EXECUTION COPY

As of November 18, 2005

NC Capital Corporation
New Century Mortgage Corporation
18400 Von Karman, Suite 1000
Irvine, CA 92612

Attention: Mr. Kevin Cloyd

Re: Purchase Price and Terms Agreement

Dear Mr. Cloyd:

Morgan Stanley Mortgage Capital Inc. (the “Purchaser”) hereby confirms its
agreement to purchase and NC Capital Corporation (the “Seller”) hereby confirms its agreement
to sell, on a mandatory delivery basis, a pool of fixed and adjustable rate, first and second lien,
residential mortgage loans described herein (the “Mortgage Loans”) on a servicing released
basis, on the terms and conditions set forth below.

In addition to this Purchase Price and Terms Agreement (which incorporates the
terms set forth on Exhibit A hereto (the “Bid Terms”)), (i) the Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of December 1, 2005 (the
“Purchase Agreement”), between the Purchaser and the Seller, and (ii) the Amended and
Restated Servicing Agreement, dated as of December 1, 2005 (the “Servicing Agreement”),
between the Purchaser and New Century Mortgage Corporation (“NCMC”), shall set forth the
terms and provisions with respect to the Mortgage Loans and the sale and servicing thereof. The
Mortgage Loans will be conveyed by the Seller to the Purchaser pursuant to an Assignment and
Conveyance, to be dated as of the Closing Date (the “Assignment and Conveyance”), to be
executed by the Seller.

Ownership of the Mortgage Loans shall be evidenced by delivery of the Mortgage

Loans as whole loans pursuant to this Purchase Price and Terms Agreement, the Purchase
Agreement and the Servicing Agreement.

1. Term of this Commitment

The Mortgage Loans shall be purchased by the Purchaser and sold by the Seller,
subject to the terms hereof and the Bid Terms, on January 27, 2006 or such other date as shall be
mutually agreed upon by the parties hereto (the “Closing Date”).

Notwithstanding the foregoing and prior to the Closing Date, in the event that
there is a material adverse change to (a) the Property, business, operations, financial condition or
prospects of the Seller or any of its Material Affiliates, (b) the ability of the Seller or any of its
Material Affiliates to perform its obligations under any of this Purchase Price and Terms
Agreement, the Purchase Agreement or the Servicing Agreement or (c) the Mortgage Loans as a

NYLIB5 870362.5
whole, in each case as determined in good faith by the Purchaser in its sole discretion, the
Purchaser shall be relieved of any obligation to purchase any Mortgage Loans.

When used in this Section 1, the term “Property” shall mean any right or interest
in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible
or intangible, and the term “Material Affiliate” shall mean each of New Century Financial
Corporation and New Century Mortgage Corporation, and their respective successors and
assigns.

2. Aggregate Amount of Mortgage Loans

The aggregate outstanding principal balance of the Mortgage Loans as of January

1, 2006 (the “Cut-off Date”) shall be $1,500,000,000.

The Purchaser, in its sole discretion, may accept delivery of less than the
$1,500,000,000 pool amount. In the event that the Seller delivers Mortgage Loans with an
aggregate outstanding principal balance that is less than $1,425,000,000, the Seller shall pay the
Purchaser a pair-off fee (as described in the Bid Terms) for the difference between the actual
amount delivered (in the aggregate) and $1,425,000,000.

3. Total Purchase Price

The purchase price for the Mortgage Loans (the “Mortgage Loan Purchase Price”)
shall be equal to the product of (i) the Mortgage Loan Price Percentage (as defined below) and
(ii) the aggregate outstanding principal balance of the Mortgage Loans as of the Cut-off Date,
after application of payments due on such Mortgage Loans on or before the Cut-off Date, to the
extent such payments were actually received (the “Cut-off Date Aggregate Pool Balance”), plus
accrued interest at the weighted average mortgage interest rate (net of the servicing fee) from the
date on which interest was last paid through the day prior to the Closing Date, inclusive. In the
event the characteristics and parameters of the pool of Mortgage Loans as described in Section 4
change prior to the Closing Date, the Seller and Purchaser shall negotiate in good faith to
recalculate the Mortgage Loan Price Percentage. Additionally, in connection with the servicing
rights related to the Mortgage Loans (the “Servicing Rights”), the Purchaser shall pay to the
Seller on the Closing Date an amount equal to 100% of (i) 75 basis points (0.75%) (the
“Servicing Rights Price Percentage”) multiplied by (ii) the Cut-off Date Aggregate Pool Balance
(the “Servicing Rights Purchase Price”). When used herein, (a) the Mortgage Loan Price
Percentage plus the Servicing Rights Percentage shall equal the “Purchase Price Percentage” and
(b) the Mortgage Loan Purchase Price plus the Servicing Rights Purchase Price shall equal the
“Total Purchase Price”.

The “Mortgage Loan Price Percentage” with respect to each of the Mortgage
Loans shall be equal to 101.01667% (which amount does not include the Servicing Rights Price
Percentage). Notwithstanding the foregoing sentence, the Mortgage Loan Price Percentage shall
be adjusted up or down per the following table for every basis point (0.01%) by which the
weighted average interest rate of the Mortgage Loans (the “Weighted Average Gross Coupon”)
as of the Cut-off Date exceeds or falls below a rate equal to 8.15%.

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 Weighted Average Adjustment to Mortgage Loan Price
Gross Coupon Percentage per 0.01% (1 bp) change in
("GWAC") Range GWAC
> 8.15% 1.5 bps up
= 8.15% none
< 8.15% 1.70833 bps down

Notwithstanding the foregoing paragraph, the Mortgage Loan Price Percentage

with respect to Adjustable Rate Mortgage Loans shall be adjusted up or down per the following
table for every basis point (0.01%) by which the weighted average margin of the Mortgage
Loans (the “GWAM”) as of the Cut-off Date exceeds or falls below a rate equal to 6.054%.
Weighted Average Adjustment to Mortgage Loan Price
Gross Margin Percentage per 0.01% (1 bp) change in
("GWAM") Range GWAM
> 6.054% 0.3 bps up
= 6.054% none
< 6.054% 0.3 bps down

The Total Purchase Price for the Mortgage Loans shall be paid to the Seller in
immediately available funds by wire transfer on the Closing Date to an account designated by the
Seller in writing.

Thereafter, the Seller shall pay the Purchaser an amount equal to the product of (i)
the Servicing Rights Price Percentage and (ii) the difference between (a) the Cut-off Date
Aggregate Pool Balance and (b) the aggregate outstanding principal balance of such Mortgage
Loans as of the servicing transfer cut-off date (the “Transfer Cut-off Date”), plus accrued interest
at the federal funds rate as of the Closing Date from the Closing Date through the Servicing
Transfer Date, inclusive (the “Servicing Adjustment Amount”). The Servicing Adjustment
Amount shall be paid to the Purchaser within one (1) business day of the Servicing Transfer Date
(as defined below) in immediately available funds by wire transfer to an account designated by
the Purchaser in writing.

4. The Mortgage Loans

The Mortgage Loans will have the applicable characteristics set forth in the Bid
Terms. The Seller shall make the representations and warranties set forth in the Purchase
Agreement, with respect to the Mortgage Loans, as of the Closing Date. In addition, Seller
agrees that (i) the Mortgage Loans shall be selected from among the outstanding one- to four-
family mortgage loans in the Seller’s portfolio on the Closing Date as to which the
representations and warranties set forth in the Purchase Agreement can be made, (ii) such
selection will not be made in a manner so as to affect adversely the interests of the Purchaser,
(iii) no Mortgage Loan will be a “High Cost Loan” where High Cost Loan means a Mortgage
Loan classified as (a) a “high cost” loan under the Home Ownership and Equity Protection Act
of 1994, (b) a “high cost home,” “threshold,” “covered,” “high risk home,” or “predatory” loan
under any other applicable federal, state or local law (or a similarly classified loan using different
terminology under a law imposing heightened regulatory scrutiny or additional legal liability for
residential mortgage loans having high interest rates, points and/or fees) or (c) a Mortgage Loan

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NYLIB5 870362.5
categorized as High Cost pursuant to Appendix E of Standard & Poor’s Glossary, (iv) no
Mortgage Loan will be secured by mortgaged property located in the State of Georgia if
originated on or after October 1, 2002 and on or prior to March 7, 2003, (v) no Mortgage Loan
originated on or after July 1, 2004 requires the related mortgagor to submit to arbitration to
resolve any dispute arising out of or relating in any way to the Mortgage Loan transaction, and
(vi) no Mortgage Loan will be secured by mortgaged property that is a Manufactured Home (as
defined in the Bid Terms); provided, however, a Mortgage Loan may be secured by mortgaged
property that is a modular home.

Notwithstanding the second sentence of Subsection 9.02(kkk) of the Purchase

Agreement, and solely in connection with the Mortgage Loans, the Seller shall include a field on
the Mortgage Loan schedule to be provided on the Closing Date that shall set forth the “points
and fees” percentage for each such Mortgage Loan, which may or may not comply with the 5%
limitation set forth in such clause. The parties acknowledge that the Purchaser shall not have the
right to assert a breach of such clause solely due to the fact that the percentage does not comply
with the 5% limitation.

5. Servicing

The Servicing Rights with respect to the Mortgage Loans shall be assigned and
transferred to the Purchaser on the Closing Date. The Mortgage Loans shall be serviced by
NCMC or its assignee on behalf of the Purchaser and its assignees pursuant to the Servicing
Agreement from and after the Closing Date and until the date or dates on which the Purchaser
and NCMC shall agree upon the removal of some or all of the Mortgage Loans from the terms
and provisions of the Servicing Agreement (the “Servicing Transfer Date”). Notwithstanding the
foregoing, the final Servicing Transfer Date with respect to the Mortgage Loans shall be no
earlier than ninety (90) days following the Closing Date unless otherwise agreed upon by the
Purchaser and NCMC. At such time the Seller shall cooperate to effect a Complete Servicing
Transfer with respect to the related Mortgage Loans. A “Complete Servicing Transfer” shall
include the following: (i) the Seller shall have fully complied with the servicing transfer
provisions contained in the Purchase Agreement and the Servicing Agreement; (ii) the Seller
shall have provided the Purchaser or its designee with a complete servicing file with respect to
each of the related Mortgage Loans; and (iii) the Seller shall have provided the Purchaser or its
designee with a complete and accurate servicing tape with respect to each of the related
Mortgage Loans.

6. Purchase Agreement

The Purchase Agreement and the Servicing Agreement each set forth additional
representations and warranties (the “Representations and Warranties”) and require the Seller, at
the Purchaser’s option, to repurchase any Mortgage Loan with respect to which a material breach
of a Representation and Warranty is discovered and cannot be cured (a “Loan in Breach”) at the
Repurchase Price (defined below).

Notwithstanding anything to the contrary set forth in the Purchase Agreement or

in the Servicing Agreement, the price for such repurchase (the “Repurchase Price”) with respect
to any Loan in Breach shall be with respect to any Mortgage Loan that becomes a Loan in

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NYLIB5 870362.5
Breach (a) during the first year immediately following the Closing Date, an amount equal to the
Purchase Price Percentage multiplied by the then outstanding principal balance of such Loan in
Breach as of the date of such repurchase, plus accrued interest on such Loan in Breach at the
mortgage interest rate from the date to which interest had last been paid through the date of such
repurchase, plus the amount of any outstanding advances owed to any servicer, plus all costs and
expenses incurred by the Purchaser arising out of or based upon such breach, including without
limitation costs and expenses incurred in the enforcement of the Seller's repurchase obligation
thereunder, (b) during the second year following the Closing Date, an amount equal to the
product of (i) 100% plus an amount equal to (A) a fraction, whose numerator is equal to 12 less
the number of months since the first anniversary of the Closing Date and whose denominator is
equal to 12, multiplied by (B) the Purchase Price Percentage less 100%, multiplied by (ii) the
then outstanding principal balance of such Loan in Breach as of the date of such repurchase, plus
accrued interest on such Loan in Breach at the mortgage interest rate from the date to which
interest had last been paid through the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred by the Purchaser
arising out of or based upon such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation thereunder, and (c) thereafter,
an amount equal to the then outstanding principal balance of such Loan in Breach as of the date
of such repurchase plus accrued interest thereon at the mortgage interest rate from the date to
which interest had last been paid through the date of such repurchase, plus the amount of any
outstanding advances owed to any servicer, plus all costs and expenses incurred by the Purchaser
arising out of or based upon such breach, including without limitation costs and expenses
incurred in the enforcement of the Seller's repurchase obligation thereunder.

In addition, with respect to any Mortgage Loan, all payments required to be made
up to the Closing Date for the Mortgage Loan under the terms of the mortgage note, other than
payments not yet 30 days delinquent, have been made and credited. No payment required under
the Mortgage Loan is 30 days or more delinquent nor has any payment under the Mortgage Loan
been 30 days or more delinquent at any time since the origination of the Mortgage Loan. With
respect to any Mortgage Loan, in the event that (i) the first scheduled payment of principal and
interest due after origination of such Mortgage Loan or (ii) the first scheduled payment of
principal and interest due after the Closing Date is not paid to the Purchaser by the thirtieth day
of the month immediately following the month in which the applicable payment was due, the
Seller, at the Purchaser's option, shall repurchase such Mortgage Loan within thirty (30) days
thereafter at a price equal to the Repurchase Price; provided, however, that any repurchase
request must be made within ninety (90) days of any such delinquency; and, provided, further,
that the Seller shall repurchase such delinquent Mortgage Loan within thirty (30) days after such
request. For purposes of clarification, with respect to the first scheduled payment of principal
and interest due after the Closing Date, such payment shall not be considered a “First Payment
Default” for purposes of clause (ii) of the previous sentence until the payment has not been
received by the Purchaser within sixty (60) days of the related Due Date (effectively allowing for
a thirty (30) day cure period).

The repurchase price provisions set forth in this Section 6 shall survive the
Closing Date and shall not merge with the closing documents, but instead shall be independently
enforceable by the Purchaser.

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NYLIB5 870362.5
7. Review of Loan Files

With respect to each Mortgage Loan, the Seller shall make the Mortgage Loan
file, together with all credit and servicing files (including, without limitation, the related
mortgagor’s payment history), available at its offices for review during normal business hours
prior to the Closing Date. The Purchaser, or its designee, may review such files prior to the
Closing Date for the purpose of ensuring conformity with the terms of this Purchase Price and
Terms Agreement and the Purchase Agreement. If the Purchaser makes such examination prior
to the Closing Date and identifies any Mortgage Loans which do not conform to the Purchaser’s
requirements, in its sole discretion, such Mortgage Loans shall be deleted from the Mortgage
Loan schedule to be delivered to the Purchaser on the Closing Date.

The Purchaser may, at its option and without notice to the Seller, purchase all or
part of the Mortgage Loans without conducting any partial or complete examination. The fact
that the Purchaser or any prospective purchaser of the Mortgage Loans has conducted or has
failed to conduct any partial or complete examination of the Mortgage Loan files shall not affect
the Purchaser’s (or any of its successors’) rights to demand repurchase, substitution or other
relief as provided under the Purchase Agreement.

8. Securitization

In the event of a securitization of the Mortgage Loans by the Purchaser or any of

its affiliates, the Seller, NCMC and the Purchaser shall comply with the provisions relating to
securitizations set forth in the Bid Terms.

9. Intention of the Parties

It is the intention of the parties that the Purchaser is purchasing, and the Seller is
selling, interests in the Mortgage Loans and not a debt instrument of the Seller or other security.
Accordingly, each party intends to treat the transaction for federal income tax purposes as a sale
by the Seller, and a purchase by the Purchaser, of an ownership interest (the “Ownership
Interest”) in the Mortgage Loans. Moreover, the arrangement under which the Mortgage Loans
are held will be consistent with the classification of such arrangement as a grantor trust in the
event it is not found to represent direct ownership of the related Ownership Interest in the
Mortgage Loans. The Purchaser shall have the right to review the Mortgage Loans and the
related Mortgage Loan files to determine the characteristics of the Mortgage Loans which will
affect the federal income tax consequences of owning the Ownership Interest in the Mortgage
Loans and the Seller shall cooperate with all reasonable requests made by the Purchaser in the
course of such review.

10. Costs

All costs and expenses incurred in connection with the transactions contemplated
herein shall be paid as set forth in the Purchase Agreement.

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NYLIB5 870362.5
11. Confidential Information

The Purchaser and the Seller shall keep confidential and shall not divulge to any
non-affiliated person, without the other’s prior written consent, the price paid by the Purchaser
for the Mortgage Loans, except to the extent that it is appropriate for the Purchaser or the Seller,
as the case may be, to do so in working with legal counsel, auditors, taxing authorities or other
governmental agencies. The rights and obligations set forth in this Section shall survive the
Closing Date and shall not merge with or into any of the closing documents described herein, but
instead shall be independently enforceable.

12. Brokerage Fees

Neither the Seller nor the Purchaser has employed or used a broker in connection
with the transactions contemplated herein, and to the extent that a demand is made upon either
the Seller or the Purchaser for brokerage fees associated herewith, neither the Seller nor the
Purchaser shall be responsible for paying any brokerage fees of the other party. Each party
hereto shall indemnify and hold the other party harmless against all claims of any brokers or
other persons employed or used by the first party for brokers’ commissions relating thereto,
which indemnification shall include all losses, damages and expenses, including attorney’s fees
for settlement, litigation or appearance and other costs for same, suffered by such other party in
connection with such claims. The rights and obligations set forth in the preceding sentence shall
survive the Closing Date and shall not merge with or into any of the closing documents described
herein, but instead shall be independently enforceable.

13. Notices

All demands, notices and communications hereunder shall be in writing and shall
be deemed to have been duly given if mailed, by registered or certified mail, return receipt
requested, or if by other means, when received by the other party at the address shown on the
first page hereof, or such other address as may hereafter be furnished to the other party by like
notice. Any such demand, notice or communication hereunder shall be deemed to have been
received on the date delivered to or received at the premises of the addressee (as evidenced, in
the case of registered or certified mail, by the date noted on the return receipt).

14. Governing Law

This Purchase Price and Terms Agreement shall be deemed in effect when a
fully executed counterpart thereof is received by the Purchaser in the State of New York
and shall be deemed to have been made in the State of New York. This Purchase Price and
Terms Agreement shall be construed in accordance with the substantive laws of the State of
New York without regard to conflicts of law principles.

15. Further Agreements

The Purchaser and the Seller each agree to execute and deliver to the other such
additional documents, instruments or agreements that may be necessary or appropriate to
effectuate the purposes and intent of this Purchase Price and Terms Agreement.

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NYLIB5 870362.5
16. Entire Agreement and Amendments

This Purchase Price and Terms Agreement contains the entire agreement relating
to the subject matter hereof between the Seller and the Purchaser and supersedes any prior oral or
written agreement between the Seller and the Purchaser. This Purchase Price and Terms
Agreement may only be amended by a written document signed by both the Seller and the
Purchaser.

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NYLIB5 870362.5
 Final

Exhibit A

Bid Terms

Seller NC Capital Corporation

Pool Amount Approximately $306,900,000 in Fixed Rate Mortgage Loans and

$1,193,100,000 in Adjustable Rate Mortgage Loans

Pool Parameters The parameters of the Mortgage Loans shall be as described

below. (All concentration percentages reflect the principal
balance and not the Mortgage Loan count)

Settlement Months of January 27, 2006

Deliveries for Bid
Terms

Gross Weighted The weighted average gross coupon on the Mortgage Loans is no
Average Coupon less than 8.15% with respect to the Mortgage Loans

Gross Weighted No less than 6.07%

Average Margin –
ARMs Only

% of ARMs v Fixed No less than 79.54% of Mortgage Loans shall be ARMs. No

(includes 2nd lien more than 20.46% shall be Fixed Rate.
loans)

Minimum Balance 1st $30,000 minimum unpaid principal balance

Lien Only

Seasoning No Mortgage Loan shall have a note date before November 1,

2005. Notwithstanding the foregoing, the Purchaser understands
that a small portion of the Mortgage Loans shall have note dates
prior to November 1, 2005, as applicable. In connection with
such Mortgage Loans, the Seller represents that no Mortgage
Loan has been rejected by any other buyer.

Weighted Average Approximately 359.9 months

Maturity (Months)
ARMs

Weighted Average Approximately 350.3 months

Maturity (Months)
Fixed Rate Loans

ƒ Weighted Average No less than 624

FICO

ƒ FICO<=525 No more than 4.56%

NYLIB5 873913.3
ƒ FICO<=550 No more than 11.37%

ƒ FICO <= 600 No more than 34.68%

ƒ Prepayment Penalty All Mortgage Loans with prepayment penalties contain hard
(Hard) Total prepayment penalty provisions.

ƒ Prepayment Penalty No less than 73.11%

ƒ Prepayment Penalty No less than bid tape

with 5 year term

ƒ Prepayment Penalty No less than 20.77%

with 3 year term

ƒ Prepayment Penalty No less than 47.69%

with 2 year term

ƒ Prepayment Penalty No less than 4.66%

with 1 year term

ƒ Interest Only Loans No more than 25.41% of Mortgage Loans shall be Interest Only
Loans.

ƒ Weighted Average No more than 78.12%

Original LTV

ƒ Weighted Average No more than 80.12%

Combined Original

ƒ 2nd Liens (must The Mortgage Loans shall consist of no more than 2.46% second
accompany 1sts - no lien collateral and no second lien Mortgage Loan shall have a
standalone 2nds) CLTV more than 100%.

ƒ Silent Seconds No more than 22.62%

ƒ Loans w/ Combined No more than 40.39%

Original LTV > 80%

ƒ Loans w/ Combined No more than 8.67%

Original LTV > 90%

ƒ Loans w/ Combined No more than 3.08%

Original LTV > 95%

ƒ Full Documentation No less than 52.95% of Mortgage Loans shall be Full

Loans Documentation

ƒ Stated Documentation No more than 41.82% of Mortgage Loans shall be Stated

Loans Documentation

ƒ Limited No more than 5.24% of Mortgage Loans shall be Limited

NYLIB5 873913.3
 Documentation Loans Documentation

ƒ Purchase Money No less than 38.00%

Loans

ƒ Cash-Out Refinance No more than 58.89%

Loans

ƒ Refinance –Rate No more than 3.11%

Term Loans

ƒ Credit Grades: AA No less than 77.58%

ƒ Credit Grades: A+ No less than 10.59%

ƒ Credit Grades: A- No more than 5.51%

ƒ Credit Grades: B No more than 3.11%

ƒ Credit Grades: C No more than 2.90%

ƒ Credit Grades: C- No more than 0.29%

ƒ Owner Occupied No less than 90.62% of Mortgage Loans shall be Primary Owner
Primary Occupied dwellings

ƒ Investment No more than 9.38% of Mortgage Loans shall be an Investment

Property/2nd Home Property/2nd Home

ƒ Geographic No more than 36.78% of the mortgaged property shall be located

concentration in the State of California

ƒ Alabama Loans
ƒ No more than 0.36%. No loans originated prior to August 25, 2005.
Any loan originated between August 26, 2005 and prior to October
1, 2005 will require a verbal verification of employment and a
certified appraisal dated on or after October 1, 2005.

ƒ Notwithstanding anything to the contrary set forth in the Purchase

Agreement or hereunder, solely with respect to Mortgage Loans
affected by Hurricane Katrina, the Seller and the Purchaser agree
that if the related Mortgagor is delinquent in any monthly
payment due the earlier of either (a) the closing date of any
securitization with respect to such Mortgage Loan or (b) the first
through fifth due date either (i) after origination of such Mortgage
Loan, or (ii) after the related closing date, the Seller, at the
Purchaser’s option, shall repurchase such Mortgage Loan from
the Purchaser at the Purchase Price (as defined in the PPTA), and
pursuant to the terms of the Purchase Agreement.

ƒ Louisiana Loans
ƒ No more than 0.08%. No loans originated prior to August 25,
2005. Any loan originated between August 26, 2005 and prior to

NYLIB5 873913.3
 October 1, 2005 will require a verbal verification of employment
and a certified appraisal dated on or after October 1, 2005.

ƒ Notwithstanding anything to the contrary set forth in the Purchase

Agreement or hereunder, solely with respect to Mortgage Loans
affected by Hurricane Katrina, the Seller and the Purchaser agree
that if the related Mortgagor is delinquent in any monthly
payment due the earlier of either (a) the closing date of any
securitization with respect to such Mortgage Loan or (b) the first
through fifth due date either (i) after origination of such Mortgage
Loan, or (ii) after the related closing date, the Seller, at the
Purchaser’s option, shall repurchase such Mortgage Loan from
the Purchaser at the Purchase Price (as defined in the PPTA), and
pursuant to the terms of the Purchase Agreement.

ƒ Mississippi Loans
ƒ No more than 0.16%. No loans originated prior to August 25,
2005. Any loan originated between August 26, 2005 and prior to
October 1, 2005 will require a verbal verification of employment
and a certified appraisal dated on or after October 1, 2005.

ƒ Notwithstanding anything to the contrary set forth in the Purchase

Agreement or hereunder, solely with respect to Mortgage Loans
affected by Hurricane Katrina, the Seller and the Purchaser agree
that if the related Mortgagor is delinquent in any monthly
payment due the earlier of either (a) the closing date of any
securitization with respect to such Mortgage Loan or (b) the first
through fifth due date either (i) after origination of such Mortgage
Loan, or (ii) after the related closing date, the Seller, at the
Purchaser’s option, shall repurchase such Mortgage Loan from
the Purchaser at the Purchase Price (as defined in the PPTA), and
pursuant to the terms of the Purchase Agreement.

ƒ Property Types: No less than 74.65% of Mortgage Loans shall be Single Family
Single Family dwellings

ƒ Property Types: 2-4 No more than 8.52% of Mortgage Loans shall be 2-4 Family
Family dwellings

ƒ Manufactured None
Housing Loans

ƒ Home Improvement None

Loans

ƒ No Adverse Selection: The pool has not been adversely selected. No loan has been
rejected by a buyer for any reason.

ƒ Servicing: Seller or its affiliates is the sole servicer of all Mortgage Loans.

Remittance will be on the 18th of each month. Remittance

reports shall be delivered to the Purchaser on the 10th day of

NYLIB5 873913.3
 each month covering the activity of the preceding calendar month
in hard copy and electronic format. The servicing fee will be 50
basis points annually.

Principal and interest advances will be made by the Seller or its

successors or assigns. Compensating interest will be paid by the
Seller or its successors or assigns for full and partial prepayments
up to the servicing fee.

Any prepayment penalty collected will be remitted to Morgan

Stanley. Late fees and other ancillary fees shall be retained by
the servicer. Prepayment penalty fees will not be waived. Such
amounts will be deposited into the custodial account and remitted
to Morgan Stanley with the regular remittance on the 18th.

Each mortgage loan shall have a tax service contract. If Morgan

Stanley or any of its successors or assigns terminates Seller or its
successors or assigns as servicer or if Morgan Stanley purchases
the servicing rights from the Seller, Seller will transfer the tax
service contracts at no cost.

Morgan Stanley or any of its successors or assigns will make all

decisions regarding defaulted Mortgage Loans.

In the event Morgan Stanley securitizes the Mortgage Loans,

Morgan Stanley or a third party will be responsible for
performing all REMIC reporting and tax payment at no cost to
the Seller.

ƒ Premium Seller will reimburse the amount paid over par for all loans
Protection: without prepayment penalties that prepay in full for a period of 6
months. This premium protection will be assignable. This
premium protection will terminate in the event Morgan Stanley
securitizes the Mortgage Loans.

ƒ Repurchase for On any mortgage loan that has been repurchased by Seller for a
Breach of breach of a representations or warranty, Seller shall pay Morgan
Representations Stanley the purchase price plus accrued interest for the first year
and Warranties: after the closing date. Thereafter, Seller shall pay par plus 11/12
of the premium plus accrued interest for the next month, 10/12
for the month after that until such scale reaches par. This
premium protection shall be assignable. In the event Morgan
Stanley securitizes the Mortgage Loans, repurchase for breach of
representation or warranty will be at par plus accrued interest (no
premium).

ƒ Section 32 Loans: None of the Mortgage Loans are “High Rate, High Cost” loans
(commonly known as Section 32 loans) according to Regulation
Z of the Truth and Lending Act.

ƒ Due Dates: None of the Mortgage Loans shall have dues dates other than the
first of the month.

ƒ Interest: All loans shall pay interest in arrears and shall not be calculated

NYLIB5 873913.3
 on a simple interest basis.

Pair-off fee: On each Closing Date, in the event that the Seller delivers the
Mortgage Loans with an unpaid principal balance that is less than
$1,425,000,000 the Seller shall pay the Purchaser a pair-off for
the difference between the actual amount delivered and
$1,425,000,000. Such a pair-off fee shall be equal to any
decrease in basis points on the yield of the 2-year USSWAPS
rate from the trade date to each Closing Date times the product of
2 and the difference between the actual amount delivered and
$1,425,000,000.

Securitization: In the event Morgan Stanley exits the loans through a

securitization, Seller agrees to cooperate fully with any third
party insurer, monitor or master servicer, as deemed appropriate
in the securitization, and in any servicing transfer at no cost to
Morgan Stanley or any other third party. The Seller will also
agree that it will, in the event the Purchaser securitizes the
Mortgage Loans, (i) provide necessary disclosure, including,
without limitation, disclosure regarding the Seller’s company,
portfolio performance, and underwriting procedures, (ii) restate
on the date of any securitization the representations and
warranties regarding itself and the individual mortgage loans
with such modifications as are necessary to reflect events
occurring between the closing date and the reconstitution date but
only if the date of securitization is within 6 months of the
settlement of Morgan Stanley's final purchase of the loans from
the Seller, and (iii) jointly and severally with any affiliate thereof
acceptable to the Purchaser agree (A) to indemnify and hold
harmless the Purchaser, each affiliate designated by the
Purchaser and each person who controls the Purchaser or such
affiliate from and against any and all losses, claims, damages and
liabilities arising from any untrue statement or alleged untrue
statement of a material fact contained in any information with
respect to the Seller, its affiliate, its business or the Mortgage
Loans (the “Seller Information”) in the related offering
documents, including collateral term sheets and computational
materials, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (B) if such
indemnification were not available, to contribute to such losses,
claims, damages and liabilities in proportion to their relative
benefit and fault, in which case relative benefit for the Seller, and
the persons related thereto, will be measured relative to the
Purchase Price and the relative benefit of the Purchaser and the
persons related thereto, will be measured relative to the
underwriting discount received in connection with the
securitization, and (iv) perform all other things reasonably
required for securitization. Morgan Stanley will reimburse to the
Seller up to $10,000 of the Seller's out-of-pocket expenses
incurred in connection with a securitization of the Mortgage
Loans by Morgan Stanley.

NYLIB5 873913.3