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


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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 shall not relieve it from any
liability which it may have to any indemnified party otherwise than under this
Section 1.

          If any such claim or action shall be brought against an indemnified
party, and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel reasonably satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, except as provided in
the following paragraph, the indemnifying party shall not be liable to the
indemnified party under this Section 1 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the defense
thereof other than reasonable costs of investigation.

          Any indemnified party shall have the right to employ separate counsel
in any such action and to participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such indemnified party
unless: (i) the employment thereof has been specifically authorized by the
indemnifying party in writing; (ii) such indemnified party shall have been
advised by such counsel that there may be one or more legal defenses available
to it which are different from or additional to those available to the
indemnifying party and in the reasonable judgment of such counsel it is
advisable for such indemnified party to employ


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separate counsel; or (iii) the indemnifying party has failed to assume the
defense of such action and employ counsel reasonably satisfactory to the
indemnified party, in which case, if such indemnified party notifies the
indemnifying party in writing that it elects to employ separate counsel at the
expense of the indemnifying party, the indemnifying party shall not have the
right to assume the defense of such action on behalf of such indemnified party,
it being understood, however, the indemnifying party shall not, in connection
with any one such action or separate but substantially similar or related
actions in the same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more than one
separate firm of attorneys (in addition to local counsel) at any time for all
such indemnified parties, which firm shall be designated in writing by (x) the
Representative, if the indemnified parties under this Section 1 consist of the
Underwriters and/or the Depositor or any of their respective directors, officers
or controlling persons, or (y) by the Unaffiliated Seller if the indemnified
parties under this Section 1 consist of the Unaffiliated Seller or any of its
respective directors, officers or controlling persons.

          Each indemnified party, as a condition of the indemnity agreements
contained in this Section 1, shall cooperate with the indemnifying party in the
defense of any such action or claim. No indemnifying party shall be liable for
any settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in any such action,
the indemnifying party agrees to indemnify and hold harmless any indemnified
party from and against any loss or liability by reason of such settlement or
judgment.

          Notwithstanding the foregoing sentence, if at any time an indemnified
party shall have requested an indemnifying party to reimburse the indemnified
party for the reasonable fees and expenses of counsel, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement.

     Section 1.04 If the indemnification provided for in this Section 1 is
unavailable to an indemnified party under Sections 1(a) or 1(b) hereof or
insufficient in respect of any losses, claims, damages or liabilities referred
to therein, then (i) the indemnifying party, in lieu of indemnifying such
indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities, in
such proportion as is appropriate to reflect the relative benefits received by
the indemnifying party and the indemnified party, respectively, from the
issuance of the Offered Certificates or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as to
reflect not only the relative benefits referred to in clause (i) above but also
the relative fault of the indemnifying party and the indemnified party,
respectively, in connection with the statements or omissions that result in such
losses, claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Unaffiliated Seller on the
one hand and the Depositor and the Underwriters on the other shall be deemed to
be in such proportion as the total net proceeds from the offering received by
the Unaffiliated Seller bears to the total underwriting discounts and
commissions. The relative fault of the indemnified party and indemnifying party
shall be determined by reference to, among other things, whether the


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untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
parties and their relative knowledge, access to information and opportunity to
correct or prevent such statement or omission and any other equitable
considerations.

          The Depositor, the Underwriters and the Unaffiliated Seller agree that
it would not be just and equitable if contribution pursuant to this Section 1(d)
were determined by pro rata allocation or by any other method of allocation
which does not take account of the considerations referred to in this Section
1(d) above. The amount paid or payable by an indemnified party as a result of
the losses, claims, damages and liabilities referred to in this Section 1(d)
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim, except
where the indemnified party is required to bear such expenses pursuant to this
Section 1, which expenses the indemnifying party shall pay, at the request of
the indemnified party, to the extent that the indemnifying party will be
ultimately obligated to pay such expenses. In the event that any expenses so
paid by the indemnifying party are subsequently determined to not be required to
be borne by the indemnifying party hereunder, the indemnified shall promptly
refund the amount so paid to the indemnifying party. In no case shall any
Underwriter, together with the Depositor be responsible for any amount in excess
of (x) the amount received by such Underwriter in connection with its resale of
the Offered Certificates, over (y) the amount paid by such Underwriter for the
Offered Certificates, as applicable. No person guilty of fraudulent
misrepresentations (within the meaning of Section 11(f) of the 1933 Act), shall
be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

     Section 1.05 The indemnity and contribution agreements contained in this
Section 1 and the representations and warranties set forth in Section 2 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement, (ii) any investigation made by the Depositor, its directors
or officers or any person controlling the Depositor, by or on behalf of the
Underwriter, its directors or officers or any person controlling the Underwriter
or by or on behalf of the Unaffiliated Seller and each of their respective
directors, officers or any person controlling the Sellers, and (iii) acceptance
of and payment for any of the Offered Certificates.

     ARTICLE II Representations and Warranties. The Unaffiliated Seller
represents that:

          (a) the Unaffiliated Seller is validly existing and in good standing
under the laws of its jurisdiction of formation or incorporation, as applicable,
and has full power and authority to own its assets and to transact the business
in which it is currently engaged. The Unaffiliated Seller is duly qualified to
do business and is in good standing in each jurisdiction in which the character
of the business transacted by it or any properties owned or leased by it
requires such qualification and in which the failure so to qualify would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Unaffiliated Seller;

          (b) the Unaffiliated Seller is not required to obtain the consent of
any other person or any consent, license, approval or authorization from, or
registration or declaration


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with, any governmental authority, bureau or agency in connection with the
execution, delivery, performance, validity or enforceability of this Agreement;

          (c) the execution, delivery and performance of this Agreement by the
Unaffiliated Seller will not violate any provision of any existing law or
regulation or any order decree of any court applicable to the Unaffiliated
Seller or any provision of the charter or bylaws of the Unaffiliated Seller, or
constitute a material breach of any mortgage, indenture, contract or other
agreement to which the Unaffiliated Seller is a party or by which it may be
bound;

          (d) no proceeding of or before any court, tribunal or governmental
body is currently pending or, to the knowledge of the Unaffiliated Seller,
threatened against the Unaffiliated Seller or any of its properties or with
respect to this Agreement or the Certificates in either case, which would have a
material adverse effect on the business, properties, assets or condition
(financial or otherwise) of the Unaffiliated Seller;

          (e) the Unaffiliated Seller has full power and authority to make,
execute, deliver and perform this Agreement and all of the transactions
contemplated hereunder, and has taken all necessary corporate action to
authorize the execution, delivery and performance of this Agreement. When
executed and delivered, this Agreement will constitute the legal, valid and
binding obligation of the Unaffiliated Seller enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the enforcement of
creditors' rights generally, by the availability of equitable remedies, and by
limitations of public policy under applicable securities law as to rights of
indemnity and contribution thereunder; and

          (f) this Agreement has been duly executed and delivered by the
Unaffiliated Seller.

     ARTICLE III Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Depositor will be mailed,
delivered or telegraphed and confirmed to Morgan Stanley ABS Capital I Inc. 1585
Broadway, New York, New York 10036, Attention: Valerie Kay with a copy to
Michelle Wilke at Morgan Stanley & Co. Incorporated's legal department at 1585
Broadway, 38th Floor, New York, New York 10036; if sent to the Representative
will be mailed, delivered or telegraphed and confirmed to Morgan Stanley & Co.
Incorporated, 1585 Broadway, New York, New York 10036, Attention: Valerie Kay
with a copy to Michelle Wilke at Morgan Stanley & Co. Incorporation's legal
department at 1585 Broadway, 38th Floor, New York, New York 10036; or, if sent
to the Unaffiliated Seller, will be mailed, delivered or telegraphed and
confirmed to the Unaffiliated Seller, 9 West 57th Street, New York, New York
10019, Attention: General Counsel.

     ARTICLE IV Miscellaneous. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without giving
effect to the conflict of laws provisions thereof. This Agreement shall inure to
the benefit of and be binding upon the parties hereto and their successors and
assigns and the controlling persons referred to herein, and no other person
shall have any right or obligation hereunder. Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated orally, but only by
an instrument in writing signed by the party against whom enforcement of the
change, waiver, discharge or termination is sought. This Agreement may be
executed in counterparts, each of which when so


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executed and delivered shall be considered an original, and all such
counterparts shall constitute one and the same instrument. Capitalized terms
used but not defined herein shall have the meanings provided in the P&S.

                  [Remainder of Page Intentionally Left Blank]


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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective officers hereunto duly authorized, this
25th day of May, 2006.

                                        MORGAN STANLEY ABS CAPITAL I INC.,
                                           as Depositor


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


                                        MORGAN STANLEY & CO. INCORPORATED,
                                           as Representative


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


                                        IXIS REAL ESTATE CAPITAL INC.,
                                           as Unaffiliated Seller


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


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

          [Signature Page to the Underwriter Indemnification Agreement]