corporate Trust
Office, Deutsche Bank National Trust Company, 1761 East St. Andrew Place, Santa 
Ana, California 92705-4934, Attention: Trust Administration DC03M3, or such     
other address as the Trustee may hereafter furnish to the parties hereto, (d) in
the case of the Unaffiliated Seller, CDC Mortgage Capital, Inc., 9 West 57th    
Street, New York, New York 10019, Attention General Counsel, or such other      
address as the Unaffiliated Seller may hereafter furnish to the parties hereto, 
(e) in the case of each of the Rating Agencies, the address specified therefor  
in the definition corresponding to the name of such Rating Agency and (f) in the
case of any Originator, the address specified therefor in the applicable        
Mortgage Loan Purchase Agreement. Notices to Certificateholders shall be deemed 
given when mailed, first class postage prepaid, to their respective addresses   
appearing in the Certificate Register.                                          

Section 10.06     Severability of Provisions.                 
--------------------------

         If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such       
covenants, agreements, provisions or terms shall be deemed severable from the   
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this 
Agreement or of the Certificates or the rights of the Holders thereof.          

Section 10.07     Assignment.                                 
----------                

      Notwithstanding anything to the contrary contained herein, except as
provided in Section 6.02, this Agreement may not be assigned by the Servicer    
without the prior written consent of the Trustee, the Certificate Insurer and   
Depositor; provided, however, that, subject to Section 3.27, the Servicer may   
pledge or sell its interest in any reimbursements for P&I Advances or Servicing 
Advances hereunder.                                                             

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Section 10.08     Limitation on Rights of Certificateholders. 
                ------------------------------------------

       The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the trust created hereby, nor entitle such          
Certificateholder's legal representative or heirs to claim an accounting or to  
take any action or commence any proceeding in any court for a petition or       
winding up of the trust created hereby, or otherwise affect the rights,         
obligations and liabilities of the parties hereto or any of them.               

       No Certificateholder shall have any right to vote (except as provided
herein) or in any manner otherwise control the operation and management of the  
Trust Fund, or the obligations of the parties hereto, nor shall anything herein 
set forth or contained in the terms of the Certificates be construed so as to   
constitute the Certificateholders from time to time as partners or members of an
association; nor shall any Certificateholder be under any liability to any third
party by reason of any action taken by the parties to this Agreement pursuant to
any provision hereof.                                                           

    No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or     
proceeding in equity or at law upon or under or with respect to this Agreement, 
unless such Holder previously shall have given to the Trustee a written notice  
of an Event of Default and of the continuance thereof, as herein provided, and  
unless the Holders of Certificates evidencing not less than 25% of the Voting   
Rights evidenced by the Certificates, and the Certificate Insurer, shall also   
have made written request to the Trustee to institute such action, suit or      
proceeding in its own name as Trustee hereunder and shall have offered to the   
Trustee such reasonable indemnity as it may require against the costs, expenses,
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days 
after its receipt of such notice, request and offer of indemnity shall have     
neglected or refused to institute any such action, suit or proceeding; it being 
understood and intended, and being expressly covenanted by each                 
Certificateholder with every other Certificateholder and the Trustee, that no   
one or more Holders of Certificates shall have any right in any manner whatever 
by virtue or by availing itself or themselves of any provisions of this         
Agreement to affect, disturb or prejudice the rights of the Holders of any other
of the Certificates, or to obtain or seek to obtain priority over or preference 
to any other such Holder or to enforce any right under this Agreement, except in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 10.08, each
and every Certificateholder and the Trustee shall be entitled to such relief as 
can be given either at law or in equity.                                        

Section 10.09     Inspection and Audit Rights.                
 ---------------------------

      The Servicer agrees that, on reasonable prior notice, it will permit
any representative of the Depositor, the Unaffiliated Seller, the Certificate   
Insurer or the Trustee during the Servicer's normal business hours, to examine  
all the books of account, records, reports and other papers of the Servicer     
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause 
such books to be audited by independent certified public accountants selected by
the party conducting the inspection and to discuss its affairs, finances and    
accounts relating to the Mortgage Loans with its officers, employees and        
independent public accountants (and by this provision the Servicer hereby       
authorizes said accountants to discuss with such representative such affairs,   

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finances and accounts), all at such reasonable times and as often as may be     
reasonably requested. Any out-of-pocket expense of the Servicer incident to the 
exercise by the Depositor, the Unaffiliated Seller, the Certificate Insurer or  
the Trustee of any right under this Section 10.09 shall be borne by the         
Servicer.                                                                       

Section 10.10     Certificates Nonassessable and Fully Paid.  
               -----------------------------------------

        It is the intention of the Depositor that Certificateholders shall not
be personally liable for obligations of the Trust Fund, that the interests in   
the Trust Fund represented by the Certificates shall be nonassessable for any   
reason whatsoever, and that the Certificates, upon due authentication thereof by
the Trustee pursuant to this Agreement, are and shall be deemed fully paid.     

Section 10.11     The Certificate Insurer Default.            
     -------------------------------

   Any right conferred to the Certificate Insurer shall be suspended
during any period in which a Certificate Insurer Default exists. At such time as
the Class A-1 and Class A-3 Certificates are no longer outstanding hereunder,   
and no amounts owed to the Certificate Insurer hereunder remain unpaid, the     
Certificate Insurer's rights hereunder shall terminate.                         

Section 10.12     Third Party Beneficiary.                    
-----------------------   

      The parties agree that the Certificate Insurer is intended and shall
have all rights of a third-party beneficiary of this Agreement.                 

Section 10.13     Waiver of Jury Trial.                       
--------------------      

        EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY, WAIVES (TO
THE EXTENT PERMITTED BY APPLICABLE LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY
OF ANY DISPUTE ARISING UNDER OR RELATING TO THIS AGREEMENT AND AGREES THAT ANY  
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.              

Section 10.14     Limitation of Damages                       
---------------------     

        NOTWITHSTANDING ANYTHING CONTAINED HEREIN TO THE CONTRARY, THE PARTIES
HERETO AGREE THAT NO PARTY HERETO SHALL BE LIABLE TO ANY OTHER PARTY HERETO FOR 
ANY SPECIAL, CONSEQUENTIAL OR PUNITIVE DAMAGES WHATSOEVER, WHETHER IN CONTRACT, 
TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY) OR ANY OTHER LEGAL OR EQUITABLE
PRINCIPLES; PROVIDED THAT, THE FOREGOING PROVISION SHALL NOT LIMIT OR RELIEVE   
ANY PARTY HERETO OF ANY OBLIGATION UNDER THIS AGREEMENT TO INDEMNIFY ANY OTHER  
PARTY HERETO AGAINST (X) ANY DAMAGES IMPOSED UPON SUCH PARTY BY ANY THIRD PARTY 
CLAIM OR ORDER, DECREE OR ACTION OF ANY REGULATORY OR ADMINISTRATIVE BODY, OR   
(Y) WITH RESPECT TO ANY LOSSES SUSTAINED OR EXPENSES INCURRED BY OR ON BEHALF OF
THE TRUST (IT BEING UNDERSTOOD THAT TRUST LOSSES CAUSED BY THE SERVICER'S       
FAILURE TO PERFORM ITS DUTIES SHALL NOT BE CONSIDERED "CONSEQUENTIAL" OR        

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"SPECIAL" DAMAGES FOR PURPOSES OF THE LIMITATION PROVIDED ABOVE, AND SHALL BE   
COVERED BY THE INDEMNIFICATION PROVIDED HEREIN).                                

 * * * * * * *

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         IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated Seller
and the Servicer have caused their names to be signed hereto by their respective
officers thereunto duly authorized as of the day and year first above written.  

                                MORGAN STANLEY ABS CAPITAL I INC.,
            as Depositor

                  By:  /s/ VALERIE KAY
                                            ------------------------------------
                          Name:  Valerie Kay
                                 Title: Executive Director

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                solely as Trustee and not in its
                   individual capacity

                     By:  /s/ JEREMY CONYERS
                                            ------------------------------------
                             Name:  Jeremy Conyers
                        Title: Associate

                 By:  /s/ ALAN SUEDA
                                            ------------------------------------
                         Name:  Alan Sueda
                        Title: Associate

                     OCWEN FEDERAL BANK FSB,
           as Servicer

                      By:  /s/ RICHARD DELGADO
                                            ------------------------------------
                              Name:  Richard Delgado
                             Title: Vice President

                        CDC MORTGAGE CAPITAL INC.,
                      as Unaffiliated Seller

                      By:  /s/ ANTHONY MALANGA
                                            ------------------------------------
                              Name:  Anthony Malanga
                                Title: Managing Director

                      By:  /s/ WILLIAM BRANAGH
                                            ------------------------------------
                              Name:  William Branagh
                                Title: Managing Director

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SCHEDULE I

Mortgage Loan Schedule

 [On File at Dewey Ballantine LLP]

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 SCHEDULE IA

Mortgage Loan Schedule - Group I

 [On File at Dewey Ballantine LLP]

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 SCHEDULE IB

 Mortgage Loan Schedule - Group II

 [On File at Dewey Ballantine LLP]

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 SCHEDULE II

 CDC MORTGAGE CAPITAL TRUST 2003-HE3

 Mortgage Pass-Through Certificates,
 Series 2003-HE3

Representations and Warranties of the Servicer
----------------------------------------------

  (1)      The Servicer is a federally chartered savings bank duly
organized, validly existing and in good standing under the laws of the United   
States of America and is duly authorized and qualified to transact any and all  
business contemplated by this Pooling and Servicing Agreement to be conducted by
the Servicer in any state in which a Mortgaged Property is located or is        
otherwise not required under applicable law to effect such qualification and, in
any event, is in compliance with the doing business laws of any such State, to  
the extent necessary to ensure its ability to enforce each Mortgage Loan and to 
service the Mortgage Loans in accordance with the terms of this Pooling and     
Servicing Agreement;                                                            

        (2)      The Servicer has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and       
consummate the transactions contemplated by this Pooling and Servicing Agreement
and has duly authorized by all necessary action on the part of the Servicer the 
execution, delivery and performance of this Pooling and Servicing Agreement; and
this Pooling and Servicing Agreement, assuming the due authorization, execution 
and delivery thereof by the other parties thereto, constitutes a legal, valid   
and binding obligation of the Servicer, enforceable against the Servicer in     
accordance with its terms, except to the extent that (a) the enforceability     
thereof may be limited by bankruptcy, insolvency, moratorium, receivership and  
other similar laws relating to creditors' rights generally and (b) the remedy of
specific performance and injunctive and other forms of equitable relief may be  
subject to the equitable defenses and to the discretion of the court before     
which any proceeding therefor may be brought;                                   

   (3)      The execution and delivery of this Pooling and Servicing
Agreement by the Servicer, the servicing of the Mortgage Loans by the Servicer  
hereunder, the consummation by the Servicer of any other of the transactions    
herein contemplated, and the fulfillment of or compliance with the terms hereof 
are in the ordinary course of business of the Servicer and will not (A) result  
in a breach of any term or provision of the organizational documents of the     
Servicer or (B) conflict with, result in a breach, violation or acceleration of,
or result in a default under, the terms of any other material agreement or      
instrument to which the Servicer is a party or by which it may be bound, or any 
statute, order or regulation applicable to the Servicer of any court, regulatory
body, administrative agency or governmental body having jurisdiction over the   
Servicer; and the Servicer is not a party to, bound by, or in breach or         
violation of any indenture or other agreement or instrument, or subject to or in
violation of any statute, order or regulation of any court, regulatory body,    

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administrative agency or governmental body having jurisdiction over it, which   
materially and adversely affects or, to the Servicer's knowledge, would in the  
future materially and adversely affect, (x) the ability of the Servicer to      
perform its obligations under this Pooling and Servicing Agreement or (y) the   
business, operations, financial condition, properties or assets of the Servicer 
taken as a whole;                                                               

        (4)      The Servicer is an approved seller/servicer for Fannie Mae or
Freddie Mac in good standing;                                                   

   (5)      No litigation is pending against the Servicer that would
materially and adversely affect the execution, delivery or enforceability of    
this Pooling and Servicing Agreement or the ability of the Servicer to service  
the Mortgage Loans or to perform any of its other obligations hereunder in      
accordance with the terms hereof;                                               

       (6)      No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and         
performance by the Servicer of, or compliance by the Servicer with, this Pooling
and Servicing Agreement or the consummation by the Servicer of the transactions 
contemplated by this Pooling and Servicing Agreement, except for such consents, 
approvals, authorizations or orders, if any, that have been obtained prior to   
the Closing Date; and                                                           

      (7)      The Servicer represents that its computer and other systems
used in servicing the Mortgage Loans operate in a manner such that the Servicer 
can service the Mortgage Loans in accordance with the terms of this Pooling and 
Servicing Agreement.                                                            

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SCHEDULE IIA

Further Representations and Warranties of the Servicer

         (1)      Mortgage Loan Schedule. With respect to each Mortgage Loan, as
of the applicable Cut-off Date, each of (1) the last Due Date on which a payment
was actually applied to the outstanding principal balance of each Mortgage Loan;
(2) the Stated Principal Balance of each Mortgage Loan, after deduction of      
payments of principal due and collected on or before the applicable Cut-off     
Date; and (3) the Servicing Transfer Date for each Mortgage Loan, in each case, 
as listed on the Mortgage Loan Schedule, is true and correct;                   

      (2)      Payments Current. Unless otherwise indicated on the related
Mortgage Loan Schedule, with respect to each Mortgage Loan, no Scheduled Payment
is 30 days or more Delinquent as of the Cut-off Date nor has any Payment been 30
days or more Delinquent at any time from and after the Servicing Transfer Date; 

         (3)      Original Terms Unmodified. With respect to each Mortgage Loan,
the terms of the Mortgage Note and Mortgage have not been impaired, waived,     
altered or modified by the Servicer (or to its knowledge by any other Person) in
any material respect from and after the Servicing Transfer Date;                

     (4)      No Satisfaction of Mortgage. With respect to each Mortgage
Loan, since the related Servicing Transfer Date and except for prepayments in   
full, the Mortgage has not been satisfied, cancelled, subordinated or rescinded 
by the Servicer (or to its knowledge by any other Person), in whole or in part, 
and the Mortgaged Property has not been released from the lien of the Mortgage  
by the Servicer (or to its knowledge by any other Person), in whole or in part, 
nor has any instrument been executed by the Servicer (or to its knowledge by any
other Person) that would effect any such release, cancellation, subordination or
rescission. From and after the Servicing Transfer Date, the Servicer has not    
waived the performance by the Mortgagor of any material action, if the          
Mortgagor's failure to perform such action would cause the Mortgage Loan to be  
in default, nor has the Servicer waived any material default resulting from any 
action or inaction by the Mortgagor;                                            

      (5)      No Defaults. With respect to each Mortgage Loan, other than
payments due but not yet 30 days Delinquent, to the Servicer's knowledge, there 
is no material default, breach, violation or event which would permit           
acceleration existing under the Mortgage or the Mortgage Note;                  

     (6)      Mortgaged Property Undamaged; No Condemnation Proceedings.
With respect to each Mortgage Loan, to the Servicer's knowledge, there is no    
proceeding pending or threatened for the total or partial condemnation of the   
Mortgaged Property. To the Servicer's knowledge, the related Mortgaged Property 
is undamaged by waste, fire, earthquake or earth movement, windstorm, flood,    
tornado or other casualty so as to affect adversely the value of the related    
Mortgaged Property as security for the Mortgage Loan or the use for which the   
premises were intended and each related Mortgaged Property is in good repair;   

     (7)      Escrow Payments/Interest Rate Adjustments. With respect to
each Mortgage Loan, since the Servicing Transfer Date, the servicing and        
collection practices used by the Servicer with respect to such Mortgage Loan    

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have been in all material respects in compliance with Accepted Servicing        
Practices, applicable laws and regulations, and have been in all material       
respects legal and proper. With respect to escrow deposits and Escrow Payments, 
if any, all such deposits and payments received by the Servicer are in the      
possession of, or under the control of, the Servicer and there exist no         
deficiencies in connection therewith for which customary arrangements for       
repayment thereof have not been made. All Escrow Payments have been collected in
full compliance with state and federal law and the provisions of the related    
Mortgage Note and Mortgage. From and after the Servicing Transfer Date, all     
Mortgage Rate adjustments (if any) have been made in strict compliance with     
state and federal law and the terms of the related Mortgage Note;               

        (8)      Other Insurance Policies. With respect to each Mortgage Loan,
from and after the Servicing Transfer Date, to the Servicer's knowledge, no     
action, inaction or event has occurred and no state of facts exists or has      
existed that has resulted or will result in the exclusion from, denial of, or   
defense to coverage under any insurance policy related to such Mortgage Loan,   
irrespective of the cause of such failure of coverage;                          

   (9)      No Violation of Environmental Laws. With respect to each
Mortgage Loan, to the Servicer's knowledge, there is no pending action or       
proceeding directly involving the related Mortgaged Property in which compliance
with any environmental law, rule or regulation is an issue; to the Servicer's   
knowledge, there is no violation of any environmental law, rule or regulation   
with respect to the related Mortgaged Property; and                             

        (10)     Soldiers' and Sailors' Civil Relief Act. With respect to each
Mortgage Loan, no Mortgagor has notified the Servicer, and the Servicer has no  
knowledge, of any relief requested or allowed to the Mortgagor under the        
Soldiers' and Sailors' Civil Relief Act of 1940 or any similar state or local   
law.                                                                            

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SCHEDULE III

(a)      Due Organization and Authority. The Unaffiliated Seller is a           
         corporation duly organized, validly existing and in good standing under
     the laws of the state of New York and has all licenses necessary to
         carry on its business as now being conducted and is licensed, qualified
  and in good standing in each state wherein it owns or leases any
      material properties or where a Mortgaged Property is located, if the
   laws of such state require licensing or qualification in order to
        conduct business of the type conducted by the Unaffiliated Seller, and
        in any event the Unaffiliated Seller is in compliance with the laws of
         any such state to the extent necessary; the Unaffiliated Seller has the
        full corporate power, authority and legal right to execute and deliver
         this Agreement and to perform its obligations hereunder; the execution,
       delivery and performance of this Agreement by the Unaffiliated Seller
        and the consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement and all agreements
contemplated hereby have been duly executed and delivered and 
         constitute the valid, legal, binding and enforceable obligations of the
       Unaffiliated Seller, regardless of whether such enforcement is sought
         in a proceeding in equity or at law; and all requisite corporate action
      has been taken by the Unaffiliated Seller to make this Agreement and
all agreements contemplated hereby valid and binding upon the 
Unaffiliated Seller in accordance with their terms;           

(b)      No Conflicts. Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby, nor the 
    fulfillment of or compliance with the terms and conditions of this
   Agreement, will conflict with or result in a breach of any of the
         terms, conditions or provisions of the Unaffiliated Seller's charter or
    by-laws or any legal restriction or any agreement or instrument to
       which the Unaffiliated Seller is now a party or by which it is bound,
       or constitute a default or result in an acceleration under any of the
    foregoing, except such unfulfillment, non-compliance or default or
       acceleration does not in the aggregate have a material adverse effect
      on the operation, business, condition (business or otherwise) of the
  Unaffiliated Seller or result in the violation of any law, rule,
        regulation, order, judgment or decree to which the Unaffiliated Seller
   or its property is subject, except such violation does not in the
      aggregate have a material adverse effect on the operation, business,
        condition (business or otherwise) of the Unaffiliated Seller or result
       in the creation or imposition of any lien, charge or encumbrance that
         would have an adverse effect upon any of its properties pursuant to the
     terms of any mortgage, contract, deed of trust or other instrument;

(c)      No Litigation Pending. There is no action, suit, proceeding or         
    investigation pending nor, to the Unaffiliated Seller's knowledge,
threatened against the Unaffiliated Seller, before any court, 
     administrative agency or other tribunal asserting the invalidity of
   this Agreement, seeking to prevent the consummation of any of the
         transactions contemplated by this Agreement or which, either in any one
         instance or in the aggregate, may result in any material adverse change
        in the business, operations, financial condition, properties or assets
        of the Unaffiliated Seller, or in any material impairment of the right
or ability of the Unaffiliated Seller to carry on its business
       substantially as now conducted, or which would draw into question the
     validity of this Agreement or of any action taken or to be taken in
         connection with the obligations of the Unaffiliated Seller contemplated
      herein, or which would be likely to impair materially the ability of
       the Unaffiliated Seller to perform under the terms of this Agreement;

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(d)      No Consent Required. No consent, approval, authorization or order of,  
        or registration or filing with, or notice to any court or governmental
     agency or body including HUD, the FHA or the VA is required for the
      execution, delivery and performance by the Unaffiliated Seller of or
  compliance by the Unaffiliated Seller with this Agreement or the
        consummation of the transactions contemplated by this Agreement, or if
      required, such approval has been obtained prior to the Closing Date;

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 EXHIBIT A

Unless this Certificate is presented by an authorized representative of the     
Depository Trust Company, a New York corporation ("DTC"), to Issuer or its agent
for registration of transfer, exchange, or payment, and any certificate issued  
is registered in the name of Cede & Co. or in such other name as is requested by
an authorized representative of DTC (and any payment is made to Cede & Co. or to
such other entity as is requested by an authorized representative of DTC), ANY  
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest
herein.                                                                         

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS        
OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT         
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER    
ASSETS.                                                                         

Certificate No.                          :       [A-1-1/A-2-1/A-3-1/A-4-1/A-5-1/
                                                M-1-1/M-2-1/M-3-1/B-1-1/B-2-1/
                        B-3-1]

Cut-off Date                             :       August 1, 2003                 

First Distribution Date                  :       September 25, 2003             

Initial Certificate Balance of this                                             
Certificate ("Denomination")             :       A-1 $200,000,000               
------------                                        

                              A-2 $110,000

                                  A-3 $145,000,000

                                 A-4 $80,000,000

                                 A-5 $44,765,000

                                 M-1 $45,311,000

                                 M-2 $35,321,000

                                M-3 $7,849,000

                                B-1 $9,276,000

                                B-2 $9,276,000

                                 B-3 $13,202,000

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Initial Certificate Balances of all                                             

Certificates of this Class               :       A-1 $200,000,000               

                                  A-2 $110,000,000

                                  A-3 $145,000,000

                                 A-4 $80,000,000

                                 A-5 $44,765,000

                                 M-1 $45,311,000

                                 M-2 $35,321,000

                                M-3 $7,849,000

                                B-1 $9,276,000

                                B-2 $9,276,000

                                 B-3 $13,202,000

CUSIP                                    :       A-1 12506Y BL 2                

                                 A-2 12506Y BM 0

                                 A-3 12506Y BU 2

                                 A-4 12506Y BV 0

                                 A-5 12506Y BW 8

                                 M-1 12506Y BN 8

                                 M-2 12506Y BP 3

                                 M-3 12506Y BQ 1

                                 B-1 12506Y BR 9

                                 B-2 12506Y BS 7

                                 B-3 12506Y BT 5

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 MORGAN STANLEY ABS CAPITAL I INC.

 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3
[Class A-1] [Class A-2] [Class A-3] [Class A-4] [Class A-5][Class M-1]
 [Class M-2] [Class M-3] [Class B-1] [Class B-2] [Class B-3]

        evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.                   

      Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less  
than the Certificate Balance as set forth herein. This Certificate does not     
evidence an obligation of, or an interest in, and is not guaranteed by the      
Depositor, the Unaffiliated Seller, any Originator, the Servicer or the Trustee 
referred to below or any of their respective affiliates. Neither this           
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.                                                      

This certifies that CEDE & CO. is the registered owner of the 
Percentage Interest evidenced by this Certificate (obtained by dividing the     
denomination of this Certificate by the aggregate of the denominations of all   
Certificates of the Class to which this Certificate belongs) in certain monthly 
distributions pursuant to a Pooling and Servicing Agreement dated as of the     
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital 
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the             
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein 
have the meanings assigned in the Agreement. This Certificate is issued under   
and is subject to the terms, provisions and conditions of the Agreement, to     
which Agreement the Holder of this Certificate by virtue of the acceptance      
hereof assents and by which such Holder is bound.                               

        Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.                             

 This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an       
authorized signatory of the Trustee.                                            

 * * *

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        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.                                                                       

Dated:                                                                          

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                   not in its individual capacity, but
                 solely as Trustee

                                       By:______________________________________

Countersigned:                                                                  

By:_________________________________                                            
Authorized Signatory of                                                   
DEUTSCHE BANK NATIONAL TRUST COMPANY,                                     
not in its individual capacity,                                           
but solely as Trustee                                                     

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

    This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through         
Certificates, Series 2003-HE3 (herein collectively called the "Certificates"),  
and representing a beneficial ownership interest in the Trust Fund created by   
the Agreement.                                                                  

      The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders  
for any amount payable under this Certificate or the Agreement or, except as    
expressly provided in the Agreement, subject to any liability under the         
Agreement.                                                                      

  This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of 
rights, benefits, obligations and duties evidenced thereby, and the rights,     
duties and immunities of the Trustee.                                           

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business  
Day immediately following (the "Distribution Date"), commencing on the first    
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this  
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date        
pursuant to the Agreement. The Record Date applicable to each Distribution Date 
is the Business Date immediately preceding such Distribution Date; provided,    
however, that for any Definitive Certificates, the Record Date shall be the last
Business Day of the month next preceding the month of such Distribution Date.   

     Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or    
other entity having appropriate facilities therefor, if such Certificateholder  
shall have so notified the Trustee in writing at least five Business Days prior 
to the related Record Date and such Certificateholder shall satisfy the         
conditions to receive such form of payment set forth in the Agreement, or, if   
not, by check mailed by first class mail to the address of such                 
Certificateholder appearing in the Certificate Register. The final distribution 
on each Certificate will be made in like manner, but only upon presentment and  
surrender of such Certificate at the offices designated by the Trustee for such 
purposes, or such other location specified in the notice to Certificateholders  
of such final distribution.                                                     

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the     
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate   
Insurer, with the consent of the Holders of Certificates affected by such       
amendment evidencing the requisite Percentage Interest, as provided in the      
Agreement. Any such consent by the Holder of this Certificate shall be          

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conclusive and binding on such Holder and upon all future Holders of this       
Certificate and of any Certificate issued upon the transfer hereof or in        
exchange therefor or in lieu hereof whether or not notation of such consent is  
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the 
Certificates.                                                                   

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate   
Register of the Trustee upon surrender of this Certificate for registration of  
transfer at the offices designated by the Trustee for such purposes, accompanied
by a written instrument of transfer in form satisfactory to the Trustee and the 
Certificate Registrar duly executed by the holder hereof or such holder's       
attorney duly authorized in writing, and thereupon one or more new Certificates 
of the same Class in authorized denominations and evidencing the same aggregate 
Percentage Interest in the Trust Fund will be issued to the designated          
transferee or transferees.                                                      

       The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the         
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations 
and evidencing the same aggregate Percentage Interest, as requested by the      
Holder surrendering the same.                                                   

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any  
tax or other governmental charge payable in connection therewith.               

       The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in    
whose name this Certificate is registered as the owner hereof for all purposes, 
and no such party shall be affected by any notice to the contrary.              

  On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is 
less than or equal to 10% of the Maximum Pool Principal Balance, the Servicer   
and/or the Class X Certificateholders will have the option to repurchase, in    
whole, from the Trust Fund all remaining Mortgage Loans and all property        
acquired in respect of the Mortgage Loans at a purchase price determined as     
provided in the Agreement. The obligations and responsibilities created by the  
Agreement will terminate as provided in Section 9.01 of the Agreement.          

      Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed           
inconsistent with that meaning.                                                 

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ASSIGNMENT
----------

   FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of        
assignee)                                                                       

the Percentage Interest evidenced by the within Certificate and hereby          
authorizes the transfer of registration of such Percentage Interest to assignee 
on the Certificate Register of the Trust Fund.                                  

        I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______________________________________________________.

Dated:                                                                          

                                       _________________________________________
                                     Signature by or on behalf of assignor

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 DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
_______________________________________________________________________________,
account number _______ or, if mailed by check, to _____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.                                                                   

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 EXHIBIT B

[Reserved]

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 EXHIBIT C

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE  
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF  
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE        
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED  
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE  
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION  
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.                                   

EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST  
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A       
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE     
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL, STATE OR LOCAL LAW       
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE  
CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE 
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER. ANY PURPORTED   
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH
IN THE AGREEMENT SHALL BE VOID AND OF NO EFFECT.                                

Certificate No.                          :       1                              

Cut-off Date                             :       August 1, 2003                 

First Distribution Date                  :       September 25, 2003             

Percentage Interest of this Certificate                                         
("Denomination")                         :       100%                           

Principal Balance                        :       $100                           

CUSIP                                    :       N/A                            

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

 Class P

        evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.                   

        Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or an 
interest in, and is not guaranteed by the Depositor, the Unaffiliated Seller,   
the Servicer or the Trustee referred to below or any of their respective        
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or   
insured by any governmental agency or instrumentality.                          

        This certifies that __________________, is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the     
denomination of this Certificate by the aggregate of the denominations of all   
Certificates of the Class to which this Certificate belongs) in certain monthly 
distributions pursuant to a Pooling and Servicing Agreement dated as of the     
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital 
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the             
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein 
have the meanings assigned in the Agreement. This Certificate is issued under   
and is subject to the terms, provisions and conditions of the Agreement, to     
which Agreement the Holder of this Certificate by virtue of the acceptance      
hereof assents and by which such Holder is bound.                               

         This Certificate does not have a Pass-Through Rate and will be entitled
to distributions only to the extent set forth in the Agreement. In addition, any
distribution of the proceeds of any remaining assets of the Trust will be made  
only upon presentment and surrender of this Certificate at the offices          
designated by the Trustee for such purpose, or the office or agency maintained  
by the Trustee.                                                                 

      No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act  
of 1933, as amended (the "1933 Act"), and any applicable state securities laws  
or is made in accordance with the 1933 Act and such laws. In the event of any   
such transfer, the Trustee shall require the transferor to execute a transferor 
certificate (in substantially the form attached to the Agreement) and deliver   
either (i) a Rule 144A Letter, in either case substantially in the form attached
to the Agreement, or (ii) a written Opinion of Counsel to the Trustee that such 
transfer may be made pursuant to an exemption, describing the applicable        
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall be an expense of the transferor.   

      Except as provided in the Agreement, no transfer of a Certificate of
this Class shall be made unless the Trustee shall have received a representation
letter from the transferee of this Certificate, acceptable to and in form and   

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substance satisfactory to the Trustee, to the effect that such transferee is not
an employee benefit plan or arrangement subject to Title I of ERISA, Section    
4975 of the Code or any Similar Law, and is not acting on behalf of any such    
plan or arrangement or using the assets of any such plan or arrangement to      
effect such transfer. Any purported transfer of a Certificate of this Class in  
violation of the transfer restrictions set forth in the Agreement shall be void 
and of no effect.                                                               

        Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.                             

 This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an       
authorized signatory of the Trustee.                                            

 * * *

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        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.                                                                       

Dated:                                                                          

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                   not in its individual capacity, but
                 solely as Trustee

                                       By:______________________________________

Countersigned:                                                                  

By:________________________________                                             
Authorized Signatory of                                                   
DEUTSCHE BANK NATIONAL TRUST COMPANY,                                     
not in its individual capacity,                                           
but solely as Trustee                                                     

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

    This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through         
Certificates, Series 2003-HE3 (herein collectively called the "Certificates"),  
and representing a beneficial ownership interest in the Trust Fund created by   
the Agreement.                                                                  

      The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders  
for any amount payable under this Certificate or the Agreement or, except as    
expressly provided in the Agreement, subject to any liability under the         
Agreement.                                                                      

  This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of 
rights, benefits, obligations and duties evidenced thereby, and the rights,     
duties and immunities of the Trustee.                                           

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the      
Business Day immediately following (the "Distribution Date"), commencing on the 
first Distribution Date specified on the face hereof, to the Person in whose    
name this Certificate is registered at the close of business on the applicable  
Record Date in an amount equal to the product of the Percentage Interest        
evidenced by this Certificate and the amount required to be distributed to      
Holders of Certificates of the Class to which this Certificate belongs on such  
Distribution Date pursuant to the Agreement. The Record Date applicable to each 
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.                                                      

     Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or    
other entity having appropriate facilities therefor, if such Certificateholder  
shall have so notified the Trustee in writing at least five Business Days prior 
to the related Record Date and such Certificateholder shall satisfy the         
conditions to receive such form of payment set forth in the Agreement, or, if   
not, by check mailed by first class mail to the address of such                 
Certificateholder appearing in the Certificate Register. The final distribution 
on each Certificate will be made in like manner, but only upon presentment and  
surrender of such Certificate at the offices designated by the Trustee for such 
purposes or such other location specified in the notice to Certificateholders of
such final distribution.                                                        

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the     
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., Certificate      
Insurer with the consent of the Holders of Certificates affected by such        
amendment evidencing the requisite Percentage Interest, as provided in the      
Agreement. Any such consent by the Holder of this Certificate shall be          
conclusive and binding on such Holder and upon all future Holders of this       
Certificate and of any Certificate issued upon the transfer hereof or in        

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exchange therefor or in lieu hereof whether or not notation of such consent is  
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the 
Certificates.                                                                   

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate   
Register of the Trustee upon surrender of this Certificate for registration of  
transfer at the offices designated by the Trustee for such purposes or the      
office or agency maintained by the Trustee in New York, New York, accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the    
Certificate Registrar duly executed by the holder hereof or such holder's       
attorney duly authorized in writing, and thereupon one or more new Certificates 
of the same Class in authorized denominations and evidencing the same aggregate 
Percentage Interest in the Trust Fund will be issued to the designated          
transferee or transferees.                                                      

       The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the         
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations 
and evidencing the same aggregate Percentage Interest, as requested by the      
Holder surrendering the same.                                                   

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any  
tax or other governmental charge payable in connection therewith.               

       The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in    
whose name this Certificate is registered as the owner hereof for all purposes, 
and no such party shall be affected by any notice to the contrary.              

  On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is 
less than or equal to 10% of the Maximum Pool Principal Balance, the Servicer   
and/or the Class X Certificateholders will have the option to repurchase, in    
whole, from the Trust Fund all remaining Mortgage Loans and all property        
acquired in respect of the Mortgage Loans at a purchase price determined as     
provided in the Agreement. The obligations and responsibilities created by the  
Agreement will terminate as provided in Section 9.01 of the Agreement.          

      Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed           
inconsistent with that meaning.                                                 

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ASSIGNMENT
----------

   FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of        
assignee)                                                                       

the Percentage Interest evidenced by the within Certificate and hereby          
authorizes the transfer of registration of such Percentage Interest to assignee 
on the Certificate Register of the Trust Fund.                                  

        I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:______________________________________________________.

Dated:                                                                          

                                       _________________________________________
                                       Signature by or on behalf of assignor

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 DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

                  This information is provided by______________________________,
the assignee named above, or __________________________________________________,
as its agent.                                                                   

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 EXHIBIT D

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THREE  
"RESIDUAL INTERESTS" IN THREE "REAL ESTATE MORTGAGE INVESTMENT CONDUITS," AS    
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").                                  

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE  
PROPOSED TRANSFEREE DELIVERS TO THE TRUSTEE A TRANSFER AFFIDAVIT IN ACCORDANCE  
WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.                        

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE  
TRANSFEREE DELIVERS TO THE TRUSTEE A REPRESENTATION LETTER TO THE EFFECT THAT   
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE 
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), 
SECTION 4975 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE"), OR  
ANY FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY SIMILAR TO THE       
FOREGOING PROVISIONS OF ERISA OR THE CODE, OR A PERSON ACTING ON BEHALF OF ANY  
SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO 
EFFECT SUCH TRANSFER. ANY PURPORTED TRANSFER OF THIS CERTIFICATE IN VIOLATION OF
THE TRANSFER RESTRICTIONS SET FORTH IN THE AGREEMENT SHALL BE VOID AND OF NO    
EFFECT.                                                                         

Certificate No.                          :       1                              

Cut-off Date                             :       August 1, 2003                 

First Distribution Date                  :       September 25, 2003             

Percentage Interest of this Certificate                                         
("Denomination")                         :       100%                           

CUSIP                                    :       N/A                            

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

 Class R

        evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.                   

       Distributions in respect of this Certificate is distributable monthly
as set forth herein. This Class R Certificate has no Certificate Balance and is 
not entitled to distributions in respect of principal or interest. This         
Certificate does not evidence an obligation of, or an interest in, and is not   
guaranteed by the Depositor, the Servicer, the Unaffiliated Seller or the       
Trustee referred to below or any of their respective affiliates. Neither this   
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.                                                      

       This certifies that CDC Mortgage Capital Inc. is the registered owner
of the Percentage Interest specified above of any monthly distributions due to  
the Class R Certificates pursuant to a Pooling and Servicing Agreement dated as 
of the Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS  
Capital I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as      
servicer (the "Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller    
(the "Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee
(the "Trustee"). To the extent not defined herein, the capitalized terms used   
herein have the meanings assigned in the Agreement. This Certificate is issued  
under and is subject to the terms, provisions and conditions of the Agreement,  
to which Agreement the Holder of this Certificate by virtue of the acceptance   
hereof assents and by which such Holder is bound.                               

       Any distribution of the proceeds of any remaining assets of the Trust
Fund will be made only upon presentment and surrender of this Class R           
Certificate at the offices designated by the Trustee for such purposes or the   
office or agency maintained by the Trustee in California.                       

       No transfer of a Class R Certificate shall be made unless the Trustee
shall have received a representation letter from the transferee of this         
Certificate, acceptable to and in form and substance satisfactory to the        
Trustee, to the effect that such transferee is not an employee benefit plan or  
arrangement subject to Title I of ERISA, Section 4975 of the Code or any Similar
Law, and is not acting on behalf of any such plan or arrangement or using the   
assets of any such plan or arrangement to effect such transfer. Any purported   
transfer of a Class R Certificate in violation of the transfer restrictions set 
forth in the Agreement shall be void and of no effect.                          

Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to  
have agreed to be bound by the following provisions, and the rights of each     
Person acquiring any Ownership Interest in this Class R Certificate are         
expressly subject to the following provisions: (i) each Person holding or       
acquiring any Ownership Interest in this Class R Certificate shall be a         
Permitted Transferee and shall promptly notify the Trustee of any change or     
impending change in its status as a Permitted Transferee, (ii) no Ownership     
Interest in this Class R Certificate may be registered on the Closing Date or   
thereafter transferred, and the Trustee shall not register the Transfer of this 

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Certificate unless, in addition to the certificates required to be delivered to 
the Trustee under Section 5.02(b) of the Agreement, the Trustee shall have been 
furnished with a Transfer Affidavit of the initial owner or the proposed        
transferee in the form attached as Exhibit H to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall   
agree (A) to obtain a Transfer Affidavit from any other Person to whom such     
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R       
Certificate and (C) not to Transfer the Ownership Interest in this Class R      
Certificate or to cause the Transfer of the Ownership Interest in this Class R  
Certificate to any other Person if it has actual knowledge that such Person is  
not a Permitted Transferee and (iv) any attempted or purported Transfer of the  
Ownership Interest in this Class R Certificate in violation of the provisions   
herein shall be absolutely null and void and shall vest no rights in the        
purported Transferee.                                                           

        Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.                             

 This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an       
authorized signatory of the Trustee.                                            

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        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.                                                                       

Dated:                                                                          

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                   not in its individual capacity, but
                 solely as Trustee

                                       By:______________________________________

Countersigned:                                                                  

By:_______________________________                                              
Authorized Signatory of                                                   
DEUTSCHE BANK NATIONAL TRUST COMPANY,                                     
not in its individual capacity,                                           
but solely as Trustee                                                     

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

    This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through         
Certificates, Series 2003-HE3 (herein collectively called the "Certificates"),  
and representing a beneficial ownership interest in the Trust Fund created by   
the Agreement.                                                                  

      The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders  
for any amount payable under this Certificate or the Agreement or, except as    
expressly provided in the Agreement, subject to any liability under the         
Agreement.                                                                      

  This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of 
rights, benefits, obligations and duties evidenced thereby, and the rights,     
duties and immunities of the Trustee.                                           

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such day is not a Business Day, the Business  
Day immediately following (the "Distribution Date"), commencing on the first    
Distribution Date specified on the face hereof, to the Person in whose name this
Certificate is registered at the close of business on the applicable Record Date
in an amount equal to the product of the Percentage Interest evidenced by this  
Certificate and the amount required to be distributed to Holders of Certificates
of the Class to which this Certificate belongs on such Distribution Date        
pursuant to the Agreement. The Record Date applicable to each Distribution Date 
is the last Business Day of the month next preceding the month of such          
Distribution Date.                                                              

     Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or    
other entity having appropriate facilities therefor, if such Certificateholder  
shall have so notified the Trustee in writing at least five Business Days prior 
to the related Record Date and such Certificateholder shall satisfy the         
conditions to receive such form of payment set forth in the Agreement, or, if   
not, by check mailed by first class mail to the address of such                 
Certificateholder appearing in the Certificate Register. The final distribution 
on each Certificate will be made in like manner, but only upon presentment and  
surrender of such Certificate at the offices designated by the Trustee for such 
purposes or such other location specified in the notice to Certificateholders of
such final distribution.                                                        

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the     
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate   
Insurer with the consent of the Holders of Certificates affected by such        
amendment evidencing the requisite Percentage Interest, as provided in the      
Agreement. Any such consent by the Holder of this Certificate shall be          
conclusive and binding on such Holder and upon all future Holders of this       
Certificate and of any Certificate issued upon the transfer hereof or in        

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exchange therefor or in lieu hereof whether or not notation of such consent is  
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the 
Certificates.                                                                   

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate   
Register of the Trustee upon surrender of this Certificate for registration of  
transfer at the offices designated by the Trustee for such purposes or the      
office or agency maintained by the Trustee in California, accompanied by a      
written instrument of transfer in form satisfactory to the Trustee and the      
Certificate Registrar duly executed by the holder hereof or such holder's       
attorney duly authorized in writing, and thereupon one or more new Certificates 
of the same Class in authorized denominations and evidencing the same aggregate 
Percentage Interest in the Trust Fund will be issued to the designated          
transferee or transferees.                                                      

       The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the         
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations 
and evidencing the same aggregate Percentage Interest, as requested by the      
Holder surrendering the same.                                                   

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any  
tax or other governmental charge payable in connection therewith.               

       The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in    
whose name this Certificate is registered as the owner hereof for all purposes, 
and no such party shall be affected by any notice to the contrary.              

  On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is 
less than or equal to 10% of the Maximum Pool Principal Balance, the Servicer   
and/or the Class X Certificateholder will have the option to repurchase, in     
whole, from the Trust Fund all remaining Mortgage Loans and all property        
acquired in respect of the Mortgage Loans at a purchase price determined as     
provided in the Agreement. The obligations and responsibilities created by the  
Agreement will terminate as provided in Section 9.01 of the Agreement.          

      Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed           
inconsistent with that meaning.                                                 

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ASSIGNMENT
----------

   FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of        
assignee)                                                                       

the Percentage Interest evidenced by the within Certificate and hereby          
authorizes the transfer of registration of such Percentage Interest to assignee 
on the Certificate Register of the Trust Fund.                                  

        I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_____________________________________________________. 

Dated:                                                                          

                                       _________________________________________
                                       Signature by or on behalf of assignor

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 DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.                                                                   

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 EXHIBIT E

SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS        
OWNERSHIP OF TWO "REGULAR INTERESTS" IN A "REAL ESTATE MORTGAGE INVESTMENT      
CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").                     

NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE  
PROPOSED TRANSFEROR DELIVERS TO THE TRUSTEE A TRANSFEROR LETTER IN THE FORM OF  
EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE        
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO THE AGREEMENT REFERRED  
TO HEREIN OR (II) THE TRUSTEE RECEIVES AN OPINION OF COUNSEL, DELIVERED AT THE  
EXPENSE OF THE TRANSFEROR, THAT SUCH TRANSFER MAY BE MADE WITHOUT REGISTRATION  
UNDER THE SECURITIES ACT OF 1933, AS AMENDED.                                   

EXCEPT AS PROVIDED IN THE AGREEMENT, NEITHER THIS CERTIFICATE NOR ANY INTEREST  
HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE A       
REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE     
BENEFIT PLAN OR ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SECTION 4975 OF THE INTERNAL REVENUE
CODE OF 1986, AS AMENDED (THE "CODE"), OR ANY FEDERAL, STATE OR LOCAL LAW       
("SIMILAR LAW") MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE  
CODE, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE 
ASSETS OF ANY SUCH PLAN OR ARRANGEMENT TO EFFECT SUCH TRANSFER. ANY PURPORTED   
TRANSFER OF THIS CERTIFICATE IN VIOLATION OF THE TRANSFER RESTRICTIONS SET FORTH
IN THE AGREEMENT SHALL BE VOID AND OF NO EFFECT.                                

Certificate No.                          :       1                              

Cut-off Date                             :       August 1, 2003                 

First Distribution Date                  :       September 25, 2003             

Percentage Interest of this Certificate                                         
("Denomination")                         :       100%                           

CUSIP                                    :       N/A                            

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 MORGAN STANLEY ABS CAPITAL I INC.

 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

 Class X

        evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.                   

        Distributions in respect of this Certificate are distributable monthly
as set forth herein. This Certificate does not evidence an obligation of, or an 
interest in, and is not guaranteed by the Depositor, the Servicer, the          
Unaffiliated Seller or the Trustee referred to below or any of their respective 
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or   
insured by any governmental agency or instrumentality.                          

       This certifies that _____________________, is the registered owner of
the Percentage Interest evidenced by this Certificate (obtained by dividing the 
denomination of this Certificate by the aggregate of the denominations of all   
Certificates of the Class to which this Certificate belongs) in certain monthly 
distributions pursuant to a Pooling and Servicing Agreement dated as of the     
Cut-off Date specified above (the "Agreement") among Morgan Stanley ABS Capital 
I Inc., as depositor (the "Depositor"), Ocwen Federal Bank FSB, as servicer (the
"Servicer"), CDC Mortgage Capital Inc., as unaffiliated seller (the             
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). To the extent not defined herein, the capitalized terms used herein 
have the meanings assigned in the Agreement. This Certificate is issued under   
and is subject to the terms, provisions and conditions of the Agreement, to     
which Agreement the Holder of this Certificate by virtue of the acceptance      
hereof assents and by which such Holder is bound.                               

       This Certificate will be entitled to distributions only to the extent
set forth in the Agreement. In addition, any distribution of the proceeds of any
remaining assets of the Trust will be made only upon presentment and surrender  
of this Certificate at the offices designated by the Trustee for such purposes  
or the office or agency maintained by the Trustee.                              

      No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act  
of 1933, as amended (the "1933 Act"), and any applicable state securities laws  
or is made in accordance with the 1933 Act and such laws. In the event of any   
such transfer, the Trustee shall require the transferor to execute a transferor 
certificate (in substantially the form attached to the Agreement) and deliver   
either (i) a Rule 144A Letter, in either case substantially in the form attached
to the Agreement, or (ii) a written Opinion of Counsel to the Trustee that such 
transfer may be made pursuant to an exemption, describing the applicable        
exemption and the basis therefor, from the 1933 Act or is being made pursuant to
the 1933 Act, which Opinion of Counsel shall be an expense of the transferor.   

      Except as provided in the Agreement, no transfer of a Certificate of
this Class shall be made unless the Trustee shall have received a representation
letter from the transferee of this Certificate, acceptable to and in form and   
substance satisfactory to the Trustee, to the effect that such transferee is not

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an employee benefit plan or arrangement subject to Title I of ERISA, Section    
4975 of the Code or any Similar Law, and is not acting on behalf of any such    
plan or arrangement or using the assets of any such plan or arrangement to      
effect such transfer. Any purported transfer of a Certificate of this Class in  
violation of the transfer restrictions set forth in the Agreement shall be void 
and of no effect.                                                               

        Reference is hereby made to the further provisions of this Certificate
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.                             

 This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually countersigned by an       
authorized signatory of the Trustee.                                            

 * * *

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        IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.                                                                       

Dated:                                                                          

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
                                   not in its individual capacity, but
                 solely as Trustee

                                       By:______________________________________

Countersigned:                                                                  

By:_______________________________                                              
Authorized Signatory of                                                   
DEUTSCHE BANK NATIONAL TRUST COMPANY,                                     
not in its individual capacity,                                           
but solely as Trustee                                                     

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 MORGAN STANLEY ABS CAPITAL I INC.
 CDC Mortgage Capital Trust 2003-HE3
 Mortgage Pass-Through Certificates, Series 2003-HE3

    This Certificate is one of a duly authorized issue of Certificates
designated as CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through         
Certificates, Series 2003-HE3 (herein collectively called the "Certificates"),  
and representing a beneficial ownership interest in the Trust Fund created by   
the Agreement.                                                                  

      The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders  
for any amount payable under this Certificate or the Agreement or, except as    
expressly provided in the Agreement, subject to any liability under the         
Agreement.                                                                      

  This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of 
rights, benefits, obligations and duties evidenced thereby, and the rights,     
duties and immunities of the Trustee.                                           

        Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the      
Business Day immediately following (the "Distribution Date"), commencing on the 
first Distribution Date specified on the face hereof, to the Person in whose    
name this Certificate is registered at the close of business on the applicable  
Record Date in an amount equal to the product of the Percentage Interest        
evidenced by this Certificate and the amount required to be distributed to      
Holders of Certificates of the Class to which this Certificate belongs on such  
Distribution Date pursuant to the Agreement. The Record Date applicable to each 
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.                                                      

     Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or    
other entity having appropriate facilities therefor, if such Certificateholder  
shall have so notified the Trustee in writing at least five Business Days prior 
to the related Record Date and such Certificateholder shall satisfy the         
conditions to receive such form of payment set forth in the Agreement, or, if   
not, by check mailed by first class mail to the address of such                 
Certificateholder appearing in the Certificate Register. The final distribution 
on each Certificate will be made in like manner, but only upon presentment and  
surrender of such Certificate at the offices designated by the Trustee for such 
purposes or such other location specified in the notice to Certificateholders of
such final distribution.                                                        

      The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the     
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties thereto, and Financial Security Assurance Inc., as Certificate   
Insurer with the consent of the Holders of Certificates affected by such        
amendment evidencing the requisite Percentage Interest, as provided in the      
Agreement. Any such consent by the Holder of this Certificate shall be          
conclusive and binding on such Holder and upon all future Holders of this       
Certificate and of any Certificate issued upon the transfer hereof or in        

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exchange therefor or in lieu hereof whether or not notation of such consent is  
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the 
Certificates.                                                                   

         As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate   
Register of the Trustee upon surrender of this Certificate for registration of  
transfer at the offices designated by the Trustee for such purposes or the      
office or agency maintained by the Trustee in New York, New York, accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the    
Certificate Registrar duly executed by the holder hereof or such holder's       
attorney duly authorized in writing, and thereupon one or more new Certificates 
of the same Class in authorized denominations and evidencing the same aggregate 
Percentage Interest in the Trust Fund will be issued to the designated          
transferee or transferees.                                                      

       The Certificates are issuable only as registered Certificates without
coupons in denominations specified in the Agreement. As provided in the         
Agreement and subject to certain limitations therein set forth, Certificates are
exchangeable for new Certificates of the same Class in authorized denominations 
and evidencing the same aggregate Percentage Interest, as requested by the      
Holder surrendering the same.                                                   

         No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any  
tax or other governmental charge payable in connection therewith.               

       The Depositor, the Servicer, the Unaffiliated Seller, the Certificate
Insurer and the Trustee and any agent of any of them may treat the Person in    
whose name this Certificate is registered as the owner hereof for all purposes, 
and no such party shall be affected by any notice to the contrary.              

  On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans, as of the last day of the related Due Period, is 
less than or equal to 10% of the Maximum Principal Balance, the Servicer and/or 
the Class X Certificateholders will have the option to repurchase, in whole,    
from the Trust Fund all remaining Mortgage Loans and all property acquired in   
respect of the Mortgage Loans at a purchase price determined as provided in the 
Agreement. The obligations and responsibilities created by the Agreement will   
terminate as provided in Section 9.01 of the Agreement.                         

      Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed           
inconsistent with that meaning.                                                 

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ASSIGNMENT
----------

   FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of        
assignee)                                                                       

the Percentage Interest evidenced by the within Certificate and hereby          
authorizes the transfer of registration of such Percentage Interest to assignee 
on the Certificate Register of the Trust Fund.                                  

        I (We) further direct the Trustee to issue a new Certificate of a like
denomination and Class, to the above named assignee and deliver such Certificate
to the following address:_____________________________________________________. 

Dated:                                                                          

                                       _________________________________________
                                       Signature by or on behalf of assignor

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 DISTRIBUTION INSTRUCTIONS

         The assignee should include the following for purposes of distribution:

Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to ________________________________________________,
_______________________________________________________________________________,
for the account of ____________________________________________________________,
account number _______, or, if mailed by check, to ____________________________,
_______________________________________________________________________________,
Applicable statements should be mailed to _____________________________________,
_______________________________________________________________________________.

         This information is provided by ______________________________________,
the assignee named above, or __________________________________________________,
as its agent.                                                                   

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 EXHIBIT F

FORM OF INITIAL CERTIFICATION OF TRUSTEE

[date]

Morgan Stanley ABS Capital I Inc.                                               
1585 Broadway                                                                   
New York, New York 10036                                                        

Ocwen Federal Bank FSB                                                          
1675 Palm Beach Lakes Blvd.                                                     
West Palm Beach, Florida 33401                                                  

CDC Mortgage Capital Inc.                                                       
9 West 57th Street, 36th Floor                                                  
New York, New York 10019                                                        

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

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

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

     Re:      Pooling and Servicing Agreement dated as of August 1, 2003
                among Morgan Stanley ABS Capital I Inc., as Depositor, Ocwen
                Federal Bank FSB, as Servicer, CDC Mortgage Capital Inc., as
                 Unaffiliated Seller and Deutsche Bank National Trust Company,
          as Trustee, CDC Mortgage Capital Trust Series 2003-HE3

Gentlemen:                                                                      

    In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage  
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan listed  
in the attached schedule), it has received:                                     

                (i)      the original Mortgage Note, endorsed as provided in
       the following form: "Pay to the order of ________, without recourse";
and                                                           

        (ii)     a duly executed assignment of the Mortgage.

  Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such      
Mortgage Loan.                                                                  

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  The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the  
Pooling and Servicing Agreement. The Trustee makes no representations as to: (i)
the validity, legality, sufficiency, enforceability or genuineness of any of the
documents contained in each Mortgage File of any of the Mortgage Loans          
identified on the Mortgage Loan Schedule, or (ii) the collectibility,           
insurability, perfection, priority, effectiveness or suitability of any such    
Mortgage Loan. Notwithstanding anything herein to the contrary, the Trustee has 
made no determination and makes no representations as to whether (i) any        
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the        
assignment relates.                                                             

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.               

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
          as Trustee

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

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 EXHIBIT G

FORM OF FINAL CERTIFICATION OF TRUSTEE

[date]

Morgan Stanley ABS Capital I Inc.                                               
1585 Broadway                                                                   
New York, New York 10036                                                        

Ocwen Federal Bank FSB                                                          
1675 Palm Beach Lakes Blvd.                                                     
West Palm Beach, Florida 33401                                                  

CDC Mortgage Capital Inc.                                                       
9 West 57th Street, 36th Floor                                                  
New York, New York 10019                                                        

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

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

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

     Re:      Pooling and Servicing Agreement dated as of August 1, 2003
                among Morgan Stanley ABS Capital I Inc., as Depositor, Ocwen
                Federal Bank FSB, as Servicer, CDC Mortgage Capital Inc., as
                 Unaffiliated Seller and Deutsche Bank National Trust Company,
          as Trustee, CDC Mortgage Capital Trust Series 2003-HE3

Gentlemen:                                                                      

    In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Trustee, hereby certifies that as to each Mortgage Loan listed in the Mortgage  
Loan Schedule (other than any Mortgage Loan paid in full or listed on the       
attached Document Exception Report) it has received:                            

             (i)      The original Mortgage Note, endorsed in the form
       provided in Section 2.01 of the Pooling and Servicing Agreement, with
      all intervening endorsements showing a complete chain of endorsement
from the originator to the last endorsee.                     

(ii)     The original recorded Mortgage.    

              (iii)    A duly executed assignment of the Mortgage in the
       form provided in Section 2.01 of the Pooling and Servicing Agreement;
       or, if the Unaffiliated Seller has certified or the Trustee otherwise
knows that the related Mortgage has not been returned from the

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       applicable recording office, a copy of the assignment of the Mortgage
 (excluding information to be provided by the recording office).

        (iv)     The original or duplicate original recorded
       assignment or assignments of the Mortgage showing a complete chain of
assignment from the originator to the last endorsee.          

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

  Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such  
Mortgage Loan, and (b) the information set forth in items (1), (2) and (18) of  
the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape         
Information accurately reflects information set forth in the Custodial File.    

  The Trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File         
specifically required in the Pooling and Servicing Agreement. The Trustee makes 
no representations as to: (i) the validity, legality, sufficiency,              
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or  
(ii) the collectibility, insurability, perfection, priority, effectiveness or   
suitability of any such Mortgage Loan. Notwithstanding anything herein to the   
contrary, the Trustee has made no determination and makes no representations as 
to whether (i) any endorsement is sufficient to transfer all right, title and   
interest of the party so endorsing, as Noteholder or assignee thereof, in and to
that Mortgage Note or (ii) any assignment is in recordable form or sufficient to
effect the assignment of and transfer to the assignee thereof, under the        
Mortgage to which the assignment relates.                                       

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.               

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
          as Trustee

                                       By:______________________________________
                                          Name:_________________________________
                                          Title:________________________________

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 EXHIBIT H

TRANSFER AFFIDAVIT

 MORGAN STANLEY ABS CAPITAL I INC. Trust 2003-HE3,
 Mortgage Pass-Through Certificates,
 Series 2003-HE3

STATE OF                  )                                                     
) ss.:                      
COUNTY OF                 )                                                     

                The undersigned, being first duly sworn, deposes and says as
follows:                                                                        

                  1.       The undersigned is an officer of ___________________,
the proposed Transferee of an Ownership Interest in a Class R Certificate (the  
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the     
"Agreement"), relating to the above-referenced Series, by and among Morgan      
Stanley ABS Capital I Inc., as depositor (the "Depositor"), Ocwen Federal Bank  
FSB, as servicer, CDC Mortgage Capital Inc., as unaffiliated seller (the        
"Unaffiliated Seller") and Deutsche Bank National Trust Company, as Trustee.    
Capitalized terms used, but not defined herein or in Exhibit 1 hereto, shall    
have the meanings ascribed to such terms in the Agreement. The Transferee has   
authorized the undersigned to make this affidavit on behalf of the Transferee   
for the benefit of the Depositor and the Trustee.                               

              2.       The Transferee is not, as of the date hereof, and
will not be, as of the date of the Transfer, a "disqualified organization"      
within the meaning of Section 860E(e)(5) of the Internal Revenue Code of 1986.  
The Transferee will endeavor to remain other than a disqualified organization   
for so long as it retains its Ownership Interest in the Certificate.            

              3.       The Transferee has historically paid its debts as
they came due and will continue to pay its debts as they come due in the future.

       4.       The Transferee has no present knowledge or
expectation that it will be unable to pay any United States taxes owed by it or 
become insolvent or subject to a bankruptcy proceeding for so long as the       
Certificate remains outstanding.                                                

                5.       The Transferee has been advised of, and understands
that as the holder of a noneconomic residual interest it may incur tax          
liabilities in excess of any cash flows generated by the interest. The          
Transferee intends to pay such taxes associated with holding the Certificate as 
they become due.                                                                

          6.       The Transferee will not cause income from the
Certificate to be attributable to a foreign permanent establishment or fixed    
base (within the meaning of an applicable income tax treaty) of the Transferee  
or another U.S. taxpayer.                                                       

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             (1)7.    [A. Formula Test] The Transferee agrees that the
present value of the anticipated tax liabilities associated with holding the    
Certificate does not exceed the sum of the present value of any consideration   
given to the Transferee to acquire the Certificate, the present value of the    
expected future distributions on the Certificate, and the present value of the  
anticipated tax savings associated with holding the interest as the REMIC       
generates losses. The Transferee agrees that it complied with U.S. Treasury     
Regulations Section 1.860E-1(c)(8) in making such representation.               

                    The Transferee agrees that it is not a foreign
permanent establishment or fixed base (within the meaning of an applicable      
income tax treaty) of the Transferor or another U.S. taxpayer.                  

                        [B. Asset Test] The Transferee, at the time of the
transfer, and at the close of the Transferee's two fiscal years preceding the   
year of the transfer, had gross assets for financial reporting purposes in      
excess of $100 million and net assets in excess of $10 million (excluding any   
obligation of a person related to the Transferee within the meaning of U.S.     
Treasury Regulations Section 1.860E-1(c)(6)(ii) or any other asset if a         
principle purpose for holding or acquiring the other asset was to permit the    
Transferee to satisfy the above stated minimum asset requirements).             

              The Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i). The Transferee agrees, in  
connection with any subsequent transfer of its Ownership Interest in the        
Certificate, to transfer its Ownership Interest only to another "eligible       
corporation," as defined in U.S. Treasury Regulations Section 1.860E-1(c)(6)(i),
and to honor the restrictions on subsequent transfers of the Certificate by     
transferring its Ownership Interest only in a transaction that satisfies the    
requirements of U.S. Treasury Regulations Section 1.860E-1(c)(4)(i), (ii) (iii) 
and U.S. Treasury Regulations Section 1.860E-1(c)(5).                           

             The Transferee determined the consideration paid to it to
acquire the Certificate in good faith and based on reasonable market assumptions
(including, but not limited to, borrowing and investment rates, prepayment and  
loss assumptions, expense and reinvestment assumptions, tax rates and other     
factors specific to the Transferee).                                            

                  8.       The Transferee is a citizen or resident of the United
States, a corporation, partnership or other entity created or organized in, or  
under the laws of, the United States or any political subdivision thereof, or an
estate or trust whose income from sources without the United States is          
includable in gross income for United States federal income tax purposes        
regardless of its connection with the conduct of a trade or business within the 
United States.                                                                  

               9.       The Transferee's taxpayer identification number is
____________.                                                                   

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

(1) Insert either section 7A or 7B.                                             

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              10.      The Transferee is not an employee benefit plan or
arrangement subject to Title I of ERISA, Section 4975 of the Code or any Similar
Law, and is not acting on behalf of any such plan or arrangement or using the   
assets of any such plan or arrangement to effect the Transfer.                  

                  11.      The Transferee has reviewed the provisions of Section
5.02(c) of the Agreement and understands the legal consequences of the          
acquisition of an Ownership Interest in the Certificate, including, without     
limitation, the restrictions on subsequent Transfers and the provisions         
regarding voiding the Transfer and mandatory sales. The Transferee expressly    
agrees to be bound by and to abide by the provisions of Section 5.02(c) of the  
Agreement and the restrictions noted on the face of the Certificate. The        
Transferee understands and agrees that any breach of any of the representations 
included herein shall render the Transfer to the Transferee contemplated hereby 
null and void.                                                                  

      12.      The Transferee consents to any additional
restrictions or arrangements that shall be deemed necessary upon advice of      
counsel to constitute a reasonable arrangement to ensure that the Certificate   
will only be owned, directly or indirectly, by a Transferee that is not a       
disqualified organization.                                                      

                 13.      The Transferee will not transfer its interest in the
Certificate for the purpose of impeding the assessment or collection of any tax.

              14.      The Transferee will not transfer such Certificate
unless (i) it has received from any subsequent transferee an affidavit in       
substantially the same form as this affidavit containing the same               
representations set forth herein, and (ii) as of the time of the transfer, it   
does not have actual knowledge that such affidavit is false. The Transferee will
deliver such affidavit to the Trustee upon receipt.                             

 * * *

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                 IN WITNESS WHEREOF, the Transferee has caused this instrument
to be executed on its behalf, pursuant to authority of its Board of Directors,  
by its duly authorized officer and its corporate seal to be hereunto affixed,   
duly attested, this __ day of ________, 20__.                                   

                                      ------------------------------------------
                    Print Name of Transferee

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

[Corporate Seal]                                                                

ATTEST:                                                                         

---------------------------------                                               
[Assistant] Secretary                                                           

             Personally appeared before me the above-named __________,
known or proved to me to be the same person who executed the foregoing          
instrument and to be the ___________ of the Transferee, and acknowledged that he
executed the same as his free act and deed and the free act and deed of the     
Transferee.                                                                     

                 Subscribed and sworn before me this __ day of ________, 20__.

                                        ----------------------------------------
             NOTARY PUBLIC

                                My Commission expires the __ day
                  of _________, 20__

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 EXHIBIT I

FORM OF TRANSFEROR CERTIFICATE

                                                                __________, 20__

Morgan Stanley ABS Capital I Inc.                                               
1585 Broadway                                                                   
New York, New York 10036                                                        
Attention:  Michelle Wilke                                                      

Deutsche Bank National Trust Company,                                           
as Trustee,                                                                     
1761 East St. Andrew Place                                                      
Santa Ana, California 92705                                                     

                  Re:      CDC Mortgage Capital Trust, Series 2003-HE3, Mortgage
                           Pass-Through Certificates, Series 2003-HE3, Class ___

Ladies and Gentlemen:                                                           

                In connection with our disposition of the above Certificates
we certify that (a) we understand that the Certificates have not been registered
under the Securities Act of 1933, as amended (the "Act"), and are being disposed
by us in a transaction that is exempt from the registration requirements of the 
Act, (b) we have not offered or sold any Certificates to, or solicited offers to
buy any Certificates from, any person, or otherwise approached or negotiated    
with any person with respect thereto, in a manner that would be deemed, or taken
any other action which would result in, a violation of Section 5 of the Act and 
(c) to the extent we are disposing of a Residual Certificate, we have no        
knowledge the Transferee is not a Permitted Transferee.                         

               Very truly yours,

                                       -----------------------------------------
                      Print Name of Transferor

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

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 EXHIBIT J

FORM OF RULE 144A LETTER

                                                              ____________, 20__

Morgan Stanley ABS Capital I Inc.                                               
1585 Broadway                                                                   
New York, New York 10036                                                        
Attention:  Michelle Wilke                                                      

Deutsche Bank National Trust Company,                                           
as Trustee,                                                                     
1761 East St. Andrew Place                                                      
Santa Ana, California 92705                                                     

              Re:      CDC Mortgage Capital Trust 2002, Series 2003-HE3,
                          Mortgage Pass-Through Certificates, Series 2003-HE3,
Class                     

Ladies and Gentlemen:                                                           

                In connection with our acquisition of the above Certificates
we certify that (a) we understand that the Certificates are not being registered
under the Securities Act of 1933, as amended (the "Act"), or any state          
securities laws and are being transferred to us in a transaction that is exempt 
from the registration requirements of the Act and any such laws, (b) we have    
such knowledge and experience in financial and business matters that we are     
capable of evaluating the merits and risks of investments in the Certificates,  
(c) we have had the opportunity to ask questions of and receive answers from the
Depositor concerning the purchase of the Certificates and all matters relating  
thereto or any additional information deemed necessary to our decision to       
purchase the Certificates, (d) we are not an employee benefit plan or           
arrangement that is subject to Title I of the Employee Retirement Income        
Security Act of 1974, as amended ("ERISA"), Section 4975 of the Internal Revenue
Code of 1986, as amended (the "Code"), or any federal, state or local law       
materially similar to the foregoing provisions of ERISA or the Code, and we are 
not acting on behalf of any such plan or arrangement or using the assets of any 
such plan or arrangement to effect our purchase of the Certificates, (e) we have
not, nor has anyone acting on our behalf offered, transferred, pledged, sold or 
otherwise disposed of the Certificates, any interest in the Certificates or any 
other similar security to, or solicited any offer to buy or accept a transfer,  
pledge or other disposition of the Certificates, any interest in the            
Certificates or any other similar security from, or otherwise approached or     
negotiated with respect to the Certificates, any interest in the Certificates or
any other similar security with, any person in any manner, or made any general  
solicitation by means of general advertising or in any other manner, or taken   
any other action, that would constitute a distribution of the Certificates under

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the Securities Act or that would render the disposition of the Certificates a   
violation of Section 5 of the Securities Act or require registration pursuant   
thereto, nor will act, nor has authorized or will authorize any person to act,  
in such manner with respect to the Certificates, (f) to the extent that the     
Certificate transferred is a Class X Certificate, we are a bankruptcy-remote    
entity and (g) we are a "qualified institutional buyer" as that term is defined 
in Rule 144A under the Securities Act and have completed either of the forms of 
certification to that effect attached hereto as Annex 1 or Annex 2. We are aware
that the sale to us is being made in reliance on Rule 144A. We are acquiring the
Certificates for our own account or for resale pursuant to Rule 144A and        
further, understand that such Certificates may be resold, pledged or transferred
only (i) to a person reasonably believed to be a qualified institutional buyer  
that purchases for its own account or for the account of a qualified            
institutional buyer to whom notice is given that the resale, pledge or transfer 
is being made in reliance on Rule 144A, or (ii) pursuant to another exemption   
from registration under the Securities Act.                                     

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                                                            ANNEX 1 TO EXHIBIT J

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------

[For Transferees Other Than Registered Investment Companies]

                The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this        
certification relates with respect to the Certificates described therein:       

                  1.       As indicated below, the undersigned is the President,
Chief Financial Officer, Senior Vice President or other executive officer of the
Buyer.                                                                          

                 2.       In connection with purchases by the Buyer, the Buyer
is a "qualified institutional buyer" as that term is defined in Rule 144A under 
the Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_________ in securities (except for   
the excluded securities referred to below) as of the end of the Buyer's most    
recent fiscal year (such amount being calculated in accordance with Rule 144A   
and (ii) the Buyer satisfies the criteria in the category marked below.         

            _________   Corporation, etc. The Buyer is a corporation
                            (other than a bank, savings and loan association
                             or similar institution), Massachusetts or similar
                      business trust, partnership, or charitable
                              organization described in Section 501(c)(3) of the
                      Internal Revenue Code of 1986, as amended.

                 _________   Bank. The Buyer (a) is a national bank or banking
                              institution organized under the laws of any State,
                      territory or the District of Columbia, the
                          business of which is substantially confined to
                     banking and is supervised by the State or
                              territorial banking commission or similar official
                           or is a foreign bank or equivalent institution,
                        and (b) has an audited net worth of at least
                            $25,000,000 as demonstrated in its latest annual
                             financial statements, a copy of which is attached
hereto.             

                _________   Savings and Loan. The Buyer (a) is a savings and
                            loan association, building and loan association,
                              cooperative bank, homestead association or similar
                              institution, which is supervised and examined by a
                              State or Federal authority having supervision over
                             any such institutions or is a foreign savings and
                              loan association or equivalent institution and (b)
                            has an audited net worth of at least $25,000,000
                          as demonstrated in its latest annual financial
                           statements, a copy of which is attached hereto.

               _________   Broker-dealer. The Buyer is a dealer registered
                             pursuant to Section 15 of the Securities Exchange
Act of 1934.        

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            _________   Insurance Company. The Buyer is an insurance
                          company whose primary and predominant business
                       activity is the writing of insurance or the
                         reinsuring of risks underwritten by insurance
                            companies and which is subject to supervision by
                            the insurance commissioner or a similar official
                              or agency of a State, territory or the District of
Columbia.           

        _________   State or Local Plan. The Buyer is a plan
                      established and maintained by a State, its
                    political subdivisions, or any agency or
                         instrumentality of the State or its political
                           subdivisions, for the benefit of its employees.

                 _________   ERISA Plan. The Buyer is an employee benefit plan
                         within the meaning of Title I of the Employee
                   Retirement Income Security Act of 1974.

              _________   Investment Advisor. The Buyer is an investment
                            advisor registered under the Investment Advisors
Act of 1940.        

             _________   Small Business Investment Company. Buyer is a
                             small business investment company licensed by the
                            U.S. Small Business Administration under Section
                              301(c) or (d) of the Small Business Investment Act
of 1958.            

                 _________   Business Development Company. Buyer is a business
                     development company as defined in Section
                              202(a)(22) of the Investment Advisors Act of 1940.

                  3.       The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer, (ii) securities   
that are part of an unsold allotment to or subscription by the Buyer, if the    
Buyer is a dealer, (iii) securities issued or guaranteed by the U.S. or any     
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,   
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but 
subject to a repurchase agreement and (viii) currency, interest rate and        
commodity swaps.                                                                

                4.       For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the     
Buyer used the cost of such securities to the Buyer and did not include any of  
the securities referred to in the preceding paragraph, except (i) where the     
Buyer reports its securities holdings in its financial statements on the basis  
of their market value, and (ii) no current information with respect to the cost 
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such   
aggregate amount, the Buyer may have included securities owned by subsidiaries  
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in  
its financial statements prepared in accordance with generally accepted         
accounting principles and if the investments of such subsidiaries are managed   
under the Buyer's direction. However, such securities were not included if the  
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of    
1934, as amended.                                                               

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                 5.       The Buyer acknowledges that it is familiar with Rule
144A and understands that the seller to it and other parties related to the     
Certificates are relying and will continue to rely on the statements made herein
because one or more sales to the Buyer may be in reliance on Rule 144A.         

        6.       Until the date of purchase of the Rule 144A
Securities, the Buyer will notify each of the parties to which this             
certification is made of any changes in the information and conclusions herein. 
Until such notice is given, the Buyer's purchase of the Certificates will       
constitute a reaffirmation of this certification as of the date of such         
purchase. In addition, if the Buyer is a bank or savings and loan is provided   
above, the Buyer agrees that it will furnish to such parties updated annual     
financial statements promptly after they become available.                      

                                       -----------------------------------------
                      Print Name of Transferor

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

   Date:
                                            ------------------------------------

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                                                            ANNEX 2 TO EXHIBIT J

QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------

[For Transferees That are Registered Investment Companies]

                The undersigned (the "Buyer") hereby certifies as follows to
the parties listed in the Rule 144A Transferee Certificate to which this        
certification relates with respect to the Certificates described therein:       

                  1.       As indicated below, the undersigned is the President,
Chief Financial Officer or Senior Vice President of the Buyer or, if the Buyer  
is a "qualified institutional buyer" as that term is defined in Rule 144A under 
the Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a 
Family of Investment Companies (as defined below), is such an officer of the    
Adviser.                                                                        

                  2.       In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the     
Buyer is an investment company registered under the Investment Company Act of   
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's      
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's    
most recent fiscal year. For purposes of determining the amount of securities   
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of   
such securities was used, except (i) where the Buyer or the Buyer's Family of   
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the       
preceding sentence applies, the securities may be valued at market.             

                 _________   The Buyer owned $______ in securities (other than
                            the excluded securities referred to below) as of
                          the end of the Buyer's most recent fiscal year
                            (such amount being calculated in accordance with
Rule 144A).         

           _________   The Buyer is part of a Family of Investment
                             Companies which owned in the aggregate $ ________
                             in securities (other than the excluded securities
                           referred to below) as of the end of the Buyer's
                      most recent fiscal year (such amount being
                     calculated in accordance with Rule 144A).

              3.       The term "Family of Investment Companies" as used
herein means two or more registered investment companies (or series thereof)    
that have the same investment adviser or investment advisers that are affiliated
(by virtue of being majority owned subsidiaries of the same parent or because   
one investment adviser is a majority owned subsidiary of the other).            

                  4.       The term "securities" as used herein does not include
(i) securities of issuers that are affiliated with the Buyer or are part of the 
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by 
the U.S. or any instrumentality thereof, (iii) bank deposit notes and           
certificates of deposit, (iv) loan participations, (v) repurchase agreements,   

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(vi) securities owned but subject to a repurchase agreement and (vii) currency, 
interest rate and commodity swaps.                                              

                 5.       The Buyer is familiar with Rule 144A and understands
that the parties listed in the Rule 144A Transferee Certificate to which this   
certification relates are relying and will continue to rely on the statements   
made herein because one or more sales to the Buyer will be in reliance on Rule  
144A. In addition, the Buyer will only purchase for the Buyer's own account.    

                6.       Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee          
Certificate to which this certification relates of any changes in the           
information and conclusions herein. Until such notice is given, the Buyer's     
purchase of the Certificates will constitute a reaffirmation of this            
certification by the undersigned as of the date of such purchase.               

                                       -----------------------------------------
                      Print Name of Transferor

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

            IF AN ADVISER:

                                       -----------------------------------------
                                       Print Name of Buyer

   Date:
                                            ------------------------------------

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 EXHIBIT K

 REQUEST FOR RELEASE
 (for Trustee)

To:      [Address]                                                              

Re:                                         

               In connection with the administration of the Mortgage Loans
held by you as the Trustee on behalf of the Certificateholders, we request the  
release, and acknowledge receipt, of the (Custodial File/[specify documents])   
for the Mortgage Loan described below, for the reason indicated.                

Mortgagor's Name, Address & Zip Code:                                           
-------------------------------------                                           

Mortgage Loan Number:                                                           
---------------------                                                           

Send Custodial File to:                                                         
-----------------------                                                         

Reason for Requesting Documents (check one)                                     
-------------------------------------------                                     

              _________   1.    Mortgage Loan Paid in Full. (The Company
                         hereby certifies that all amounts received in
                          connection therewith have been credited to the
                             Collection Account as provided in the Pooling and
 Servicing Agreement.)

          _________   2.    Mortgage Loan Repurchase Pursuant to
                        Subsection 2.03 of the Pooling and Servicing
                             Agreement. (The Company hereby certifies that the
                     repurchase price has been credited to the
                             Collection Account as provided in the Pooling and
 Servicing Agreement.)

 _________   3.    Mortgage Loan Liquidated By
                            _________________. (The Company hereby certifies
                        that all proceeds of foreclosure, insurance,
                       condemnation or other liquidation have been
                           finally received and credited to the Collection
                         Account pursuant to the Pooling and Servicing
Agreement.)         

   _________   4.    Mortgage Loan in Foreclosure.

_________   5.    Other (explain).          

                If box 1, 2 or 3 above is checked, and if all or part of the
Custodial File was previously released to us, please release to us our previous 
request and receipt on file with you, as well as any additional documents in    
your possession relating to the specified Mortgage Loan.                        

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                 If box 4 or 5 above is checked, upon our return of all of the
above documents to you as the Trustee, please acknowledge your receipt by       
signing in the space indicated below, and returning this form.                  

                      OCWEN FEDERAL BANK FSB

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

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 EXHIBIT L

 FORM OF SUBSEQUENT TRANSFER AGREEMENT

 CDC MORTGAGE CAPITAL TRUST 2003-HE3

                 Pursuant to separate Mortgage Loan Purchase Agreements, Aames
Capital Corporation ("Aames"), Aegis Mortgage Corporation ("Aegis"), Ameriquest 
Mortgage Company ("Ameriquest"), BNC Mortgage, Inc. ("BNC"), Chapel Mortgage    
Corporation ("Chapel"), Encore Credit Corp. ("Encore"), First Banc Mortgage,    
Inc. ("First Banc"), First NLC Financial Services, LLC ("NLC"), Impac Funding   
Corporation ("IFC") (and its affiliate, Novelle Financial Services, Inc.        
("Novelle")), Master Financial, Inc. ("Master Financial"), People's Choice Home 
Loan, Inc. ("People's Choice"), and SIB Mortgage Corp. ("SIB" and together with 
Aames, Aegis, Ameriquest, BNC, Chapel, Encore, First Banc, NLC, IFC, Novelle,   
Master Financial and People's Choice, the "Originators") have agreed to sell to 
CDC Mortgage Capital Inc. (the "Unaffiliated Seller") certain mortgage loans    
(each, a "Mortgage Loan"). These Mortgage Loans may in turn be sold by the      
Unaffiliated Seller to MORGAN STANLEY ABS CAPITAL I INC. (the "Depositor") and  
then sold by the Depositor to the CDC Mortgage Capital Trust 2003-HE3 (the      
"Trust Fund"). The Trust Fund was established pursuant to a Pooling and         
Servicing Agreement, dated as of August 1, 2003 (the "Pooling and Servicing     
Agreement") among the Unaffiliated Seller, the Depositor, Ocwen Federal Bank    
FSB, as servicer (the "Servicer") and Deutsche Bank National Trust Company, as  
trustee (the "Trustee"). The Pooling and Servicing Agreement permits a          
pre-funding feature, allowing for the acquisition by the Trust Fund of          
Subsequent Mortgage Loans during the Pre-Funding Period. Representations and    
warranties with respect to the Mortgage Loans have been made by the Originators 
pursuant to separate Assignment and Recognition Agreements.                     

             Capitalized terms used herein and not defined herein have
their respective meanings as set forth in the Pooling and Servicing Agreement.  

Conveyance of Subsequent Mortgage Loans.    
----------------------------------------    

         The Unaffiliated Seller does hereby irrevocably sell,
transfer, assign, set over and otherwise convey to the Depositor, without       
recourse (except as otherwise explicitly provided for herein) all of its right, 
title and interest in and to the Subsequent Mortgage Loans, exclusive of the    
obligations of the Unaffiliated Seller or any other Person with respect to the  
Subsequent Mortgage Loans but including specifically, without limitation, the   
Mortgages, the Custodial Files and all other documents, materials and properties
appurtenant thereto and the Mortgage Notes, including all interest and principal
collected by the Unaffiliated Seller on or with respect to the Subsequent       
Mortgage Loans after the related Subsequent Cut-off Date, together with all of  
its right, title and interest in and to the proceeds received after such        
Subsequent Cut-off Date of any related insurance policies on behalf of the      
Depositor.                                                                      

                 The Depositor does hereby irrevocably sell, transfer, assign,
set over and otherwise convey to the Trust Fund, without recourse (except as    
otherwise explicitly provided for herein) all of its right, title and interest  
in and to the Subsequent Mortgage Loans, exclusive of the obligations of the    
Depositor or any other Person with respect to the Subsequent Mortgage Loans but 

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including specifically, without limitation, the Mortgages, the Custodial Files  
and all other documents, materials and properties appurtenant thereto and the   
Mortgage Notes, including all interest and principal collected by the Depositor 
on or with respect to the Subsequent Mortgage Loans after the related Subsequent
Cut-off Date, together with all of its right, title and interest in and to the  
proceeds received after such Subsequent Cut-off Date of any related insurance   
policies on behalf of the Trust Fund.                                           

          The expenses and costs relating to the delivery of the
Subsequent Mortgage Loans specified in this Subsequent Transfer Agreement and   
the Pooling and Servicing Agreement shall be borne by the Unaffiliated Seller.  

                 The Unaffiliated Seller hereby affirms the representation and
warranty set forth in Sections 3.01(f), 3.01(h) and 3.03 of the Unaffiliated    
Seller's Agreement with respect to the Subsequent Mortgage Loans as of the date 
hereof. The Unaffiliated Seller hereby delivers notice and confirms that each of
the conditions set forth in Section 2.01(c) of the Pooling and Servicing        
Agreement are satisfied as of the date hereof.                                  

                  The Servicer hereby affirms the representations and warranties
set forth in Schedule IIA to the Pooling and Servicing Agreement with respect to
the Subsequent Mortgage Loans as of the date hereof.                            

                  Additional terms of the sale are attached hereto as Attachment
A.                                                                              

              To the extent permitted by applicable law, this Subsequent
Transfer Agreement, or a memorandum thereof if permitted under applicable law,  
is subject to recordation in all appropriate public offices for real property   
records in all counties or other comparable jurisdictions in which any or all of
the properties subject to the Mortgages are situated, and in any other          
appropriate public recording office or elsewhere, such recordation to be        
effected by the Servicer at the Unaffiliated Seller's expense, but only when    
accompanied by an opinion of counsel to the effect that such recordation        
materially and beneficially affects the interests of the Certificateholders or  
is necessary for the administration or servicing of the Mortgage Loans.         

                 This Agreement shall be construed in accordance with the laws
of the State of New York and the obligations, rights and remedies of the parties
hereunder shall be determined in accordance with such laws, without giving      
effect to the principles of conflicts of laws.                                  

                  This Agreement may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall 
constitute one and the same Agreement.                                          

         All terms and conditions of the Pooling and Servicing
Agreement are hereby ratified, confirmed and incorporated herein; provided, that
in the event of any conflict the provisions of this Subsequent Transfer         
Agreement shall control over the conflicting provisions of the Pooling and      
Servicing Agreement.                                                            

[Remainder of Page Intentionally Left Blank]

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                        CDC MORTGAGE CAPITAL INC.,
                        as Unaffiliated Seller

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

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

                                MORGAN STANLEY ABS CAPITAL I INC.,
              as Depositor

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

                     OCWEN FEDERAL BANK FSB,
             as Servicer

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

                                   DEUTSCHE BANK NATIONAL TRUST COMPANY,
            as Trustee

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

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

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 EXHIBIT M

 FORM OF CERTIFICATION TO BE
 PROVIDED TO DEPOSITOR
 ---------------------

Re:      CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through Certificates,
Series 2003-HE3, issued pursuant to the Pooling and Servicing 
   Agreement, dated as of August 1, 2003 (the "Pooling and Servicing
         Agreement"), among Morgan Stanley ABS Capital I Inc., as depositor (the
 "Depositor", CDC Mortgage Capital Inc., as unaffiliated seller,
       Deutsche Bank National Trust Company, as trustee (the "Trustee"), and
Ocwen Federal Bank FSB, as servicer (the "Servicer").         

I, [identify the certifying individual], certify that:                          

   1.       I have reviewed this annual report on Form 10-K ("Annual
                 Report"), and all reports on Form 8-K containing distribution
               or servicing reports (collectively with this Annual Report,
              the "Reports") filed in respect of periods included in the
                year covered by this Annual Report of the Depositor relating
             to the above-referenced trust and series of certificates;

       2.       Based on my knowledge, the information in the Reports, taken
          as a whole, does not contain any untrue statement of a
               material fact or omit to state a material fact necessary to
                 make the statements made, in light of the circumstances under
                  which such statements were made, not misleading as of the last
    day of the period covered by this Annual Report;

3.       Based on my knowledge, the distribution or servicing 
             information required to be provided to the Trustee by the
          Servicer under the Pooling and Servicing Agreement for
          inclusion in the Reports is included in these Reports;

         4.       Based on my knowledge and upon the annual compliance statement
                  included in this Annual Report and required to be delivered to
               the Trustee in accordance with the terms of the Pooling and
                Servicing Agreement, and except as disclosed in the Reports,
                the Servicer has fulfilled its obligations under the Pooling
and Servicing Agreement; and                

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        5.       The Reports disclose all significant deficiencies relating to
                  the Servicer's compliance with the minimum servicing standards
           based upon the report provided by an independent public
                accountant, after conducting a review in compliance with the
              Uniform Single Attestation Program for Mortgage Bankers or
                similar procedure, as set forth in the Pooling and Servicing
Agreement, that is included in the Reports. 

In giving the certifications above, I have reasonably relied on information     
provided to me by the following unaffiliated parties: the Trustee and the       
Servicer.                                                                       

Date:    _________________________                                              

__________________________________                                              
[Signature] [Title]                                                             

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 EXHIBIT N

 Annual Certifications

Re: CDC Mortgage Capital Trust 2003-HE3 Mortgage Pass-Through Certificates,     
Series 2003-HE3, issued pursuant to the Pooling and Servicing Agreement, dated  
as of August 1, 2003 (the "Pooling and Servicing Agreement"), among Morgan      
Stanley ABS Capital I Inc., as depositor (the "Depositor," CDC Mortgage Capital 
Inc., as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National
Trust Company, as trustee (the "Trustee"), and Ocwen Federal Bank FSB, as       
servicer (the "Servicer").                                                      

I, [identify the certifying individual], certify to the Depositor and the       
Trustee, if applicable, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:         

      1.       [To be certified by the Trustee] I have reviewed the annual
             report on Form 10-K for the fiscal year 2003 (the "Annual
                 Report"), and all reports on Form 8-K containing distribution
                 date reports filed in respect of periods included in the year
               covered by the Annual Report (collectively with this Annual
            Report, the "Reports"), of the Depositor relating to the
above-referenced trust;                     

      2.       [To be certified by the Trustee] Based on my knowledge, the
                  information in the Reports, taken as a whole, does not contain
              any untrue statement of a material fact or omit to state a
                 material fact necessary to make the statements made, in light
               of the circumstances under which such statements were made,
                  not misleading as of the last day of the period covered by the
Annual Report;                              

      3.       [To be certified by the Trustee] Based on my knowledge, the
                 distribution or servicing information required to be provided
                  to the Trustee by the Servicer under the Pooling and Servicing
             Agreement for inclusion in the Reports is included in the
Reports;                                    

 4.       [To be certified by the Servicer] I am responsible for
                reviewing the activities performed by the Servicer under the
            Pooling and Servicing Agreement during the calendar year
           immediately preceding the date of this certificate (the
           "Relevant Year"). Based upon the review required by the
                  Pooling and Servicing Agreement and except as disclosed in the
             annual compliance statement or the accountant's statement
                  provided pursuant to Section 3.23 of the Pooling and Servicing
            Agreement, to the best of my knowledge, the Servicer has
             fulfilled its obligations under the Pooling and Servicing
Agreement throughout the Relevant Year; and 

         5.       [To be certified by the Servicer] All significant deficiencies
          relating to the Servicer's compliance with the minimum
                 servicing standards for purposes of the report provided by an
            independent public accountant, after conducting a review
               conducted in compliance with the Uniform Single Attestation
             Program for Mortgage Bankers or similar procedure, as set

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           forth in the Pooling and Servicing Agreement, have been
                  disclosed to such accountant and are included in such reports.

Date:    _________________________                                              

__________________________________                                              
[Signature] [Title]                                                             

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘8-K’ Filing		Date		First		Last			Other Filings
		11/25/33		7		64
		2/24/06		33
		6/24/05		33
		11/25/03		24		97			8-K
		11/24/03		43		97
		10/27/03		97					8-K
		10/1/03		97
		9/25/03		149		174			8-K
Filed on:		9/9/03
For Period End:		8/25/03		13		49
		8/22/03		44
		8/1/03		1		205
		6/30/03		15
		6/23/03		14
		6/1/03		36
		4/1/03		29
		3/7/03		59
		1/29/03		32
		12/1/02		15		27
		10/24/02		41
		10/14/02		30
		10/1/02		59
		9/27/02		39
		7/11/02		49
		6/4/02		19
		2/26/02		17
		8/20/96		53
									List all Filings