INDEMNIFICATION AGREEMENT
MORGAN STANLEY ABS CAPITAL I INC.
IXIS REAL ESTATE CAPITAL TRUST
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-HE2
WHEREAS, Morgan Stanley ABS Capital I Inc. (the "Depositor") is
acting
as depositor with respect to (i) the Free Writing Prospectus, dated
April 21,
2006 (the "Free Writing Prospectus"), (ii) the Prospectus, dated
May 10, 2005
(the "Base Prospectus"), (iii) the Prospectus Supplement, dated May
22, 2006
(the "Prospectus Supplement" and together with the Base Prospectus,
the
"Prospectus", and collectively with the Free Writing Prospectus,
the "Offering
Documents"), relating to IXIS Real Estate Capital Trust 2006-HE2,
Mortgage
Pass-Through Certificates, Series 2006-HE2, (the "Certificates") to
be issued
pursuant to a Pooling and Servicing Agreement, dated as of May 1,
2006 (the
"P&S"), among the Depositor, IXIS Real Estate Capital Inc., as
unaffiliated
seller (the "Unaffiliated Seller"), Master Financial, Inc., as a
servicer, Saxon
Mortgage Services, as a servicer, JPMorgan Chase Bank, National
Association, as
securities administrator, master servicer and backup servicer, and
Deutsche Bank
National Trust Company, as trustee and custodian;
WHEREAS, the Depositor purchased the Mortgage Loans from the
Unaffiliated Seller pursuant to an Unaffiliated Seller's Agreement
dated as of
May 1, 2006, by and between the Depositor and the Unaffiliated
Seller; and
WHEREAS, Morgan Stanley & Co. Incorporated, as representative
(the
"Representative"), of itself and the other underwriters named in
the
Underwriting Agreement (collectively, the "Underwriters"), dated
May 25, 2006,
between the Depositor and the Representative pursuant to which the
Representative on behalf of the Underwriters is agreeing, subject
to the terms
and conditions therein, that the Underwriters purchase on the
Closing Date
described therein the Offered Certificates (the "Offered
Certificates") as
described therein.
NOW THEREFORE, in consideration of the agreements contained herein,
and other valuable consideration the receipt and sufficiency of
which is hereby
acknowledged, the Unaffiliated Seller, the Depositor and the
Representative
agree as follows:
ARTICLE I Indemnification and Contribution.
Section 1.01 The Unaffiliated Seller agrees to indemnify and hold
harmless
the Depositor and each Underwriter, their respective officers and
directors and
each person, if any, who controls the Depositor or any Underwriter
within the
meaning of either Section 15 of the Securities Act of 1933, as
amended (the
"1933 Act") or Section 20 of the Securities Exchange Act of 1934,
as amended
(the "1934 Act"), against any and all losses, claims, damages or
liabilities,
joint or several, to which they or any of them may become subject
under the 1933
Act, the 1934 Act or other federal or state statutory law or
regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities
(or actions in respect thereof) arise out of or are based in whole
or in part
upon any untrue statement or alleged untrue statement of a material
fact
contained in the Free Writing Prospectus, the Prospectus Supplement
or in the
ABS Informational and Computational Materials or any omission or
alleged
omission to state in the Free Writing Prospectus, the Prospectus
Supplement or
in the ABS Informational and
Computational Materials a material fact required to be stated
therein or
necessary to make the statements therein, in light of the
circumstances in which
they were made, not misleading, or any such untrue statement or
omission or
alleged untrue statement or alleged omission made in any amendment
of or
supplement the Free Writing Prospectus, the Prospectus Supplement
or to the ABS
Informational and Computational Materials, and agrees to reimburse
the Depositor
and each Underwriter and each such officer, director and
controlling person
promptly upon demand for any legal or other expenses reasonably
incurred by any
of them in connection with investigating or defending or preparing
to defend
against any such loss, claim, damage, liability or action as such
expenses are
incurred; provided however, that the Unaffiliated Seller shall be
liable in any
such case only to the extent that any such loss, claim, damage,
liability or
action arises out of, or is based upon, any untrue statement or
alleged untrue
statement or omission or alleged omission made in reliance upon and
in
conformity with the Seller Information. The foregoing indemnity
agreement is in
addition to any liability which the Unaffiliated Seller may
otherwise have to
the Underwriters, the Depositor or any such director, officer or
controlling
person of the Underwriters or of the Depositor.
Section 1.02 Each Underwriter, severally but not jointly, agrees to
indemnify and hold harmless the Unaffiliated Seller, its officers
and directors
and each person, if any, who controls the Unaffiliated Seller
within the meaning
of either Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any
and all losses, claims, damages or liabilities, joint or several,
to which the
Unaffiliated Seller may become subject under the 1933 Act, the 1934
Act or other
federal or state statutory law or regulation, at common law or
otherwise,
insofar as such losses, claims, damages or liabilities (or actions
in respect
thereof) arise out of or are based in whole or in part upon any
untrue statement
or alleged untrue statement of a material fact contained in the the
Prospectus
Supplement or any omission or alleged omission to state in the
Prospectus
Supplement a material fact required to be stated therein or
necessary to make
the statements therein, in light of the circumstances in which they
were made,
not misleading, or any such untrue statement or omission or alleged
untrue
statement or alleged omission made in any amendment of or
supplement to the
Prospectus Supplement, and including in each case any information
included
therein by its incorporation by reference into the Prospectus and
agrees to
reimburse the Unaffiliated Seller, and each such director, officer
or
controlling person for any legal or other expenses reasonably
incurred by any of
them in connection with investigating or defending or preparing to
defend
against any such loss, claim, damage, liability or action as such
expenses are
incurred; provided however, that the Underwriters shall be liable
in any such
case only to the extent that any such loss, claim, damage,
liability or action
arises out of, or is based upon, any untrue statement or alleged
untrue
statement or omission or alleged omission made in reliance upon and
in
conformity with the Underwriter Information. The foregoing
indemnity agreement
is in addition to any liability which the Underwriter may otherwise
have to the
Unaffiliated Seller or any such director, officer or controlling
person of the
Unaffiliated Seller.
As used herein:
"Depositor Information" means the statements set forth in the Free
Writing Prospectus and the Prospectus Supplement under the caption
"The
Depositor".
"Seller Information" means (x) the information and data concerning
the
Mortgage Loans set forth on any computer tape (or other electronic
or printed
medium) furnished to the
2
Depositor and/or the Unaffiliated Seller, in the ABS Informational
and
Computational Materials, (as defined below) to the extent such ABS
Informational
and Computational Materials were approved by the Unaffiliated
Seller and (y) the
information set forth in the Free Writing Prospectus and the
Prospectus
Supplement, other than the Depositor Information, the Servicer
Information and
the Underwriter Information (including, without limitation, the
Static Pool
Information (as defined below)).
"Servicer Information" means the information concerning the
servicers
under the caption "The Servicers" in the Free Writing Prospectus
and the
Prospectus Supplement.
"Static Pool Information" means information regarding the
Unaffiliated
Seller's residential mortgage loan securitization provided to the
Depositor by
the Unaffiliated Seller and made available on the internet at
http://www.morganstanley.com/institutional/abs_spi/IXIS.html.
"Underwriter Information" means the statements set forth (i) in the
last paragraph on the cover page of the Prospectus Supplement, (ii)
and under
the caption "Plan of Distribution" in the Prospectus Supplement.
The term "ABS Informational and Computational Materials" has the
meaning assigned to it in Item 1101(a) of Regulation AB.
Section 1.03 Promptly after receipt by any indemnified party under
this
Section 1 of notice of any claim or the commencement of any action,
such
indemnified party shall, if a claim in respect thereof is to be
made against any
indemnifying party under this Section 1, notify the indemnifying
party in
writing of the claim or the commencement of that action; provided,
however, that
the failure to notify an indemnifying party shall not relieve it
from any
liability which it may have under this Section 1 except to the
extent it has
been materially prejudiced by such failure; and provided further,
however, that
the failure to notify any indemnifying party sha
