Document:

EXECUTION COPY

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                       MORGAN STANLEY ABS CAPITAL I INC.,

                                  as Depositor,

                      COUNTRYWIDE HOME LOANS SERVICING LP,

                                  as Servicer,

                         IXIS REAL ESTATE CAPITAL INC.,

                             as Unaffiliated Seller,

                      DEUTSCHE BANK NATIONAL TRUST COMPANY,

                                  as Custodian,

                                       and

                            JPMORGAN CHASE BANK, N.A.

                                   as Trustee.

                         POOLING AND SERVICING AGREEMENT

                             Dated as of May 1, 2005

                     IXIS REAL ESTATE CAPITAL TRUST 2005-HE2

                       MORTGAGE PASS-THROUGH CERTIFICATES,
                                 SERIES 2005-HE2

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                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----
ARTICLE I DEFINITIONS.........................................................10

ARTICLE II CONVEYANCE OF MORTGAGE LOANS; REPRESENTATIONS AND WARRANTIES.......55

   Section 2.01    Conveyance of Mortgage Loans...............................55
   Section 2.02    Acceptance by the Custodian of the Mortgage Loans..........61
   Section 2.03    Representations, Warranties and Covenants of the
                   Unaffiliated Seller and the Servicer.......................62
   Section 2.04    The Depositor and the Mortgage Loans.......................67
   Section 2.05    Delivery of Opinion of Counsel in Connection with
                   Substitutions and Non-Qualified Mortgages..................67
   Section 2.06    Execution and Delivery of Certificates.....................67
   Section 2.07    REMIC Matters..............................................67
   Section 2.08    Representations and Warranties of the Depositor............68

ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS....................69

   Section 3.01    Servicer to Service Mortgage Loans.........................69
   Section 3.02    Subservicing Agreements Between the Servicer and
                   Subservicers...............................................71
   Section 3.03    Successor Subservicers.....................................72
   Section 3.04    Liability of the Servicer..................................72
   Section 3.05    No Contractual Relationship Between Subservicers and
                   the Trustee................................................73
   Section 3.06    Assumption or Termination of Subservicing Agreements
                   by Trustee.................................................73
   Section 3.07    Collection of Certain Mortgage Loan Payments;
                   Establishment of Certain Accounts..........................73
   Section 3.08    Subservicing Accounts......................................77
   Section 3.09    Collection of Taxes, Assessments and Similar Items;
                   Escrow Accounts............................................77
   Section 3.10    Collection Account.........................................78
   Section 3.11    Withdrawals from the Collection Account....................79
   Section 3.12    Investment of Funds in the Accounts........................81
   Section 3.13    Maintenance of Hazard Insurance and Errors and
                   Omissions and Fidelity Coverage............................82
   Section 3.14    Enforcement of Due-On-Sale Clauses Assumption
                   Agreements.................................................83
   Section 3.15    Realization Upon Defaulted Mortgage Loans..................84
   Section 3.16    Release of Mortgage Files..................................86
   Section 3.17    Title, Conservation and Disposition of REO Property........87
   Section 3.18    Notification of Adjustments................................89
   Section 3.19    Access to Certain Documentation and Information
                   Regarding the Mortgage Loans...............................89
   Section 3.20    Documents, Records and Funds in Possession of the
                   Servicer to be Held for the Trustee........................89
   Section 3.21    Servicing Compensation.....................................90
   Section 3.22    Annual Statement as to Compliance..........................90

                                        i

   Section 3.23    Annual Independent Public Accountants' Servicing
                   Statement; Financial Statements............................91
   Section 3.24    Trustee to Act as Servicer.................................91
   Section 3.25    Compensating Interest......................................92
   Section 3.26    Credit Reporting; Gramm-Leach-Bliley Act...................92
   Section 3.27    Advance Facilities.........................................92

ARTICLE IV DISTRIBUTIONS AND ADVANCES BY THE SERVICER.........................94

   Section 4.01    Advances...................................................94
   Section 4.02    Priorities of Distribution.................................95
   Section 4.03    Monthly Statements to Certificateholders..................102
   Section 4.04    Certain Matters Relating to the Determination of
                   LIBOR.....................................................105
   Section 4.05    Allocation of Applied Realized Loss Amounts...............105

ARTICLE V THE CERTIFICATES...................................................106

   Section 5.01    The Certificates..........................................106
   Section 5.02    Certificate Register; Registration of Transfer and
                   Exchange of Certificates..................................106
   Section 5.03    Mutilated, Destroyed, Lost or Stolen Certificates.........111
   Section 5.04    Persons Deemed Owners.....................................111
   Section 5.05    Access to List of Certificateholders' Names and
                   Addresses.................................................112
   Section 5.06    Maintenance of Office or Agency...........................112

ARTICLE VI THE DEPOSITOR AND THE SERVICER....................................112

   Section 6.01    Respective Liabilities of the Depositor and the
                   Servicer..................................................112
   Section 6.02    Merger or Consolidation of the Depositor or the
                   Servicer..................................................112
   Section 6.03    Limitation on Liability of the Depositor, the Servicer
                   and Others................................................113
   Section 6.04    Limitation on Resignation of the Servicer.................114
   Section 6.05    Additional Indemnification by the Servicer; Third Party
                   Claims....................................................114

ARTICLE VII DEFAULT..........................................................115

   Section 7.01    Events of Default.........................................115
   Section 7.02    Trustee to Act; Appointment of Successor..................117
   Section 7.03    Notification to Certificateholders........................119

ARTICLE VIII CONCERNING THE TRUSTEE..........................................119

   Section 8.01    Duties of the Trustee.....................................119
   Section 8.03    Trustee Not Liable for Certificates or Mortgage Loans.....121
   Section 8.04    Trustee May Own Certificates..............................122
   Section 8.05    Trustee's and Custodian's Fees and Expenses...............122
   Section 8.06    Eligibility Requirements for the Trustee..................122
   Section 8.07    Resignation and Removal of the Trustee....................123
   Section 8.08    Successor Trustee.........................................124
   Section 8.09    Merger or Consolidation of the Trustee....................124
   Section 8.10    Appointment of Co-Trustee or Separate Trustee.............124
   Section 8.11    Tax Matters...............................................126
   Section 8.12    Periodic Filings..........................................128
   Section 8.13    Tax Classification of the Excess Reserve Fund Account.....130

                                       ii

   Section 8.14    Interest Rate Cap Agreements..............................130

ARTICLE IX TERMINATION.......................................................130

   Section 9.01    Termination upon Liquidation or Purchase of the
                   Mortgage Loans............................................130
   Section 9.02    Final Distribution on the Certificates....................131
   Section 9.03    Additional Termination Requirements.......................132

ARTICLE X MISCELLANEOUS PROVISIONS...........................................133

   Section 10.01   Amendment.................................................133
   Section 10.02   Recordation of Agreement; Counterparts....................135
   Section 10.03   Governing Law.............................................135
   Section 10.04   Intention of Parties......................................136
   Section 10.05   Notices...................................................136
   Section 10.06   Severability of Provisions................................137
   Section 10.07   Assignment................................................137
   Section 10.08   Limitation on Rights of Certificateholders................137
   Section 10.09   Inspection and Audit Rights...............................138
   Section 10.10   Certificates Nonassessable and Fully Paid.................138
   Section 10.11   Waiver of Jury Trial......................................139

SCHEDULES

Schedule I     Mortgage Loan Schedule
Schedule IA    Schedule of Countrywide Serviced Loans
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-MZ,
               Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6,
               Class B-1, Class B-2 and Class B-3 Certificate
Exhibit B      Form of Class B-4 Certificate
Exhibit C      Form of Class P Certificate
Exhibit D      Form of Class R Certificate
Exhibit E      Form of Class X Certificate
Exhibit F      Form of Initial Certification of Custodian
Exhibit G      Form of Final Certification of Custodian
Exhibit H      Form of Residual 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      Servicer Certification to be provided to Depositor
Exhibit O      Trustee Certification to be provided to Depositor

                                       iii

          THIS POOLING AND SERVICING AGREEMENT, dated as of May 1, 2005, among
MORGAN STANLEY ABS CAPITAL I INC., a Delaware corporation, as depositor (the
"Depositor"), COUNTRYWIDE HOME LOANS SERVICING LP, a Texas limited partnership,
as servicer (the "Servicer"), IXIS REAL ESTATE CAPITAL INC. (f/k/a CDC Mortgage
Capital Inc.), a New York corporation, as unaffiliated seller (the "Unaffiliated
Seller"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking association,
as custodian (the "Custodian") and JPMORGAN CHASE BANK, N.A. as trustee (the
"Trustee"),

                                   WITNESSETH:

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 Class of Certificates, other
than the Class P and Class R Certificates and other than the right of each Class
of LIBOR Certificates to receive Basis Risk Carry Forward Amounts and the right
of the Class X Certificates to receive payments from the Interest Rate Cap
Agreements and the Pre-Funding Reserve Account, represents ownership of one or
more regular interests in the Upper Tier REMIC for purposes of the REMIC
Provisions. The Class P Certificates represent beneficial ownership of the
Prepayment Charges, which portion of the Trust Fund shall be treated as a
grantor trust. The Class R Certificate represents ownership of the sole class of
residual interest in each of the Lower Tier REMIC, the Middle Tier REMIC and the
Upper Tier REMIC for purposes of the REMIC Provisions. The Class UT-R, Class
MT-R and Class LT-R Interests 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.
The Class MT-A-1, Class MT-A-2, Class MT-A-3, Class MT-A-4, Class MT-A-MZ, Class
MT-M-1, Class MT-M-2, Class MT-M-3, Class MT-M-4, Class MT-M-5, Class MT-M-6,
Class MT-B-1, Class MT-B-2, Class MT-B-3, and Class MT-B-4 Interests are hereby
designated the MT Accretion Directed Classes.

          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 Account, the Pre-Funding Reserve Account, the
Capitalized Interest Account and the Interest Rate Cap Agreements.

                                       1

          The Lower Tier Regular Interests and the Class LT-R Interest shall
have the following tier interest rate, initial tier principal amount and latest
possible maturity date as set forth in the table below.

<TABLE>

LOWER TIER CLASS   TIER INTEREST   INITIAL TIER PRINCIPAL
   DESIGNATION          RATE               AMOUNT           LATEST POSSIBLE MATURITY DATE
----------------   -------------   ----------------------   -----------------------------

Class LT-C              (1)             $705,450,196              September 25, 2035

Class LT-N              (2)                  (3)                  September 25, 2035

Class LT-PO             (4)             $158,370,942              September 25, 2035

Class LT-R              (5)                  (5)
</TABLE>

(1)  The interest rate with respect to any Distribution Date for this interest
     is (i) for the first three distribution Dates, 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 Prepayment 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 Prepayment Period on the Mortgage Loans.

(2)  The interest rate with respect to any Distribution Date for the Class LT-N
     Interest is (i) for the first three Distribution Dates, all interest on the
     Subsequent Mortgage Loans for such Distribution Date divided by
     $158,370,942, and (ii) thereafter, 0.00%.

(3)  The Class LT-N Interest will have a notional principal balance equal to
     $158,370,942.

(4)  The interest rate with respect to any Distribution Date for the Class LT-PO
     Interest is (i) for the first three Distribution Dates, 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
     Prepayment Period on the Mortgage Loans.

(5)  The Class LT-R Interest 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 Interest, 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 Account to the Lower Tier REMIC shall
be allocated to the Class LT-PO Interest.

          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
Interests, until such Classes are paid in full or eliminated by such losses.

                                       2

          The Middle Tier REMIC Regular Interests and the Class MT-R Interest
shall have the following tier interest rate, initial principal amount,
corresponding classes, and latest possible maturity date as set forth in the
table below.

<TABLE>

                      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 Corresponding     Class A-1     September 25, 2035
                               Class initial principal
                               balance

Class MT-A-2           (1)     1/2 of the Corresponding     Class A-2     September 25, 2035
                               Class initial principal
                               balance

Class MT-A-3           (1)     1/2 of the Corresponding     Class A-3     September 25, 2035
                               Class initial principal
                               balance

Class MT-A-4           (1)     1/2 of the Corresponding     Class A-4     September 25, 2035
                               Class initial principal
                               balance

Class MT-A-MZ          (1)     1/2 of the Corresponding     Class A-MZ    September 25, 2035
                               Class initial principal
                               balance

Class MT-M-1           (1)     1/2 of the Corresponding     Class M-1     September 25, 2035
                               Class initial principal
                               balance

Class MT-M-2           (1)     1/2 of the Corresponding     Class M-2     September 25, 2035
                               Class initial principal
                               balance

Class MT-M-3           (1)     1/2 of the Corresponding     Class M-3     September 25, 2035
                               Class initial principal
                               balance

Class MT-M-4           (1)     1/2 of the Corresponding     Class M-4     September 25, 2035
                               Class initial principal
                               balance

Class MT-M-5           (1)     1/2 of the Corresponding     Class M-5     September 25, 2035
                               Class initial principal
                               balance

Class MT-M-6           (1)     1/2 of the Corresponding     Class M-6     September 25, 2035
                               Class initial principal
                               balance
</TABLE>

                                       3

<TABLE>

                      TIER
MIDDLE TIER CLASS   INTEREST   INITIAL TIER PRINCIPAL     CORRESPONDING     LATEST POSSIBLE
   DESIGNATION        RATE              AMOUNT               CLASS           MATURITY DATE
-----------------   --------   ------------------------   -------------   ------------------

Class MT-B-1           (1)     1/2 of the Corresponding     Class B-1     September 25, 2035
                               Class initial principal
                               balance

Class MT-B-2           (1)     1/2 of the Corresponding     Class B-2     September 25, 2035
                               Class initial principal
                               balance

Class MT-B-3           (1)     1/2 of the Corresponding     Class B-3     September 25, 2035
                               Class initial principal
                               balance

Class MT-B-4           (1)     1/2 of the Corresponding     Class B-4     September 25, 2035
                               Class initial principal
                               balance

Class MT-Accrual       (1)                  (2)                N/A        September 25, 2035

Class MT-N             (3)                  (4)              Class X      September 25, 2035

Class MT-R             (5)                  (5)              Class R
</TABLE>

(1)  The interest rate with respect to any Distribution Date for these interests
     is the weighted average of the Pass-Through Rates of the Class LT-C and
     Class LT-PO Interests.

(2)  The Class MT-Accrual Interest will have an initial principal balance equal
     to the product of (a) 1/2 and (b) the sum of (i) the Pool Stated Principal
     Balance, (ii) the Subordinated Amount and (iii) the Pre-Funding Amount.

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

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

(5)  The Class MT-R Interest is the sole class of residual interest in the
     Middle Tier REMIC. The Class MT-R Interest 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 Class MT-Accrual Interest. 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 Class MT-Accrual Interest may not exceed interest
accruals for such Distribution Date for the

                                        4

Class MT-Accrual Interest. If, with respect to any Distribution Date, 50% of the
increase in the Subordinated Amount exceeds accrued interest on the Class
MT-Accrual Interest, 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 Class MT-Accrual Interest
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 Class MT-Accrual Interest 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 in the Subordinated Amount shall be
allocated to the Class MT-Accrual Interest 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 the principal balance of its Corresponding Class, and (ii)
the principal balance of the Class MT-Accrual Interest is equal to 50% of the
sum of (1) the Pool Stated Principal Balance, (2) the Subordinated Amount and
(3) the Pre-Funding Amount.

          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.

<TABLE>

   UPPER TIER      UPPER TIER
     CLASS          INTEREST    INITIAL UPPER TIER                         LATEST POSSIBLE MATURITY
  DESIGNATION        RATE         PRINCIPAL AMOUNT   CORRESPONDING CLASS             DATE
----------------   ----------   ------------------   -------------------   ------------------------

 Class A-1            (1)          $255,000,000         Class A-1(21)         September 25, 2035

 Class A-2            (2)          $175,000,000         Class A-2(21)         September 25, 2035

 Class A-3            (3)          $ 70,000,000         Class A-3(21)         September 25, 2035

 Class A-4            (4)          $109,858,000         Class A-4(21)         September 25, 2035

 Class A-MZ           (5)          $ 95,020,000         Class A-MZ(21)        September 25, 2035

 Class M-1            (6)          $ 28,938,000         Class M-1(21)         September 25, 2035

 Class M-2            (7)          $ 15,980,000         Class M-2(21)         September 25, 2035

 Class M-3            (8)          $ 12,958,000         Class M-3(21)         September 25, 2035

 Class M-4            (9)          $ 22,891,000         Class M-4(21)         September 25, 2035

 Class M-5           (10)          $ 12,957,000         Class M-5(21)         September 25, 2035

 Class M-6           (11)          $ 11,230,000         Class M-6(21)         September 25, 2035

 Class B-1           (12)          $ 13,389,000         Class B-1(21)         September 25, 2035

 Class B-2           (13)          $  8,638,000         Class B-2(21)         September 25, 2035
</TABLE>

                                        5

<TABLE>

   UPPER TIER      UPPER TIER
     CLASS          INTEREST    INITIAL UPPER TIER                         LATEST POSSIBLE MATURITY
  DESIGNATION        RATE         PRINCIPAL AMOUNT   CORRESPONDING CLASS              DATE
----------------   ----------   ------------------   -------------------   ------------------------

 Class B-3           (14)           $9,503,000          Class B-3(21)         September 25, 2035

 Class B-4           (15)           $8,638,000          Class B-4(21)         September 25, 2035

 Class X-1(20)       (16)               (16)             Class X(22)          September 25, 2035

 Class X-2(20)       (17)               (18)             Class X(22)          September 25, 2035

 Class UT-R          (19)               (19)               Class R
</TABLE>

(1)  The Class A-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the least of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.0800% or (y)
     after the Optional Termination Date, 0.1600% and (b) the Adjusted WAC Cap.

(2)  The Class A-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the least of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.1500% or (y)
     after the Optional Termination Date, 0.3000% and (b) the Adjusted WAC Cap.

(3)  The Class A-3 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.2200% or (y)
     after the Optional Termination Date, 0.4400% and (b) the Adjusted WAC Cap.

(4)  The Class A-4 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.3400% or (y)
     after the Optional Termination Date, 0.6800% and (b) the Adjusted WAC Cap.

(5)  The Class A-MZ Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.2600% or (y)
     after the Optional Termination Date, 0.5200% and (b) the Adjusted WAC Cap.

(6)  The Class M-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.4300% or (y)
     after the Optional Termination Date, 0.6450% and (b) the Adjusted WAC Cap.

(7)  The Class M-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to

                                        6

     the Optional Termination Date, 0.4500% or (y) after the Optional
     Termination Date, 0.6750% and (b) the Adjusted WAC Cap.

(8)  The Class M-3 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.4800% or (y)
     after the Optional Termination Date, 0.7200% and (b) the Adjusted WAC Cap.

(9)  The Class M-4 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.6200% or (y)
     after the Optional Termination Date, 0.9300% and (b) the Adjusted WAC Cap.

(10) The Class M-5 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.6500% or (y)
     after the Optional Termination Date, 0.9750% and (b) the Adjusted WAC Cap.

(11) The Class M-6 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 0.6900% or (y)
     after the Optional Termination Date, 1.0350% and (b) the Adjusted WAC Cap.

(12) The Class B-1 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 1.2000% or (y)
     after the Optional Termination Date, 1.8000% and (b) the Adjusted WAC Cap.

(13) The Class B-2 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 1.3000% or (y)
     after the Optional Termination Date, 1.9500% and (b) the Adjusted WAC Cap.

(14) The Class B-3 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 1.7500% or (y)
     after the Optional Termination Date, 2.6250% and (b) the Adjusted WAC Cap.

(15) The Class B-4 Certificates will bear interest during each Interest Accrual
     Period at a per annum variable rate equal to the lesser of (a) one-month
     LIBOR plus (x) on or prior to the Optional Termination Date, 3.500% or (y)
     after the Optional Termination Date, 5.2500% and (b) the Adjusted WAC Cap.

(16) The Class X-1 Interest has an initial principal balance of $13,821,138 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
     Interest 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 Interest
     shall

                                        7

     bear interest at a rate equal to the excess, if any, of the Adjusted 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 Class MT-Accrual Interest 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 Interest 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.

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

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

(19) The Class UT-R Interest is the sole class of residual interest in the Upper
     Tier REMIC. The Class UT-R Interest does not have a principal amount or an
     interest rate.

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

(21) 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 Carry Forward 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 Certificateholders.

(22) The Class X Certificates also represent the right to receive payments from
     the Interest Rate Cap Agreements and the Pre-Funding Reserve Account.

          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 in excess thereof. The minimum denomination for the Class P
Certificates will be $1 with integral multiples thereof. The minimum
denomination for the Class X Certificates will be a 1% Percentage Interest in
such Class. The Class R 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
                                         M-4, Class M-5, Class M-6, Class B-1,
                                         Class B-2, Class B-3 and Class B-4
                                         Certificates.

                                        8

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.

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

Non-Delay Certificates................   Class A-1, Class A-2, Class A-3, Class
                                         A-4, Class A-MZ, 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 B-4, 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.

                                        9

                                   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.

          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 Pre-Funding Account or the Pre-Funding Reserve Account. Each
Account shall be an Eligible Account.

          Accredited: Accredited Home Lenders, Inc., a California corporation,
and its successors in interest.

          Accredited Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Accredited, and each other Assignment and Recognition Agreement,
by and among the Unaffiliated Seller, the Depositor and Accredited in connection
with any Subsequent Transfer of Accredited Mortgage Loans.

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

          Accredited Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and Accredited.

          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 such Distribution Date 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 Unaffiliated Seller desires to make a
Subsequent Transfer.

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

                                       10

          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 of the Pass-Through Rates of
the Middle Tier Regular Interests (other than the Class MT-N).

          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.

          Advancing Person: As defined in Section 3.27.

          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.

          Allstate: Allstate Home Loans, Inc., a California corporation.

          Allstate Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Allstate, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Allstate in connection with
any Subsequent Transfer of Allstate Mortgage Loans.

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

          Allstate Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of September 1, 2004, as amended to date, by and between the
Unaffiliated Seller and Allstate.

                                       11

          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, Insurance Proceeds, Condemnation Proceeds 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.

          Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
LIBOR 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 Accredited Assignment
Agreement, the Allstate Assignment Agreement, the BNC Assignment Agreement, the
Chapel Mortgage Assignment Agreement, the Encore Assignment Agreement, the First
Bank Assignment Agreement, the First Horizon Assignment Agreement, the Fremont
Assignment Agreement, the Homeowners Assignment Agreement, the Home Loan Corp.
Assignment Agreement, the Impac Assignment Agreement, the Lenders Direct
Assignment Agreement, the Lime Financial Assignment Agreement, the Master
Financial Assignment Agreement, the NC Capital Assignment Agreement, the Novelle
Assignment Agreement, the People's Choice Assignment Agreement, the Platinum
Assignment Agreement or the ResMae 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.

          Available Funds: With respect to any Distribution Date and the
Mortgage Loans, to the extent received by the Trustee (x) the sum of (i) the
aggregate amount of Scheduled Payments on the Mortgage Loans due on the related
Due Date (net of the related Expense Fees) and received by the Servicer on or
prior to the related Determination Date, together with any P&I Advance in
respect thereof, (ii) certain unscheduled payments in respect of the Mortgage
Loans received by the Servicer during the related Prepayment Period and remitted
to the Trustee, including all partial or full prepayments, Insurance Proceeds,
Condemnation Proceeds, Liquidation Proceeds (excluding Prepayment Charges),
(iii) Compensating Interest payments from the Servicer to the Trustee in respect
of Prepayment Interest Shortfalls for that Distribution Date, (iv) for any
Distribution Date on or prior to August 25, 2005, any funds required to be paid
from the Capitalized Interest Account to make up for any interest shortfalls on
the Initial Mortgage Loans, (v) immediately following the end of the Pre-Funding
Period, all amounts, if any, on deposit in the Pre-Funding Account, (vi) the
proceeds from repurchases of Mortgage Loans, and any Substitution Adjustment
Amounts received in connection with respect to the substitutions of Mortgage
Loans that occur during the month in which such Distribution Date occurs at the
Repurchase Price and (vii) all proceeds received with respect to the termination
of

                                       12

the Trust Fund pursuant to Section 9.01(a) hereof, reduced by (y) amounts in
reimbursement for Advances previously made with respect to the Mortgage Loans
and other amounts, in each case, as to which the Servicer, the Depositor, the
Custodian or the Trustee are entitled to be paid or reimbursed pursuant to the
Agreement.

          Average Net Proceeds: As defined in Exhibit M hereto.

          Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.

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

          Basis Risk Carry Forward Amount: With respect to each Class of LIBOR
Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass-Through Rate for any Class of LIBOR Certificates is
based upon the Adjusted WAC Cap, 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, for such Distribution Date and
(B) the Basis Risk Carry Forward 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, a payment in an amount
equal to any Basis Risk Carry Forward Amount less any Interest Rate Cap Payment
with respect to such Distribution Date; provided, however, that with respect to
any Distribution Date, the payment cannot exceed the amounts otherwise available
for distribution on the Class X Certificates.

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

          BNC: BNC Mortgage, Inc., a Delaware corporation, and its successors in
interest.

          BNC Assignment Agreement: The Assignment and Recognition Agreement,
dated as of May 26, 2005, 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 Agreements, and which has been
acquired by the Trust Fund.

                                       13

          BNC Purchase Agreements: The Second Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of March 30, 2004, 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 States of New
York, Utah, New Jersey and Florida, (b) the applicable states in which the
Servicer's servicing operations are located, (c) the State in which the
Trustee's operations are located or (d) the State in which the Custodian's
operations are located, are authorized or obligated by law or executive order to
be closed.

          Cap Provider: IXIS 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 LIBOR Certificateholders and designated "JPMorgan
Chase Bank, N.A., in trust for registered holders of IXIS Real Estate Capital
Trust 2005-HE2, Mortgage Pass-Through Certificates, Series 2005-HE2".

          Capitalized Interest Requirement: With respect to the Distribution
Dates occurring in June 2005, July 2005 and August 2005, the excess, if any, of
(x) the Accrued Certificate Interests for all classes of the LIBOR 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.

          Certificate Balance: With respect to any Class of Certificates, other
than the Class X and Class R Certificates, 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
Certificates, reduced by any Applied Realized Loss Amounts allocated to such
Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of Unpaid
Realized Loss Amounts for such Class or Classes for such Distribution Date);
provided, that the Certificate Balance of any Class of Certificates that had
previously been reduced to zero shall not be increased as a result of any
Subsequent Recoveries. The Class X and Class R Certificates have no Certificate
Balance.

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

                                       14

          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% 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, and its successors in interest.

          Chapel Mortgage Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, 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, Class A-2, Class A-3, Class A-4
and Class A-MZ Certificates.

          Class A Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class A Certificates, dated May 26, 2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller, as "Party B"
thereunder, or any replacement thereof.

          Class A Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's "Preceding Business
Day Convention") with respect to the Class A Certificates, for the first 28
Distribution Dates, the amount, if any, equal to

                                       15

the product of (i) the excess, if any, of the lesser of (A) one-month LIBOR rate
as of the related reset date under the Class A Certificates Interest Rate Cap
Agreement and (B) the applicable cap ceiling rate set forth on Schedule A to
such Interest Rate Cap Agreement for such Distribution Date over the applicable
cap strike rate set forth on Schedule A to such Interest Rate Cap Agreement for
such Distribution Date, calculated on an "actual/360" basis, (ii) the applicable
Class A notional amount set forth on Schedule A to the Class A Interest Rate Cap
Agreement for that Distribution Date and (iii) the multiplier set forth on
Schedule A to such Interest Rate Cap Agreement.

          Class A Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (x) the aggregate Class
Certificate Balances of the Class A Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) 63.20% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,319,106.

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

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

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

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

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

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

          Class B Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class B Certificates, dated May 26, 2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller, as "Party B"
thereunder, or any replacement thereof.

          Class B Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's "Preceding Business
Day Convention"), with respect to the Class B Certificates, for the first 28
Distribution Dates, the amount, if any, equal to the product of (i) the excess,
if any, of the lesser of (A) one-month LIBOR rate as of the related reset date
under the Class B Certificates Interest Rate Cap Agreement for such Distribution
Date over the applicable cap strike rate set forth on Schedule A to such
Interest Rate Cap Agreement for such Distribution Date, calculated on an
"actual/360" basis; (ii) the applicable Class B notional amount set forth on
Schedule A to the Class B Certificates Interest Rate Cap Agreement for that
Distribution Date and (iii) the multiplier set forth on Schedule A to such
Interest Rate Cap Agreement.

                                       16

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

          Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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 the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), and (H) the Class Certificate Balance of the
Class B-1 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 90.60% of the Current Maximum Amount and (B) the excess, if any,
of the Current Maximum Amount over $4,319,106.

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

          Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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 the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), and (I) the Class
Certificate Balance of the Class B-2 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 92.60% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,319,106.

                                       17

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

          Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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 the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution Amount on such Distribution Date), (I) the Class
Certificate Balance of the Class B-2 Certificates (after taking into account the
distribution of the Class B-2 Principal Distribution Amount on such Distribution
Date), and (J) the Class Certificate Balance of the Class B-3 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 94.80%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

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

          Class B-4 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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 the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date), (G) the Class Certificate Balance of the Class M-6 Certificates (after
taking into account the distribution of the Class M-6 Principal Distribution
Amount on such Distribution Date), (H) the Class Certificate Balance of the
Class B-1 Certificates (after taking into account the distribution of the Class
B-1 Principal Distribution

                                       18

Amount on such Distribution Date), (I) the Class Certificate Balance of the
Class B-2 Certificates (after taking into account the distribution of the Class
B-2 Principal Distribution Amount on such Distribution Date), (J) the Class
Certificate Balance of the Class B-3 Certificates (after taking into account the
distribution of the Class B-3 Principal Distribution Amount on such Distribution
Date), and (K) the Class Certificate Balance of the Class B-4 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 96.80%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

          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 Certificates Interest Rate Cap Agreement: The interest rate
cap agreement, relating to the Class M Certificates, dated May 26, 2005 with the
Cap Provider, as "Party A" thereunder, and the Unaffiliated Seller, as "Party B"
thereunder, or any replacement thereof.

          Class M Certificates Interest Rate Cap Payment: On the 24th day of
each month (subject to adjustment in accordance with ISDA's "Preceding Business
Day Convention") with respect to the Class M Certificates, for the first 28
Distribution Dates, the amount, if any, equal to the product of (i) the excess,
if any, of the lesser of (A) one-month LIBOR rate as of the related reset date
under the Class M Certificates Interest Rate Cap Agreement and (B) the
applicable cap ceiling rate set forth on Schedule A to such Interest Rate Cap
Agreement for such Distribution Date over the applicable cap strike rate set
forth on Schedule A to such Interest Rate Cap Agreement for such Distribution
Date, calculated on an "actual/360" basis; (ii) the applicable Class M notional
amount set forth on Schedule A to the Class M Certificates Interest Rate Cap
Agreement for that Distribution Date and (iii) the multiplier set forth on
Schedule A to such Interest Rate Cap Agreement;

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

          Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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) 69.90% of the Current Maximum Amount and (B) the excess, if any, of the
Current Maximum Amount over $4,319,106.

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

          Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal

                                       19

Distribution Amount on such Distribution Date), (B) the Class Certificate
Balance of the Class M-1 Certificates (after taking into account the
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) 73.60%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

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

          Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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) 76.60%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

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

          Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the distribution of the Class A Principal Distribution Amount on
such Distribution Date), (B) the Class Certificate Balances of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal Distribution Amount on such Distribution Date), (C) the Class
Certificate Balances of the Class M-2 Certificates (after taking into account
the distribution of the Class M-2 Principal Distribution Amount on such
Distribution Date), (D) the Class Certificate Balances of the Class M-3
Certificates (after taking into account the distribution of the Class M-3
Principal Distribution Amount on such Distribution Date) and (E) the Class
Certificate Balances of the Class M-4 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 81.90% of the Current Maximum
Amount and (B) the excess, if any, of the Current Maximum Amount over
$4,319,106.

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

          Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) aggregate
Class Certificate Balances of the Class A Certificates (after taking into
account the distribution of the Class A Principal Distribution Amount on such
Distribution Date), (B) the Certificate Principal Balance of the Class M-1
Certificates (after taking into account the distribution of the Class M-1
Principal

                                       20

Distribution Amount on such Distribution Date), (C) the Certificate Principal
Balance of the Class M-2 Certificates (after taking into account the
distribution of the Class M-2 Principal Distribution Amount on such Distribution
Date), (D) the Certificate Principal Balance of the Class M-3 Certificates
(after taking into account the distribution of the Class M-3 Principal
Distribution Amount on such Distribution Date), (E) the Certificate Principal
Balance of the Class M-4 Certificates (after taking into account the
distribution of the Class M-4 Principal Distribution Amount on such Distribution
Date) and (F) the Certificate Principal Balance of the Class M-5 Certificates
immediately prior to such Distribution Date over (i) the lesser of (A) 84.90% of
the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

          Class M-6 Certificates: All Certificates bearing the class designation
of "Class M-6".

          Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, an amount equal to the excess of (i) the sum of (A) the
aggregate Class Certificate Balances of the Class A Certificates (after taking
into account the 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 the 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 the
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 the distribution of the Class M-3 Principal Distribution
Amount on such Distribution Date), (E) the Class Certificate Balance of the
Class M-4 Certificates (after taking into account the distribution of the Class
M-4 Principal Distribution Amount on such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount on such Distribution
Date) and (G) the Class Certificate Balance of the Class M-6 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 87.50%
of the Current Maximum Amount and (B) the excess, if any, of the Current Maximum
Amount over $4,319,106.

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

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

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

          Class X Distributable Amount: On any Distribution Date, the sum of (i)
as a distribution in respect of interest, 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, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class X Regular Interest which is distributable as a
Subordination Reduction Amount, less (iii) any amounts paid as a Basis Risk
Payment.

                                       21

          Class X Regular Interest: The Upper Tier Regular Interests represented
by the Class X Certificates as specified and described in the Preliminary
Statement and the related footnote thereto.

          Closing Date: May 26, 2005.

          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 amount by which the Prepayment Interest Shortfall, if any, for such
Distribution Date exceeds all Prepayment Interest Excesses for such Distribution
Date, with respect to voluntary Principal Prepayments in Full (excluding any
payments made upon liquidation of the Mortgage Loan) 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 New York 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 4 New York Plaza, 6th Floor, New York,
New York 10004-2477, Attn: Institutional Trust Services/Global Debt-IXIS Real
Estate Capital Trust 2005-HE2, facsimile no. (212) 623-5930 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 corresponds to the class of interests in another such REMIC
or to a Class of Certificates in the manner set out below:

CORRESPONDING MIDDLE TIER   CORRESPONDING 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-MZ                 Class A-MZ           Class A-MZ
      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 -M-4                 Class M-4            Class M-4
      Class MT -M-5                 Class M-5            Class M-5
      Class MT -M-6                 Class M-6            Class M-6

                                       22

CORRESPONDING MIDDLE TIER   CORRESPONDING UPPER TIER   CORRESPONDING
    CLASS DESIGNATION               INTEREST            CERTIFICATE
-------------------------   ------------------------   -------------
      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
      Class MT -B-4                 Class B-4            Class B-4

          Countrywide: Countrywide Home Loans Servicing LP, a Texas limited
partnership.

          Covered Loan: A Mortgage Loan categorized as Covered pursuant to
Appendix E of Standard and Poor's Glossary.

          Cumulative Loss Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date to the last day of the
calendar month preceding the month in which the Distribution Date occurs less
any amounts received with respect to Realized Losses 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 Cut-off Date Pool
Principal Balance of the Mortgage Loans.

          Cumulative Loss Trigger Event: With respect to any Distribution Date,
a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of 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 cumulative
loss percentage as follows with respect to such Distribution Date:

<TABLE>

DISTRIBUTION DATE OCCURRING IN   CUMULATIVE LOSS PERCENTAGE
------------------------------   --------------------------

June 2007 through May 2008       1.350% for the first month, plus an additional 1/12th of 1.650% for
                                 each month thereafter (e.g., 2.175% in December 2007)
June 2008 through May 2009       3.000% for the first month, plus an additional 1/12th of 1.500% for
                                 each month thereafter (e.g., 3.750% in December  2008)
June 2009 through May 2010       4.500% for the first month, plus an additional 1/12th of 1.500% for
                                 each month thereafter (e.g., 5.250% in December 2009)
June 2010 through May 2011       6.000% for the first month, plus an additional 1/12th of 0.500% for
                                 each month thereafter (e.g., 6.250% in December 2010)
June 2011 and thereafter         6.500%
</TABLE>

          Current Maximum Amount: With respect to any date of determination, the
sum of (i) the aggregate of the Stated Principal Balances of the Mortgage Loans
in the Trust at such

                                       23

time, and (ii) with respect to each date of determination prior to the
Distribution Date on or prior to August 25, 2005, the Pre-Funding Amount
immediately prior to such Distribution Date, net of investment earnings on
deposit therein.

          Custodian: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest.

          Custodian Fee: With respect to any Distribution Date, an amount equal
to the sum of (a) the product of one-twelfth of the Custodian 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 Pre-Funding Amount.

          Custodian Fee Rate: With respect to each Mortgage Loan, 0.0015% per
annum.

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

          Cut-off Date: With respect to the Initial Mortgage Loans, May 1, 2005,
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 (after giving effect to
payments of principal due on that date, whether or not received).

          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 May 1, 2005 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 Property; (7)
the first date on which the Scheduled 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 Rate Mortgage Loan, Adjustable Rate Mortgage
Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (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

                                       24

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 United States
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 United States 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 aggregate Stated
Principal Balance of 60+ Day Delinquent Loans as of the last day of the related
Due Period, over (y) the Current Maximum Amount of the Mortgage Loans as of the
last day of the related Due Period exceeds 41.00% of the prior period's Senior
Enhancement Percentage.

          Delinquent: A mortgage loan is "Delinquent" if any Scheduled 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 Scheduled Payment has not been received by the close of
business on the corresponding day of the month immediately succeeding the month
in which that Scheduled 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.

                                       25

          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,
and its successors 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 "JPMorgan Chase Bank,
N.A., in trust for registered holders of IXIS Real Estate Capital Trust
2005-HE2, Mortgage Pass-Through Certificates, Series 2005-HE2". Funds in the
Distribution Account shall be held in trust for the Certificateholders for the
uses and purposes set forth in this Agreement.

          Distribution Date: The 25th day of each calendar month, or if such day
is not a Business Day, the next succeeding Business Day, commencing in June
2005.

          Document Certification and Exception Report: The report attached to
Exhibit F 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.

          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: Any of (i) an account or accounts maintained with a
federal or state chartered depository institution or trust company the
commercial paper, short-term debt obligations, demand deposits or other
short-term deposits of which are rated in one of the two highest rating
categories by each of the Rating Agencies at the time any amounts are held on
deposit therein, (ii) an account or accounts the deposits in which are fully
insured by the FDIC (to the limits established by such corporation), the
uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel delivered to each Rating Agency, the
Certificateholders will have a claim with respect to the funds in such account
or a perfected first priority security interest against such collateral (which
shall be limited to

                                       26

Permitted Investments) securing such funds that is superior
to claims of any other depositors or creditors of the depository institution
with which such account is maintained, (iii) a trust account or accounts
maintained with the trust department of a federal or state chartered depository
institution, national banking association or trust company acting in its
fiduciary capacity, (iv) an account otherwise acceptable to each Rating Agency
or (v) an account maintained with a "qualified depository" (as such term is
defined in the related Servicing Agreement). Eligible Accounts may bear
interest.

          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, and its
successors in interest.

          Encore Assignment Agreement: The Assignment and Recognition Agreement,
dated as of May 26, 2005, 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).

          Event of Default: As defined in Section 7.01.

                                       27

          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 Holders of the Regular Certificates and
designated "JPMorgan Chase Bank, N.A., in trust for registered holders of IXIS
Real Estate Capital Trust 2005-HE2, Mortgage Pass-Through Certificates, Series
2005-HE2". Funds in the Excess Reserve Fund Account shall be held in trust for
the Holders of the Regular Certificates for the uses and purposes set forth in
this Agreement. Amounts on deposit in the Excess Reserve Fund Account shall not
be invested.

          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.

          Exchange Act: As defined in Section 8.12(a).

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

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

          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 Custodian 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, Condemnation
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.

                                       28

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

                                                                FINAL SCHEDULED
                                                               DISTRIBUTION DATE
                                                              ------------------
Class A-1 Certificates.....................................   September 25, 2035
Class A-2 Certificates.....................................   September 25, 2035
Class A-3 Certificates.....................................   September 25, 2035
Class A-4 Certificates.....................................   September 25, 2035
Class A-MZ Certificates....................................   September 25, 2035
Class M-1 Certificates.....................................   September 25, 2035
Class M-2 Certificates.....................................   September 25, 2035
Class M-3 Certificates.....................................   September 25, 2035
Class M-4 Certificates.....................................   September 25, 2035
Class M-5 Certificates.....................................   September 25, 2035
Class M-6 Certificates.....................................   September 25, 2035
Class B-1 Certificates.....................................   September 25, 2035
Class B-2 Certificates.....................................   September 25, 2035
Class B-3 Certificates.....................................   September 25, 2035
Class B-4 Certificates.....................................   September 25, 2035
Class X Certificates.......................................   September 25, 2035
Class P Certificates.......................................   September 25, 2035
Class R Certificates.......................................   September 25, 2035

          First Bank: First Bank Mortgage, a Missouri corporation, and its
successors in interest.

          First Bank Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and First Bank, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and First Bank in connection
with any Subsequent Transfer of First Bank Mortgage Loans.

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

          First Bank 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 Bank.

          First Horizon: First Horizon Home Loan Corp., a Kansas corporation.

          First Horizon Capital Assignment Agreement: Each Assignment and
Recognition Agreement by and among the Unaffiliated Seller, the Depositor and
First Horizon in connection with any Subsequent Transfer of First Horizon
Capital Mortgage Loans.

                                       29

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

          First Horizon Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and First Horizon.

          First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.

          Fitch: Fitch, Inc., and its successors in interest. 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 Street Plaza, New York, New York 10004, Attention: Residential Mortgage
Surveillance Group - IXIS Real Estate Capital Trust 2005-HE2, or such other
address as Fitch may hereafter furnish to the Depositor, the Trustee and the
Servicer.

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

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

          Fremont: Fremont Investment & Loan, Inc., a California State chartered
industrial bank.

          Fremont Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Fremont, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Fremont in connection with
any Subsequent Transfer of Fremont Mortgage Loans.

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

          Fremont Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of November 22, 2004, as amended to date, by and between the
Unaffiliated Seller and Fremont.

          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.

          High Cost Loan: 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," (excluding New Jersey "Covered Home Loans" as
that term is defined in clause (1) of the definition of that term in the New
Jersey Home Ownership Security Act of 2002), "high risk home," "predatory" or
similar loan under any other applicable state, federal or local law (or a
similarly classified loan using different terminology under a law imposing
heightened regulatory

                                       30

scrutiny or additional legal liability for residential
mortgage loans having high interest rates, points and/or fees) or (c) a Mortgage
Loan categorized as High Cost pursuant to Appendix E of Standard & Poor's
Glossary.

          Home Loan: A Mortgage Loan categorized as Home Loan pursuant to
Appendix E of Standard & Poor's Glossary.

          Home Loan Corp.: Home Loan Corp., a Texas corporation.

          Home Loan Corp. Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Home Loan Corp., and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Home Loan
Corp. in connection with any Subsequent Transfer of Home Loan Corp. Mortgage
Loans.

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

          Home Loan Corp. Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of September 1, 2004, as amended to date, by and
between the Unaffiliated Seller and Home Loan Corp.

          Homeowners: Homeowners Loan Corp., a Delaware corporation, and its
successors in interest.

          Homeowners Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Homeowners, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Homeowners in connection
with any Subsequent Transfer of Homeowners Mortgage Loans.

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

          Homeowners Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 1, 2004, as amended to date, by and
between the Unaffiliated Seller and Homeowners.

          Impac: Impac Funding Corporation, a California corporation, and its
successors in interest.

          Impac Assignment Agreement: The Assignment and Recognition Agreement,
dated as of May 26, 2005, 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.

                                       31

          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: May 1, 2005.

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

          Initial Pre-Funded Amount: $158,370,942.

          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.

          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
immediately preceding the current Distribution Date (on an actual/360 day count
basis).

          Interest Rate Cap Agreement: The Class A Certificates Interest Rate
Cap Agreement, the Class M Certificates Interest Rate Cap Agreement and/or the
Class B Certificates Interest Rate Cap Agreement, as applicable.

          Interest Rate Cap Payment: The Class A Certificates Interest Rate Cap
Payment, the Class M Certificates Interest Rate Cap Payment and/or the Class B
Certificates Interest Rate Cap Payment, as applicable.

          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 Prepayment 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;

                                       32

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

          (iv) the interest component of all Condemnation Proceeds, Insurance
Proceeds and Liquidation Proceeds received by the Servicer during the related
Prepayment 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 Prepayment Period and the
Trustee Fee and the Custodian Fee for the related Distribution Date, 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).

          Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS System as the investor pursuant to the MERS Procedures
Manual.

          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 Scheduled Payments or as
Insurance Proceeds, Condemnation 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.

          Lenders Direct: Lenders Direct Capital Corporation, a California
corporation, and its successors in interest.

          Lenders Direct Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Lenders Direct, and each other Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lenders Direct
in connection with any Subsequent Transfer of Lenders Mortgage Loans.

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

          Lenders Direct Purchase Agreement: The Amended and Restated Mortgage
Loan Purchase and Warranties Agreement, dated as of October 1, 2003, as amended
to date, by and between the Unaffiliated Seller and Lenders Direct.

                                       33

          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 shall be required to 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 Trustee, after
consultation with the Depositor, at approximately 11:00 a.m. (New York City
time) on such date for one-month U.S. dollar loans to leading European banks.

          LIBOR Certificates: As specified in the Preliminary Statement.

          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.

          Lime Financial: Lime Financial Services, Ltd., an Oregon corporation,
and its successors in interest.

          Lime Financial Assignment Agreement: Each Assignment and Recognition
Agreement by and among the Unaffiliated Seller, the Depositor and Lime Financial
in connection with any Subsequent Transfer of Lime Financial Mortgage Loans.

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

          Lime Financial Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of May 1, 2005, as amended to date, by and
between the Unaffiliated Seller and Lime Financial.

          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 to the Trustee 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

                                       34

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 Liquidated Mortgage Loan, whether through trustee's sale, foreclosure sale
or otherwise, including any Subsequent Recoveries.

          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.

          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,
and its successors in interest.

          Master Financial Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, 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 Adjustable Rate 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.

          MERS: Mortgage Electronic Registration System, Inc.

                                       35

          MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Originators have designated or will designate MERS as, and have taken or will
take such action as is necessary to cause MERS to be, the mortgagee of record,
as nominee for the Originators, in accordance with the MERS Procedure Manual and
(b) the Originators have designated or will designate the Trustee as the
Investor on the MERS(R) System.

          MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.

          MERS(R)System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.

          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 Adjustable Rate Mortgage Loan.

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

          Moody's: Moody's Investors Service, Inc, and its successors in
interest. 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, the Trustee, and the
Servicer.

          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: 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, Prepayment Charges, 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 Purchase Agreement: The Accredited Purchase Agreement,
the Allstate Purchase Agreement, the BNC Purchase Agreement, the Chapel Mortgage
Purchase

                                       36

Agreement, the Encore Purchase Agreement, the First Bank Purchase
Agreement, the First Horizon Purchase Agreement, the Fremont Purchase Agreement,
the Homeowners Purchase Agreement, the Home Loan Corp. Purchase Agreement, the
Impac Purchase Agreement, the Lenders Direct Purchase Agreement, the Lime
Financial Purchase Agreement, the Master Financial Purchase Agreement, the NC
Capital Purchase Agreement, the Novelle Purchase Agreement, the People's Choice
Purchase Agreement, the Platinum Purchase Agreement or the ResMae Purchase
Agreement, as applicable.

          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 Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, 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) with respect to each Adjustable Rate Mortgage Loan,
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;
(20) the Servicing Transfer Date; (21) a Code indicating whether the Mortgage
Loan has been 30 days Delinquent since the applicable Servicing Transfer Date;
and (22) whether such Mortgage Loan provides for a Prepayment Charge as well as
the term and amount of such Prepayment Charge, if any.

          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.

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

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

          NC Capital: NC Capital Corporation, a California corporation.

          NC Capital Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and

                                       37

NC Capital, and each other Assignment and Recognition Agreement by and among the
Unaffiliated Seller, the Depositor and NC Capital in connection with any
Subsequent Transfer of NC Capital Mortgage Loans.

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

          NC Capital Purchase Agreement: The Mortgage Loan Purchase and
Warranties Agreement, dated as of February 1, 2005, as amended to date, by and
between the Unaffiliated Seller and NC Capital.

          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 for such
Distribution Date exceeds the sum of (i) the Compensating Interest payments made
with respect to such Distribution Date and (ii) all Prepayment Interest Excesses
for such Distribution Date.

          NIM Issuer: Any entity established as the issuer of a series of NIM
Securities.

          NIM Indenture: The Indenture, dated as of May 26, 2005, between IXIS
Real Estate Capital Inc. NIM 2005-HE2N, as issuer, IXIS Real Estate Capital Inc.
NIM Trust 2005-HE2N, as co-issuer, and JPMorgan Chase Bank, N.A., as indenture
trustee.

          NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by Standard &
Poor's.

          NIM Trustee: The trustee for any series of NIM Securities.

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

          Non-Permitted Transferee: A Person other than a Permitted Transferee.

          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, Condemnation Proceeds, Liquidation Proceeds or
otherwise on such Mortgage Loan or REO Property as provided herein.

          Nonrecoverable Servicing 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, Condemnation Proceeds, Liquidation
Proceeds or otherwise on such Mortgage Loan or REO Property. The determination
by the Servicer that it has made a Nonrecoverable Servicing

                                       38

Advance or that any proposed Servicing Advances, if made, would constitute a
Nonrecoverable Servicing Advance, shall be evidenced by an Officers' Certificate
delivered to the Trustee.

          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,
and its successors in interest.

          Novelle Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, 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.

          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, as amended to date, by and between
the Unaffiliated Seller and Novelle.

          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; 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

                                       39

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; provided, however, that the
Unaffiliated Seller or any of its affiliates, may only participate in the
exercise of the clean-up call by the majority owners of the Class X Certificates
if the Unaffiliated Seller or any of its affiliates, is not the majority owner
of the Class X Certificates, either directly or indirectly.

          Originator: The party that originated or acquired a Mortgage Loan and,
more specifically, (i) with respect to any Accredited Mortgage Loan, Accredited,
(ii) with respect to any Allstate Mortgage Loan, Allstate, (iii) with respect to
any BNC Mortgage Loan, BNC, (iv) with respect to any Chapel Mortgage Loan,
Chapel Mortgage, (v) with respect to any Encore Mortgage Loan, Encore, (vi) with
respect to any First Bank Mortgage Loan, First Bank, (vii) with respect to any
First Horizon Mortgage Loan, First Horizon, (viii) with respect to any Fremont
Mortgage Loan, Fremont, (ix) with respect to any Homeowners Mortgage Loan,
Homeowners, (x) with respect to any Home Loan Corp. Mortgage Loan, Home Loan
Corp., (xi) with respect to any Impac Mortgage Loan or Novelle Mortgage Loan,
Impac or Novelle, as applicable, (xii) with respect to any Lenders Direct
Mortgage Loan, Lenders Direct, (xiii) with respect to any Lime Financial
Mortgage Loan, Lime Financial, (xiv) with respect to any Master Financial
Mortgage Loan, Master Financial, (xv) with respect to any NC Capital Mortgage
Loan, NC Capital, (xvi) with respect to any People's Choice Mortgage Loan,
People's Choice, (xvii) with respect to any Platinum Mortgage Loan, Platinum,
and (xviii) with respect to any ResMae Mortgage Loan, ResMae.

          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/or interest on
such Mortgage Loan, net of the related Servicing Fee, that were due during the
related Due Period on the Mortgage Loan, and

                                       40

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, 0.0800%; Class A-2, 0.1500%; Class A-3, 0.2200%; Class
A-4, 0.3400%; Class A-MZ, 0.2600%; Class M-1, 0.4300%; Class M-2, 0.4500%; Class
M-3, 0.4800%; Class M-4, 0.6200%; Class M-5, 0.6500%; Class M-6, 0.6900%; Class
B-1, 1.2000%; Class B-2, 1.3000%; Class B-3, 1.7500%; and Class B-4, 3.500%. On
the first Distribution Date after the Optional Termination Date, the
Pass-Through Margins shall increase to the following percentages: Class A-1,
0.1600%; Class A-2, 0.3000%; Class A-3, 0.4400%; Class A-4, 0.6800%; Class A-MZ,
0.5200%; Class M-1, 0.6450%; Class M-2, 0.6750%; Class M-3, 0.7200%; Class M-4,
0.9300%; Class M-5, 0.9750%; Class M-6, 1.0350%; Class B-1, 1.8000%; Class B-2,
1.9500%; Class B-3, 2.6250%; and Class B-4, 5.2500%.

          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, and its successors in interest.

          People's Choice Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005 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.

                                       41

          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 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) any demand, money market fund, common trust fund or time deposit
     or obligation, or interest-bearing or other security or investment, (A)
     rated in the highest rating category by each Rating Agency (if rated by
     such Rating Agency) or (B) that would not adversely affect the then current
     rating by either Rating Agency of any of the Certificates. Such investments
     in this subsection (vi) may include money market mutual funds or common
     trust funds, including, without limitation, the J.P. Morgan Prime Money
     Market Fund or any other fund for which JPMorgan Chase Bank, the Trustee or
     an affiliate thereof serves as an investment advisor, administrator,
     shareholder servicing agent, and/or custodian or subcustodian,
     notwithstanding that (i) JPMorgan Chase Bank or an affiliate thereof
     charges and collects fees and expenses from such funds for services
     rendered, (ii) JPMorgan Chase Bank or an affiliate thereof charges and
     collects fees and expenses for services rendered pursuant to this
     Agreement, and (iii) services performed for such funds and pursuant to this
     Agreement may converge at any time. The Trustee specifically authorizes
     JPMorgan Chase Bank or an affiliate thereof to charge and collect from the
     Trust Fund such fees as are collected from all investors in such funds for
     services rendered to such funds (but not to exceed investment earnings
     thereon); and

                                       42

          (vii) if previously confirmed in writing to the Trustee, 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.

          Physical Certificates: As specified in the Preliminary Statement.

          Plan: As defined in Section 5.02(b).

          Platinum: Platinum Capital Group, a California corporation.

          Platinum Assignment Agreement: The Assignment and Recognition
Agreement, dated as of May 26, 2005, by and among the Unaffiliated Seller, the
Depositor and Platinum, and each other Assignment and Recognition Agreement by
and among the Unaffiliated Seller, the Depositor and Platinum in connection with
any Subsequent Transfer of Platinum Mortgage Loans.

                                       43

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

          Platinum Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of December 14, 2004, as amended to date, by and between the
Unaffiliated Seller and Platinum.

          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.

          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 "JPMorgan Chase Bank,
N.A., in trust for registered holders of IXIS Real Estate Capital Trust
2005-HE2, Mortgage Pass-Through Certificates, Series 2005-HE2," the funds of
which, during the Pre-Funding Period, shall be applied solely to the purchase of
Subsequent Mortgage Loans.

          Pre-Funding Amount: With respect to any date, the amount on deposit in
the Pre-Funding Account, which amount the Trustee shall evidence to the
Custodian upon request.

          Pre-Funding Earnings: The actual investment earnings realized on
amounts deposited in the 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) August
24, 2005.

          Pre-Funding Reserve Account: The separate Eligible Account created and
maintained by the Trustee pursuant to Section 3.07(j) in the name of the Trustee
for the benefit of the Class X Certificateholders and designated "JPMorgan Chase
Bank, N.A., in trust for holders of IXIS Real Estate Capital Trust 2005-HE2,
Mortgage Pass-Through Certificates, Series 2005-HE2, Class X".

          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 pursuant to the terms of the related
Mortgage Note.

          Prepayment Interest Excess: With respect to any Distribution Date, any
interest collected by the Servicer with respect to any Mortgage Loan as to which
a Principal Prepayment in Full occurs from the 1st day of the month through the
15th day of the month in which such Distribution Date occurs and that represents
interest that accrues from the 1st day of such month to the date of such
Principal Prepayment in Full.

          Prepayment Interest Shortfall: With respect to any Remittance Date,
the sum of, for each Mortgage Loan that was during the portion of the Prepayment
Period from and

                                       44

including the 16th day of the month preceding the month in which
such Distribution Date occurs (or from the day following the Cut-off Date, in
the case of the first Distribution Date) through the last day of such month 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.

          Prepayment Period: With respect to any Distribution Date, the period
from and including the 16th day of the month preceding the month in which such
Distribution Date occurs (or, in the case of the first Distribution Date, from
and including the Cut-off Date) to and including the 15th day of the 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 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
Charge 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 Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period, of: (i) each Scheduled Payment of principal
on a Mortgage Loan during the related Due Period and received by the Servicer on
or prior to the related Determination Date or advanced by the Servicer for the
related Remittance Date and all Principal Prepayments received during the
related Prepayment Period; (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
allocable to principal and Repurchase Prices received by the Servicer with
respect to such Distribution Date; and (v) the proceeds of any termination of
the Trust Fund pursuant to Section 9.01(a) (to the extent such proceeds relate
to principal); 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.

                                       45

          Prospectus Supplement: The Prospectus Supplement, dated May 23, 2005,
relating to the Offered Certificates.

          PTCE 95-60: As defined in Section 5.02(b).

          PUD: Planned Unit Development.

          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, the Trustee, and the
Servicer.

          Realized Loss: The excess of the unpaid principal balance of a
Liquidated Mortgage Loan together with accrued and unpaid interest thereon over
the Liquidation Proceeds, net of customary out-of-pocket expenses incurred by
the Servicer in connection with the liquidation of such Liquidated Mortgage Loan
and net of the amount of any unreimbursed Servicing Advances with respect to
such Liquidated Mortgage Loan.

          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 the month in which such applicable Distribution Date
occurs.

          Reference Bank: As defined in Section 4.04.

          Regular Certificates: As specified in the Preliminary Statement.

          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 result of the
application of the Servicemembers Civil Relief Act and similar state laws.

                                       46

          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, the Excess Reserve Fund Account, the
Pre-Funding Account, the Pre-Funding Reserve Account, the Capitalized Interest
Account and the Interest Rate Cap Agreements.

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

          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, Bank of America Securities LLC, Countrywide Securities
Corporation and IXIS Securities LLC.

          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 Custodian 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.

                                       47

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

          Residual Certificates: As specified in the Preliminary Statement.

          ResMae: ResMae Mortgage Corporation, a California corporation.

          ResMae Assignment Agreement: The Assignment and Recognition Agreement,
dated as of May 26, 2005, by and among the Unaffiliated Seller, the Depositor
and ResMae, and each other Assignment and Recognition Agreement by and among the
Unaffiliated Seller, the Depositor and ResMae in connection with any Subsequent
Transfer of ResMae Mortgage Loans.

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

          ResMae Purchase Agreement: The Mortgage Loan Purchase and Warranties
Agreement, dated as of February 1, 2005, as amended to date, by and between the
Unaffiliated Seller and ResMae.

          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
scheduled 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 Scheduled 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 Scheduled 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

                                       48

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).

          Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.

          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 Balance of the Subordinated Certificates and (ii) the Subordinated
Amount (in each case after taking into account the distribution 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, 36.80%.

          Sequential Trigger Event: With respect to any Distribution Date the
event that exists if either (a) before the Distribution Date in June 2008, the
quotient of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period and (y) the
Maximum Pool Principal Balance, exceeds 2.50%; or if (b) either prior to or
after the Distribution Date in June 2008, a Trigger Event is in effect.

          Servicer: Countrywide Home Loans Servicing LP, a Texas limited
partnership, and its successors and assigns, in its capacity as servicer
hereunder.

          Servicer Remittance Report: As defined in Section 4.03(d).

          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, inspection and protection of a Mortgaged Property,
(ii) any enforcement, administrative 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. 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 foreclosure in respect of any Mortgage Loan to the extent not recovered
from the Mortgagor or otherwise

                                       49

payable under this Agreement. The Servicer shall not be required to make any
Nonrecoverable Servicing 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 applicable Stated
Principal Balance on such Mortgage Loan at the end of the related Due Period.
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,
Insurance Proceeds, Condemnation Proceeds and proceeds received with respect to
REO Properties, to the extent permitted by Section 3.11) of such Scheduled
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 Custodian 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 and the Custodian 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 Countrywide commenced servicing such Mortgage Loan, as set forth on the
Mortgage Loan Schedule.

          Specified Subordinated Amount: With respect to any Distribution Date
prior to the Stepdown Date, an amount equal to 1.60% of the Maximum Pool
Principal Balance; and with respect to any Distribution Date on and after the
Stepdown Date, an amount equal to 3.20% 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
Trigger Event exists, the Specified Subordinated Amount shall not be reduced to
the applicable percentage of the Current Maximum Amount, but instead will remain
the same as the prior period's Specified Subordinated Amount until the
Distribution Date on which a Trigger Event no longer exists. When the Class
Certificate Balance of each Class of LIBOR 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., and its successors in interest. 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 Street, New York, New

                                       50

York 10041, Attention: Residential Mortgage Surveillance Group - IXIS Real
Estate Capital Trust 2005-HE2, or such other address as Standard & Poor's may
hereafter furnish to the Depositor, the Trustee, and the Servicer.

          Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)Glossary,
as may be in effect from time to time.

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

          Stated Principal Balance: As to each Mortgage Loan and as of any date
of determination, (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 remitted 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 by the Servicer on or prior to the related Determination Date or
advanced by the Servicer prior to the related Remittance Date and any
unscheduled principal payments and other unscheduled principal collections
received during the related Prepayment Period, and the Stated Principal Balance
of any Mortgage Loan that has prepaid in full or has become a Liquidated
Mortgage Loan during the related Prepayment Period shall be zero.

          Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in June 2008 and (b) the Distribution Date on which the
aggregate Class Certificate Balance of the Class A Certificates have been
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 allocation of the
Principal Distribution Amount to the LIBOR Certificates on the applicable
Distribution Date) is greater than or equal to the Senior Specified Enhancement
Percentage.

          Subordinated Amount: With respect to 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 LIBOR Certificates as of such Distribution Date plus the Class
Certificate Balances 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
Net Monthly Excess Cash Flow.

                                       51

          Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.

          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.

          Subservicer: As defined in Section 3.02(a).

          Subservicing Account: As defined in Section 3.08.

          Subservicing Agreement: As defined in Section 3.02(a).

          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, as applicable, 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), 3.01(n), 3.01(o), 3.01(p) and 3.03 of
the Unaffiliated Seller's Agreement, each representation and warranty set forth
in the applicable Mortgage Loan Purchase Agreement and each of the requirements
set forth in Sections 2.01(c) hereof.

                                       52

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

          Tax Matters Person: The Holder of the Class R Certificates designated
as "tax matters person" of the Lower Tier REMIC, the Middle Tier REMIC and the
Upper Tier REMIC, respectively, in the manner provided under Treasury
regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1.

          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.

          Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicer on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicer for the related
Remittance Date (net of Expense Fees) over (ii) the sum of the amounts payable
to the LIBOR Certificates pursuant to Section 4.02(a)(i) 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 Cumulative Loss Trigger Event.

          Trust: The express trust created hereunder in Section 2.01(d).

          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 Interest Rate Cap Agreements, for the benefit
of the Holders of the LIBOR Certificates; and (vii) all proceeds of the
conversion, voluntary or involuntary, of any of the foregoing.

                                       53

          Trustee: JPMorgan Chase Bank, N.A. a national banking association, and
its successors in interest 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, 0.020% 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 Amount: 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)
the amount in respect of interest on such Class of Certificates actually
distributed on that Distribution Date and (b) 30 days' interest on the amount in
clause (a) above 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) the Applied
Realized Loss Amount with respect to such Class over (ii) the sum of (a) all
distributions in reduction of such Applied Realized Loss Amounts on all previous
Distribution Dates and (b) the amount by which the Class Certificate Balance of
such Class has been increased due to the distribution of any Subsequent Recovery
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

                                       54

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
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.

                                   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 and the
Trustee, on behalf of the Trust, hereby accepts 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. The Mortgage
Loans permitted by the terms of this Agreement to be included in the Trust Fund
are limited to (i) the Initial Mortgage Loans (which the Depositor acquired
pursuant to the Unaffiliated Seller's Agreement), (ii) Subsequent Mortgage Loans
(which the Depositor is required hereunder to have acquired pursuant to
Subsequent Transfer Agreements) and (iii) Substitute Mortgage Loans (which, by
definition as set forth herein and referred to in the Unaffiliated Seller's
Agreement and Subsequent Transfer Agreements). It is agreed and understood by
the parties hereto that it is not intended that any Mortgage Loan be included in
the Trust that is a High Cost Loan.

          (b) In connection with the transfer and assignment of each Mortgage
Loan, the Unaffiliated Seller has delivered or caused to be delivered to the
Custodian 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

                                       55

     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, unless the Trustee and the
     Custodian are advised by the related Originator that state law does not so
     allow. 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 cannot 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 Custodian, on behalf of 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;

          (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 (except
     with respect to MERS Designated Mortgage Loans);

          (vi) the originals of all intervening assignments of mortgage,
     evidencing a complete chain of assignment from the originator (or MERS with
     respect to each MERS Designated Mortgage Loan) 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

                                       56

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

          If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all reasonable actions as are necessary at the expense
of the applicable Originator to the extent permitted under the related Purchase
Agreement and otherwise at the expense of the Depositor to cause the Trustee to
be shown as Investor of the related Mortgage Loan on the records of MERS for the
purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS.

          From time to time, the Servicer shall forward to the Custodian
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 Custodian 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 Custodian
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 Servicer,
or the Servicer's designee shall direct the Custodian to 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 MERS Designated Mortgage Loan or 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) 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 Assignment of Mortgage is
required to be recorded pursuant to the terms hereof, the Mortgage shall be
assigned from the related Originator, to "JPMorgan Chase Bank, N.A. as trustee
under the Pooling and Servicing Agreement dated as of May 1, 2005, IXIS Real
Estate Capital Trust 2005-HE2." 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

                                       57

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 Custodian, 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, the Custodian and the Servicer a copy of the Data Tape
Information in electronic, machine readable medium in a form mutually acceptable
to the Custodian, 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 Custodian, 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 Custodian within 90 days following the related Delivery Date, as evidenced
by the Custodian's Final Certification, 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 or the Trustee, 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
or the Trustee, 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.

          (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 Pre-Funding Account, 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

                                       58

     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 Pre-Funding Account 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 and the Rating Agencies 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 created hereunder,
          and will not cause any REMIC created hereunder 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;

               (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

                                       59

          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) each of the Rating Agencies shall have provided a notice in
          either written or electronic format acknowledging their respective
          consents to the transfer of the Subsequent Mortgage Loans to the Trust
          Fund.

          (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 the entire mortgage loan pool:

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

          (B)  no more than 36.00% may be first lien mortgage loans which are
               secured by Mortgaged Properties which also secure second lien
               mortgage loans;

          (C)  no less than 9.00% and no more than 12.00% may be Fixed Rate
               Mortgage Loans;

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

          (E)  the weighted average gross Mortgage Rate must not be less than
               7.43%, or more than 7.53%;

          (F)  the weighted average LTV must not exceed 81.00%, and no more than
               37.00% of the Mortgage Loans may have LTVs in excess of 80.00%;

          (G)  at least 84.00% of the Mortgage Loans must have Prepayment
               Charges;

          (H)  the weighted average Gross Margin for the Adjustable Rate
               Mortgage Loans must be at least 6.25%;

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

          (J)  the weighted average credit score for the second-lien mortgage
               loans must be at least 652;

          (K)  the weighted average Stated Documentation and No Ratio
               Documentation percentage must not exceed 55.00%.

          (L)  no more than 32.50% may have an interest-only period; and

                                       60

          (M)  no mortgage loan is classified as a "high cost" loan under the
               Home Ownership and Equity Protection Act of 1994 ("HOEPA") and no
               mortgage loan is in violation of, or classified as a "high cost,"
               "threshold," "predatory" or similar loan under, any other
               applicable state, federal or local law.

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

          (iv) 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).

          (d) The Depositor does hereby establish, pursuant to the further
provisions of the Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "IXIS REAL ESTATE CAPITAL
TRUST 2005-HE2" and JPMorgan Chase Bank, N.A. is hereby appointed as Trustee in
accordance with the provisions of this Agreement. The parties hereto acknowledge
and agree that it is the policy and intention of the Trust to acquire only
Mortgage Loans meeting the requirements set forth in this Agreement.

          (e) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).

          Section 2.02 Acceptance by the Custodian of the Mortgage Loans.

          The Custodian 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, on behalf of the
Trustee, in trust for the exclusive use and benefit of all present and future
Certificateholders. The Custodian acknowledges that it will maintain possession
of the related Mortgage Notes in the State of California, unless otherwise
permitted under this Agreement or by the Rating Agencies.

          In connection with each Delivery, the Custodian shall deliver via
facsimile (with original to follow the next Business Day) to the Depositor, the
Trustee, the Unaffiliated Seller, the Servicer 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 Custodian
shall not be responsible for verifying the validity, sufficiency or genuineness
of any document in any Custodial File.

          Within 120 days after the related Delivery Date, the Custodian 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, the Trustee a Final Certification to the effect that, as to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan

                                       61

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 reviewed by 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 Custodian 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 determines that any noncompliance identified
by the Custodian is a breach of a representation or warranty relating to such
Mortgage Loan, such party shall give written notice to the Trustee thereof.

          The Custodian 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 Custodian, 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.

          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
Custodian and the Trustee and (ii) Schedule IIA hereto to the Unaffiliated
Seller, 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 on Schedule IA hereto for which
the Servicing Transfer Date has occurred prior to the Closing Date or the
related Subsequent Transfer Date, as applicable.

          (b) IXIS Real Estate 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 Custodian, 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 and
the Unaffiliated Seller, 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),
3.01(n), 3.01(o), 3.01(p) 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.

                                       62

          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), 3.01(n), 3.01(o), 3.01(p) 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 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. The Trustee shall forward such Request for
Release to the Custodian and the Custodian shall release the related Mortgage
File.

          In the event there is a breach of a representation or warranty by
Allstate Home Loans with respect to a Allstate Home Loan that materially and
adversely affects the value of such Mortgage Loan or the interest of the Trustee
and the Certificateholders therein, and, upon discovery or receipt of notice,
Allstate fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Allstate Assignment Agreement or the Allstate
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Chapel Mortgage
with respect to a Chapel Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Chapel
Mortgage fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Chapel Mortgage Assignment Agreement or the
Chapel Mortgage Purchase Agreement, the Unaffiliated Seller shall cure,
substitute or repurchase such Mortgage Loan subject to the conditions set forth
in this Section 2.03. In the event there is a breach of a representation or
warranty by Encore with respect to an Encore Mortgage Loan that materially and
adversely affects the value of such Mortgage Loan or the interest of the Trustee
and the Certificateholders therein, and, upon discovery or receipt of notice,
Encore fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Encore Assignment Agreement or the Encore
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by First Bank with
respect to a First Bank Mortgage Loan that materially and adversely affects the
value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, First Bank
fails to cure, substitute or repurchase such Mortgage Loan within the period
specified in either the First Bank Assignment Agreement or the First Bank
Purchase Agreement, the Unaffiliated Seller shall cure, substitute or repurchase
such Mortgage Loan subject to the conditions set forth in this Section 2.03. In
the event there is a breach of a representation or warranty by Home Loan Corp.
with respect to a Home Loan Corp. Mortgage Loan that materially and adversely
affects the value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Home Loan
Corp. fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Home Loan Corp. Assignment

                                       63

Agreement or the Home Loan Corp. Purchase Agreement, the Unaffiliated Seller
shall cure, substitute or repurchase such Mortgage Loan subject to the
conditions set forth in this Section 2.03. In the event there is a breach of a
representation or warranty by Homeowners with respect to a Homeowners Mortgage
Loan that materially and adversely affects the value of such Mortgage Loan or
the interest of the Trustee and the Certificateholders therein, and, upon
discovery or receipt of notice, Homeowners fails to cure, substitute or
repurchase such Mortgage Loan within the period specified in either the
Homeowners Assignment Agreement or the Homeowners Purchase Agreement, the
Unaffiliated Seller shall cure, substitute or repurchase such Mortgage Loan
subject to the conditions set forth in this Section 2.03. In the event there is
a breach of a representation or warranty by Lenders Direct with respect to a
Lenders Direct Mortgage Loan that materially and adversely affects the value of
such Mortgage Loan or the interest of the Trustee and the Certificateholders
therein, and, upon discovery or receipt of notice, Lenders Direct fails to cure,
substitute or repurchase such Mortgage Loan within the period specified in
either the Lenders Direct Assignment Agreement or the Lenders Direct Purchase
Agreement, the Unaffiliated Seller shall cure, substitute or repurchase such
Mortgage Loan subject to the conditions set forth in this Section 2.03. In the
event there is a breach of a representation or warranty by Lime Financial with
respect to a Lime Financial Mortgage Loan that materially and adversely affects
the value of such Mortgage Loan or the interest of the Trustee and the
Certificateholders therein, and, upon discovery or receipt of notice, Lime
Financial fails to cure, substitute or repurchase such Mortgage Loan within the
period specified in either the Lime Financial Assignment Agreement or the Lime
Financial Purchase Agreement, the Unaffiliated Seller shall cure, substitute or
repurchase such Mortgage Loan subject to the conditions set forth in this
Section 2.03. In the event there is a breach of a representation or warranty by
Master Financial with respect to a Master Financial Mortgage Loan that
materially and adversely affects the value of such Mortgage Loan or the interest
of the Trustee and the Certificateholders therein, and, upon discovery or
receipt of notice, Master Financial fails to cure, substitute or repurchase such
Mortgage Loan within the period specified in either the Master Financial
Assignment Agreement or the Master Financial Purchase Agreement, the
Unaffiliated Seller shall cure, substitute or repurchase such Mortgage Loan
subject to the conditions set forth in this Section 2.03. In the event there is
a breach of a representation or warranty by Platinum with respect to a Platinum
Mortgage Loan that materially and adversely affects the value of such Mortgage
Loan or the interest of the Trustee and the Certificateholders therein, and,
upon discovery or receipt of notice, Platinum fails to cure, substitute or
repurchase such Mortgage Loan within the period specified in either the Platinum
Assignment Agreement or the Platinum Purchase Agreement, the Unaffiliated Seller
shall cure, substitute or repurchase such Mortgage Loan subject to the
conditions set forth in this Section 2.03. In the event there is a breach of a
representation or warranty by ResMae with respect to a ResMae Mortgage Loan that
materially and adversely affects the value of such Mortgage Loan or the interest
of the Trustee and the Certificateholders therein, and, upon discovery or
receipt of notice, ResMae fails to cure, substitute or repurchase such Mortgage
Loan within the period specified in either the ResMae Assignment Agreement or
the ResMae Purchase Agreement, the Unaffiliated Seller shall cure, substitute or
repurchase such Mortgage Loan subject to the conditions set forth in this
Section 2.03.

          With respect to any Substitute Mortgage Loan or Loans, the
Unaffiliated Seller shall deliver to the Custodian, on behalf of the Trustee,
for the benefit of the Certificateholders the Mortgage Note, the Mortgage, the
related Assignment of the Mortgage, and such other

                                       64

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 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 Scheduled 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 unpaid principal balance of all such Deleted Mortgage Loans. The
Unaffiliated Seller shall deposit the amount of such shortage plus an amount
equal to the aggregate of any unreimbursed Advances and accrued and unpaid
Servicing Fees with respect to such Deleted Mortgage Loans (the "Substitution
Adjustment Amount") 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 receipt of written notice (x) from the Custodian that any
document does not comply with the requirements set forth in clauses (i) through
(iv) of the Custodian's review of the Custodial Files pursuant to Section 2.02
or (y) 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
Custodian 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 (x) 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 (y) that a Mortgage
Loan does not 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.

          (d) Upon receipt 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.

                                       65

          (e) 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), 3.01(n), 3.01(o), 3.01(p)
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 this Section 2.03, the Trustee shall forward the Request for
Release from the Servicer to the Custodian and the Custodian 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.

          (f) 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 forward
the Request for Release from the Servicer to the Custodian, and the Custodian
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 Custodian 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 and the
provision of reasonable indemnity satisfactory to the Trustee in accordance with
Sections 6.03 and 8.02.

          (g) 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.

                                       66

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

          Section 2.04 The Depositor and the Mortgage Loans.

          The Depositor hereby represents and warrants to the Trustee 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 Day, as defined in Sections
860F(a)(2) and 860G(d) of the Code, respectively, or (ii) cause any REMIC
created hereunder 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.

          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 September 25, 2035, which is the Distribution Date in the
month following the month in which the latest maturity date of any Mortgage Loan
occurs.

                                       67

          Section 2.08 Representations and Warranties of the Depositor.

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

          (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 by-laws 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;

                                       68

          (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

          (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 to the
Custodian, on behalf of the Trustee, 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, 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, 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 Custodian 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, 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 prudent 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

                                       69

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 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 covenants 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 Agreement. 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, or cause to
be furnished, 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 (except for a reduction of interest payments resulting from the
application of the Servicemembers Civil Relief Act or any similar state
statutes) 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
Department of the Treasury regulations promulgated thereunder) and (B) cause any

                                       70

REMIC created hereunder to fail to qualify as a REMIC under the Code or the
imposition of any tax on "prohibited transactions" or "contributions after the
startup day" 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.

          (e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration of any disputes arising in connection with such Mortgage
Loan, the Servicer shall be entitled to waive any such provisions on behalf of
the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.

          Section 3.02 Subservicing Agreements Between the Servicer and
Subservicers.

          (a) Subject to the consent of the Depositor, 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 Depositor, 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 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.

                                       71

          (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.

          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.

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          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 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 and
Accepted Servicing Practices, 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

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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
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 receive any Basis
Risk Payment and any Interest Rate Cap Payments and, to secure their limited
recourse obligation to pay to the LIBOR Certificateholders Basis Risk Carry
Forward 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 LIBOR Certificates
for such date into the Excess Reserve Fund Account.

          (c) (i) On each Distribution Date on which there exists a Basis Risk
Carry Forward 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)(U), the lesser of (a) the Class X
Distributable Amount (without regard to the reduction in the definition thereof
with respect to the Basis Risk Payment) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(T), and (b) the Basis Risk
Payment and (2) withdraw from the Excess Reserve Fund Account amounts necessary
to pay to such Class or Classes of Certificates the Basis Risk Carry Forward
Amount. Such payments

                                       74

shall be allocated to those Classes on a pro rata basis based upon the amount of
Basis Risk Carry Forward Amount owed to each such Class and shall be paid in the
priority set forth in Section 4.02(a)(iii)(V).

               (ii) The Trustee shall account for the Excess Reserve Fund
Account as an outside reserve fund within the meaning of Treasury regulations
section 1.860G-2(h) and not as an asset of any REMIC created pursuant to this
Agreement. The beneficial owners of the Excess Reserve Fund Account are the
Class X Certificateholders. 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 Certificateholders.

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

               (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) and Sections
4.02(a)(iii)(V)-(W).

          (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(a)(i);

          (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 $100.00 into the Capitalized Interest Account from the proceeds of
the sale of the LIBOR Certificates.

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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
regulations section 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 the Pre-Funding Account
on behalf of the Certificateholders. On the Closing Date, the Trustee shall
deposit the Initial Pre-Funded Amount into the Pre-Funding Account from the
proceeds of the sale of the LIBOR Certificates. Withdrawals from the Pre-Funding
Account shall be made in accordance with Sections 4.02(e) and (f).

          (g) The Servicer or the Trustee (if directed in writing by the
Servicer) may invest the funds in the Accounts with respect to the Collection
Account and the Distribution Account or by the Unaffiliated Seller, with respect
to the Pre-Funding Account 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.

          (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.

          (i) In order to comply with its duties under the U.S.A. Patriot Act,
the Trustee may and the Custodian shall obtain and verify certain information
and documentation from the parties hereto, including but not limited to, each
party's name, address and other identifying information.

          (j) The Trustee shall establish and maintain the Pre-Funding Reserve
Account, on behalf of the Class X Certificateholders. On the Closing Date, the
Unaffiliated Seller shall remit to the Trustee and the Trustee shall deposit
$7,975,188.02 into the Pre-Funding Reserve Account. The Trustee shall account
for the Pre-Funding Reserve Account as an outside reserve fund within the
meaning of Treasury regulations section 1.860G-2(h) and not as an asset of any
REMIC created pursuant to this Agreement. The beneficial owner of the
Pre-Funding Reserve Account shall be the Unaffiliated Seller. On the Closing
Date, the Class X Certificateholders' rights in the Pre-Funding Reserve Account
will be conveyed to JPMorgan Chase Bank, N.A., as indenture trustee on behalf of
the Noteholders of the IXIS Real Estate Capital Inc. NIM 2005-HE2N Notes and
shall be subject to the terms of the NIM Indenture.

          (k) [Reserved].

          (l) On any Subsequent Transfer Date on which at least 99% of the
Initial Pre-Funded Amount has been used to purchase Subsequent Mortgage Loans,
the Trustee shall withdraw and release to the Unaffiliated Seller any remaining
amounts in the Pre-Funding Reserve Account. If less than 99% of the Initial
Pre-Funded Amount has been used to purchase Subsequent Mortgage Loans, then on
the Distribution Date following the end of the Pre-Funding Period, the Trustee
shall (a) withdraw an amount equal to (i) the percentage of the Initial
Pre-Funded Amount not used to purchase Subsequent Mortgage Loans multiplied by
(ii) $7,975,188

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and remit such amount to the Class X Certificateholders and (b) withdraw any
remaining amounts in the Pre-Funding Reserve Account and release such amounts to
the Unaffiliated Seller, and thereafter the Pre-Funding Reserve Account shall be
terminated.

          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

                                       77

comparable items; (ii) reimburse the Servicer (or a Subservicer to the extent
provided in the related Subservicing Agreement) out of related 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; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; or (vii) 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 entitled "JPMorgan Chase Bank, N.A. on behalf of IXIS
Real Estate Capital Trust 2005-HE2". 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 $241,383.22 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;

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          (iii) all Insurance Proceeds and Condemnation Proceeds to the extent
     such Insurance Proceeds and Condemnation 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 Accepted Servicing Practices, and Liquidation Proceeds;

          (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 each 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 Scheduled Payments on Mortgage Loans with
     respect to which such P&I Advances were made in accordance with the
     provisions of Section 4.01;

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          (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, Liquidation
     Proceeds, Condemnation Proceeds, Insurance Proceeds, 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);

          (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 and any Prepayment
     Interest Excesses;

          (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, Liquidation
     Proceeds, Condemnation Proceeds, Insurance Proceeds, 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, the Custodian or the
     Trustee for expenses and/or indemnities incurred by or reimbursable to the
     Servicer, the Depositor, the Custodian or the Trustee, as the case may be,
     pursuant to Section 6.03;

          (ix) to reimburse the Servicer, the Unaffiliated Seller, the
     Depositor, the Custodian or the Trustee, as the case may be, for expenses
     reasonably incurred in respect of the breach or defect giving rise to the
     repurchase 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 repurchase 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),

                                       80

(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)(vi) above.

          Section 3.12 Investment of Funds in the Accounts.

          (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 invest the funds in the
Pre-Funding Account, the Pre-Funding Reserve Account 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:

          (i)  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

          (ii) 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 Account, the
Pre-Funding Reserve Account 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

                                       81

4.02. Whether in regard to the Pre-Funding Account or the Capitalized Interest
Account, the Unaffiliated Seller shall deposit in the 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.

          (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 outstanding 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

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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 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 from
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

                                       83

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 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, and such substitution is in the best interest of the
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
and the Custodian that any such substitution, modification or assumption
agreement has been completed and forward to the Custodian 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 whatsoever. 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 Accepted
Servicing Practices, 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

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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 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,
Condemnation 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, Condemnation
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 reimburse the Servicer for any related
unreimbursed P&I Advances, pursuant to Section 3.11; third, 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 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 consistent with Accepted Servicing Practices, 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,
consistent with Accepted Servicing Practices, to proceed with foreclosure or

                                       85

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. 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.

          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 and the Custodian 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 for
Release, the Custodian 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 Custodian shall, upon
request of the Servicer and delivery to the Custodian, 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 Custodian when the need therefor by the
Servicer no longer exists, unless the Mortgage Loan has been charged-off or
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 Custodian 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 charged-off or 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 Custodian to the Servicer or its designee.

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          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. 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
Custodian shall deliver the related Custodial File to the Servicer by regular
mail, unless the Servicer requests that the Custodian 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) [Reserved].

          (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, 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 from a REO Disposition 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 Lower Tier 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 any
REMIC created hereunder 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 any REMIC created
hereunder 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 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 Custodian, the Unaffiliated Seller, 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, Condemnation 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

                                       89

against and deduct from any such funds any amounts that are properly due and
payable to the Servicer under this Agreement.

          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, Condemnation 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. In
addition, the Servicer shall be entitled to retain Prepayment Interest Excesses
(to the extent not required to offset Prepayment Interest Shortfalls), but only
to the extent such amounts are received by the Servicer.

          (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 from the Trust Fund 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 and the Trustee on or before March
15th of each calendar year, commencing in 2006, an Officer's 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, and (ii) 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 the Servicer and the nature and status
thereof.

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

          Not later than March 15th of each calendar year commencing in 2006,
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 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 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
calendar 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
predecessor 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.

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          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 and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
the subservicing agreement to the assuming party.

          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 payable by the
Servicer for the related Distribution Date.

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

          (a) With respect to each Mortgage Loan, 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 national 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 Depositor, 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

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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.

          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, 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

                                       93

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.

                                   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 related
Determination Date, 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
paragraph (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 Servicing Advance. The determination by the Servicer
that it has made a

                                       94

Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance or that any
proposed P&I Advance or Servicing Advance, if made, would constitute a
Nonrecoverable P&I Advance or a Nonrecoverable Servicing Advance, 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 shall allocate from amounts
then on deposit in the Distribution Account in the following order of priority
and to the extent of the Available Funds remaining:

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

          (A)  to the holders of the Class A Certificates, pro rata, the Accrued
               Certificate Interest and any Unpaid Interest Amount for each
               class of Class A Certificates;

          (B)  payable from any remaining Interest Remittance Amounts, to the
               Class M-1 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (C)  payable from any remaining Interest Remittance Amounts, to the
               Class M-2 Certificates, the Accrued Certificate Interest for such
               class on such Distribution Date;

          (D)  payable from any remaining Interest Remittance Amounts, to the
               Class M-3 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (E)  payable from any remaining Interest Remittance Amounts, to the
               Class M-4 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (F)  payable from any remaining Interest Remittance Amounts, to the
               Class M-5 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (G)  payable from any remaining Interest Remittance Amounts, to the
               Class M-6 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

                                       95

          (H)  payable from any remaining Interest Remittance Amounts, to the
               Class B-1 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (I)  payable from any remaining Interest Remittance Amounts, to the
               Class B-2 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date;

          (J)  payable from any remaining Interest Remittance Amounts, to the
               Class B-3 Certificates, the Accrued Certificate Interest for such
               Class on such Distribution Date; and

          (K)  payable from any remaining Interest Remittance Amounts, to the
               Class B-4 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 LIBOR Certificates then entitled to distributions of principal as
set forth below from the amounts remaining on deposit in the Distribution
Account after making distributions pursuant to clause (i) above, in an amount
equal to the Principal Distribution Amount in the following order of priority:

          (A)  to the Class A Certificates, allocated as described in Section
               4.02(c), until the respective Class Certificate Balances are
               reduced to zero;

          (B)  sequentially, to the Class M-1, Class M-2, Class M-3, Class M-4,
               Class M-5, Class M-6, Class B-1, Class B-2, Class B-3 and Class
               B-4 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 LIBOR Certificates then entitled to distribution of
principal, from amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, in an amount equal to, in the
aggregate, the Principal Distribution Amount in the following amounts and order
of priority:

          (A)  to the Class A Certificates, the lesser of the Principal
               Distribution Amount and the Class A Principal Distribution
               Amount, allocated between the Class A Certificates as described
               in Section 4.02(c);

          (B)  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;

                                       96

          (C)  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;

          (D)  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;

          (E)  to the Class M-4 Certificates, the lesser of the remaining
               Principal Distribution Amount and the Class M-4 Principal
               Distribution Amount, until the Class Certificate Balance thereof
               has been reduced to zero;

          (F)  to the Class M-5 Certificates, the lesser of the remaining
               Principal Distribution Amount and the Class M-5 Principal
               Distribution Amount, until the Class Certificate Balance thereof
               has been reduced to zero;

          (G)  to the Class M-6 Certificates, the lesser of the remaining
               Principal Distribution Amount and the Class M-6 Principal
               Distribution Amount, until the Class Certificate Balance thereof
               has been reduced to zero;

          (H)  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;

          (I)  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;

          (J)  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; and

          (K)  to the Class B-4 Certificates, the lesser of the remaining
               Principal Distribution Amount and the Class B-4 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 Holders of the Class M-1 Certificates, any Unpaid Interest
               Amount for such Class;

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

                                       97

          (C)  to the Holders of the Class M-2 Certificates, any Unpaid Interest
               Amount for such Class;

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

          (E)  to the Holders of the Class M-3 Certificates, any Unpaid Interest
               Amount for such Class;

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

          (G)  to the Holders of the Class M-4 Certificates, any Unpaid Interest
               Amount for such Class;

          (H)  to the Holders of the Class M-4 Certificates, any Unpaid Realized
               Loss Amount for such Class;

          (I)  to the Holders of the Class M-5 Certificates, any Unpaid Interest
               Amount for such Class;

          (J)  to the Holders of the Class M-5 Certificates, any Unpaid Realized
               Loss Amount for such Class;

          (K)  to the Holders of the Class M-6 Certificates, any Unpaid Interest
               Amount for such Class;

          (L)  to the Holders of the Class M-6 Certificates, any Unpaid Realized
               Loss Amount for such Class;

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

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

          (O)  to the Holders of the Class B-2 Certificates, any Unpaid Interest
               Amount for such Class;

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

          (Q)  to the Holders of the Class B-3 Certificates, any Unpaid Interest
               Amount for such Class;

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

                                       98

          (S)  to the Holders of the Class B-4 Certificates, any Unpaid Interest
               Amount for such Class;

          (T)  to the Holders of the Class B-4 Certificates, any Unpaid Realized
               Loss Amount for such Class;

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

          (V)  (i) to the Class A Certificates, from any Class A Certificates
               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 Carry Forward Amount with
               respect to the Class A Certificates for that Distribution Date,
               allocated (a) first, between the Class A-1, Class A-2, Class A-3,
               Class A-4 and Class A-MZ certificates pro rata, based upon their
               respective Class Certificate Balances and (b) second, any
               remaining amounts to the Class A-1, Class A-2, Class A-3 , Class
               A-4 and Class A-MZ certificates, pro rata, based on any Basis
               Risk Carry Forward Amounts remaining unpaid, in order to
               reimburse such unpaid amounts, (ii) from any Class M Certificates
               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 Carry Forward Amount with
               respect to the Class M Certificates for that Distribution Date,
               allocated (a) first, among the Class M-1, Class M-2, Class M-3,
               Class M-4, Class M-5 and Class M-6 Certificates pro rata, based
               upon their respective Class Certificate Balances and (b) second,
               any remaining amounts to the Class M-1, Class M-2, Class M-3,
               Class M-4, Class M-5 and Class M-6 Certificates, pro rata, based
               on any Basis Risk Carry Forward Amounts remaining unpaid, in
               order to reimburse such unpaid amounts, and (iii) from any Class
               B 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 Carry Forward Amount with
               respect to the Class B Certificates for that Distribution Date,
               allocated (a) first, among the Class B-1, Class B-2, Class B-3
               and Class B-4 Certificates pro rata, based upon their respective
               Class Certificate Balances and (b) second, any remaining amounts
               to the Class B-1, Class B-2, Class B-3 and Class B-4
               Certificates, pro rata, based on any Basis Risk Carry Forward
               Amounts remaining unpaid, in order to reimburse such unpaid
               amounts;

          (W)  from amounts on deposit in the Excess Reserve Fund Account (not
               including any Interest Rate Cap Payments included in that
               account), an amount equal to any unpaid remaining Basis Risk
               Carry Forward Amount with respect to any LIBOR Certificates
               allocated to the LIBOR Certificates in the same order and
               priority in which Accrued Certificate Interest is allocated among
               those Classes of Certificates, with the allocation to the Class A
               Certificates being further allocated: (a) first,

                                       99

               among the Class A-1, Class A-2, Class A-3, Class A-4 and Class
               A-MZ Certificates pro rata, based upon their respective Class
               Certificate Balances and (b) second, any remaining amounts to the
               Class A-1, Class A-2, Class A-3, Class A-4 and Class A-MZ
               Certificates, pro rata, based on any Basis Risk Carry Forward
               Amounts remaining unpaid, in order to reimburse such unpaid
               amounts;

          (X)  to the Holders of the Class P Certificates (as a payment from the
               Upper Tier REMIC to the Class X 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)-(W)
               (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

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

          (b) On each Distribution Date prior to any distributions on any other
Class of Certificates, all amounts representing Prepayment Charges from the
Mortgage Loans received during the related Prepayment Period shall be
distributed by the Trustee to the Holders of the Class P Certificates.

          (c) So long as a Sequential Trigger Event is not in effect, any
principal distributed to the Class A Certificates shall be allocated pro rata
between the Class A Sequential Certificates and the Class A-MZ Certificates,
based on their respective Class Certificate Balances, until their Class
Certificate Balances have been reduced to zero; provided, however, that if a
Sequential Trigger Event is in effect, any principal distributions allocated to
the Class A Certificates shall be allocated sequentially, first to the Class A
Sequential Certificates, until their Class Certificate Balance have been reduced
to zero, and then to the Class A-MZ Certificates, until their Class Certificate
Balance has been reduced to zero. Any principal allocated to the Class A
Sequential Certificates is required to be allocated sequentially, first to the
Class A-1 Certificates, until their Class Certificate Balance has been reduced
to zero, second to the Class A-2 Certificates, until their Class Certificate
Balance has been reduced to zero, third to the Class A-3 Certificates, until
their Class Certificate Balance has been reduced to zero and fourth to the Class
A-4 Certificates, until their Class Certificate Balance has been reduced to
zero. Notwithstanding the foregoing, on and after the Distribution Date on which
the aggregate Class Certificate Balances of the Subordinated Certificates and
the principal balance of the Class X certificates have been reduced to zero, any
principal distributions allocated to the Class A Certificates shall be allocated
first, pro rata among the classes of Class A Sequential Certificates, based on
their respective Class Certificate Balances, until their Class Certificate
Balances have been reduced to zero, and second, to the Class A-MZ Certificates,
until their Class Certificate Balance has been reduced to zero.

          (d) On the June 2005, July 2005 and August 2005 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.

                                       100

          (e) On either the Distribution Date following the final Subsequent
Transfer Date or August 24, 2005, whichever date is earlier, any amounts
remaining in the Capitalized Interest Account and all Pre-Funding Earnings in
the Pre-Funding Account, after taking into account the transfers in respect of
the Distribution Date described in clause (d) above, shall be paid by the
Trustee to the Unaffiliated Seller.

          (f) On each Subsequent Transfer Date, the Unaffiliated Seller shall
instruct in writing the Trustee to withdraw from the Pre-Funding Account 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.

          (g) If the Pre-Funding Amount available in the Pre-Funding Account
(exclusive of Pre-Funding Earnings) has been reduced to $100,000 or less by the
close of business on July 1, 2005 then, on the July 25, 2005 Distribution Date,
after giving effect to any reductions in such Pre-Funding Amount on such date,
the Trustee shall withdraw from the 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 such
Pre-Funding Account has not been reduced to zero by the close of business on
August 24, 2005, the Trustee shall withdraw from such Pre-Funding Account the
amount on deposit therein, other than the Pre-Funding Earnings, and deposit such
amount into the Distribution Account on such day for distribution on the August
25, 2005 Distribution Date into the Distribution Account. Any amount deposited
into the Distribution Account pursuant to the preceding sentence from the
Pre-Funding Account shall be distributed pro rata, based on their relative Class
Certificate Balances immediately prior to the related Distribution Date, to the
Class A Sequential Certificates and the Class A-MZ Certificates until those
Certificates are reduced to zero; provided that amounts allocated to the Class A
Sequential Certificates shall be allocated as follows: first, to the Class A-1
Certificates until the Certificate Balance of the Class A-1 Certificates has
been reduced to zero, second, to the Class A-2 Certificates until the
Certificate Balance of the Class A-2 Certificates has been reduced to zero,
third, to the Class A-3 Certificates until the Certificate Balance of the Class
A-3 Certificates has been reduced to zero, and fourth, to the Class A-4
Certificates until the Certificate Balance of the Class A-4 Certificates has
been reduced to zero as a separate payment of principal, on the related
Distribution Date.

          (h) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Trustee 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-MZ,
     Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
     B-1, Class B-2, Class B-3 and Class B-4

                                      101

     Certificates, based on the amount of interest to which such Classes would
     otherwise be entitled.

          (i) Following the applicable Final Scheduled Distribution Date, no
Class of Certificates other than the Class R Certificates shall be entitled to
receive any remaining amounts. Any amounts remaining in any of the Accounts
shall be applied to the Class R Certificates.

          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 and each Rating Agency a statement, based solely on the
information provided by the Servicer, setting forth with respect to the related
distribution:

          (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 Carry
     Forward Amount for such Distribution Date and the amount of all Basis Risk
     Carry Forward 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 Carry Forward 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 Expense Fees paid to or retained by the
     Servicer or the Trustee (stated separately and 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

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     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 aggregate 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;

          (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)and whether a Sequential Trigger Event has
     occurred and is continuing;

          (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 aggregate amount of Subsequent Recoveries incurred during the
     preceding calendar month and aggregate Subsequent Recoveries through such
     Distribution Date;

          (xvi) 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 Loss Amounts and Unpaid Interest Amounts;

          (xvii) the Subordinated Amount and Specified Subordinated Amount;

          (xviii) the Interest Remittance Amount, the Principal Remittance
     Amount and the Prepayment Charges remitted by Servicer with respect to that
     Distribution Date;

          (xix) the Pre-Funded Amount as of the end of the prior Due Period;

          (xx) the amount of any principal prepayment on the Certificates
     resulting from the application of unused moneys in the Pre-Funding Account;
     and

          (xxi) the Class A Certificates Interest Rate Cap Payment, if any, the
     Class M Certificates Interest Rate Cap Payment, if any, and the Class B
     Certificates 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

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Section 4.03(d) below. The Trustee will provide the above statement via the
Trustee's internet website on each Distribution Date. The Trustee's website will
initially be located at www.jpmorgan.com/sfr and assistance in using the website
can be obtained by calling the Trustee's investor relations desk at
1-877-722-1095. 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 made available 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) and (a)(ii) of this Section 4.03
aggregated for such calendar year or applicable portion 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 for each Distribution Date,
the Servicer shall furnish to the Trustee and, subject to the terms of the
confidentiality agreement between the Servicer and the Unaffiliated Seller, the
Unaffiliated Seller 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 day of the related Prepayment
Period (the "Servicer Remittance Report").

          The Servicer shall furnish to the Trustee and, subject to the terms of
the confidentiality agreement between the Servicer and the Unaffiliated Seller,
the Unaffiliated Seller 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 Charges, 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;

          (v) the individual and aggregate Scheduled Principal Balances of the
     Mortgage Loans;

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          (vi) the aggregate of any expenses reimbursed to the Servicer during
     the prior distribution period pursuant to Section 3.05 and 3.11; and

          (vii) the number and aggregate Scheduled Principal Balances of
     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.

          Section 4.04 Certain Matters Relating to the Determination of LIBOR.

          LIBOR shall be calculated by the Trustee in accordance with the
definition 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 LIBOR Determination Date. The Trustee,
after consultation with the Depositor, 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 Trustee should terminate a
Reference Bank, the Trustee, after consultation with the Depositor, 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 Allocation of Applied Realized Loss Amounts.

          Any Applied Realized Loss Amounts shall be allocated by the Trustee to
the most junior Class of Subordinated Certificates then outstanding in reduction
of the Class Certificate Balance thereof.

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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 and aggregate
denominations per Class set forth in the Preliminary Statement).

          The Depositor hereby directs the Trustee to register the Class X
Certificates and the Class P Certificates initially to "Sigler & Co.", as
nominee of JPMorgan Chase Bank, N.A., as indenture trustee on behalf of the
Noteholders of the IXIS Real Estate Capital Inc. NIM 2005-HE2N Notes, and to
deliver such Class X Certificates and Class P Certificates on the Closing Date
to JPMorgan Chase Bank N.A., or as otherwise directed by the Depositor.

          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 (x) by wire
transfer in immediately available funds to the account of such holder at a bank
or other entity having appropriate facilities therefor, or (y) upon the request,
in writing, of the applicable Certificateholder, 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 authentication 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 authenticated by the Trustee by manual signature, and such
authentication 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 authentication. On the Closing
Date, the Trustee shall authenticate the Certificates to be issued at the
direction of the Depositor, or any affiliate thereof.

          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) 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.

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          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 (i) the transfer of Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
and Class P Certificates to the NIM Issuer, if any, or the NIM Trustee, if any,
or (iii) a transfer of the Class X or Class P Certificates from the NIM Issuer,
if any, or the NIM Trustee, if any, to the Depositor, Unaffiliated Seller or an
Affiliate of the Depositor or the Unaffiliated Seller, in the event that a
transfer of a Private Certificate which is a Physical Certificate 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. In the event that a transfer of a Private Certificate which
is a Book-Entry Certificate 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 will
be deemed to have made as of the transfer date each of the certifications set
forth in the Transferor Certificate in respect of such Certificate and the
transferee will be deemed to have made as of the transfer date each of the
certifications set forth in the Rule 144A Letter in respect of such Certificate,
in each case as if such Certificate were evidenced by a Physical Certificate.
The Depositor shall, and the Unaffiliated Seller may, 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

                                      107

provided by Rule 144A. The Trustee and the Servicer shall cooperate with the
Depositor and the Unaffiliated Seller 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 and the Unaffiliated Seller 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, the Depositor, the Servicer and the
Unaffiliated Seller 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 (i) the transfer of Class X, Class P or Class R
Certificates to the Depositor or an Affiliate of the Depositor, (ii) a transfer
of the Class X and Class P Certificates to the NIM Issuer, if any, or the NIM
Trustee, if any, or (iii) a transfer of the Class X or Class P Certificates from
the NIM Issuer, if any, or the NIM Trustee, if any, to the Depositor,
Unaffiliated Seller or an Affiliate of the Depositor or the Unaffiliated Seller,
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 either (A) 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 materially similar to the
foregoing provisions of ERISA or the Code (each, a "Plan"), and is not acting on
behalf of any Plan or using the assets of any Plan to effect such transfer or
(B) with respect to the transfer of an ERISA-Restricted Certificate that is not
a Class P, Class X or Class R Certificate, such transferee is an insurance
company that is purchasing the Certificate with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60") and the conditions for
exemptive relief under Sections I and III of PTCE 95-60 are satisfied with
respect to the purchase and holding of such Certificate. For purposes of the
preceding sentence, with respect to (i) the transfer of an ERISA-Restricted
Certificate that is not a Physical Certificate and (ii) the transfer of the
Class X or Class P Certificates from the NIM Issuer, if any, or the NIM Trustee,
if any, to an Affiliate of the Depositor or Unaffiliated Seller, 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 Certificate. 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:

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          (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, and (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 it has actual knowledge that such Person (i) is a Non-Permitted
     Transferee;

          (iv) Any attempted or purported Transfer of any Ownership Interest in
     a Residual Certificate in violation of the provisions of Section 5.02(b)
     and 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
     Section 5.02(b) and 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 a Non-Permitted Transferee at the time it
     became a Holder or, at such subsequent time as it became a Non-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; and

          (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 a Non-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

                                      109

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 regulations section 1.860E-1(c), cause any REMIC created
hereunder to fail to qualify as a REMIC at any time that the Certificates are
outstanding or result in the 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 a Non-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 a Non-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 or (y) after the occurrence of an Event
of Default, Certificate Owners representing at least a majority 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

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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 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.

          (f) Each Private Certificate presented or surrendered for registration
of transfer or exchange shall be accompanied by a written instrument of transfer
and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and all appropriate
attachments) or W-9 in form satisfactory to the Trustee, duly executed by the
Certificateholder or his attorney duly authorized in writing. Each Certificate
presented or surrendered for registration of transfer or exchange shall be
canceled and subsequently disposed of by the Trustee in accordance with its
customary practice. No service charge shall be made for any registration of
transfer or change of Private Certificates, but the Trustee may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of private Certificates.

          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 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, authenticate 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 and the Depositor and any agent of the
Servicer, the Depositor 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

                                      111

Agreement and for all other purposes whatsoever, and neither the Servicer, the
Trustee and the Depositor nor any agent of the Servicer, the Depositor 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 in writing such
information 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
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 Dallas where Certificates may be
surrendered for registration of transfer or exchange. The Trustee initially
designates its office for such purposes located at 2001 Bryan Street, 10th
Floor, Dallas, Texas 75201. The Trustee shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.

                                   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 limited partnership, 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

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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.

          None of the Depositor, the Servicer, the Custodian, 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 Custodian, the Trustee or any such Person against
any breach of representations or warranties made by it herein or protect the
Depositor, the Servicer, the Custodian, the Trustee or any such Person from any
liability which would otherwise be imposed by reasons of willful misfeasance,
bad faith or negligence (or with respect to the Depositor, gross 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 Custodian, the Trustee and any
director, officer, employee or agent of the Depositor, the Servicer, the
Custodian 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 and, in the case of the Trustee, other matters
(other than standard administrative expenses incurred in its role as Trustee)
relating to this Agreement or the Certificates (including, as to the Trustee,
the undertaking of actions as directed by the Unaffiliated Seller pursuant to
Section 2.03), other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence (or with respect to the Depositor,
gross 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, the Custodian or the
Depositor for any action taken or

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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).

          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 Depositor and the Trustee (and written notice to the Custodian) 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 (and its Affiliate, Morgan
Stanley Mortgage Capital Inc.), the Unaffiliated Seller, the Custodian and the
Trustee and any director, officer, employee, or agent of the Depositor (or its
Affiliate, Morgan Stanley Mortgage Capital Inc.), the Unaffiliated Seller, the
Custodian 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

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Mortgage Loans in compliance with the terms of this Agreement. The Servicer
shall indemnify the Unaffiliated Seller and any director, officer, employee, or
agent of 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, the Custodian 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, the Custodian and the Trustee, as applicable) 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, the Custodian 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. This indemnity shall
survive the termination of this Agreement or the earlier resignation or removal
of the Servicer.

                                   ARTICLE VII

                                     DEFAULT

          Section 7.01 Events of Default.

          "Event of Default," wherever used herein, means any one of the
following events:

          (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 or by the Trustee or to the Trustee by
Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or

          (b) failure on the part of the Servicer to duly 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 (x) 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 and (y) such number of days shall be ten in the
case of a failure to observe or perform any of the obligations set forth in
Sections 3.22, 3.23 or 8.12) 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 or by the Trustee, or to the Trustee by
Certificateholders entitled to at least 25% of the Voting Rights 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

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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) Fitch reduces its servicer rating of the Servicer to "RPS2-" or
lower, Moody's reduces its servicer rating of the Servicer to "SQ3" or lower, or
Standard & Poor's reduces its servicer rating of the Servicer to "Average" or
lower; 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 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 and the Trustee by any Certificateholders entitled to at
least 25% of the Voting Rights in the Certificates and (ii) actual knowledge of
such breach by a Servicing Officer of the Servicer; or

          (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.

          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, or at the direction of Holders holding a majority 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. In the event that a Responsible
Officer of the Trustee has actual knowledge of the occurrence of an event of
default described in clause (a) of this Section 7.01, the Trustee shall give
written notice to the Servicer of the occurrence of such an event within one
Business Day of the first day on which such

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Responsible Officer obtains actual knowledge of such occurrence; provided,
however, that the failure of the Trustee to provide such notice within one
Business Day will not affect the rights of the Depositor or the
Certificateholders to provide notice as required pursuant to clause (a) of this
Section 7.01. 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. If an
Event of Default described in clause (g) shall occur, and shall not have been
cured at least two (2) Business Days, prior to the related Distribution Date,
the Trustee shall, prior to the related Distribution Date, immediately terminate
the rights and obligations of the Servicer hereunder and succeed to the rights
and obligations of the Servicer hereunder pursuant to Section 7.02, including
the obligation to immediately make any P&I Advances, which the Servicer failed
to make subject to Section 4.01 pursuant to the terms hereof prior to such
Distribution Date. Any costs related to the transfer of servicing from the
Trustee to such successor Servicer shall be reimbursable by the Trust Fund. 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.

          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, 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 and 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

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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, if it is otherwise
unable to so act, or at the direction of Holders holding a majority of the
Voting Rights, 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. If
no successor Servicer meeting such qualifications shall have been approved by
the Depositor within 30 days after the giving of such notice or resignation, the
Trustee may petition any court of competent jurisdiction for the appointment of
a successor Servicer meeting the qualifications set forth in Section 7.02.

          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 Depositor (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

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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 3.13.

          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 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 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.

          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

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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;

          (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 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; and

          (d) none of the provisions contained in this Agreement shall in any
event require the Trustee to perform, or be responsible for the manner of
performance of, any of the obligations of the Servicer under this Agreement
except during such time, if any, as the Trustee shall be the successor to, and
be vested with the rights, duties, powers and privileges of, the Servicer in
accordance with the terms of this Agreement.

          Section 8.02 Certain Matters Affecting the Trustee and the Custodian.

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 other paper
or document, unless requested in writing to do so by the Holders of Certificates
evidencing not less than 25% of the Voting Rights allocated

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to each Class of Certificates; provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities likely to
be incurred by it in the making of such investigation is, in the opinion of the
Trustee, not assured to the Trustee by the security afforded to it by the terms
of this Agreement, the Trustee may require indemnity satisfactory to the Trustee
against such cost, expense or liability as a condition to taking any such
action;

          (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) except as otherwise provided in Section 7.01, 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;

          (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;

          (j) the right of the Trustee to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and the Trustee
shall not be answerable for other than its negligence or willful misconduct in
the performance of such act;

          (k) the Trustee shall not be required to give any bond or surety in
respect of the execution of the Trust Fund created hereby or the powers granted
hereunder; and

          (l) the Custodian shall be entitled to the same protections,
immunities and indemnities afforded the Trustee in and under this Agreement.

          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
authentication 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

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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.

          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 and Custodian'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 and the Custodian, as applicable, under
this Agreement.

          (b) On each Distribution Date, the Trustee shall withdraw from the
Distribution Account and remit to the Custodian, the Custodian Fee for such
Distribution Date as compensation for the Custodian's activities under this
Agreement. The Custodian and any director, officer, employee or agent of the
Custodian 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
Custodian under this Agreement.

          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 any 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

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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 Custodian, the Unaffiliated Seller and each Rating Agency not less
than 60 days before the date specified in such notice, when, subject to 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 may remove the Trustee and appoint a
successor trustee reasonably acceptable to the Depositor 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 Holders of Certificates entitled to at least a majority 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.

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          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 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.

          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

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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 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.

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          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;

          (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 described 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 a Non-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;

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          (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

          The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for the Lower Tier REMIC and the
Upper-Tier REMIC, within the meaning of Treasury regulations section
1.860F-4(d), and the Trustee is hereby designated as agent of such
Certificateholder for such purpose (or if the Trustee is not so permitted, such
Holder shall be the Tax Matters Person in accordance with the REMIC Provisions).
In such capacity, the Trustee shall, 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 Carry Forward 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

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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), (ii) or (iii), 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 "Exchange Act"). The
Trustee shall prepare on behalf of the Trust any Forms 8-K and 10-K customary
for 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

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hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the SEC (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 O, with such changes as
may be necessary or appropriate as a result of changes promulgated by the SEC,
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, with
such changes as may be necessary or appropriate as a result of changes
promulgated by the SEC, 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, (i) the Trustee shall indemnify and hold harmless
the Depositor and its officers, directors, employees, agents 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, employees,
agents 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 any material misstatement
or omission, negligence, bad faith or willful misconduct of the Servicer 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 such
indemnified party as a result of the losses, claims, damages or liabilities of
such indemnified party in such proportion as is appropriate to reflect the
relative fault of such indemnified party, 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

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under this Section 8.12(c) or any material misstatement or omission, negligence,
bad faith or willful misconduct of the Servicer 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 Section 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 LIBOR
Certificates has to receive payments of Basis Risk Carry Forward 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 be comprised of 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.

          Section 8.14 Interest Rate Cap Agreements.

          The Trustee is hereby authorized and directed to execute and deliver
the Interest Rate Cap Agreements 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 (subject to the restrictions set forth in the definition of
"Optional Termination Date") of all Mortgage Loans (and REO Properties) at the
price equal to the sum of (i) 100% of the unpaid principal balance of each
Mortgage Loan (other than in respect of REO Property) plus accrued and unpaid
interest thereon at the applicable 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 party
exercising the optimal termination at the expense of the party exercising the
optimal termination plus, accrued and unpaid interest on each Mortgage Loan at
the applicable Mortgage Rate and (y) the unpaid principal balance of each
Mortgage Loan related to any REO Property, in each case plus accrued

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and unpaid interest thereon at the applicable 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 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 ("NIM 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 NIM Securities to the extent the NIM
Securities are then outstanding; 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 NIM Securities, to the extent the NIM Securities are then outstanding, 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 NIM Trustee (plus any outstanding fees and expenses due and owing to the
NIM Trustee) under the indenture creating the NIM Securities.

          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 to each
Certificateholder. If the Servicer or the Class X Certificateholder elects to
terminate the Trust Fund pursuant to 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 final Distribution 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

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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 forward the Request for Release to the Custodian and the Custodian
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 (after
reimbursement of all amounts due to the Servicer, the Depositor and the Trustee
hereunder), 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, up to an amount equal to
(i) as to each Class of Regular Certificates (except the Class X Certificates),
the Certificate Balance thereof plus for each such Class and the Class X
Certificates accrued interest thereon in the case of an interest-bearing
Certificate and all other amounts to which such Classes are entitled pursuant to
Section 4.02 and (ii) as to the Residual Certificates, the amount, if any, which
remains on deposit in the 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 purchase option described in Section 9.01 is
exercised, 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 any REMIC created hereunder as defined in Section 860F of the
Code, or (ii) cause either the

                                       132

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
purchaser thereof, and, no later than the Distribution Date after such sale (and
in no event more than 90 days after 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 regulations section 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 pursuant to Section 9.01.

                                    ARTICLE X

                            MISCELLANEOUS PROVISIONS

          Section 10.01 Amendment.

          This Agreement may be amended from time to time (x) by the Depositor,
the Servicer, the Custodian and the Trustee, (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 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 (it being understood that any Opinion of Counsel with respect
to income tax matters will be limited to an opinion that such amendment will not
cause the imposition of any federal income tax on any REMIC created hereunder or
the Certificateholders or cause any REMIC created hereunder to fail to qualify
as a REMIC at any time that any Certificates are outstanding); and provided,
further, that any such action pursuant to clause (iv) or (v) above 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.

                                       133

          In addition, this Agreement may also be amended from time to time (x)
by the Trustee, the Depositor, the Custodian and the Servicer, 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, the Custodian and the Trustee, (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 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 federal income tax on any REMIC or the Certificateholders or
cause any REMIC created hereunder 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

                                       134

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 the Cap Provider,
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 or the Custodian
to enter into an amendment without receiving an Opinion of Counsel (which
Opinion shall not be an expense of the Trustee, the Custodian or the Trust
Fund), satisfactory to the Trustee and the Custodian 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 Mortgaged Properties 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.

          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.

                                       135

          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, 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;

          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.

                                       136

          All directions, demands, consents, notices and other communications
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,
10th Floor, New York, New York, 10036, Attention: Valerie Kay, with a copy to
Michelle Wilke, Esq., 1585 Broadway, 38th Floor, New York, New York 10036, (b)
in the case of the Servicer, Countrywide Home Loans Servicing LP, 450 Park
Granada, Calabasas, California, 91302, 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, JPMorgan Chase Bank,
N.A., 4 New York Plaza, 6th Floor, New York, New York 10004, Attention:
Institutional Trust Services/Global Debt - IXIS Real Estate Capital Trust
2005-HE2 or such other address as the Trustee may hereafter furnish to the
parties hereto, (d) in the case of the Custodian to Deutsche Bank National Trust
Company, 1761 East St. Andrew Place, Santa Ana, California 92705-4934,
Attention: Trust Administration - IX054C, (e) in the case of the Unaffiliated
Seller, IXIS Real Estate 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, (f) 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 (g) 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 6.04, this Agreement may not be assigned by the Servicer
without the prior written consent of the Trustee 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.

          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

                                       137

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, 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 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, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any customary out-of-pocket expense of the Servicer incident to the
exercise by the Depositor, the Unaffiliated Seller 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

                                       138

authentication thereof by the Trustee pursuant to this Agreement, are and shall
be deemed fully paid.

          Section 10.11 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.

                                       139

          IN WITNESS WHEREOF, the Depositor, the Trustee, the Unaffiliated
Seller, the Servicer and the Custodian 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:
                                          -------------------------------------
                                      Name:
                                      Title:

                                      JPMORGAN CHASE BANK, N.A., solely as
                                      Trustee and not in its individual capacity

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

                                      DEUTSCHE BANK NATIONAL TRUST
                                      COMPANY, as Custodian

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

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

                                      COUNTRYWIDE HOME LOANS SERVICING
                                      LP, as Servicer
                                      By: COUNTRYWIDE GP, INC.

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

                                       140

                                      IXIS REAL ESTATE CAPITAL INC.,
                                      as Unaffiliated Seller

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

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

                                       141

                                   SCHEDULE I

                             Mortgage Loan Schedule

                       [On File with Dewey Ballantine LLP]

                                      I-A-1

                                   SCHEDULE IA

                     Schedule of Countrywide Serviced Loans

                       [On File with Dewey Ballantine LLP]

                                      IA-1

                                   SCHEDULE II

                     IXIS REAL ESTATE CAPITAL TRUST 2005-HE2

                       Mortgage Pass-Through Certificates,
                                 Series 2005-HE2

                 Representations and Warranties of the Servicer

          (1) The Servicer is duly organized as a limited partnership and is
validly existing and in good standing under the laws of the state of Texas and
is licensed 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 securing a Mortgage Loan 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,
administrative agency or governmental body having jurisdiction over it, which
materially and adversely affects or, to the Servicer's

                                      II-1

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 action, suit, proceeding or investigation is pending or, to the
best of the Servicer's knowledge, threatened against the Servicer, before any
court, administrative agency or other tribunal asserting the invalidity of this
Pooling and Servicing Agreement, seeking to prevent the consummation of any of
the transactions contemplated by this Pooling and Servicing Agreement or which,
either in any one instance or in the aggregate, may result in any material
adverse change in business, operations, financial conditions, properties or
assets of the Servicer, or in any material impairment of the right or ability of
the Servicer to carry on its business substantially as now conducted, or in any
material liability on the part of the Servicer, or which would draw into
question the validity of this Pooling and Servicing Agreement or the Mortgage
Loans or of any action taken or to be taken in connection with the obligations
of the Servicer contemplated herein, or which would be likely to impair
materially the ability of the Servicer to perform under the terms of this
Pooling and Servicing Agreement;

          (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;

          (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; and

          (8) With respect to each Mortgage Loan, to the extent the Servicer
serviced such Mortgage Loan and to the extent the Servicer provided monthly
reports to the three credit repositories, the Servicer has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulation,
accurate and compete information (i.e., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the national credit repositories), on a monthly basis.

                                      II-2

                                  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
through the Cut-off 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 or on behalf of the Servicer 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, in
whole or in part, and the Mortgaged Property has not been released from the lien
of the Mortgage, in whole or in part, nor has any instrument been executed 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 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 default resulting from any action or inaction by the
Mortgagor;

          (5) No Defaults. With respect to each Mortgage Loan, to the best
knowledge of the Servicer, other than payments due but not yet 30 days
Delinquent, there is no material default, breach, violation or event which would
permit acceleration existing under the Mortgage or the Mortgage Note;

          (6) 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 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

                                     II-A-1

compliance with state and federal law and the provisions of the related Mortgage
Note and Mortgage (to the extent not otherwise prohibited by law). 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;

          (7) Other Insurance Policies. The improvements upon each Mortgaged
Property are covered by a valid and existing hazard insurance policy with a
generally acceptable carrier that provides for fire and extended coverage and
coverage for such other hazards as are customary in the area where the Mortgaged
Property is located; and

          (8) Servicemembers Civil Relief Act. With respect to each Mortgage
Loan, from and after the Servicing Transfer Date, no Mortgagor has notified the
Servicer, and the Servicer has no knowledge, of any relief requested or allowed
to the Mortgagor under the Servicemembers Civil Relief Act or any similar state
or local law.

                                     II-A-2

                                  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

                                     III-1

     which would be likely to impair materially the ability of the Unaffiliated
     Seller to perform under the terms of this Agreement; and

(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.

                                     III-2

                                    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, 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-MZ-
                                          1/M-1-1/M-2-1/M-3-1/M-4-1/M-5-
                                          1/M-6-1/B-1-1/B-2-1/B-3-1]

Cut-off Date                          :   May 1, 2005

First Distribution Date               :   June 25, 2005

Initial Certificate Balance of this
Certificate ("Denomination")          :

Initial Certificate Balances of all
Certificates of this Class            :

CUSIP                                 :

ISIN                                  :

                                      A-1

                        MORGAN STANLEY ABS CAPITAL I INC.

                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2
    [Class A-1] [Class A-2] [Class A-3] [Class A-4] [Class A-MZ] [Class M-1]
    [Class M-2] [Class M-3] [Class M-4] [Class M-5] [Class M-6] [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"), Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), IXIS Real Estate Capital Inc., as unaffiliated seller
(the "Unaffiliated Seller"), Deutsche Bank National Trust Company, as custodian
(the "Custodian") and JPMorgan Chase Bank, N.A., 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 authenticated by an
authorized signatory of the Trustee.

                                      * * *

                                      A-2

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

          Dated:

                                     JPMORGAN CHASE BANK, N.A., not in its
                                     individual capacity, but solely as Trustee

                                     By:
                                         ---------------------------------------

Authenticated:

By:
    -------------------------------
    Authorized Signatory of
    JPMORGAN CHASE BANK, N.A.,
    not in its individual capacity,
    but solely as Trustee

                                      A-3

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

          This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through
Certificates, Series 2005-HE2 (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 Business Day 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 to the Agreement, 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

                                      A-4

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 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 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.

                                      A-5

                                   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

                                      A-6

                            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.

                                      A-7

                                    EXHIBIT B

IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE PROPOSED TRANSFEROR DELIVERS TO
THE TRUSTEE A TRANSFEROR LETTER (THE "TRANSFEROR LETTER") IN THE FORM OF EXHIBIT
I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE RECEIVES A RULE
144A LETTER (THE "144A LETTER") IN THE FORM OF EXHIBIT J 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.

IF THIS CERTIFICATE IS A BOOK-ENTRY CERTIFICATE, THE PROPOSED TRANSFEROR WILL BE
DEEMED TO HAVE MADE EACH OF THE CERTIFICATIONS SET FORTH IN THE TRANSFEROR
LETTER AND THE PROPOSED TRANSFEREE WILL BE DEEMED TO HAVE MADE EACH OF THE
CERTIFICATIONS SET FORTH IN THE RULE 144A LETTER, IN EACH CASE AS IF SUCH
CERTIFICATE WERE EVIDENCED BY A PHYSICAL CERTIFICATE

IF THIS CERTIFICATE IS A PHYSICAL CERTIFICATE, NEITHER THIS CERTIFICATE NOR ANY
INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE TRANSFEREE DELIVERS TO THE TRUSTEE
A REPRESENTATION LETTER TO THE EFFECT THAT EITHER (I) 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 MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR
THE CODE (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE
ASSETS OF ANY PLAN TO ACQUIRE THIS CERTIFICATE, OR (II) SUCH TRANSFEREE IS AN
INSURANCE COMPANY AND IS PURCHASING THIS CERTIFICATE WITH FUNDS CONTAINED IN AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN SECTION V(E) OF
PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTCE 95-60")) AND THE CONDITIONS
FOR EXEMPTIVE RELIEF UNDER SECTIONS I AND III OF PTCE 95-60 ARE SATISFIED WITH
RESPECT TO ITS PURCHASE AND HOLDING OF THIS CERTIFICATE. IF THIS CERTIFICATE IS
A BOOK-ENTRY CERTIFICATE, EACH TRANSFEREE WILL BE DEEMED TO HAVE MADE THE
FOREGOING REPRESENTATION.

                                     -viii-

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.                       :   B-4-1

Cut-off Date                          :   May 1, 2005

First Distribution Date               :   June 25, 2005

Initial Certificate Balance of this
Certificate ("Denomination")          :

Initial Certificate Balances of all       $8,638,000
Certificates of this Class            :

CUSIP

ISIN                                  :

                                      B-1

                        MORGAN STANLEY ABS CAPITAL I INC.

                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2
                                    Class B-4

          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"), Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), IXIS Real Estate Capital Inc., as unaffiliated seller
(the "Unaffiliated Seller"), Deutsche Bank National Trust Company, as custodian
(the "Custodian") and JPMorgan Chase Bank, N.A., 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 authenticated by an
authorized signatory of the Trustee.

                                      * * *

                                      B-2

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

          Dated:

                                        JPMORGAN CHASE BANK, N.A.,
                                        not in its individual capacity, but
                                        solely as Trustee

                                        By:
                                            ------------------------------------

Authenticated:

By:
    ------------------------------------
    Authorized Signatory of
    JPMORGAN CHASE BANK, N.A.,
    not in its individual capacity,
    but solely as Trustee

                                      B-3

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

          This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through
Certificates, Series 2005-HE2 (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 Business Day 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 to the Agreement, 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

                                      B-4

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 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 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.

                                      B-5

                                   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

                                      B-6

                            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.

                                      B-7

                                    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
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE, (EACH, A
"PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN
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                        : May 1, 2005

First Distribution Date             : June 25, 2005

Initial Certificate Balance of this
Certificate ("Denomination")        : $[100]

Initial Certificate Balance of all  : $100
Certificates of this Class

CUSIP                               : N/A

                                      C-1

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

                                     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,
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 __________________, 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"), Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), IXIS Real Estate Capital Inc., as unaffiliated seller
(the "Unaffiliated Seller"), Deutsche Bank National Trust Company, as custodian
(the "Custodian") and JPMorgan Chase Bank, N.A., 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 purposes, or such other location
specified in the notice to Certificateholders of such final distribution.

          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.

                                      C-2

          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
a Plan, and is not acting on behalf of any Plan or using the assets of any Plan
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 authenticated by an
authorized signatory of the Trustee.

                                      * * *

                                      C-3

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

          Dated:

                           JPMORGAN CHASE BANK, N.A.,
                           not in its individual capacity, but solely as Trustee

                           By:
                               -------------------------------------------------

Authenticated:

By:
   --------------------------------------------------
   Authorized Signatory of
   JPMORGAN CHASE BANK, N.A.,
   not in its individual capacity,
   but solely as Trustee

                                      C-4

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

          This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through
Certificates, Series 2005-HE2 (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 to the Agreement, 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
exchange therefor or in

                                      C-5

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 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.

                                      C-6

                                   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

                                      C-7

                            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.

                                      C-8

                                    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").

EXCEPT AS PROVIDED IN THE AGREEMENT, 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 MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS
OF ERISA OR THE CODE (EACH, A "PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN
OR USING THE ASSETS OF ANY PLAN 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.                         : R-1

Cut-off Date                            : May 1, 2005

First Distribution Date                 : June 25, 2005

Percentage Interest of this Certificate
("Denomination")                        : 100%

CUSIP                                   : N/A

                                      D-1

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

                                     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 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 ____________________ 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"), Countrywide Home Loans Servicing
LP, as servicer (the "Servicer"), IXIS Real Estate Capital Inc., as unaffiliated
seller (the "Unaffiliated Seller"), Deutsche Bank National Trust Company, as
custodian (the "Custodian") and JPMorgan Chase Bank, N.A., 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 such
other location specified in the notice to Certificateholders of such final
distribution.

          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 a Plan, and is not acting on
behalf of any Plan or using the assets of any Plan 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

                                      D-2

Closing Date or thereafter transferred, and the Trustee shall not register the
Transfer of this 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 a Non-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 authenticated by an
authorized signatory of the Trustee.

                                      D-3

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

          Dated:

                           JPMORGAN CHASE BANK, N.A.,
                           not in its individual capacity, but solely as Trustee

                           By:
                              --------------------------------------------------

Authenticated:

By:
   --------------------------------------------------
   Authorized Signatory of
   JPMORGAN CHASE BANK, N.A.,
   not in its individual capacity,
   but solely as Trustee

                                      D-4

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

          This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through
Certificates, Series 2005-HE2 (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 to the Agreement, 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
exchange therefor or in

                                      D-5

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 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.

                                      D-6

                                   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

                                      D-7

                            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.

                                      D-8

                                    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") AND CERTAIN OTHER
ASSETS.

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 I TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE TRUSTEE
RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT J 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
MATERIALLY SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE (EACH, A
"PLAN"), AND IS NOT ACTING ON BEHALF OF ANY PLAN OR USING THE ASSETS OF ANY PLAN
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.                           :   X-1

Cut-off Date                              :   May 1, 2005

First Distribution Date                   :   June 25, 2005

Percentage Interest of this Certificate
("Denomination")                          :   [100]%

CUSIP                                     :   N/A

                                      E-1

                        MORGAN STANLEY ABS CAPITAL I INC.

                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

                                     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 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 _____________________, 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"), Countrywide Home Loans Servicing LP, as
servicer (the "Servicer"), IXIS Real Estate Capital Inc., as unaffiliated seller
(the "Unaffiliated Seller"), Deutsche Bank National Trust Company, as custodian
(the "Custodian") and JPMorgan Chase Bank, N.A., 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 Certificate Balance or 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 purposes, or such
other location specified in the notice to Certificateholders of such final
distribution.

          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.

                                      E-2

          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
a Plan, and is not acting on behalf of any Plan or using the assets of any Plan
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 authenticated by an
authorized signatory of the Trustee.

                                      * * *

                                      E-3

          IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.

          Dated:

                                           JPMORGAN CHASE BANK, N.A.,
                                           not in its individual capacity, but
                                           solely as Trustee

                                           By:
                                               ---------------------------------

Authenticated:

By:
    ------------------------------------
    Authorized Signatory of
    JPMORGAN CHASE BANK, N.A.,
    not in its individual capacity,
    but solely as Trustee

                                      E-4

                        MORGAN STANLEY ABS CAPITAL I INC.
                     IXIS Real Estate Capital Trust 2005-HE2
               Mortgage Pass-Through Certificates, Series 2005-HE2

          This Certificate is one of a duly authorized issue of Certificates
designated as IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through
Certificates, Series 2005-HE2 (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 to the Agreement, 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
exchange therefor or in

                                      E-5

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 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.

                                      E-6

                                   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

                                      E-7

                            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.

                                      E-8

                                    EXHIBIT F

                   FORM OF INITIAL CERTIFICATION OF CUSTODIAN

                                     [date]

Morgan Stanley ABS Capital I Inc.
1585 Broadway, 10th Floor
New York, New York 10036

Countrywide Home Loans Servicing LP
7105 Corporate Drive
Plano, Texas 75024

IXIS Real Estate Capital Inc.
9 West 57th Street, 36th Floor
New York, New York 10019

JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004

          Re: Pooling and Servicing Agreement, dated as of May 1, 2005, among
              Morgan Stanley ABS Capital I Inc., as Depositor, Countrywide Home
              Loans Servicing LP, as Servicer, IXIS Real Estate Capital Inc.,
              as Unaffiliated Seller, Deutsche Bank National Trust Company, as
              Custodian and JPMorgan Chase Bank, N.A., as Trustee, IXIS Real
              Estate Capital Trust Series 2005-HE2

Ladies and Gentlemen:

          In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, hereby certifies that 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.

          The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
Pooling and Servicing

                                      F-1

Agreement. The Custodian 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 collectability, insurability, perfection,
priority, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Custodian 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 Custodian

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

                                      F-2

                                    EXHIBIT G

                    FORM OF FINAL CERTIFICATION OF CUSTODIAN

                                     [date]

Morgan Stanley ABS Capital I Inc.
1585 Broadway, 10th Floor
New York, New York 10036

Countrywide Home Loans Servicing LP
450 Park Granada
Calabasas, California 91302

IXIS Real Estate Capital Inc.
9 West 57th Street, 36th Floor
New York, New York 10019

JPMorgan Chase Bank, N.A.
4 New York Plaza, 6th Floor
New York, New York 10004

----------
          Re:  Pooling and Servicing Agreement, dated as of May 1, 2005, among
               Morgan Stanley ABS Capital I Inc., as Depositor, Countrywide Home
               Loans Servicing LP, as Servicer, IXIS Real Estate Capital Inc.,
               as Unaffiliated Seller, Deutsche Bank National Trust Company, as
               Custodian and JPMorgan Chase Bank, N.A., as Trustee, IXIS Real
               Estate Capital Trust Series 2005-HE2

Ladies and Gentlemen:

          In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, 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 Custodian otherwise knows that the
     related Mortgage has not been

                                      G-1

     returned from the 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 Custodian 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 Custodian 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 collectability,
insurability, perfection, priority, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
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 Custodian,

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

                                      G-2

                                    EXHIBIT H

                           RESIDUAL TRANSFER AFFIDAVIT

                    IXIS REAL ESTATE CAPITAL Trust 2005-HE2,
                       Mortgage Pass-Through Certificates,
                                 Series 2005-HE2

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"), Countrywide Home Loans Servicing LP, as
servicer, IXIS Real Estate Capital Inc., as unaffiliated seller (the
"Unaffiliated Seller"), Deutsche Bank National Trust Company, as custodian (the
"Custodian"), and JPMorgan Chase Bank, N.A. as Trustee (in such capacity, the
"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.

                                      H-1

          (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.

                                      H-2

          10. The Transferee is not a Plan and is not acting on behalf of any
Plan, or using the assets of any Plan 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.

                                      * * *

                                      H-3

          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__

                                      H-4

                                    EXHIBIT I

                         FORM OF TRANSFEROR CERTIFICATE

                                                                __________, 20__

Morgan Stanley ABS Capital I Inc.
1585 Broadway, 10th Floor
New York, New York 10036

JPMorgan Chase Bank, N.A.
as Trustee
4 New York Plaza, 6th Floor
New York, New York 10004

          Re:  IXIS Real Estate Capital Trust, Series 2005-HE2, Mortgage
               Pass-Through Certificates, Series 2005-HE2, 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 a Non-Permitted Transferee.

                                        Very truly yours,

                                        ----------------------------------------
                                        Print Name of Transferor

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

                                      I-1

                                    EXHIBIT J

                            FORM OF RULE 144A LETTER

                                                              ____________, 20__

Morgan Stanley ABS Capital I Inc.
1585 Broadway, 10th Floor
New York, New York 10036

JPMorgan Chase Bank, N.A.
as Trustee
4 New York Plaza, 6th Floor
New York, New York 10004

          Re:  IXIS Real Estate Capital Trust, Series 2005-HE2, Mortgage
               Pass-Through Certificates, Series 2005-HE2, 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) either (i) 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 (each, a
"Plan"), and we are not acting on behalf of any Plan or using the assets of any
Plan to effect our purchase of the Certificates or (ii) with respect to any
Certificates other than Class P, Class R and Class X Certificates, we are an
insurance company and are purchasing the Certificates with funds contained in an
"insurance company general account" (as defined term is defined in Section V(e)
of Prohibited Transaction Class Exemption 95-60 ("PTCE 95-60")), and the
conditions for exemptive relief under Sections I and III of PTCE 95-60 are
satisfied with respect to our purchase and holding 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

                                      J-1

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 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, and (f) 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.

          In connection with our purchase of the Certificates, we acknowledge
and agree that (i) none of you nor any of your affiliates is acting as a
fiduciary or financial or investment adviser for us; (ii) we are not relying
(for purposes of making any investment decision or otherwise) upon any advice,
counsel or representations (whether written or oral) of any of you or your
affiliates with respect to the Certificates; (iii) none of you nor any of your
affiliates has given to us (directly or indirectly through any other person) any
assurance, guarantee or representation whatsoever as to the expected or
projected success, profitability, return, performance, result, effect,
consequence, or benefit (including legal, regulatory, tax, financial, accounting
or otherwise) of our purchase of the Certificates; (iv) we have performed our
own diligence to the extent we have deemed necessary and we have consulted with
our own legal, regulatory, tax, business, investment, financial and accounting
advisers to the extent that we have deemed necessary, and we have made our own
investment decisions based upon our own judgment and upon any advice from such
advisers as we have deemed necessary and appropriate and not upon any view
expressed by any of you or your affiliates with respect to the Certificates; (v)
none of you nor any of your affiliates will be obligated to make payments on the
Certificates in the event that the assets of the trust is insufficient to
provide for such payments; (vi) you and your affiliates may have positions and
may effect transactions in any of the Series 2005-HE2 securities; and (vii) we
are familiar with the Certificates and have reviewed and understand the related
pooling and servicing agreement, the prospectus supplement and prospectus
relating to Series 2005-HE2 and the other material transaction documents related
thereto.

                                      J-2

                                                            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.

                                      J-3

          _______   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.

                                      J-4

          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 Transferee

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

                                        Date:
                                              ----------------------------------

                                      J-5

                                                            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,

                                      J-6

(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 Transferee

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

                                        IF AN ADVISER:

                                        ----------------------------------------
                                                   Print Name of Buyer

                                        Date:
                                              ----------------------------------

                                      J-7

                                    EXHIBIT K

                           FORM OF REQUEST FOR RELEASE

     To:  JPMorgan Chase Bank, N.A.
          4 New York Plaza, 6th Floor
          New York, NY 10004

          Deutsche Bank National Trust Company
          1761 East St. Andrew Place
          Santa Ana, California 92705-4934

          Re:

          In connection with the administration of the Mortgage Loans held by
Deutsche Bank National Trust Company as the Custodian 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 Servicer 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 Servicer 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
                    Servicer 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).

                                      K-1

          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.

          If box 4 or 5 above is checked, upon our return of all of the above
documents to you as the Custodian, please acknowledge your receipt by signing in
the space indicated below, and returning this form if requested.

                                         COUNTRYWIDE HOME LOANS SERVICING LP

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

                                      K-2

                                    EXHIBIT L

                      FORM OF SUBSEQUENT TRANSFER AGREEMENT

                     IXIS REAL ESTATE CAPITAL TRUST 2005-HE2

          Pursuant to separate Mortgage Loan Purchase Agreements, Chapel
Mortgage Corporation ("Chapel"), ResMae Mortgage Corporation ("ResMae"),
Homeowners Loan Corp. ("Homeowners"), NC Capital Corporation ("NC Capital"),
Accredited Home Lenders, Inc. ("Accredited"), First Bank Mortgage ("First
Bank"), Lenders Direct Capital Corporation ("Lenders Direct"), Encore Credit
Corp. ("Encore"), Master Financial, Inc. ("Master Financial"), Impac Funding
Corporation ("IFC") (and its affiliate, Novelle Financial Services, Inc.
"Novelle"), Lime Financial Services, Ltd. ("Lime Financial"), Fremont Investment
& Loan, Inc. ("Fremont"), People's Choice Home Loan, Inc. ("People's Choice"),
Allstate Home Loans Inc. ("Allstate"), Platinum Capital Group ("Platinum
Capital"), BNC Mortgage, Inc. ("BNC"), Home Loan Corp. ("Home Loan") and First
Horizon Home Loan Corp. ("First Horizon" and together with Chapel, ResMae,
Homeowners, NC Capital, Accredited, First Bank, Lenders Direct, Encore, Master
Financial, IFC, Novelle, Lime Financial, Fremont, People's Choice, Allstate,
Platinum Capital, BNC and Home Loan, the "Originators") have agreed to sell to
IXIS Real Estate 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 IXIS Real Estate Capital Trust 2005-HE2 (the
"Trust Fund"). The Trust Fund was established pursuant to a Pooling and
Servicing Agreement, dated as of May 1, 2005 (the "Pooling and Servicing
Agreement") among the Unaffiliated Seller, the Depositor, Countrywide Home Loans
Servicing LP, as servicer (the "Servicer"), Deutsche Bank National Trust
Company, as custodian (the "Custodian") and JPMorgan Chase Bank, N.A., 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.

                                      L-1

          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 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), 3.01(n), 3.01(p), 3.01(o) 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.

                                      L-2

                  [Remainder of Page Intentionally Left Blank]

                                      L-3

                                         IXIS REAL ESTATE CAPITAL INC.,
                                            as Unaffiliated Seller

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

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

                                         MORGAN STANLEY ABS CAPITAL I INC.,
                                            as Depositor

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

                                         COUNTRYWIDE HOME LOANS SERVICING LP,
                                            as Servicer

                                         By: Countrywide GP, Inc.

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

                                         JPMORGAN CHASE BANK, N.A.,
                                            as Trustee

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

                                      L-4

                                    EXHIBIT M

                           FORM OF CERTIFICATION TO BE
                              PROVIDED BY DEPOSITOR

Re:  IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through Certificates,
     Series 2005-HE2, issued pursuant to the Pooling and Servicing Agreement,
     dated as of May 1, 2005 (the "Pooling and Servicing Agreement"), among
     Morgan Stanley ABS Capital I Inc., as depositor (the "Depositor"), IXIS
     Real Estate Capital Inc., as unaffiliated seller, Deutsche Bank National
     Trust Company, as custodian (the "Custodian"), JPMorgan Chase Bank, N.A.,
     as trustee (the "Trustee"), and Countrywide Home Loans Servicing LP, 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

     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.

                                      M-1

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]

                                      M-2

                                    EXHIBIT N

               Servicer Certifications to be provided to Depositor

Re: IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through Certificates,
Series 2005-HE2, issued pursuant to the Pooling and Servicing Agreement, dated
as of May 1, 2005 (the "Pooling and Servicing Agreement"), among Morgan Stanley
ABS Capital I Inc., as depositor (the "Depositor)", IXIS Real Estate Capital
Inc., as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National
Trust Company, as custodian (the "Custodian"), JPMorgan Chase Bank, N.A., as
trustee (the "Trustee"), and Countrywide Home Loans Servicing LP, as servicer
(the "Servicer").

I, [identify the certifying individual], certify to the Depositor and the
Trustee, as applicable, and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

     1.   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

     2.   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 forth in the
          Pooling and Servicing Agreement, have been disclosed to such
          accountant and are included in such reports.

Date: ______________

--------------------
[Signature]
[Title]

                                      N-1

                                    EXHIBIT O

               Trustee Certifications to be provided to Depositor

Re: IXIS Real Estate Capital Trust 2005-HE2 Mortgage Pass-Through Certificates,
Series 2005-HE2, issued pursuant to the Pooling and Servicing Agreement, dated
as of May 1, 2005 (the "Pooling and Servicing Agreement"), among Morgan Stanley
ABS Capital I Inc., as depositor (the "Depositor)", IXIS Real Estate Capital
Inc., as unaffiliated seller (the "Unaffiliated Seller"), Deutsche Bank National
Trust Company, as custodian (the "Custodian"), JPMorgan Chase Bank, N.A., as
trustee (the "Trustee"), and Countrywide Home Loans Servicing LP, as servicer
(the "Servicer").

     JPMorgan Chase Bank, N.A. not in its individual capacity but solely as
trustee, certifies to the Servicer, and its officers, directors and affiliates,
and with the knowledge and intent that they will rely upon this certification,
that:

     1.   It has reviewed the annual report on Form 10-K for the fiscal year
          20__ (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.   Based on its knowledge, the distribution information in the
          distribution reports contained in all Form 8-K prepared by the
          Trustee, 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.   Based on its knowledge, the distribution 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;

     In compiling the distribution information and making the foregoing
certifications, the Trustee has relied upon information furnished to it by the
Servicer under the Pooling and Servicing Agreement. The Trustee shall have no
responsibility or liability for any inaccuracy in such reports resulting from
information so provided by the Servicer.

                                      JPMORGAN CHASE BANK, N.A. not in its
                                      individual capacity, but solely as Trustee

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

                                      O-1QUANTA CAPITAL HOLDINGS LTD.

                          2003 LONG TERM INCENTIVE PLAN

         1. PURPOSES. The purposes of the 2003 Long Term Incentive Plan are to
advance the interests of Quanta Capital Holdings Ltd. and its shareholders by
providing a means to attract, retain, and motivate employees and directors of
the Company upon whose judgment, initiative and efforts the continued success,
growth and development of the Company is dependent.

         2. DEFINITIONS. For purposes of the Plan, the following terms shall be
defined as set forth below:

         "Affiliate" means any entity other than the Company and its
Subsidiaries that is designated by the Board or the Committee as a participating
employer under the Plan, provided that the Company directly or indirectly owns
at least 20% of the combined voting power of all classes of stock of such entity
or at least 20% of the ownership interests in such entity.

         "Award" means any Option, SAR, Restricted Share, Restricted Share Unit,
Performance Award, Dividend Equivalent, Other Share-Based Award or Director's
Share granted to an Eligible Employee under the Plan.

         "Award Agreement" means any written agreement, contract, or other
instrument or document evidencing an Award.

         "Beneficiary" means the person, persons, trust or trusts which have
been designated by such Eligible Employee in his or her most recent written
beneficiary designation filed with the Company to receive the benefits specified
under this Plan upon the death of the Eligible Employee, or, if there is no
designated Beneficiary or surviving designated Beneficiary, then the person,
persons, trust or trusts entitled by will or the laws of descent and
distribution to receive such benefits.

         "Board" means the Board of Directors of the Company.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time. References to any provision of the Code shall be deemed to include
successor provisions thereto and regulations thereunder.

         "Committee" means the Compensation Committee of the Board, or such
other Board committee or subcommittee (or the entire Board) as may be designated
by the Board to administer the Plan. In the case of awards governed by Code
section 162(m), the committee members will be "outside directors" qualified to
make and administer such awards, pursuant to Code section 162(m) and the
underlying regulations.

         "Company" means Quanta Capital Holdings Ltd., a corporation organized
under the laws of Bermuda, or any successor corporation.

         "Director" means a non-employee member of the Board.

         "Director's Shares" means Shares granted to a Director as payment of
the Director's annual retainer fee pursuant to the Director's election under
Section 7 of the Plan.

         "Dividend Equivalent" means a right, granted under Section 5(g), to
receive cash, Shares, or other property equal in value to dividends paid with
respect to a specified number of Shares. Dividend Equivalents may be awarded on
a free-standing basis or in connection with another Award, and may be paid
currently or on a deferred basis.

                                       1

         "Eligible Employee" means (1) an employee of the Company or its
Subsidiaries or Affiliates, including any director who is an employee, who is
responsible for or contributes to the management, growth and/or profitability of
the business of the Company, its Subsidiaries or Affiliates, (2) any Director,
and (3) any consultant performing service for the Company or its Subsidiaries or
Affiliates who is designated eligible to receive an Award. Notwithstanding any
provisions of this Plan to the contrary, an Award may be granted to an employee
or consultant, in connection with his or her hiring or retention prior to the
date the employee or consultant first performs services for the Company, a
Subsidiary or an Affiliate; provided, however, that any such Award shall not
become vested prior to the date the employee or consultant first performs such
services.

         "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time. References to any provision of the Exchange Act shall be
deemed to include successor provisions thereto and regulations thereunder.

         "Fair Market Value" means, with respect to Shares or other property,
the fair market value of such Shares or other property determined by such
methods or procedures as shall be established from time to time by the
Committee. Unless otherwise determined by the Committee in good faith, the Fair
Market Value of Shares as of any given date prior to the existence of a public
market for the Company's Shares shall mean the Company's book value. Thereafter,
unless otherwise determined by the Committee in good faith, the Fair Market
Value of Shares shall mean the mean between the high and low selling prices per
Share on the immediately preceding date (or, if the Shares were not traded on
that day, the next preceding day that the Shares were traded) on the principal
exchange (not including the PORTAL Market) on which the Shares are traded, as
such prices are officially quoted on such exchange. However, notwithstanding the
above, in the case of any broker-assisted exercise of stock options or SARs, if
stock is sold to cover the exercise price of the option or the withholding
required with respect to the option or SAR, the Fair Market Value of Shares is
deemed to be the selling price of the shares sold incident to the
broker-assisted exercise, unless a different Fair Market Value is otherwise
determined by the Committee in good faith.

         "ISO" means any Option intended to be and designated as an incentive
stock option within the meaning of Section 422 of the Code.

         "NQSO" means any Option that is not an ISO.

         "Option" means a right, granted under Section 5(b) or Section 7, to
purchase Shares.

         "Other Share-Based Award" means a right, granted under Section 5(h),
that relates to or is valued by reference to Shares.

         "Participant" means an Eligible Employee or Director who has been
granted an Award under the Plan.

         "Performance Award" means any Option, SAR, Restricted Stock, or
Restricted Share Unit that is subject to the achievement of performance criteria
listed in Section 5(f).

         "Performance Unit" means a performance unit granted under Section 5(f).

         "Plan" means this 2003 Long Term Incentive Plan.

         "Restricted Shares" means an Award of Shares under Section 5(d) that
may be subject to certain restrictions and to a risk of forfeiture.

         "Restricted Share Unit" means a right, granted under Section 5(e), to
receive Shares or cash at the end of a specified deferral period.

                                       2

         "Rule 16b-3" means Rule 16b-3, as from time to time in effect and
applicable to the Plan and Participants, promulgated by the Securities and
Exchange Commission under Section 16 of the Exchange Act.

         "SAR" or "Share Appreciation Right" means the right, granted under
Section 5(c), to be paid an amount measured by the difference between the
exercise price of the right and the Fair Market Value of Shares on the date of
exercise of the right, with payment to be made in cash, Shares, or property as
specified in the Award or determined by the Committee.

         "Shares" means common shares, $.01 par value per share, of the Company.

         "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the
corporations (other than the last corporation in the unbroken chain) owns shares
possessing 50% or more of the total combined voting power of all classes of
stock in one of the other corporations in the chain.

         3. ADMINISTRATION.

                   (a) Authority of the Committee. The Plan shall be
administered by the Committee, and the Committee shall have full and final
authority to take the following actions, in each case subject to and consistent
with the provisions of the Plan:

                          (i)    to select Eligible Employees to whom Awards may
                                 be granted;

                          (ii)   to designate Affiliates;

                          (iii)  to determine the type or types of Awards to be
                                 granted to each Eligible Employee;

                          (iv)   to determine the type and number of Awards to
                                 be granted, the number of Shares to which an
                                 Award may relate, the terms and conditions of
                                 any Award granted under the Plan (including,
                                 but not limited to, any exercise price, grant
                                 price, or purchase price, and any bases for
                                 adjusting such exercise, grant or purchase
                                 price, any restriction or condition, any
                                 schedule for lapse of restrictions or
                                 conditions relating to transferability or
                                 forfeiture, exercisability, or settlement of an
                                 Award, and waiver or accelerations thereof, and
                                 waivers of performance conditions relating to
                                 an Award, based in each case on such
                                 considerations as the Committee shall
                                 determine), and all other matters to be
                                 determined in connection with an Award;

                          (v)    to determine whether, to what extent, and under
                                 what circumstances an Award may be settled, or
                                 the exercise price of an Award may be paid, in
                                 cash, Shares, other Awards, or other property,
                                 or an Award may be cancelled, forfeited,
                                 exchanged, or surrendered;

                          (vi)   to determine whether, to what extent, and under
                                 what circumstances cash, Shares, other Awards,
                                 or other property payable with respect to an
                                 Award will be deferred either automatically, at
                                 the election of the Committee, or at the
                                 election of the Eligible Employee;

                          (vii)  to prescribe the form of each Award Agreement,
                                 which need not be identical for each Eligible
                                 Employee;

                                       3

                          (viii) to adopt, amend, suspend, waive, and rescind
                                 such rules and regulations and appoint such
                                 agents as the Committee may deem necessary or
                                 advisable to administer the Plan;

                          (ix)   to correct any defect or supply any omission or
                                 reconcile any inconsistency in the Plan and to
                                 construe and interpret the Plan and any Award,
                                 rules and regulations, Award Agreement, or
                                 other instrument hereunder;

                          (x)    to accelerate the exercisability or vesting of
                                 all or any portion of any Award or to extend
                                 the period during which an Award is
                                 exercisable; and

                          (xi)   to make all other decisions and determinations
                                 as may be required under the terms of the Plan
                                 or as the Committee may deem necessary or
                                 advisable for the administration of the Plan.

                   (b) Manner of Exercise of Committee Authority. The Committee
shall have sole discretion in exercising its authority under the Plan. Any
action of the Committee with respect to the Plan shall be final, conclusive, and
binding on all persons, including the Company, Subsidiaries, Affiliates,
Eligible Employees, any person claiming any rights under the Plan from or
through any Eligible Employee, and shareholders. The express grant of any
specific power to the Committee, and the taking of any action by the Committee,
shall not be construed as limiting any power or authority of the Committee. The
Committee may delegate to officers or managers of the Company or any Subsidiary
or Affiliate the authority, subject to such terms as the Committee shall
determine, to perform administrative functions and, with respect to Awards
granted to persons not subject to Section 16 of the Exchange Act, to perform
such other functions as the Committee may determine, to the extent permitted
under Rule 16b-3 (if applicable) and applicable law. Notwithstanding any
provision of this Plan to the contrary, the Committee may grant Awards which are
subject to the approval of the Board; provided that an Award shall be subject to
Board approval only if the Committee expressly so states.

                   (c) Limitation of Liability. Each member of the Committee
shall be entitled to, in good faith, rely or act upon any report or other
information furnished to him or her by any officer or other employee of the
Company or any Subsidiary or Affiliate, the Company's independent certified
public accountants, or other professional retained by the Company to assist in
the administration of the Plan. No member of the Committee, nor any officer or
employee of the Company acting on behalf of the Committee, shall be personally
liable for any action, determination, or interpretation taken or made in good
faith with respect to the Plan, and all members of the Committee and any officer
or employee of the Company acting on their behalf shall, to the extent permitted
by law, be fully indemnified and protected by the Company with respect to any
such action, determination, or interpretation.

                   (d) Limitation on Committee's Discretion. Anything in this
Plan to the contrary notwithstanding, in the case of any Award which is intended
to qualify as "performance-based compensation" within the meaning of Section
162(m)(4)(C) of the Code, if the Award Agreement so provides, the Committee
shall have no discretion to increase the amount of compensation payable under
the Award to the extent such an increase would cause the Award to lose its
qualification as such performance-based compensation.

         4. SHARES SUBJECT TO THE PLAN.

                   (a) Subject to adjustment as provided in Section 4(c) hereof,
the total number of Shares reserved for issuance under the Plan shall be
9,350,000. No Award may be granted if the number of Shares to which such Award
relates, when added to the number of Shares previously issued

                                       4

under the Plan, exceeds the number of Shares reserved under the preceding
sentence. If any Awards are forfeited, cancelled, terminated, exchanged or
surrendered or such Award is settled in cash or otherwise terminates without a
distribution of Shares to the Participant, any Shares counted against the number
of Shares reserved and available under the Plan with respect to such Award
shall, to the extent of any such forfeiture, settlement, termination,
cancellation, exchange or surrender, again be available for Awards under the
Plan. Upon the exercise of any Award granted in tandem with any other Awards,
such related Awards shall be cancelled to the extent of the number of Shares as
to which the Award is exercised. Subject to adjustment as provided in Section
4(c) hereof, the maximum number of Shares (i) with respect to which Options and
SARs may be granted during a calendar year to any Eligible Employee under this
Plan shall be 700,000 Shares and (ii) with respect to Restricted Shares and
Restricted Share Units (including Awards intended to qualify as
performance-based compensation within the meaning of Section 162(m)(4)(C) of the
Code) shall be the equivalent of 250,000 Shares during a calendar year to any
Eligible Employee under this Plan.

                   (b) Any Shares distributed pursuant to an Award may consist,
in whole or in part, of authorized and unissued Shares or treasury Shares
including Shares acquired by purchase in the open market or in private
transactions.

                   (c) In the event that the Committee shall determine that any
dividend in Shares, recapitalization, Share split, reverse split,
reorganization, merger, consolidation, spin-off, combination, repurchase, or
share exchange, or other similar corporate transaction or event, affects the
Shares such that an adjustment is appropriate in order to prevent dilution or
enlargement of the rights of Eligible Employees under the Plan, then the
Committee shall make such equitable changes or adjustments as it deems
appropriate and, in such manner as it may deem equitable, adjust any or all of
(1) the number and kind of shares which may thereafter be issued under the Plan,
(2) the number and kind of shares, other securities or other consideration
issued or issuable in respect of outstanding Awards, and (3) the exercise price,
grant price, or purchase price relating to any Award; provided, however, in each
case that, with respect to ISOs, such adjustment shall be made in accordance
with Section 424(a) of the Code, unless the Committee determines otherwise. In
addition, the Committee is authorized to make adjustments in the terms and
conditions of, and the criteria and performance objectives included in, Awards
in recognition of unusual or non-recurring events (including, without
limitation, events described in the preceding sentence) affecting the Company or
any Subsidiary or Affiliate or the financial statements of the Company or any
Subsidiary or Affiliate, or in response to changes in applicable laws,
regulations, or accounting principles; provided, however, that, if an Award
Agreement specifically so provides, the Committee shall not have discretion to
increase the amount of compensation payable under the Award to the extent such
an increase would cause the Award to lose its qualification as performance-based
compensation for purposes of Section 162(m)(4)(C) of the Code and the
regulations thereunder.

         5. SPECIFIC TERMS OF AWARDS.

                   (a) General. Awards may be granted on the terms and
conditions set forth in this Section 5. In addition, the Committee may impose on
any Award or the exercise thereof, at the date of grant or thereafter (subject
to Section 8(d)), such additional terms and conditions, not inconsistent with
the provisions of the Plan, as the Committee shall determine, including terms
regarding forfeiture of Awards or continued exercisability of Awards in the
event of termination of employment by the Eligible Employee.

                   (b) Options. The Committee is authorized to grant Options,
which may be NQSOs or ISOs, to Eligible Employees on the following terms and
conditions:

                          (i)    EXERCISE PRICE. The exercise price per Share
                                 purchasable under an Option shall be determined
                                 by the Committee, and the Committee may,
                                 without limitation, set an exercise price that
                                 is based upon

                                       5

                                 achievement of performance criteria described
                                 in Section 5(f)(i) if deemed appropriate by the
                                 Committee.

                          (ii)   OPTION TERM. The term of each Option shall be
                                 determined by the Committee, but such term
                                 shall not exceed ten years.

                          (iii)  TIME AND METHOD OF EXERCISE. The Committee
                                 shall determine at the date of grant or
                                 thereafter the time or times at which an Option
                                 may be exercised in whole or in part
                                 (including, without limitation, upon
                                 achievement of performance criteria if deemed
                                 appropriate by the Committee), the methods by
                                 which such exercise price may be paid or deemed
                                 to be paid (including, without limitation,
                                 broker-assisted exercise arrangements), the
                                 form of such payment (including, without
                                 limitation, cash, Shares, notes or other
                                 property), and the methods by which Shares will
                                 be delivered or deemed to be delivered to
                                 Eligible Employees; provided, however, that in
                                 no event may any portion of the exercise price
                                 be paid with Shares acquired either under an
                                 Award granted pursuant to this Plan, upon
                                 exercise of a stock option granted under
                                 another Company plan or as a stock bonus or
                                 other stock award granted under another Company
                                 plan unless, in any such case, the Shares were
                                 acquired and vested more than six months in
                                 advance of the date of exercise.

                          (iv)   ISOs. The terms of any ISO granted under the
                                 Plan shall comply in all respects with the
                                 provisions of Section 422 of the Code,
                                 including but not limited to the requirement
                                 that no ISO shall be granted more than ten
                                 years after the earlier of the date of adoption
                                 or shareholder approval of the Plan. ISOs may
                                 only be granted to employees of the Company or
                                 a Subsidiary, and cannot be transferred other
                                 than by will or the laws of descent or
                                 distribution.

                   (c) SARs. The Committee is authorized to grant SARs to
Eligible Employees on the following terms and conditions:

                          (i)    RIGHT TO PAYMENT. A SAR shall confer on the
                                 Eligible Employee to whom it is granted a right
                                 to receive with respect to each Share subject
                                 thereto, upon exercise thereof, the excess of
                                 (1) the Fair Market Value of one Share on the
                                 date of exercise (or, if the Committee shall so
                                 determine in the case of any such right, the
                                 Fair Market Value of one Share at any time
                                 during a specified period before or after the
                                 date of exercise) over (2) the exercise price
                                 of the SAR as determined by the Committee as of
                                 the date of grant of the SAR (which, in the
                                 case of a SAR granted in tandem with an Option,
                                 shall be equal to the exercise price of the
                                 underlying Option).

                          (ii)   OTHER TERMS. The Committee shall determine, at
                                 the time of grant or thereafter, the time or
                                 times at which a SAR may be exercised in whole
                                 or in part (which shall not be more than ten
                                 years after the date of grant of the SAR), the
                                 method of exercise, method of settlement, form
                                 of consideration payable in settlement, method
                                 by which Shares will be delivered or deemed to
                                 be delivered to Eligible Employees, whether or
                                 not a SAR shall be in tandem with any other
                                 Award, and any other terms and conditions of
                                 any SAR, including the achievement of
                                 performance criteria described in Section
                                 5(f)(i). Unless the Committee determines
                                 otherwise, a SAR (1) granted in tandem with a

                                       6

                                 NQSO may be granted at the time of grant of the
                                 related NQSO or at any time thereafter or (2)
                                 granted in tandem with an ISO may only be
                                 granted at the time of grant of the related
                                 ISO.

                   (d) Restricted Shares. The Committee is authorized to grant
Restricted Shares to Eligible Employees on the following terms and conditions:

                          (i)    ISSUANCE AND RESTRICTIONS. Restricted Shares
                                 shall be subject to such restrictions on
                                 transferability and other restrictions, if any,
                                 as the Committee may impose at the date of
                                 grant or thereafter, which restrictions, if
                                 any, may lapse separately or in combination at
                                 such times, under such circumstances
                                 (including, without limitation, upon
                                 achievement of performance criteria if deemed
                                 appropriate by the Committee), in such
                                 installments or otherwise, as the Committee may
                                 determine. Except to the extent restricted
                                 under the Award Agreement relating to the
                                 Restricted Shares, an Eligible Employee granted
                                 Restricted Shares shall have all of the rights
                                 of a shareholder including, without limitation,
                                 the right to vote Restricted Shares and the
                                 right to receive dividends thereon. If the
                                 lapse of restrictions is conditioned on the
                                 achievement of performance criteria, the
                                 Committee shall select the criterion or
                                 criteria from the list of criteria set forth in
                                 Section 5(f)(i). The Committee must certify in
                                 writing prior to the lapse of restrictions
                                 conditioned on the achievement of performance
                                 criteria that such performance criteria were in
                                 fact satisfied.

                          (ii)   FORFEITURE. Except as otherwise determined by
                                 the Committee, at the date of grant or
                                 thereafter, upon termination of employment
                                 during any applicable restriction period,
                                 Restricted Shares and any accrued but unpaid
                                 dividends or Dividend Equivalents that are at
                                 that time subject to restrictions shall be
                                 forfeited; provided, however, that the
                                 Committee may provide, by rule or regulation or
                                 in any Award Agreement, or may determine in any
                                 individual case, that restrictions or
                                 forfeiture conditions relating to Restricted
                                 Shares will be waived in whole or in part in
                                 the event of terminations resulting from
                                 specified causes, and the Committee may in
                                 other cases waive in whole or in part the
                                 forfeiture of Restricted Shares, provided that
                                 such waivers do not violate any provisions of
                                 Code section 162(m).

                          (iii)  CERTIFICATES FOR SHARES. Restricted Shares
                                 granted under the Plan may be evidenced in such
                                 manner as the Committee shall determine. If
                                 certificates representing Restricted Shares are
                                 registered in the name of the Eligible
                                 Employee, such certificates shall bear an
                                 appropriate legend referring to the terms,
                                 conditions, and restrictions applicable to such
                                 Restricted Shares, and the Company shall retain
                                 physical possession of the certificate.

                          (iv)   DIVIDENDS. Dividends paid on Restricted Shares
                                 shall be either paid at the dividend payment
                                 date, or deferred for payment to such date as
                                 determined by the Committee, in cash or in
                                 unrestricted Shares having a Fair Market Value
                                 equal to the amount of such dividends. Shares
                                 distributed in connection with a Share split or
                                 dividend in Shares, and other property
                                 distributed as a dividend, shall be subject to
                                 restrictions and a risk of forfeiture to the
                                 same extent as the Restricted Shares

                                       7

                                 with respect to which such Shares or other
                                 property has been distributed.

                   (e) Restricted Share Units. The Committee is authorized to
grant Restricted Share Units to Eligible Employees, subject to the following
terms and conditions:

                          (i)    AWARD AND RESTRICTIONS. Delivery of Shares or
                                 cash, as the case may be, will occur upon
                                 expiration of the deferral period specified for
                                 Restricted Share Units by the Committee (or, if
                                 permitted by the Committee, as elected by the
                                 Eligible Employee). In addition, Restricted
                                 Share Units shall be subject to such
                                 restrictions as the Committee may impose, if
                                 any (including, without limitation, the
                                 achievement of performance criteria if deemed
                                 appropriate by the Committee), at the date of
                                 grant or thereafter, which restrictions may
                                 lapse at the expiration of the deferral period
                                 or at earlier or later specified times,
                                 separately or in combination, in installments
                                 or otherwise, as the Committee may determine.
                                 If the lapse of restrictions is conditioned on
                                 the achievement of performance criteria, the
                                 Committee shall select the criterion or
                                 criteria from the list of criteria set forth in
                                 Section 5(f)(i). The Committee must certify in
                                 writing prior to the lapse of restrictions
                                 conditioned on the achievement of performance
                                 criteria that such criteria were in fact
                                 satisfied.

                          (ii)   FORFEITURE. Except as otherwise determined by
                                 the Committee at date of grant or thereafter,
                                 upon termination of employment (as determined
                                 under criteria established by the Committee)
                                 during the applicable deferral period or
                                 portion thereof to which forfeiture conditions
                                 apply (as provided in the Award Agreement
                                 evidencing the Restricted Share Units), or upon
                                 failure to satisfy any other conditions
                                 precedent to the delivery of Shares or cash to
                                 which such Restricted Share Units relate, all
                                 Restricted Share Units that are at that time
                                 subject to deferral or restriction shall be
                                 forfeited; provided, however, that the
                                 Committee may provide, by rule or regulation or
                                 in any Award Agreement, or may determine in any
                                 individual case, that restrictions or
                                 forfeiture conditions relating to Restricted
                                 Share Units will be waived in whole or in part
                                 in the event of termination resulting from
                                 specified causes, and the Committee may in
                                 other cases waive in whole or in part the
                                 forfeiture of Restricted Share Units.

                   (f) Performance Awards. The Committee is authorized to grant
Awards to Eligible Employees subject to the following terms and performance
conditions:

                          (i)    PERFORMANCE PERIOD. The Committee shall
                                 determine a performance period (the
                                 "Performance Period") of one or more years and
                                 shall determine the performance objectives for
                                 grants of Performance Awards. Performance
                                 objectives may vary from Eligible Employee to
                                 Eligible Employee and shall be based upon such
                                 one or more of the following performance
                                 criteria as the Committee may deem appropriate:
                                 growth in book, economic book and/or intrinsic
                                 book value; appreciation in value of the
                                 Shares; total shareholder return; earnings per
                                 share; comprehensive income; operating income;
                                 net income; pretax earnings; pretax earnings
                                 before interest, depreciation and amortization;
                                 pro forma net income; return on equity; return
                                 on designated assets; return on capital;
                                 economic value added; earnings;

                                       8

                                 revenues; expenses; operating profit margin;
                                 operating cash flow; free cash flow; cash flow
                                 return on investment; operating margin; net
                                 profit margin; or any of the above criteria as
                                 compared to the performance of a published or
                                 special index deemed applicable by the
                                 Committee, including, but not limited to, the
                                 Standard & Poor's 500 Stock Index. The
                                 performance objectives may be determined by
                                 reference to the performance of the Company, or
                                 of a Subsidiary or Affiliate, or of a division
                                 or unit of any of the foregoing. Performance
                                 Periods may overlap and Eligible Employees may
                                 participate simultaneously with respect to
                                 different Performance Awards for which
                                 different Performance Periods are prescribed.

                          (ii)   AWARD VALUE. At the beginning of a Performance
                                 Period, the Committee shall determine for each
                                 Eligible Employee or group of Eligible
                                 Employees with respect to that Performance
                                 Period the range of number of Shares, if any,
                                 in the case of Options or Restricted Shares,
                                 and the range of dollar values, if any, in the
                                 case of SARs or Restricted Share Units, which
                                 may be fixed or may vary in accordance with
                                 such performance or other criteria specified by
                                 the Committee, which shall be paid to an
                                 Eligible Employee as an Award if the relevant
                                 measure of Company performance for the
                                 Performance Period is met. The Committee must
                                 certify in writing that the applicable
                                 performance criteria were satisfied prior to
                                 payment of any Performance Award.

                          (iii)  SIGNIFICANT EVENTS. If during the course of a
                                 Performance Period there shall occur
                                 significant events as determined by the
                                 Committee which the Committee expects to have a
                                 substantial effect on a performance objective
                                 during such period, the Committee may revise
                                 such objective; provided, however, that, if an
                                 Award Agreement so provides, the Committee
                                 shall not have any discretion to increase the
                                 amount of compensation payable under the Award
                                 to the extent such an increase would cause the
                                 Award to lose its qualification as
                                 performance-based compensation for purposes of
                                 Section 162(m)(4)(C) of the Code and the
                                 regulations thereunder.

                          (iv)   FORFEITURE. Except as otherwise determined by
                                 the Committee, at the date of grant or
                                 thereafter, upon termination of employment
                                 during the applicable Performance Period,
                                 Performance Awards for which the Performance
                                 Period was prescribed shall be forfeited;
                                 provided, however, that the Committee may
                                 provide, by rule or regulation or in any Award
                                 Agreement, or may determine in an individual
                                 case, that restrictions or forfeiture
                                 conditions relating to Performance Awards will
                                 be waived in whole or in part in the event of
                                 terminations resulting from specified causes,
                                 and the Committee may in other cases waive in
                                 whole or in part the forfeiture of Performance
                                 Awards.

                          (v)    PAYMENT. Each Performance Award may be paid in
                                 whole Shares, or cash, or a combination of
                                 Shares and cash either as a lump sum payment or
                                 in installments, all as the Committee shall
                                 determine, at the time of grant of the
                                 Performance Award or otherwise, commencing as
                                 soon as practicable after the end of the
                                 relevant Performance Period. The Committee must
                                 certify in writing prior to the payment of any
                                 Performance Award that the performance
                                 objectives and any other material terms were in
                                 fact satisfied.

                                       9

                   (g) Dividend Equivalents. The Committee is authorized to
grant Dividend Equivalents to Eligible Employees. The Committee may provide, at
the date of grant or thereafter, that Dividend Equivalents shall be paid or
distributed when accrued or shall be deemed to have been reinvested in
additional Shares, or other investment vehicles as the Committee may specify,
provided that Dividend Equivalents (other than freestanding Dividend
Equivalents) shall be subject to all conditions and restrictions of the
underlying Awards to which they relate.

                   (h) Other Share-Based Awards. The Committee is authorized,
subject to limitations under applicable law, to grant to Eligible Employees such
other Awards that may be denominated or payable in, valued in whole or in part
by reference to, or otherwise based on, or related to, Shares, as deemed by the
Committee to be consistent with the purposes of the Plan, including, without
limitation, unrestricted shares awarded purely as a "bonus" and not subject to
any restrictions or conditions, other rights convertible or exchangeable into
Shares, purchase rights for Shares, Awards with value and payment contingent
upon performance of the Company or any other factors designated by the
Committee, and Awards valued by reference to the performance of specified
Subsidiaries or Affiliates. The Committee shall determine the terms and
conditions of such Awards at date of grant or thereafter. Shares delivered
pursuant to an Award in the nature of a purchase right granted under this
Section 5(h) shall be purchased for such consideration, paid for at such times,
by such methods, and in such forms, including, without limitation, cash, Shares,
notes or other property, as the Committee shall determine. Cash awards, as an
element of or supplement to any other Award under the Plan, shall also be
authorized pursuant to this Section 5(h).

         6. CERTAIN PROVISIONS APPLICABLE TO AWARDS.

                   (a) Stand-Alone, Additional, Tandem and Substitute Awards.
Awards granted under the Plan may, in the discretion of the Committee, be
granted to Eligible Employees either alone or in addition to, in tandem with, or
in exchange or substitution for, any other Award granted under the Plan or any
award granted under any other plan or agreement of the Company, any Subsidiary
or Affiliate, or any business entity to be acquired by the Company or a
Subsidiary or Affiliate, or any other right of an Eligible Employee to receive
payment from the Company or any Subsidiary or Affiliate. Awards may be granted
in addition to or in tandem with such other Awards or awards, and may be granted
either as of the same time as or a different time from the grant of such other
Awards or awards. The per Share exercise price of any Option, grant price of any
SAR, or purchase price of any other Award conferring a right to purchase Shares
which is granted, in connection with the substitution of awards granted under
any other plan or agreement of the Company or any Subsidiary or Affiliate or any
business entity to be acquired by the Company or any Subsidiary or Affiliate,
shall be determined by the Committee, in its discretion. Notwithstanding the
foregoing, the exercise price of any Option, grant price of any SAR or purchase
price of any other Award conferring a right to purchase Shares which is granted
in exchange or substitution for an option, SAR or other award granted by the
Company (other than in connection with a transaction described in Section 4(c)
hereof) shall not be less than the exercise price, grant price or purchase price
of the exchanged or substituted option, SAR or other award, and outstanding
Awards shall not be amended (other than in connection with a transaction
described in Section 4(c) hereof) to reduce the exercise price, grant price or
purchase price of any such Award.

                   (b) Terms of Awards. The term of each Award granted to an
Eligible Employee shall be for such period as may be determined by the
Committee; provided, however, that in no event shall the term of any ISO or a
SAR granted in tandem therewith exceed a period of ten years from the date of
its grant (or such shorter period as may be applicable under Section 422 of the
Code).

                   (c) Form of Payment Under Awards. Subject to the terms of the
Plan and any applicable Award Agreement, payments to be made by the Company or a
Subsidiary or Affiliate upon the grant, maturation, or exercise of an Award may
be made in such forms as the Committee shall determine at the date of grant or
thereafter, including, without limitation, cash, Shares, or other property, and
may be made in a single payment or transfer, in installments, or on a deferred
basis.

                                       10

The Committee may make rules relating to installment or deferred payments with
respect to Awards, including the rate of interest to be credited with respect to
such payments.

                   (d) Nontransferability. Except as set forth below and except
for vested Shares, Awards shall not be transferable by an Eligible Employee
except by will or the laws of descent and distribution (except pursuant to a
Beneficiary designation) and shall be exercisable during the lifetime of an
Eligible Employee only by such Eligible Employee or his guardian or legal
representative. Notwithstanding the foregoing, if the Committee expressly so
provides in the applicable Award agreement (at the time of grant or at any time
thereafter), an Award (other than an ISO) granted hereunder may be transferred
by a Participant (for no consideration) to members of his or her "immediate
family," to a trust established for the exclusive benefit of solely one or more
members of the Participant's "immediate family," or to a charitable organization
qualified for tax exemption under Code section 501(c)(3). Any Award held by the
transferee will continue to be subject to the same terms and conditions that
were applicable to the Award immediately prior to the transfer, except that the
Award will be transferable by the transferee only by will or the laws of descent
and distribution. For purposes hereof, "immediate family" means the
Participant's children, stepchildren, grandchildren, parents, stepparents,
grandparents, spouse, siblings (including half brothers and sisters), in-laws,
and relationships arising because of legal adoption. An Eligible Employee's
rights under the Plan may not be pledged, mortgaged, hypothecated, or otherwise
encumbered, and shall not be subject to claims of the Eligible Employee's
creditors.

                   (e) Noncompetition. The Committee may, by way of the Award
Agreements or otherwise, establish such other terms, conditions, restrictions
and/or limitations, if any, of any Award, provided they are not inconsistent
with the Plan, including, without limitation, the requirement that the
Participant not engage in competition with the Company.

         7. DIRECTOR'S SHARES. Each Director may make an election in writing on
or prior to November 15 to receive the Director's annual retainer fees payable
in the following calendar year in the form of Shares instead of cash. Any Shares
elected shall be payable at the time cash retainer fees are otherwise payable,
and the number of Shares distributed shall be equal to 120 percent of the amount
of the annual retainer fee otherwise payable on such payment date divided by the
Fair Market Value of a Share on such date. Notwithstanding the foregoing, a
Director who is first elected or appointed to the Board may make an election
under this Section 7 within 30 days of such election or appointment in respect
of annual retainer fees payable after the date of the election. Any election
made under this Section 7 shall remain in effect for future years unless and
until a new election is made in accordance with the provisions of this Section
7.

         8. GENERAL PROVISIONS.

                   (a) Compliance with Legal and Trading Requirements. The Plan,
the granting and exercising of Awards thereunder, and the other obligations of
the Company under the Plan and any Award Agreement, shall be subject to all
applicable federal, state and foreign laws, rules and regulations, and to such
approvals by any regulatory or governmental agency as may be required. The
Company, in its discretion, may postpone the issuance or delivery of Shares
under any Award until completion of such stock exchange or market system listing
or registration or qualification of such Shares or other required action under
any state or federal law, rule or regulation as the Company may consider
appropriate, and may require any Participant to make such representations and
furnish such information as it may consider appropriate in connection with the
issuance or delivery of Shares in compliance with applicable laws, rules and
regulations. No provisions of the Plan shall be interpreted or construed to
obligate the Company to register any Shares under federal, state or foreign law.

                   (b) No Right to Continued Employment of Service. Neither the
Plan nor any action taken thereunder shall be construed as giving any employee
or director the right to be retained in the employ or service of the Company or
any of its Subsidiaries or Affiliates, nor shall it interfere in any

                                       11

way with the right of the Company or any of its Subsidiaries or Affiliates to
terminate any employee's or director's employment or service at any time.

                   (c) Taxes and Information Reporting. The Company or any
Subsidiary or Affiliate is authorized to withhold from any Award granted, any
payment relating to an Award under the Plan, including from a distribution of
Shares, or any payroll or other payment to an Eligible Employee, amounts of
withholding and other taxes due in connection with any transaction involving an
Award, and to take such other action as the Committee may deem advisable to
enable the Company and Eligible Employees to satisfy obligations for the payment
of withholding taxes and other tax obligations relating to any Award. This
authority shall include authority to withhold or receive Shares or other
property and to make cash payments in respect thereof in satisfaction of an
Eligible Employee's tax obligations; provided, however, that the amount of tax
withholding to be satisfied by withholding Shares shall be limited to the
minimum amount of taxes, including employment taxes, required to be withheld
under applicable Federal, state and local law. The Company or any Subsidiary or
Affiliate is further authorized to file information returns with the Internal
Revenue Service and any applicable state or local taxing authority reporting any
income realized with respect to any Award under the Plan (and, if necessary,
correcting any filing of information returns with respect to prior calendar
years).

                   (d) Changes to the Plan and Awards. The Board may amend,
alter, suspend, discontinue, or terminate the Plan or the Committee's authority
to grant Awards under the Plan without the consent of shareholders of the
Company or Participants, except that any such amendment, alteration, suspension,
discontinuation, or termination shall be subject to the approval of the
Company's shareholders to the extent such shareholder approval is required under
Section 422 of the Code; provided, however, that, without the consent of an
affected Participant, no amendment, alteration, suspension, discontinuation, or
termination of the Plan may impair the rights or, in any other manner, adversely
affect the rights of such Participant under any Award theretofore granted to him
or her. The Committee may waive any conditions or rights under, amend any terms
of, or amend, alter, suspend, discontinue or terminate, any Award theretofore
granted, prospectively or retrospectively; provided, however, that, without the
consent of a Participant, no amendment, alteration, suspension, discontinuation
or termination of any Award may materially and adversely affect the rights of
such Participant under any Award theretofore granted to him or her.

                   (e) No Rights to Awards, No Shareholder Rights. No Eligible
Employee or employee shall have any claim to be granted any Award under the
Plan, and there is no obligation for uniformity of treatment of Eligible
Employees and employees. No Award shall confer on any Eligible Employee any of
the rights of a shareholder of the Company unless and until Shares are duly
issued or transferred to the Eligible Employee in accordance with the terms of
the Award.

                   (f) Unfunded Status of Awards. The Plan is intended to
constitute an "unfunded" plan for incentive compensation. With respect to any
payments not yet made to a Participant pursuant to an Award, nothing contained
in the Plan or any Award shall give any such Participant any rights that are
greater than those of a general creditor of the Company; provided, however, that
the Committee may authorize the creation of trusts or make other arrangements to
meet the Company's obligations under the Plan to deliver cash, Shares, other
Awards, or other property pursuant to any Award, which trusts or other
arrangements shall be consistent with the "unfunded" status of the Plan unless
the Committee otherwise determines with the consent of each affected
Participant.

                   (g) Nonexclusivity of the Plan. Neither the adoption of the
Plan by the Board nor its submission to the shareholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of options and other awards
otherwise than under the Plan, and such arrangements may be either applicable
generally or only in specific cases.

                   (h) Not Compensation for Benefit Plans. No Award payable
under this Plan shall be deemed salary or compensation for the purpose of
computing benefits under any benefit plan or other

                                       12

arrangement of the Company for the benefit of its employees or directors unless
the Company shall determine otherwise.

                   (i) No Fractional Shares. No fractional Shares shall be
issued or delivered pursuant to the Plan or any Award. In the case of Awards to
Eligible Employees, the Committee shall determine whether cash, other Awards, or
other property shall be issued or paid in lieu of such fractional Shares or
whether such fractional Shares or any rights thereto shall be forfeited or
otherwise eliminated.

                   (j) Governing Law. The validity, construction, and effect of
the Plan, any rules and regulations relating to the Plan, and any Award
Agreement shall be determined in accordance with the laws of New York without
giving effect to principles of conflict of laws.

                   (k) Effective Date, Plan Termination. The Plan, as amended
and restated, shall become effective as of July 10, 2003 (the "Effective Date"),
subject to approval by the shareholders of the Company. The Plan shall terminate
as to future awards on the date which is 10 years after the Effective Date.

                   (l) Titles and Headings. The titles and headings of the
sections in the Plan are for convenience of reference only. In the event of any
conflict, the text of the Plan, rather than such titles or headings, shall
control.

                                       13

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