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

                           IMPAC SECURED ASSETS CORP.,
                                    Company,


                            IMPAC FUNDING CORPORATION
                                Master Servicer,


                                       and


                      DEUTSCHE BANK NATIONAL TRUST COMPANY
                                     Trustee







                         POOLING AND SERVICING AGREEMENT

                          Dated as of February 1, 2004

                            ------------------------


                       Mortgage Pass-Through Certificates

                                  Series 2004-1


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

<PAGE>

<TABLE>
<CAPTION>


                                                 TABLE OF CONTENTS

                                                                                                               PAGE
ARTICLE I

<S>                                                                                                             <C>
DEFINITIONS.......................................................................................................5
Section 1.01.     Defined Terms...................................................................................5
         Accrual Period...........................................................................................5
         Advance..................................................................................................5
         Affiliate................................................................................................5
         Aggregate Stated Principal Balance.......................................................................5
         Agreement................................................................................................5
         Allocated Realized Loss Amount...........................................................................5
         Assignment...............................................................................................5
         Available Distribution Amount............................................................................6
         Balloon Loan.............................................................................................6
         Balloon Payment..........................................................................................6
         Bankruptcy Code..........................................................................................6
         Basic Principal Distribution Amount......................................................................6
         Book-Entry Certificate...................................................................................6
         Business Day.............................................................................................6
         Cash Liquidation.........................................................................................6
         Certificate..............................................................................................7
         Certificate Account......................................................................................7
         Certificate Account Deposit Date.........................................................................7
         Certificateholder........................................................................................7
         Certificate Owner........................................................................................7
         Certificate Principal Balance............................................................................7
         Certificate Register.....................................................................................7
         Class....................................................................................................7
         Class A Certificate......................................................................................7
         Class A Principal Distribution Amount....................................................................8
         Class A-1 Certificate....................................................................................8
         Class A-2 Certificate....................................................................................8
         Class A-3 Certificate....................................................................................8
         Class A-4 Certificate....................................................................................8
         Class A-5 Certificate....................................................................................8
         Class A-6 Certificate....................................................................................8
         Class A-6 Lockout Distribution Amount....................................................................9
         Class A-6 Lockout Distribution Percentage................................................................9
         Class A-IO Certificate...................................................................................9
         Class C Certificate......................................................................................9
         Class M-1 Certificate....................................................................................9
         Class M-1 Principal Distribution Amount..................................................................9
         Class M-2 Certificate...................................................................................10



<PAGE>



         Class M-2 Principal Distribution Amount.................................................................10
         Class M-3 Certificate...................................................................................10
         Class M-3 Principal Distribution Amount.................................................................10
         Class P Certificate.....................................................................................11
         Class R Certificate.....................................................................................11
         Class R-1 Interest......................................................................................11
         Class R-2 Interest......................................................................................11
         Class R-3 Interest......................................................................................11
         Closing Date............................................................................................11
         Code....................................................................................................11
         Collateral Value........................................................................................11
         Commission..............................................................................................11
         Company.................................................................................................11
         Compensating Interest...................................................................................11
         Corporate Trust Office..................................................................................12
         Corresponding Certificate...............................................................................12
         Countrywide.............................................................................................12
         Credit Enhancement Percentage...........................................................................12
         Credit Risk Management Agreement........................................................................12
         Credit Risk Manager.....................................................................................13
         Credit Risk Manager Fee.................................................................................13
         Credit Risk Manager Fee Rate............................................................................13
         Curtailment.............................................................................................13
         Custodial Account.......................................................................................13
         Cut-off Date............................................................................................13
         Defaulted Mortgage Loan.................................................................................13
         Deficient Valuation.....................................................................................13
         Definitive Certificate..................................................................................13
         Deleted Mortgage Loan...................................................................................13
         Depository..............................................................................................13
         Depository Participant..................................................................................13
         Determination Date......................................................................................13
         Disqualified Organization...............................................................................14
         Distribution Date.......................................................................................14
         Due Date................................................................................................14
         Due Period..............................................................................................14
         Eligible Account........................................................................................14
         Event of Default........................................................................................15
         Excess Overcollateralized Amount........................................................................15
         Excess Proceeds.........................................................................................15
         Exchange Act............................................................................................15
         Extra Principal Distribution Amount.....................................................................15
         Fannie Mae..............................................................................................15
         FDIC....................................................................................................15
         Freddie Mac.............................................................................................15
         Funding Date............................................................................................15



<PAGE>



         GMAC....................................................................................................15
         Initial Certificate Principal Balance...................................................................15
         Initial Notional Amount.................................................................................15
         Insurance Policy........................................................................................15
         Insurance Proceeds......................................................................................16
         Interest Remittance Amount..............................................................................16
         Late Collections........................................................................................16
         LIBOR...................................................................................................16
         LIBOR Business Day......................................................................................16
         LIBOR Rate Adjustment Date..............................................................................16
         Liquidated Mortgage Loan................................................................................16
         Liquidation Proceeds....................................................................................16
         Loan-to-Value Ratio.....................................................................................16
         Lost Note Affidavit.....................................................................................16
         Majority Class C Certificateholder......................................................................17
         Marker Rate.............................................................................................17
         Master Servicer.........................................................................................17
         Master Servicer Prepayment Charge Payment Amount........................................................17
         Master Servicing Fees...................................................................................17
         Master Servicing Fee Rate...............................................................................18
         Maximum Uncertificated Accrued Interest Deferral Amount.................................................18
         MERS....................................................................................................18
         MERS(R)System............................................................................................18
         Mezzanine Certificate...................................................................................18
         MIN.....................................................................................................18
         MOM Loan................................................................................................18
         Monthly Interest Distributable Amount...................................................................19
         Monthly Payment.........................................................................................19
         Moody's.................................................................................................19
         Mortgage................................................................................................19
         Mortgage File...........................................................................................19
         Mortgage Loan...........................................................................................19
         Mortgage Loan Purchase Agreement........................................................................19
         Mortgage Loan Schedule..................................................................................19
         Mortgage Note...........................................................................................21
         Mortgage Rate...........................................................................................21
         Mortgaged Property......................................................................................21
         Mortgagor...............................................................................................21
         Net Liquidation Proceeds................................................................................21
         Net Mortgage Rate.......................................................................................21
         Net Monthly Excess Cashflow.............................................................................21
         Net Prepayment Interest Shortfall.......................................................................21
         Net WAC Rate............................................................................................21
         Net WAC Shortfall Amount................................................................................23
         Net WAC Shortfall Reserve Fund..........................................................................23



<PAGE>



         Net WAC Shortfall Reserve Fund Deposit..................................................................23
         Nonrecoverable Advance..................................................................................23
         Non-United States Person................................................................................23
         Notional Amount.........................................................................................23
         Officers' Certificate...................................................................................24
         One Month LIBOR.........................................................................................24
         Opinion of Counsel......................................................................................24
         Optional Termination Date...............................................................................24
         OTS.....................................................................................................24
         Outstanding Mortgage Loan...............................................................................24
         Overcollateralization Deficiency Amount.................................................................24
         Overcollateralization Release Amount....................................................................24
         Overcollateralization Target Amount.....................................................................24
         Overcollateralization Target Percentage.................................................................25
         Overcollateralized Amount...............................................................................25
         Ownership Interest......................................................................................25
         Pass-Through Rate.......................................................................................25
         Percentage Interest.....................................................................................27
         Permitted Investment....................................................................................27
         Permitted Transferee....................................................................................28
         Person..................................................................................................28
         Prepayment Assumption...................................................................................29
         Prepayment Charge.......................................................................................29
         Prepayment Interest Shortfall...........................................................................29
         Prepayment Period.......................................................................................29
         Primary Hazard Insurance Policy.........................................................................29
         Primary Insurance Policy................................................................................29
         Principal Distribution Amount...........................................................................29
         Principal Prepayment....................................................................................29
         Principal Prepayment in Full............................................................................29
         Principal Remittance Amount.............................................................................29
         Prospectus Supplement...................................................................................30
         Purchase Price..........................................................................................30
         Qualified Insurer.......................................................................................30
         Qualified Substitute Mortgage Loan......................................................................30
         Radian..................................................................................................30
         Radian Insured Loans....................................................................................30
         Radian Lender-Paid PMI Policy...........................................................................31
         Radian PMI Policy Rate..................................................................................31
         Rate Increase...........................................................................................31
         Rating Agency...........................................................................................31
         Realized Loss...........................................................................................31
         Record Date.............................................................................................31
         Regular Certificate.....................................................................................31
         Relief Act..............................................................................................32



<PAGE>



         Relief Act Interest Shortfall...........................................................................32
         REMIC...................................................................................................32
         REMIC 1.................................................................................................32
         REMIC 1 Regular Interest LT-1...........................................................................32
         REMIC 1 Regular Interest LT-2...........................................................................32
         REMIC 1 Regular Interest LT-3...........................................................................32
         REMIC 1 Regular Interest LT-4...........................................................................33
         REMIC 1 Regular Interest LT-5...........................................................................33
         REMIC 1 Regular Interest LT-6...........................................................................33
         REMIC 1 Regular Interest LT-7...........................................................................33
         REMIC 1 Regular Interest LT-8...........................................................................33
         REMIC 1 Regular Interest LT-9...........................................................................33
         REMIC 1 Regular Interest LT-P...........................................................................34
         REMIC 1 Regular Interests...............................................................................34
         REMIC 2.................................................................................................34
         REMIC 2 Interest Loss Allocation Amount.................................................................34
         REMIC 2 Overcollateralized Amount.......................................................................34
         REMIC 2 Principal Loss Allocation Amount................................................................34
         REMIC 2 Overcollateralization Target Amount.............................................................35
         REMIC 2 Regular Interest MT-AA..........................................................................35
         REMIC 2 Regular Interest MT-A1..........................................................................35
         REMIC 2 Regular Interest MT-A2..........................................................................35
         REMIC 2 Regular Interest MT-A3..........................................................................35
         REMIC 2 Regular Interest MT-A4..........................................................................35
         REMIC 2 Regular Interest MT-A5..........................................................................35
         REMIC 2 Regular Interest MT-A6..........................................................................36
         REMIC 2 Regular Interest MT-M1..........................................................................36
         REMIC 2 Regular Interest MT-M3..........................................................................36
         REMIC 2 Regular Interest MT-ZZ..........................................................................36
         REMIC 2 Regular Interest MT-IO..........................................................................36
         REMIC 2 Regular Interest MT-P...........................................................................36
         REMIC 2 Regular Interests...............................................................................37
         REMIC 3.................................................................................................37
         REMIC Provisions........................................................................................37
         REMIC Regular Interest..................................................................................37
         Remittance Report.......................................................................................37
         REO Acquisition.........................................................................................37
         REO Disposition.........................................................................................37
         REO Imputed Interest....................................................................................37
         REO Proceeds............................................................................................37
         REO Property............................................................................................38
         Request for Release.....................................................................................38
         Residual Interest.......................................................................................38
         Responsible Officer.....................................................................................38
         Seller..................................................................................................38



<PAGE>



         Servicing Account.......................................................................................38
         Servicing Advances......................................................................................38
         Servicing Guide.........................................................................................38
         Servicing Officer.......................................................................................38
         Single Certificate......................................................................................39
         Standard & Poor's.......................................................................................39
         Startup Day.............................................................................................39
         Stated Principal Balance................................................................................39
         Stepdown Date...........................................................................................39
         Sub-Servicer............................................................................................39
         Sub-Servicer Remittance Date............................................................................39
         Sub-Servicing Account...................................................................................39
         Sub-Servicing Agreement.................................................................................39
         Sub-Servicing Fees......................................................................................40
         Sub-Servicing Fee Rate..................................................................................40
         Substitution Adjustment.................................................................................40
         Tax Returns.............................................................................................40
         10% Clean-up Call Date..................................................................................40
         Transfer................................................................................................40
         Transferor..............................................................................................40
         Trigger Event...........................................................................................40
         Trust Fund..............................................................................................41
         Trustee.................................................................................................41
         Trustee's Fee...........................................................................................41
         Trustee Fee Rate........................................................................................41
         Uncertificated Accrued Interest.........................................................................41
         Uncertificated Notional Amount..........................................................................41
         Uncertificated Principal Balance........................................................................42
         Uncertificated Pass-Through Rate........................................................................42
         Uncertificated REMIC 1 Pass-Through Rate................................................................42
         Uncertificated REMIC 1 WAC Rate.........................................................................42
         Uncertificated REMIC 2 Pass-Through Rate................................................................42
         Uninsured Cause.........................................................................................43
         United States Person....................................................................................43
         Unpaid Interest Shortfall Amount........................................................................43
         Voting Rights...........................................................................................43
         Weighted Average Net Mortgage Rate......................................................................43
         Yield Maintenance Agreement ............................................................................44
         Yield Maintenance Agreement ............................................................................44
         Yield Maintenance Agreement Payment Amount..............................................................44
Section 1.02      Determination of LIBOR.........................................................................44
Section 1.03      Allocation of Certain Interest Shortfalls......................................................45






<PAGE>



ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES................................................................................47
Section 2.01.     Conveyance of Mortgage Loans...................................................................47
Section 2.02.     Acceptance of the Trust Fund by the Trustee....................................................50
Section 2.03.     Representations, Warranties and Covenants of the Master Servicer and the
                  Company........................................................................................52
Section 2.04.     Representations and Warranties of the Seller...................................................54
Section 2.05.     Issuance of Certificates; Conveyance of  REMIC Regular Interests and
                  Acceptance of REMIC 2 and REMIC 3 by the Trustee...............................................55

ARTICLE III

ADMINISTRATION AND SERVICING
OF THE TRUST FUND................................................................................................57
Section 3.01.     Master Servicer to Act as Master Servicer......................................................57
Section 3.02.     Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................59
Section 3.03.     Successor Sub-Servicers........................................................................60
Section 3.04.     Liability of the Master Servicer...............................................................60
Section 3.05.     No Contractual Relationship Between Sub-Servicers and Trustee or
                  Certificateholders.............................................................................60
Section 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee...............................61
Section 3.07.     Collection of Certain Mortgage Loan Payments...................................................61
Section 3.08.     Sub-Servicing Accounts.........................................................................62
Section 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................63
Section 3.10.     Custodial Account..............................................................................63
Section 3.11.     Permitted Withdrawals From the Custodial Account...............................................64
Section 3.12.     Permitted Investments..........................................................................65
Section 3.13.     Maintenance of Primary Hazard Insurance........................................................66
Section 3.14.     Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................68
Section 3.15.     Realization Upon Defaulted Mortgage Loans......................................................69
Section 3.16.     Trustee to Cooperate; Release of Mortgage Files................................................70
Section 3.17.     Servicing Compensation.........................................................................71
Section 3.18.     Maintenance of Certain Servicing Policies......................................................72
Section 3.19.     Annual Statement as to Compliance..............................................................72
Section 3.20.     Annual Independent Public Accountants' Servicing Statement.....................................73
Section 3.21.     Access to Certain Documentation................................................................74
Section 3.22.     Title, Conservation and Disposition of REO Property............................................74
Section 3.23.     Additional Obligations of the Master Servicer..................................................76
Section 3.24.     Additional Obligations of the Company..........................................................77
Section 3.25.     Exchange Act Reporting.........................................................................77
Section 3.26.     Credit Risk Manager Reports....................................................................79
Section 3.27.     Duties of the Credit Risk Manager..............................................................79
Section 3.28.     Limitation Upon Liability of the Credit Risk Manager...........................................79



<PAGE>



Section 3.29.     Removal of the Credit Risk Manager; Successors.................................................79

ARTICLE IV

PAYMENTS TO CERTIFICATEHOLDERS...................................................................................81
Section 4.01.     Distributions..................................................................................81
Section 4.02.     Statements to Certificateholders...............................................................85
Section 4.03.     Remittance Reports; Advances by the Master Servicer............................................87
Section 4.04.     Distributions on the REMIC Regular Interests...................................................89
Section 4.05.     Allocation of Realized Losses..................................................................92
Section 4.06.     Information Reports to Be Filed by the Master Servicer.........................................93
Section 4.07.     Compliance with Withholding Requirements.......................................................93
Section 4.08.     Net WAC Shortfall Reserve Fund.................................................................94

ARTICLE V

THE CERTIFICATES.................................................................................................96
Section 5.01.     The Certificates...............................................................................96
Section 5.02.     Registration of Transfer and Exchange of Certificates..........................................98
Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................103
Section 5.04.     Persons Deemed Owners.........................................................................103
Section 5.05.     Rule 144A Information.........................................................................103

ARTICLE VI

THE COMPANY AND THE MASTER SERVICER.............................................................................104
Section 6.01.     Liability of the Company and the Master Servicer..............................................104
Section 6.02.     Merger, Consolidation or Conversion of the Company or the Master Servicer
                   .............................................................................................104
Section 6.03.     Limitation on Liability of the Company, the Master Servicer and Others........................104
Section 6.04.     Limitation on Resignation of the Master Servicer..............................................105
Section 6.05.     Sale and Assignment of Master Servicing.......................................................106

ARTICLE VII

DEFAULT.........................................................................................................107
Section 7.01.     Events of Default.............................................................................107
Section 7.02.     Trustee to Act; Appointment of Successor......................................................109
Section 7.03.     Notification to Certificateholders............................................................110
Section 7.04.     Waiver of Events of Default...................................................................110
Section 7.05.     List of Certificateholders....................................................................111






<PAGE>



ARTICLE VIII

CONCERNING THE TRUSTEE..........................................................................................112
Section 8.01.     Duties of Trustee.............................................................................112
Section 8.02.     Certain Matters Affecting the Trustee.........................................................113
Section 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................115
Section 8.04.     Trustee May Own Certificates..................................................................115
Section 8.05.     Trustee's Fees................................................................................115
Section 8.06.     Eligibility Requirements for Trustee..........................................................116
Section 8.07.     Resignation and Removal of the Trustee........................................................116
Section 8.08.     Successor Trustee.............................................................................117
Section 8.09.     Merger or Consolidation of Trustee............................................................118
Section 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................118

ARTICLE IX

TERMINATION.....................................................................................................120
Section 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
                  Purchase of Certificates......................................................................120
Section 9.02.     Termination of REMIC 2 and REMIC 3............................................................122
Section 9.03.     Additional Termination Requirements...........................................................122

ARTICLE X

REMIC PROVISIONS................................................................................................124
Section 10.01.    REMIC Administration..........................................................................124
Section 10.02.    Prohibited Transactions and Activities........................................................127
Section 10.03.    Master Servicer and Trustee Indemnification...................................................127

ARTICLE XI

MISCELLANEOUS PROVISIONS........................................................................................128
Section 11.01.    Amendment.....................................................................................128
Section 11.02.    Recordation of Agreement; Counterparts........................................................129
Section 11.03.    Limitation on Rights of Certificateholders....................................................130
Section 11.04.    Governing Law.................................................................................130
Section 11.05.    Notices.......................................................................................131
Section 11.06.    Severability of Provisions....................................................................131
Section 11.07.    Successors and Assigns........................................................................131
Section 11.08.    Article and Section Headings..................................................................131
Section 11.09.    Notice to Rating Agencies.....................................................................131

</TABLE>
Signatures
Acknowledgments




<PAGE>


<TABLE>
<CAPTION>

<S>               <C>
Exhibit A         Form of Class A Certificate
Exhibit B-1       Form of Class [M][B] Certificate
Exhibit B-2       Form of Class C Certificate
Exhibit B-3       Form of Class P Certificate
Exhibit B-4       Form of Class R Certificate
Exhibit C         Form of Trustee Initial Certification
Exhibit D         Form of Trustee Final Certification
Exhibit E         Form of Remittance Report
Exhibit F-1       Request for Release
Exhibit F-2       Request for Release for Mortgage Loans Paid in Full
Exhibit G-1       Form of Investor Representation Letter
Exhibit G-2       Form of Transferor Representation Letter
Exhibit G-3       Form of Rule 144A Investment Representation
Exhibit G-4       Transferor Certificate for Transfers of Residual Certificates
Exhibit G-5       Transfer Affidavit and Agreement for Transfers of Residual Certificates
Exhibit H         Mortgage Loan Schedule
Exhibit I         Seller Representations and Warranties
Exhibit J         Form of Notice Under Section 3.24
Exhibit K         Impac Funding Corporation Servicing Guide
Exhibit L-1       Form 10-K Certification
Exhibit L-2       Form 10-K Back-up Certification (Master Servicer)
Exhibit L-3       Form 10-K Back-up Certification (Trustee)
Exhibit M         Form of Credit Risk Management Agreement
</TABLE>






<PAGE>



         This Pooling and Servicing Agreement, dated and effective as of
February 1, 2004, is entered into among Impac Secured Assets Corp., as company
(the "Company"), Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee").

                             PRELIMINARY STATEMENT:

         The Company intends to sell pass-through certificates (collectively,
the "Certificates"), to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in the Trust
Fund created hereunder. The Certificates will consist of thirteen classes of
certificates, designated as (i) the Class A-1 Certificates, (ii) the Class A-2
Certificates, (iii) the Class A-3 Certificates, (iv) the Class A-4 Certificates,
(v) the Class A-5 Certificates, (vi) the Class A-6 Certificates, (vii) the Class
A-IO Certificates, (viii) the Class M-1 Certificates, (ix) the Class M-2
Certificates, (x) the Class M-3 Certificates, (xi) the Class P Certificates,
(xii) the Class C Certificates and (xiii) the Class R Certificates.

                                     REMIC 1

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the Mortgage Loans and certain other
related assets subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC 1." The Class R-1 Interest will represent
the sole class of "residual interests" in REMIC 1 for purposes of the REMIC
Provisions (as defined herein) under federal income tax law. The following table
irrevocably sets forth the designation, the Uncertificated REMIC 1 Pass-Through
Rate, the initial Uncertificated Principal Balance, and solely for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the "latest possible
maturity date" for each of the REMIC 1 Regular Interests. None of the REMIC 1
Regular Interests will be certificated.
<TABLE>
<CAPTION>

                                                           Initial
                        Uncertificated REMIC 1          Uncertificated          Assumed Final
   Designation             Pass-through Rate          Principal Balance       Maturity Date(1)
   -----------             -----------------          -----------------       ----------------
<S>                        <C>                         <C>                   <C>
       LT-1                   Variable(2)              $ 201,300,640.00       March 25, 2033
       LT-2                   Variable(2)              $   5,700,000.00       March 25, 2033
       LT-3                   Variable(2)              $   2,900,000.00       March 25, 2033
       LT-4                   Variable(2)              $   2,900,000.00       March 25, 2033
       LT-5                   Variable(2)              $   2,800,000.00       March 25, 2033
       LT-6                   Variable(2)              $   2,900,000.00       March 25, 2033
       LT-7                   Variable(2)              $   2,900,000.00       March 25, 2033
       LT-8                   Variable(2)              $   2,900,000.00       March 25, 2033
       LT-9                   Variable(2)              $   5,700,000.00       March 25, 2033
       LT-P                   Variable(2)              $         100.00       March 25, 2033
-------------------
</TABLE>


                                                         1

<PAGE>



(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each REMIC 1
         Regular Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC 1
         Pass-Through Rate" herein.


                                     REMIC 2

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 1 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 2". The Class R-2 Interest will represent the sole class of
"residual interests" in REMIC 2 for purposes of the REMIC Provisions.

         The following table irrevocably sets forth the designation, the
Uncertificated REMIC 2 Pass- Through Rate, the initial Uncertificated Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date" for each of the REMIC 2
Regular Interests. None of the REMIC 2 Regular Interests will be certificated.

<TABLE>
<CAPTION>

                                                           Initial
                        Uncertificated REMIC 2          Uncertificated          Assumed Final
   Designation             Pass-through Rate          Principal Balance       Maturity Date(1)
   -----------             -----------------          -----------------       ----------------
<S>                        <C>                         <C>                   <C>
       MT-AA                  Variable(2)               $ 225,400,627.20           March 25, 2033
       MT-A1                  Variable(2)               $     767,730.00           March 25, 2033
       MT-A2                  Variable(2)               $     264,030.00           March 25, 2033
       MT-A3                  Variable(2)               $     392,630.00           March 25, 2033
       MT-A4                  Variable(2)               $     306,190.00           March 25, 2033
       MT-A5                  Variable(2)               $     191,070.00           March 25, 2033
       MT-A6                  Variable(2)               $     230,000.00           March 25, 2033
       MT-M1                  Variable(2)               $      59,800.00           March 25, 2033
       MT-M2                  Variable(2)               $      46,000.00           March 25, 2033
       MT-M3                  Variable(2)               $      34,500.00           March 25, 2033
       MT-ZZ                  Variable(2)               $   2,308,062.80           March 25, 2033
      MT-IO-A                     (4)                   $            (3)           March 25, 2033
      MT-IO-B                     (5)                   $            (3)           March 25, 2033
       MT-P                   Variable(2)               $         100.00           March 25, 2033
</TABLE>
-------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each REMIC 2
         Regular Interest.
(2)      Calculated in accordance with the definition of "Uncertificated REMIC 2
         Pass-Through Rate" herein.
(3)      REMIC 2 Regular Interest MT-IO-A and MT-IO-B will not have an
         Uncertificated Principal Balance and is not entitled to distributions
         of principal. REMIC 2 Regular Interest MT-IO-A and MT-IO-B will accrue
         interest on an uncertificated notional amount calculated in accordance
         with the definition of "Uncertificated Notional Amount" herein.
(4)      REMIC II Regular Interest MT-IO-A will accrue interest at a rate of (i)
         for the March 2004 Distribution Date through January 2005
         Distribution Date, 1.00% and (ii) thereafter, 0.00%.
(5)      REMIC II Regular Interest MT-IO-B will accrue interest at a rate of (i)
         for the March 2004 Distribution Date through the February 2006
         Distribution Date, 3.50% and (ii) thereafter, 0.00%.


                                        2

<PAGE>





                                     REMIC 3

         As provided herein, the Trustee will make an election to treat the
segregated pool of assets consisting of the REMIC 2 Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC 3". The Class R-3 Interest will represent the sole class of
"residual interests" in REMIC 3 for purposes of the REMIC Provisions.

         The following table irrevocably sets forth the Class designation,
Pass-Through Rate and Initial Certificate Principal Balance for each Class of
Certificates that represents one or more of the "regular interests" in REMIC 3
created hereunder:

<TABLE>
<CAPTION>

                               Initial Certificate                                         Assumed Final
      Class Designation        Principal Balance            Pass-through Rate            Maturity Date(1)
      -----------------        -----------------            -----------------            ----------------
<S>                            <C>                           <C>                        <C>
          Class A-1            $  76,773,000.00               Variable(2)                March 25, 2034
          Class A-2            $  26,403,000.00               Variable(2)                March 25, 2034
          Class A-3            $  39,263,000.00               Variable(2)                March 25, 2034
          Class A-4            $  30,619,000.00               Variable(2)                March 25, 2034
          Class A-5            $  19,107,000.00               Variable(2)                March 25, 2034
          Class A-6            $  23,000,000.00               Variable(2)                March 25, 2034
         Class A-IO                      (4)                  Variable(2)                March 25, 2034
          Class M-1            $    5,980,000.00              Variable(2)                March 25, 2034
          Class M-2            $    4,600,000.00              Variable(2)                March 25, 2034
          Class M-3            $    3,450,000.00              Variable(2)                March 25, 2034
           Class C             $   805,640.00(3)              Variable(2)                March 25, 2034
           Class P             $          100.00                 N/A(5)                  March 25, 2034
-------------------
</TABLE>
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest possible maturity date has
         been designated as the "latest possible maturity date" for each Class
         of Certificates that represents one or more of the "regular interests"
         in REMIC 3.
(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.
(3)      The Class C Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
         Class C Certificates will not accrue interest on their Certificate
         Principal Balance.
(4)      The Class A-IO Certificates do not have a Certificate Principal Balance
         and are not entitled to distributions of principal. The Class A-IO
         Certificates accrue interest on a Notional Amount calculated in
         accordance with the definition of "Notional Amount" herein.
(5)      The Class P Certificates do not accrue interest.




                                        3

<PAGE>




                                    ARTICLE I

                                   DEFINITIONS

         Section 1.01.     Defined Terms.

         Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations in respect of interest on
the Class A Certificates (other than the Class A-1 Certificates), the Mezzanine
Certificates, the Class C Certificates, the REMIC 1 Regular Interests and the
REMIC 2 Regular Interests shall be made on the basis of a 360-day year
consisting of twelve 30-day months. Unless otherwise specified, all calculations
in respect of interest on the Class A-1 Certificates shall accrue on the basis
of a 360-day year and the actual number of days in the related Accrual Period.
The Class P Certificates and the Class R Certificates do not accrue interest.

         "Accrual Period": With respect to each Class of Regular Certificates
(other than the Class A-1 Certificates and Class P Certificates) and each
Distribution Date, the calendar month prior to the month of such Distribution
Date. With respect to the Class A-1 Certificates (i) with respect to the
Distribution Date in March 2004, the period commencing the Closing Date and
ending on the day preceding the Distribution Date in March 2004, and (ii) with
respect to any Distribution Date after the Distribution Date in March 2004, the
period commencing on the Distribution Date in the month immediately preceding
the month in which such Distribution Date occurs and ending on the day preceding
such Distribution Date.

         "Advance": As to any Mortgage Loan, any advance made by the Subservicer
or Master Servicer on any Distribution Date pursuant to Section 4.03.

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

         "Aggregate Stated Principal Balance": As of any date of determination,
the aggregate Stated Principal Balance of the Mortgage Loans.

         "Agreement":  This Pooling and Servicing Agreement and all amendments
hereof.

         "Allocated Realized Loss Amount": With respect to any Distribution Date
and any Class of Mezzanine Certificates, the amount of any Allocated Realized
Loss Amount for such Class of Certificates remaining unpaid from previous
Distribution Date.

         "Assignment": An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage.


                                       4
<PAGE>



         "Available Distribution Amount": With respect to any Distribution Date,
an amount equal to (a) the sum of (i) the balance on deposit in the Custodial
Account as of the close of business on the related Determination Date, (ii) the
aggregate amount of any Advances made and all amounts required to be paid by the
Master Servicer pursuant to Sections 3.13 and 3.23 by deposits into the
Certificate Account on the immediately preceding Certificate Account Deposit
Date, (iii) the aggregate amount of Mortgage Loan purchases made pursuant to
Section 9.01 and (iv) the aggregate amount required to be deposited by the
Master Servicer pursuant to Section 4.01(h), reduced by (b) the sum, as of the
close of business on the related Determination Date, of (i) Monthly Payments
collected but due during a Due Period subsequent to the Due Period ending on the
first day of the month of the related Distribution Date, (ii) all interest or
other income earned on deposits in the Custodial Account or the Certificate
Account, (iii) any other amounts reimbursable or payable to the Trustee, Master
Servicer or any Sub-Servicer pursuant to Section 3.11, (iv) the Master Servicing
Fees, the Sub-Servicing Fees, the Credit Risk Manager Fees and the fees of the
Trustee payable on such Distribution Date, (v) any amounts in respect of the
premium payable to Radian under the Radian Lender-Paid PMI Policy, (vi)
Insurance Proceeds, Liquidation Proceeds, Principal Prepayments, REO Proceeds
and the proceeds of Mortgage Loan purchases made pursuant to Sections 2.02, 2.04
or 3.14, in each case received or made in the month of such Distribution Date
and (vii) amounts on deposit in the Custodial Account representing any
Prepayment Charges or Master Servicer Prepayment Charge Payment Amounts.

         "Balloon Loan": Each of the Mortgage Loans identified in the Mortgage
Loan Schedule as having an original term to maturity that is shorter than the
related amortization term.

         "Balloon Payment": With respect to any Balloon Loan, the related
Monthly Payment payable on the stated maturity date of such Balloon Loan.

         "Bankruptcy Code":  The Bankruptcy Code of 1978, as amended.

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

         "Book-Entry Certificate": Any Certificate registered in the name of the
Depository or its nominee.

         "Business Day": Any day other than a Saturday, a Sunday or a day on
which banking institutions in California or New York (and such other state or
states in which the Custodial Account or the Certificate Account are at the time
located) or in the city in which the Corporate Trust Office of the Trustee is
located are authorized or obligated by law or executive order to close.

         "Cash Liquidation": As to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.



                                       5
<PAGE>

         "Certificate":  Any Regular Certificate or Class R Certificate.

         "Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled Deutsche Bank
National Trust Company, in trust for registered holders of Impac Secured Assets
Corp., Mortgage Pass-Through Certificates, Series 2004-1, and which account or
accounts must each be an Eligible Account.

         "Certificate Account Deposit Date": With respect to any Distribution
Date, the third Business Day immediately preceding such Distribution Date.

         "Certificateholder" or "Holder": The Person in whose name a Certificate
is registered in the Certificate Register, except that only a Permitted
Transferee shall be a holder of a Residual Certificate for any purposes hereof
and, solely for the purposes of giving any consent pursuant to this Agreement,
any Certificate registered in the name of the Company or the Master Servicer or
any affiliate thereof shall be deemed not to be outstanding and the Voting
Rights to which such Certificate is entitled shall not be taken into account in
determining whether the requisite percentage of Voting Rights necessary to
effect any such consent has been obtained, except as otherwise provided in
Section 11.01. The Trustee shall be entitled to rely upon a certification of the
Company or the Master Servicer in determining if any Certificates are registered
in the name of the respective affiliate. All references herein to "Holders" or
"Certificateholders" shall reflect the rights of Certificate Owners as they may
indirectly exercise such rights through the Depository and participating members
thereof, except as otherwise specified herein; PROVIDED, HOWEVER, that the
Trustee shall be required to recognize as a "Holder" or "Certificateholder" only
the Person in whose name a Certificate is registered in the Certificate
Register.

         "Certificate Owner": With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Certificate, as reflected on the
books of an indirect participating brokerage firm for which a Depository
Participant acts as agent, if any, and otherwise on the books of a Depository
Participant, if any, and otherwise on the books of the Depository.

         "Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class A-IO Certificates and Class C Certificates)
immediately prior to any Distribution Date, the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C Certificates as of any date of determination, an amount equal to
the excess, if any, of (A) the then aggregate Uncertificated Principal Balances
of the REMIC 2 Regular Interests over (B) the then aggregate Certificate
Principal Balances of the Class A Certificates, the Mezzanine Certificates and
the Class P Certificates then outstanding. The Class A-IO Certificates will not
have a Certificate Principal Balance.

         "Certificate Register":  The register maintained pursuant to Section
5.02.

         "Class":  Collectively, all of the Certificates bearing the same
designation.

         "Class A Certificate": Any one of the Class A-1, Class A-2, Class A-3,
Class A-4, Class A-


                                       6
<PAGE>

5, Class A-6 or Class A-IO Certificates.

         "Class A Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class A Certificates, other than the Class
A-IO Certificates, immediately prior to such Distribution Date over (y) the
difference between (a) the sum of the Aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the related Prepayment Period) and (b) the Aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) multiplied by the sum of (A) approximately 12.20% and (B) the
Overcollateralization Target Percentage.

         "Class A-1 Certificate": Any one of the Class A-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-2 Certificate": Any one of the Class A-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-3 Certificate": Any one of the Class A-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-4 Certificate": Any one of the Class A-4 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-5 Certificate": Any one of the Class A-5 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-6 Certificate": Any one of the Class A-6 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.



                                        7

<PAGE>



         "Class A-6 Lockout Distribution Amount": For any Distribution Date, the
Class A-6 Lockout Distribution Percentage for that Distribution Date multiplied
by the product of (A) a fraction, the numerator of which is the Certificate
Principal Balance of the Class A-6 Certificates and the denominator of which is
the aggregate Certificate Principal Balance of all the Class A Certificates
(other than the Class A-IO Certificates and in each case immediately prior to
such Distribution Date) and (B) the Principal Distribution Amount allocable to
the Class A Certificates for such Distribution Date.

         "Class A-6 Lockout Distribution Percentage": 0% the with respect to any
Distribution Date occurring in March 2004 up to and including the Distribution
Date in February 2007, 45% the with respect to any Distribution Date occurring
in March 2007 up to and including the Distribution Date in February 2009, 80%
the with respect to any Distribution Date occurring in March 2009 up to and
including the Distribution Date in February 2010, 100% the with respect to any
Distribution Date occurring in March 2010 up to and including the Distribution
Date in February 2011, and 300% with respect to any Distribution Date occurring
in March 2011 and thereafter.

         "Class A-IO Certificate": Any one of the Class A-IO Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class A-IO Rate": With respect to the Class A-IO Certificates,

                  (A) in the case of the Distribution Dates beginning in March
2004 through January 2005, a per annum rate equal to 4.50%;

                  (B) in the case of the Distribution Dates beginning in
February 2005 through February 2006, a per annum rate equal to 3.50%; or

                  (C) in the case of each Distribution Date thereafter, 0.00%
per annum.


         "Class C Certificate": Any one of the Class C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-2, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class M-1 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class M-1 Certificates immediately prior to
such Distribution Date over (y) the difference between (a) the sum of the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related


                                        8

<PAGE>



Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and (b) the sum of (1) the aggregate Certificate Principal Balance of
the Class A Certificates (other than the Class A-IO Certificates and after
taking into account the payment of the Class A Principal Distribution Amount on
such Distribution Date) and (2) the Aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the related Prepayment Period) multiplied by the sum of (A)
approximately 7.00% and (B) the Overcollateralization Target Percentage.

         "Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class M-2 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class M-2 Certificates immediately prior to
such Distribution Date over (y) the difference between (a) the sum of the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) and (b)the sum of (1) the aggregate Certificate Principal
Balance of the Class A Certificates (other than the Class A-IO Certificates and
after taking into account the payment of the Class A Principal Distribution
Amount on such Distribution Date), (2) the Certificate Principal Balance of the
Class M-1 Certificates (after taking into account the payment of the Class M-1
Principal Distribution Amount on such Distribution Date), and (3) the Aggregate
Stated Principal Balance of the Mortgage Loans as of the last day of the related
Due Period (after giving effect to scheduled payments of principal due during
the related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) multiplied by the sum of (A) approximately 3.00% and (B) the
Overcollateralization Target Percentage.

         "Class M-3 Certificate": Any one of the Class M-3 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-1, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class M-3 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the aggregate
Certificate Principal Balance of the Class M-3 Certificates immediately prior to
such Distribution Date over (y) the difference between (a) the sum of the
Aggregate Stated Principal Balance of the Mortgage Loans as of the last day of
the related Due Period (after giving effect to scheduled payments of principal
due during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the


                                        9

<PAGE>



related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) and (b) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (other than the Class
A-IO Certificates and after taking into account the payment of the Class A
Principal Distribution Amount on such Distribution Date), (2) the Certificate
Principal Balance of the Class M-1 Certificates (after taking into account the
payment of the Class M-1 Principal Distribution Amount on such Distribution
Date), (3) the Certificate Principal Balance of the Class M-2 Certificates
(after taking into account the payment of the Class M-2 Principal Distribution
Amount on such Distribution Date) and (3) the Aggregate Stated Principal Balance
of the Mortgage Loans as of the last day of the related Due Period (after giving
effect to scheduled payments of principal due during the related Due Period, to
the extent received or advanced, and unscheduled collections of principal
received during the related Prepayment Period, and after reduction for Realized
Losses incurred during the related Prepayment Period) multiplied by the
Overcollateralization Target Percentage.

         "Class P Certificate": Any one of the Class P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-3, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a REMIC Regular Interest in REMIC 3.

         "Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit B-4, executed by the Trustee and authenticated and delivered by the
Trustee, evidencing the ownership of the Class R-1 Interest, Class R-2 Interest
and Class R-3 Interest.

         "Class R-1 Interest": The uncertificated Residual Interest in REMIC 1.

         "Class R-2 Interest": The uncertificated Residual Interest in REMIC 2.

         "Class R-3 Interest": The uncertificated Residual Interest in REMIC 3.

         "Closing Date": February 27, 2004.

         "Code":  The Internal Revenue Code of 1986.

         "Collateral Value": The appraised value of a Mortgaged Property based
upon the lesser of (i) the appraisal (as reviewed and approved by the Seller)
made at the time of the origination of the related Mortgage Loan, or (ii) the
sales price of such Mortgaged Property at such time of origination. With respect
to a Mortgage Loan the proceeds of which were used to refinance an existing
mortgage loan, the appraised value of the Mortgaged Property based upon the
appraisal (as reviewed and approved by the Seller) obtained at the time of
refinancing.

         "Commission":  The Securities and Exchange Commission.

         "Company":  Impac Secured Assets Corp., or its successor in interest.

         "Compensating Interest":  With respect to any Distribution Date, an
amount equal to


                                       10

<PAGE>



Prepayment Interest Shortfalls resulting from Principal Prepayments during the
related Prepayment Period, but not more than the sum of the Master Servicing
Fees and the Subservicing Fees for the immediately preceding Due Period.

         "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at 1761 East St. Andrew Place, Santa Ana,
California 92705, Attention: Corporate Trust, Impac Secured Assets Corp. Series
2004-1 (IM04S1).

         "Corresponding Certificate": With respect to:

                  (i) REMIC 2 Regular Interest MT-A1, the Class A-1
Certificates,

                  (ii) REMIC 2 Regular Interest MT-A2, the Class A-2
Certificates,

                  (iii) REMIC 2 Regular Interest MT-A3, the Class A-3
Certificates,

                  (iv) REMIC 2 Regular Interest MT-A4, the Class A-4
Certificates,

                  (v) REMIC 2 Regular Interest MT-A5, the Class A-5
Certificates,

                  (vi) REMIC 2 Regular Interest MT-A6, the Class A-6
Certificates,

                  (vii) REMIC 2 Regular Interest MT-M1, the Class M-1
Certificates,

                  (viii) REMIC 2 Regular Interest MT-M2, the Class M-2
Certificates,

                  (ix) REMIC 2 Regular Interest MT-M3, the Class M-3
Certificates, and

                  (x) REMIC 2 Regular Interest MT-P, the Class P Certificates.

         "Countrywide": Countrywide Home Loans Servicing LP, or its successor in
interest.

         "Credit Enhancement Percentage": For any Class or Classes of Class A
Certificates or Mezzanine Certificates and any Distribution Date is the
percentage obtained by dividing (x) the sum of (i) the aggregate Certificate
Principal Balance of any Class or Classes of Class A Certificates or Mezzanine
Certificates subordinate thereto and (ii) the Overcollateralized Amount by (y)
the Aggregate Stated Principal Balance of the Mortgage Loans, calculated after
giving effect to scheduled payments of principal due during the related Due
Period, to the extent received or advanced, and unscheduled collections of
principal received during the related Prepayment Period and distribution of the
Principal Distribution Amount to the Holders of the Certificates then entitled
to distributions of principal on the Distribution Date.

         "Credit Risk Management Agreement": The Credit Risk Management
Agreement, between the Master Servicer and the Credit Risk Manager,
substantially in the form attached hereto as Exhibit M.


                                       11

<PAGE>



         "Credit Risk Manager": The Murrayhill Company.

         "Credit Risk Manager Fee": As to each Mortgage Loan and Distribution
Date, an amount equal to interest at the Credit Risk Manager Fee Rate on the
Stated Principal Balance of such Mortgage Loan as of the Due Date in the month
immediately preceding the month in which such Distribution Date occurs.

         "Credit Risk Manager Fee Rate": On each Mortgage Loan, a rate equal to
0.01% per annum.

         "Curtailment": Any Principal Prepayment made by a Mortgagor which is
not a Principal Prepayment in Full.

         "Custodial Account": The custodial account or accounts created and
maintained pursuant to Section 3.10 in the name of a depository institution, as
custodian for the Holders of the Certificates. Any such account or accounts
shall be an Eligible Account.

         "Cut-off Date": February 1, 2004.

         "Defaulted Mortgage Loan" means any Mortgage Loan as to which the
Mortgagor has failed to make unexcused three or more consecutive scheduled
Monthly Payments.

         "Deficient Valuation": With respect to any Mortgage Loan, a valuation
by a court of competent jurisdiction of the Mortgaged Property in an amount less
than the then outstanding indebtedness under the Mortgage Loan, or any reduction
in the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.

         "Definitive Certificate":  Any definitive, fully registered
Certificate.

         "Deleted Mortgage Loan":  A Mortgage Loan replaced or to be replaced
with a Qualified Substitute Mortgage Loan.

         "Depository" The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(5) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.

         "Depository Participant": A broker, dealer, bank or other financial
institutions 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": The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Distribution Date.



                                       12

<PAGE>



         "Disqualified Organization": Any organization defined as a
"disqualified organization" under Section 860E(e)(5) of the Code, which includes
any of the following: (i) the United States, any State or political subdivision
thereof, any possession of the United States, or any agency or instrumentality
of any of the foregoing (other than an instrumentality which is a corporation if
all of its activities are subject to tax and, except for the Freddie Mac, a
majority of its board of directors is not selected by such governmental unit),
(ii) a foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (iii) any organization (other than
certain farmers' cooperatives described in Section 521 of the Code) which is
exempt from the tax imposed by Chapter 1 of the Code (including the tax imposed
by Section 511 of the Code on unrelated business taxable income), (iv) rural
electric and telephone cooperatives described in Section 1381(a)(2)(C) of the
Code and (v) any other Person so designated by the Trustee based upon an Opinion
of Counsel that the holding of an Ownership Interest in a Class R Certificate by
such Person may cause REMIC 1, REMIC 2 or REMIC 3 or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.

         "Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in March 2004.

         "Due Date":  The first day of the month of the related Distribution
Date.

         "Due Period": With respect to any Distribution Date, the period
commencing on the second day of the month preceding the month of such
Distribution Date (or, with respect to the first Due Period, the day following
the Cut-off Date) and ending on the first day of the month of the related
Distribution Date.

         "Eligible Account": Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by Standard & Poor's and P-1 by Moody's at the
time of any deposit therein or (B) 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 (obtained by
the Person requesting that the account be held pursuant to this clause (ii))
delivered to the Trustee prior to the establishment of such account, the
Certificateholders will have a claim with respect to the funds in such account
and a perfected first priority security interest against any collateral (which
shall be limited to Permitted Investments, each of which shall mature not later
than the Business Day immediately preceding the Distribution Date next following
the date of investment in such collateral or the Distribution Date if such
Permitted Investment is an obligation of the institution that maintains the
Certificate Account or Custodial Account) securing such funds that is superior
to claims of any other depositors or general creditors of the depository
institution with which such account is maintained, (ii) a segregated trust
account or accounts maintained with a federal or state chartered depository
institution or trust company subject to regulations regarding fiduciary funds on
deposit similar to Title 12 of the Code of Federal Regulations Section 9.10(b),
which, in either case, has corporate trust powers, acting in its fiduciary
capacity or (iii) a segregated account or accounts of a depository institution
acceptable to the Rating Agencies (as evidenced in writing by the Rating


                                       13

<PAGE>



Agencies that use of any such account as the Custodial Account or the
Certificate Account will not have an adverse effect on the then-current ratings
assigned to the Classes of the Certificates then rated by the Rating Agencies).
Eligible Accounts may bear interest.

         "Event of Default":  One or more of the events described in Section
7.01.

         "Excess Overcollateralized Amount": With respect to the Class A
Certificates (other than the Class A-IO Certificates) and the Mezzanine
Certificates and any Distribution Date, the excess, if any, of (i) the
Overcollateralized Amount for such Distribution Date, assuming that 100% of the
Principal Remittance Amount is applied as a principal payment on such
Distribution Date over (ii) the Overcollateralization Target Amount for such
Distribution Date.

         "Excess Proceeds":  As defined in Section 3.22.

         "Exchange Act": The Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder.

         "Extra Principal Distribution Amount": With respect to any Distribution
Date, the lesser of (x) the Net Monthly Excess Cashflow for such Distribution
Date and (y) the Overcollateralization Deficiency Amount for such Distribution
Date.

         "Fannie Mae":  Federal National Mortgage Association or any successor.

         "FDIC":  Federal Deposit Insurance Corporation or any successor.

         "Freddie Mac":  Federal Home Loan Mortgage Corporation or any
successor.

         "Funding Date": With respect to each Mortgage Loan, the date on which
funds were advanced by or on behalf of the Seller and interest began to accrue
thereunder.

         "GMAC": GMAC Mortgage Corporation, or an Affiliate thereof.

         "Initial Certificate Principal Balance": With respect to each Class of
Regular Certificates (other than the Class A-IO Certificates), the Initial
Certificate Principal Balance of such Class of Certificates as set forth in the
Preliminary Statement hereto, or with respect to any single Certificate, the
Initial Certificate Principal Balance as stated on the face thereof.

         "Initial Notional Amount": With respect to the Class A-IO Certificates,
$28,700,000.00 or with respect to any single Certificate, the Initial Notional
Amount as stated on the face thereof. With respect to the Class C Certificate,
the aggregate of the initial Uncertificated Principal Balance of the REMIC 2
Regular Interests, or with respect to any single Certificate, the Initial
Notional Amount as stated on the face thereof.

         "Insurance Policy": With respect to any Mortgage Loan, any insurance
policy (including a Radian Lender-Paid PMI Policy) which is required to be
maintained from time to time under this Agreement in respect of such Mortgage
Loan.


                                       14

<PAGE>



         "Insurance Proceeds": Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Hazard Insurance Policy, any title insurance policy or
any other insurance policy covering a Mortgage Loan, to the extent such proceeds
are not applied to the restoration of the related Mortgaged Property or released
to the Mortgagor in accordance with the procedures that the Master Servicer
would follow in servicing mortgage loans held for its own account.

         "Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Distribution Amount for such Distribution Date
allocable to interest received or advanced on the Mortgage Loans.

         "Late Collections": With respect to any Mortgage Loan, all amounts
received during any Due Period, whether as late payments of Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.

         "LIBOR": With respect to any Distribution Date and the Pass-Through
Rates on the Class A-1 Certificates, the arithmetic mean of the Loan interbank
offered rate quotations of reference banks (which will be selected by the
Trustee after consultation with the Master Servicer) for one-month U.S. dollar
deposits, expressed on a per annum basis, determined in accordance with Section
1.02.

         "LIBOR Business Day": Any day other than (i) Saturday or a Sunday or
(ii) a day on which banking institutions in the city of London, England and New
York City are required or authorized by law to be closed.

         "LIBOR Rate Adjustment Date": With respect to each Distribution Date,
the second LIBOR Business Day immediately preceding the commencement of the
related Accrual Period.

         "Liquidated Mortgage Loan": As to any Distribution Date, any Mortgage
Loan in respect of which the Master Servicer has determined, in accordance with
the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds which it expects to recover
with respect to the liquidation of the Mortgage Loan or disposition of the
related REO Property have been recovered.

         "Liquidation Proceeds": Amounts (other than Insurance Proceeds)
received by the Master Servicer in connection with the taking of an entire
Mortgaged Property by exercise of the power of eminent domain or condemnation or
in connection with the liquidation of a defaulted Mortgage Loan through
trustee's sale, foreclosure sale or otherwise, other than amounts received in
respect of any REO Property.

         "Loan-to-Value Ratio": As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Collateral Value of the related Mortgaged Property.

         "Lost Note Affidavit":  With respect to any Mortgage Note, an original
lost note affidavit


                                       15

<PAGE>



from the Seller stating that the original Mortgage Note was lost, misplaced or
destroyed, together with a copy of the related Mortgage Note.

         "Majority Class C Certificateholder":  As defined in Section 9.01.

         "Marker Rate": With respect to the Class C Certificates and any
Distribution Date, a per annum rate equal to two (2) times the weighted average
of the Uncertificated REMIC 2 Pass- Through Rates for REMIC 2 Regular Interest
MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-A3, REMIC 2
Regular Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2 Regular Interest
MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2
Regular Interest MT-M3 and REMIC 2 Regular Interest MT-ZZ, with the rate on
REMIC 2 Regular Interest MT-A1 subject to a cap equal to the lesser of (x) LIBOR
plus 0.15% per annum and (y) the Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest MT-A2 subject to a cap
equal to the lesser of (x) 3.03% per annum and (y) the Net WAC Rate for the
purpose of this calculation; with the rate on REMIC 2 Regular Interest MT-A3
subject to a cap equal to the lesser of (x) 3.71% per annum and (y) the Net WAC
Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest MT-A4 subject to a cap equal to the lesser of (x) 4.85% per annum and
(y) the Net WAC Rate for the purpose of this calculation; with the rate on REMIC
2 Regular Interest MT-A5 subject to a cap equal to the lesser of (x) 5.61% per
annum plus the Rate Increase after the 10% Clean-Up Call Date and (y) the Net
WAC Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest MT-A6 subject to a cap equal to the lesser of (x) 4.64% per annum plus
the Rate Increase after the 10% Clean -Up Call Date and (y) the Net WAC Rate for
the purpose of this calculation; with the rate on REMIC 2 Regular Interest MT-M1
subject to a cap equal to, the lesser of (x) 5.05% per annum plus the Rate
Increase after the 10% Clean-Up Call Date and (y) the Net WAC Rate; with the
rate on REMIC 2 Regular Interest MT-M2 subject to a cap equal to the lesser of
(x) 5.55% per annum plus the Rate Increase after the 10% Clean-Up Call Date and
(y) the Net WAC Rate; with the rate on REMIC 2 Regular Interest MT-3 subject to
a cap equal to the lesser of (x) 6.00% per annum plus the Rate Increase after
the 10% Clean-Up Call Date and (y) the Net WAC Rate; and with the rate on REMIC
2 Regular Interest MT-ZZ subject to a cap of zero for the purpose of this
calculation.

         "Master Servicer": Impac Funding Corporation, or any successor master
servicer appointed as herein provided.

         "Master Servicer Prepayment Charge Payment Amount": The amounts payable
by the Master Servicer in respect of any waived Prepayment Charges pursuant to
Section 2.03, and any amount paid to the Trust Fund by any Person to remedy any
breach of any representation, warranty of covenant made with respect to the
Prepayment Charges to the extent the Trust Fund, as assignee, is the beneficiary
of such representation, warranty or covenant.

         "Master Servicing Fees": As to each Mortgage Loan, an amount, payable
out of any payment of interest on the Mortgage Loan, equal to interest at the
Master Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan
as of the Due Date in the calendar month preceding the month in which the
payment of the Master Servicing Fee is due (alternatively, in the event such
payment of interest accompanies a Principal Prepayment in full made by the
Mortgagor, interest for the number of days covered by such payment of interest).
The Master Servicing Fee consists of


                                       16

<PAGE>



servicing compensation payable to the Master Servicer in respect of its master
servicing responsibilities.

         "Master Servicing Fee Rate": With respect to each Mortgage Loan, the
per annum rate of 0.03%.

         "Maximum Uncertificated Accrued Interest Deferral Amount": With respect
to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest
MT-ZZ for such Distribution Date on a balance equal to the excess of (i) the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-ZZ over (ii) the
REMIC 2 Overcollateralized Amount, in each case for such Distribution Date over
(b) the sum of (I) Uncertificated Accrued Interest on REMIC 2 Regular Interest
MT-A1, with the rate on REMIC 2 Regular Interest MT-A1 subject to a cap equal to
the lesser of (x) LIBOR plus 0.15% per annum and (y) the Net WAC Rate, (II)
Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-A2 with the rate
on REMIC 2 Regular Interest MT-A2 subject to a cap equal to the lesser of (x)
3.03% per annum and (y) the Net WAC Rate, (III) Uncertificated Accrued Interest
on REMIC 2 Regular Interest MT-A3, with the rate on REMIC 2 Regular Interest
MT-A3 subject to a cap equal to the lesser of (x) 3.71% per annum and (y) the
Net WAC Rate, (IV) Uncertificated Accrued Interest on REMIC 2 Regular Interest
MT-A4, with the rate on REMIC 2 Regular Interest MT-A4 subject to a cap equal to
the lesser of (x) 4.85% per annum and (y) the Net WAC Rate, (V) Uncertificated
Accrued Interest on REMIC 2 Regular Interest MT-A5, with the rate on REMIC 2
Regular Interest MT-A5 subject to a cap equal to the lesser of (x) 5.61% per
annum and (y) the Net WAC Rate, (VI) Uncertificated Accrued Interest on REMIC 2
Regular Interest MT-A6, with the rate on REMIC 2 Regular Interest MT-A6 subject
to a cap equal to the lesser of (x) 4.64% per annum and (y) the Net WAC Rate,
(VII) Uncertificated Accrued Interest on REMIC 2 Regular Interest MT-M1, with
the rate on REMIC 2 Regular Interest MT-M1 subject to a cap equal to the lesser
of (x) 5.05% per annum and (y) the Net WAC Rate, (VIII) Uncertificated Accrued
Interest on REMIC 2 Regular Interest MT-M2, with the rate on REMIC 2 Regular
Interest MT-M2 subject to a cap equal to the lesser of (x) 5.55% per annum and
(y) the Net WAC Rate, and (IX) Uncertificated Accrued Interest on REMIC 2
Regular Interest MT-M3, with the rate on REMIC 2 Regular Interest MT-M3 subject
to a cap equal to the lesser of (x) 6.00% per annum and (y) the Net WAC Rate.

         "MERS":  Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.

         "MERS(R) System": The system of recording transfers of Mortgages
electronically maintained by MERS.

         "Mezzanine Certificate": Any Class M-1 Certificate, Class M-2
Certificate or Class M-3 Certificate.

         "MIN": The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R)System.

         "MOM Loan": With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and


                                       17

<PAGE>



assigns, at the origination thereof.

         "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates and Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class A-IO Certificates and Class C
Certificates) of such Class immediately prior to such Distribution Date, in each
case, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls (allocated to such Certificate as set forth in Section 1.03). The
Monthly Interest Distributable Amount on the Regular Certificates, other than
the Class A-1 Certificates, will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The Monthly Interest Distributable Amount on
the Class A-1 Certificates will be calculated on the basis of the actual number
of days in the related Accrual Period and a 360-day year.

         "Monthly Payment": With respect to any Mortgage Loan, the scheduled
monthly payment of principal and interest on such Mortgage Loan which is payable
by a Mortgagor from time to time under the related Mortgage Note as originally
executed (after adjustment, if any, for Deficient Valuations occurring prior to
such Due Date, and after any adjustment by reason of any bankruptcy or similar
proceeding or any moratorium or similar waiver or grace period).

         "Moody's":  Moody's Investors Service, Inc., or its successor in
interest.

         "Mortgage": The mortgage, deed of trust or any other instrument
securing the Mortgage Loan.

         "Mortgage File": The mortgage documents listed in Section 2.01
pertaining to a particular Mortgage Loan and any additional documents required
to be added to the Mortgage File pursuant to this Agreement; provided, that
whenever the term "Mortgage File" is used to refer to documents actually
received by the Trustee, such term shall not be deemed to include such
additional documents required to be added unless they are actually so added.

         "Mortgage Loan": Each of the mortgage loans, transferred and assigned
to the Trustee pursuant to Section 2.01, 2.04 or 2.06 and from time to time held
in the Trust Fund (including any Qualified Substitute Mortgage Loans), the
Mortgage Loans so transferred, assigned and held being identified in the
Mortgage Loan Schedule. As used herein, the term "Mortgage Loan" includes the
related Mortgage Note and Mortgage.

         "Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement dated as of February 1, 2004, among Impac Funding Corporation, as
seller, Impac Mortgage Holdings, Inc., as guarantor, and the Company as
purchaser, and all amendments thereof and supplements thereto.

         "Mortgage Loan Schedule": As of any date of determination, the schedule
of Mortgage Loans included in the Trust Fund. The initial schedule of Mortgage
Loans with accompanying information transferred on the Closing Date to the
Trustee as part of the Trust Fund for the Certificates, attached hereto as
Exhibit H (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant to Section
2.02, in


                                       18

<PAGE>



computer-readable form as delivered to the Trustee), which list shall set forth
the following information with respect to each Mortgage Loan:

         (i) the loan number and name of the Mortgagor;

         (ii) the street address, city, state and zip code of the Mortgaged
Property;

         (iii) (A) the original term to maturity and (B) if such Mortgage Loan
is a Balloon Loan, the amortization term thereof;

         (iv) the original principal balance and the original Mortgage Rate;

         (v) the first payment date;

         (vi) whether the Mortgage Loan is a Balloon Mortgage Loan or a Mortgage
Loan the terms of which do not provide for a Balloon Payment;

         (vii) the type of Mortgaged Property;

         (viii) the Monthly Payment in effect as of the Cut-off Date;

         (ix) the principal balance as of the Cut-off Date;

         (x) the Mortgage Rate as of the Cut-off Date;

         (xi) the occupancy status;

         (xii) the purpose of the Mortgage Loan;

         (xiii) the Collateral Value of the Mortgaged Property;

         (xiv) the original term to maturity;

         (xv) the paid-through date of the Mortgage Loan;

         (xvi) the Master Servicing Fee Rate;

         (xvii) the Sub-Servicing Fee Rate;

         (xviii) the Net Mortgage Rate for such Mortgage Loan;

         (xix) whether such Mortgage Loan is a Radian Insured Loan and, if so,
the related Radian PMI Policy Rate;

         (xx) whether the Mortgage Loan is covered by a private mortgage
insurance policy or an original certificate of private mortgage insurance;


                                       19

<PAGE>



         (xxi) the documentation type; and

         (xxii) the type and term of the related Prepayment Charge, if any.

         The Mortgage Loan Schedule may be in the form of more than one
schedule, collectively setting forth all of the information required.

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

         "Mortgage Rate": With respect to any Mortgage Loan, the annual rate at
which interest accrues on such Mortgage Loan, as adjusted from time to time in
accordance with the provisions of the Mortgage Note.

         "Mortgaged Property":  The underlying property securing a Mortgage
Loan.

         "Mortgagor":  The obligor or obligors on a Mortgage Note.

         "Net Liquidation Proceeds": With respect to any Liquidated Mortgage
Loan or any other disposition of related Mortgaged Property (including REO
Property) the related Liquidation Proceeds net of Advances, Servicing Advances,
Master Servicing Fees, Sub-Servicing Fees, Credit Risk Manager Fees and any
other accrued and unpaid servicing fees received and retained in connection with
the liquidation of such Mortgage Loan or Mortgaged Property.

         "Net Mortgage Rate": With respect to each Mortgage Loan Due Date, a per
annum rate of interest equal to the then-applicable Mortgage Rate on such
Mortgage Loan less the sum of the Master Servicing Fee Rate, the Sub-Servicing
Fee Rate, the Trustee Fee Rate and the Credit Risk Manager Fee Rate, and with
respect to the Radian Insured Loans, the Radian PMI Policy Rate.

         "Net Monthly Excess Cashflow": With respect to each Distribution Date,
the sum of (a) any Overcollateralization Release Amount for such Distribution
Date and (b) the excess of (x) Available Distribution Amount for such
Distribution Date over (y) the sum for such Distribution Date of (A) the Monthly
Interest Distributable Amounts for the Class A Certificates and the Mezzanine
Certificates and (B) the Principal Remittance Amount.

         "Net Prepayment Interest Shortfall": With respect to any Distribution
Date, the excess, if any, of any Prepayment Interest Shortfalls for such date
over the related Compensating Interest.

         "Net WAC Rate": With respect to the Class A Certificates, other than
the Class A-IO Certtificiates, and the Mezzanine Certificates, (A) from the
March 2004 Distribution Date through and including the Distribution Date in
February 2006, (1) the weighted average of the Net Mortgage Rates of the
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the close of business on the first day of the calendar month preceding the
month in which such Distribution Date occurs less (2) the Pass-Through Rate for
the Class A-IO Certificates for such Distribution Date multiplied by a fraction,
the numerator of which is (x) the Notional Amount of the Class A-IO Certificates
immediately prior to such Distribution Date, and the denominator of which


                                       20

<PAGE>



is (y) the Aggregate Stated Principal Balance of the Mortgage Loans as of the
first day of the month preceding the month in which such Distribution Date
occurs, and (B) for each Distribution Date thereafter, the weighted average of
the Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the close of business on the first day
of the calendar month preceding the month in which such Distribution Date
occurs. For federal income tax purposes, however, the equivalent of the
foregoing, expressed as a per annum rate (but not less than zero) equal to the
weighted average of (a) the Uncertificated REMIC 1 Pass-Through Rate with
respect to REMIC 1 Regular Interest LT-1 for such Distribution Date, (b) the
excess, if any, of (1) the Uncertificated REMIC 1 Pass-Through Rate with respect
to REMIC 1 Regular Interest LT-2 for such Distribution Date over (2) (A) in the
case of the Distribution Date in March 2004 through and including the
Distribution Date in August 2004, 4.50% per annum, and (B) in the case of any
Distribution Date thereafter, 0.00% per annum; (c) the excess, if any, of (1)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT-3 for such Distribution Date over (2) (A) in the case of the
Distribution Date in March 2004 through and including the Distribution Date in
January 2005, 4.50% per annum, (B) in the case of the Distribution Date in
February 2005 through and including the Distribution Date in April 2005, 3.50%
per annum, and (C) in the case of any Distribution Date thereafter, 0.00% per
annum; (d) the excess, if any, of (1) the Uncertificated REMIC 1 Pass-Through
Rate with respect to REMIC 1 Regular Interest LT-4 for such Distribution Date
over (2) (A) in the case of the Distribution Date in March 2004 through and
including the Distribution Date in January 2005, 4.50% per annum, (B) in the
case of the Distribution Date in February 2005 through and including the
Distribution Date in May 2005, 3.50% per annum, and (C) in the case of any
Distribution Date thereafter, 0.00% per annum; (e) the excess, if any, of (1)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT-5 for such Distribution Date over (2) (A) in the case of the
Distribution Date in March 2004 through and including the Distribution Date in
January 2005, 4.50% per annum, (B) in the case of the Distribution Date in
February 2005 through and including the Distribution Date in August 2005, 3.50%
per annum, and (C) in the case of any Distribution Date thereafter, 0.00% per
annum;(f) the excess, if any, of (1) the Uncertificated REMIC 1 Pass-Through
Rate with respect to REMIC 1 Regular Interest LT-6 for such Distribution Date
over (2) (A) in the case of the Distribution Date in March 2004 through and
including the Distribution Date in January 2005, 4.50% per annum, (B) in the
case of the Distribution Date in February 2005 through and including the
Distribution Date in October 2005, 3.50% per annum, and (C) in the case of any
Distribution Date thereafter, 0.00% per annum; (g) the excess, if any, of (1)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT-7 for such Distribution Date over (2) (A) in the case of the
Distribution Date in March 2004 through and including the Distribution Date in
January 2005, 4.50% per annum, (B) in the case of the Distribution Date in
February 2005 through and including the Distribution Date in December 2005,
3.50% per annum, and (C) in the case of any Distribution Date thereafter, 0.00%
per annum; (h) the excess, if any, of (1) the Uncertificated REMIC 1 Pass-
Through Rate with respect to REMIC 1 Regular Interest LT-8 for such Distribution
Date over (2) (A) in the case of the Distribution Date in March 2004 through and
including the Distribution Date in January 2005, 4.50% per annum, (B) in the
case of the Distribution Date in February 2005 through and including the
Distribution Date in January 2006, 3.50% per annum, and (C) in the case of any
Distribution Date thereafter, 0.00% per annum; (i) the excess, if any, of (1)
the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT-9 for such Distribution Date over (2) (A) in the case of the
Distribution Date in March 2004 through and including the Distribution Date in
January 2005, 4.50% per annum, (B) in the case of the Distribution Date in


                                       21

<PAGE>



February 2005 through and including the Distribution Date in February 2006,
3.50% per annum, and (C) in the case of any Distribution Date thereafter, 0.00%
per annum; weighted on the basis of the Uncertificated Principal Balance of each
such REMIC 1 Regular Interest.

         "Net WAC Shortfall Amount": If on any Distribution Date the
Pass-Through Rate for the Class A Certificates, other than the Class A-IO
Certificates, and the Mezzanine Certificates is limited to the Net WAC Rate, the
sum of (i) the excess of (a) the amount of interest such Class A Certificates or
Mezzanine Certificates would have been entitled to receive on such Distribution
Date if the Net WAC Rate would not have been applicable to such certificates
over (b) the amount of interest accrued on such classes at the applicable Net
WAC Rate plus (ii) the related Net WAC Shortfall Amount from the prior
Distribution Date not previously distributed together with interest thereon at
the related pass-through rate for the most recently ended Accrual Period.

         "Net WAC Shortfall Reserve Fund": A reserve fund established by the
Trustee for the benefit of the Holders of the Class A Certificates (other than
the Class A-IO Certificates) and the Mezzanine Certificates, and funded on the
Closing Date by or on behalf of the Company with $5,000. The Net WAC Shortfall
Reserve Fund is an "outside reserve fund" within the meaning of Treasury
regulation Section 1.860G-2(h), which is not an asset of any REMIC, ownership of
which is evidenced by the Class C Certificates, and which is established and
maintained pursuant to Section 4.08.

         "Net WAC Shortfall Reserve Fund Deposit": With respect to the Net WAC
Shortfall Reserve Fund, an amount equal to $5,000, which the Company shall fund
initially pursuant to Section 4.08 hereof.

         "Nonrecoverable Advance": Any Advance or Servicing Advance previously
made or proposed to be made in respect of a Mortgage Loan which, in the good
faith judgment of the Master Servicer, will not or, in the case of a proposed
Advance or Servicing Advance, would not be ultimately recoverable from related
Late Collections, Insurance Proceeds, Liquidation Proceeds or REO Proceeds. The
determination by the Master Servicer that it has made a Nonrecoverable Advance
or that any proposed Advance or Servicing Advance would constitute a
Nonrecoverable Advance, shall be evidenced by a certificate of a Servicing
Officer delivered to the Company and the Trustee.

         "Non-United States Person":  Any Person other than a United States
Person.

         "Notional Amount": With respect to the Class A-IO Certificates
immediately prior to any Distribution Date, the lesser of (i) the Aggregate
Stated Principal Balance of the Mortgage Loans (prior to giving effect to
scheduled payments of principal due during the related Due Period, to the extent
received or advanced, and unscheduled collections of principal received during
the related Prepayment Period) and (ii) for the March 2004 Distribution Date
through and including the August 2004 Distribution Date, $28,700,000.00, for the
September 2004 Distribution Date through and including the April 2005
Distribution Date, $23,000,000.00, for the May 2005 Distribution Date,
$20,100,000.00, for the June 2005 Distribution Date through and including the
August 2005 Distribution Date, $17,200,000, for the September 2005 Distribution
Date through and including the October 2005 Distribution Date, $14,400,000.00,
for the November 2005 Distribution Date through


                                       22

<PAGE>



and including the December 2005 Distribution Date, $11,500,000.00, for the
January 2006 Distribution Date,$8,600,000.00, for the February 2006 Distribution
Date, $5,700,000.00 and on and after the March 2006 Distribution Date, zero. For
federal income tax purposes, the Class A-IO Certificates will not have a
notional amount, but will be entitled to 100% of the interest distributed on
REMIC 2 Regular Interest MT-IO. With respect to the Class C Certificates,
immediately prior to any Distribution Date, the aggregate of the Uncertificated
Principal Balances of the REMIC 2 Regular Interests other than REMIC 2 Regular
Interest MT-P.

         "Officers' Certificate": A certificate signed by the Chairman of the
Board, the Vice Chairman of the Board, the President or a vice president and by
the Treasurer, the Secretary, or one of the assistant treasurers or assistant
secretaries of the Company, the Seller, the Master Servicer or of any
Sub-Servicer and delivered to the Company and Trustee.

         "One Month LIBOR": The London interbank offered rate for one-month
United States dollar deposits, determined as described in Section 1.02 of this
Agreement.

         "Opinion of Counsel": A written opinion of counsel, who may be counsel
for the Company, the Seller, or the Master Servicer, reasonably acceptable to
the Trustee; except that any opinion of counsel relating to (a) the
qualification of any account required to be maintained pursuant to this
Agreement as an Eligible Account, (b) the qualification of REMIC 1, REMIC 2, or
REMIC 3 as REMICs, (c) compliance with the REMIC Provisions or (d) resignation
of the Master Servicer pursuant to Section 6.04 must be an opinion of counsel
who (i) is in fact independent of the Company and the Master Servicer, (ii) does
not have any direct financial interest or any material indirect financial
interest in the Company or the Master Servicer or in an affiliate of either and
(iii) is not connected with the Company or the Master Servicer as an officer,
employee, director or person performing similar functions.

         "Optional Termination Date": The first Distribution Date on which the
Majority Class C Certificateholders may opt to terminate the Trust Fund pursuant
to Section 9.01.

         "OTS":  Office of Thrift Supervision or any successor.

         "Outstanding Mortgage Loan": As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased prior
to such Due Date pursuant to Sections 2.02, 2.04 or 3.14.

         "Overcollateralization Deficiency Amount": With respect to any
Distribution Date, the amount, if any, by which the Overcollateralization Target
Amount exceeds the Overcollateralized Amount on such Distribution Date (after
giving effect to distributions in respect of the Basic Principal Distribution
Amount on such Distribution Date).

         "Overcollateralization Release Amount": With respect to any
Distribution Date, the lesser of (x) the Principal Remittance Amount and (y) the
Excess Overcollateralized Amount.

         "Overcollateralization Target Amount": With respect to any Distribution
Date, 0.35% of the


                                       23

<PAGE>



Aggregate Stated Principal Balance of the Mortgage Loans as of the Cut-off Date.

         "Overcollateralization Target Percentage": For any Distribution Date, a
percentage equal to (a) the Overcollateralization Target Amount divided by (b)
the Aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period).

         "Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the Aggregate Stated Principal Balance of the
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or advanced, and
unscheduled collections of principal received during the related Prepayment
Period and any Realized Losses on the Mortgage Loans) exceeds (ii) the aggregate
Certificate Principal Balance of the Class A Certificates (other than the Class
A-IO Certificates), the Mezzanine Certificates and the Class P Certificates as
of such Distribution Date after giving effect to distributions to be made on
such Distribution Date.

         "Ownership Interest": As to any Certificate, any ownership or security
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, as owner or as pledgee.

         "Pass-Through Rate": With respect to any Distribution Date and

         (i) the Class A-1 Certificates, the lesser of (x) One-Month LIBOR plus
0.15% per annum and (y) the Net WAC Rate;

         (ii) the Class A-2 Certificates, the lesser of (x) 3.03% per annum
and (y) the Net WAC Rate;

         (iii) the Class A-3 Certificates, the lesser of (x) 3.71% per annum
and (y) the Net WAC Rate;

         (iv) the Class A-4 Certificates, the lesser of (x) 4.85% per annum
and (y) the Net WAC Rate;

         (v) the Class A-5 Certificates, the lesser of (x) 5.61% per annum plus
the Rate Increase and (y) the Net WAC Rate;

         (vi) the Class A-6 Certificates, the lesser of (x) 4.64% per annum plus
the Rate Increase and (y) the Net WAC Rate;

         (vii) the Class A-IO Certificates, (a) in the case of any Distribution
Date up to and including the Distribution Date in January 2005, 4.50% per annum,
(b) in the case of any Distribution Date from and including the Distribution
Date in February 2005 up to and including the Distribution Date in February
2006, 3.50% per annum and (c) in the case of any Distribution Date


                                       24

<PAGE>



after the Distribution Date in February 2006, 0% per annum; for federal income
tax purposes, however, the Class A-IO Certificates will not have a Pass-Through
Rate, and the Monthly Interest Distributable Amount for the Class A-IO
Certificates and any Distribution Date will be deemed to be 100% of the amount
distributed on REMIC 2 Regular Interest MT-IO for such Distribution Date;

         (viii) the Class M-1 Certificates, the lesser of (x) 5.05% per annum
plus the Rate Increase and (y) the Net WAC Rate;

         (ix) the Class M-2 Certificates, the lesser of (x) 5.55% per annum plus
the Rate Increase and (y) the Net WAC Rate;

         (x) the Class M-3 Certificates, the lesser of (x) 6.00% per annum plus
the Rate Increase and (y) the Net WAC Rate; and

         (xi) the Class C Certificates, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is (x) the sum of the amounts
calculated pursuant to clauses (A) through (L) below, and the denominator of
which is (y) the aggregate of the Uncertificated Principal Balances of the REMIC
2 Regular Interests (other than REMIC 2 Regular Interests MT-IO). For purposes
of calculating the Pass-Through Rate for the Class C Certificates, the numerator
is equal to the sum of the following components:

                  (A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-AA minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-AA;

                  (B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A1;

                  (C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A2;

                  (D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A3;

                  (E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A4 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A4;

                  (F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-A5 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-A5;

                  (G) the Uncertificated REMIC 2 Pass-Through Rate for
REMIC 2 Regular Interest


                                       25

<PAGE>



MT-A6 minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest MT-A6;

                  (H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M1 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M1;

                  (I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M2 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M2;

                  (J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-M3 minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M3;

                  (K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-ZZ minus the Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-ZZ; and

                  (L) 100% of the interest on REMIC 2 Regular Interest MT-P.

         The Class P Certificates and the Class R Certificates will not accrue
interest and therefore will not have a Pass-Through Rate.

         "Percentage Interest": With respect to any Regular Certificate, the
undivided percentage ownership interest in the related Class evidenced by such
Certificate, which percentage ownership interest shall be equal to the Initial
Certificate Principal Balance thereof or Initial Notional Amount, as applicable,
thereof divided by the aggregate Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of all of the Certificates of the same
Class. With respect to any Class R Certificate, the interest in distributions to
be made with respect to such Class evidenced thereby, expressed as a percentage,
as stated on the face of each such Certificate.

         "Permitted Investment": One or more of the following:

         (i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such obligations are
backed by the full faith and credit of the United States;

         (ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof, provided
that the unsecured obligations of the party agreeing to repurchase such
obligations are at the time rated by each Rating Agency in its highest
short-term rating available;

         (iii) federal funds, certificates of deposit, demand deposits, time
deposits and 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


                                       26

<PAGE>



remaining maturity of more than 30 days) denominated in United States dollars of
any U.S. depository institution or trust company incorporated under the laws of
the United States or any state thereof or of any domestic branch of a foreign
depository institution or trust company; provided that the debt obligations of
such depository institution or trust company (or, if the only Rating Agency is
Standard & Poor's, in the case of the principal depository institution in a
depository institution holding company, debt obligations of the depository
institution holding company) at the date of acquisition thereof have been rated
by each Rating Agency in its highest short-term rating available; and provided
further that, if the only Rating Agency is Standard & Poor's and if the
depository or trust company is a principal subsidiary of a bank holding company
and the debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and, provided
further that, if the original maturity of such short-term obligations of a
domestic branch of a foreign depository institution or trust company shall
exceed 30 days, the short-term rating of such institution shall be A-1+ in the
case of Standard & Poor's if Standard & Poor's is the Rating Agency;

         (iv) commercial paper (having original maturities of not more than 365
days) of any corporation incorporated under the laws of the United States or any
state thereof which on the date of acquisition has been rated by Moody's and
Standard & Poor's in their highest short-term ratings available; provided that
such commercial paper shall have a remaining maturity of not more than 30 days;

         (v) a money market fund or a qualified investment fund rated by Moody's
in its highest long-term ratings available and rated AAAm or AAAm-G by Standard
& Poor's, including any such funds for which Deutsche Bank National Trust
Company or any affiliate thereof serves as an investment advisor, manager,
administrator, shareholder, servicing agent, and/or custodian or sub- custodian;
and

         (vi) other obligations or securities that are acceptable to each Rating
Agency as a Permitted Investment hereunder and will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency, as evidenced in writing;

PROVIDED, HOWEVER, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations.

         "Permitted Transferee": Any transferee of a Residual Certificate other
than a Disqualified Organization, a Non-United States Person or an "electing
large partnership" (as defined in Section 775 of the Code).

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



                                       27

<PAGE>



         "Prepayment Assumption": As defined in the Prospectus Supplement.

         "Prepayment Charge": With respect to any Mortgage Loan, the charges or
premiums, if any, due in connection with a full or partial prepayment of such
Mortgage Loan in accordance with the terms thereof (other than any Master
Servicer Prepayment Charge Payment Amount).

         "Prepayment Interest Shortfall": As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Prepayment
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan over the
amount of interest (adjusted to the Net Mortgage Rate) paid by the Mortgagor for
such Prepayment Period to the date of such Principal Prepayment in Full or (b) a
Curtailment during the prior calendar month, an amount equal to one month's
interest at the Net Mortgage Rate on the amount of such Curtailment.

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

         "Primary Hazard Insurance Policy": Each primary hazard insurance policy
required to be maintained pursuant to Section 3.13.

         "Primary Insurance Policy": Any primary policy of mortgage guaranty
insurance including the Radian Lender-Paid PMI Policy, or any replacement policy
therefor.

         "Principal Distribution Amount": With respect to any Distribution Date,
an amount equal to the sum of the Basic Principal Distribution Amount plus the
Extra Principal Distribution Amount.

         "Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date 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 unpaid principal balance of the Mortgage Loan.

         "Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) the principal portion of all partial and full Principal Prepayments
of the Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all Net Liquidation Proceeds,
REO Proceeds and Insurance Proceeds received during the related Prepayment
Period, (iv) the principal portion of proceeds of Mortgage Loan purchases made
pursuant to Section 2.02, 2.04 or 3.14, in each case received or made during the
related Prepayment Period, (v) the principal portion of any related Substitution
Adjustments deposited in the Custodial Account during the related Prepayment
Period and (vi) on the Distribution Date on which the Trust Fund is to be
terminated pursuant to Section 9.01, the principal portion of the termination
price received from the Majority Class C Certificateholders in


                                       28

<PAGE>



connection with a termination of the Trust Fund to occur on such Distribution
Date.

         "Prospectus Supplement": That certain Prospectus Supplement dated
February 25, 2004 relating to the public offering of the Class A Certificates
and the Mezzanine Certificates.

         "Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.14, an amount equal
to the sum of (i) 100% of the Stated Principal Balance thereof, (ii) unpaid
accrued interest (or REO Imputed Interest) at the applicable Net Mortgage Rate
on the Stated Principal Balance thereof outstanding during each Due Period that
such interest was not paid or advanced, from the date through which interest was
last paid by the Mortgagor or advanced and distributed to Certificateholders
together with unpaid Master Servicing Fees, Sub-Servicing Fees, Credit Risk
Manager Fees, Trustee's Fees and, if such Mortgage Loan is a Radian Insured
Loan, fees due Radian at the Radian PMI Policy Rate, from the date through which
interest was last paid by the Mortgagor, in each case to the first day of the
month in which such Purchase Price is to be distributed, plus (iii) the
aggregate of all Advances and Servicing Advances made in respect thereof that
were not previously reimbursed.

         "Qualified Insurer": Any insurance company duly qualified as such under
the laws of the state or states in which the related Mortgaged Property or
Mortgaged Properties is or are located, duly authorized and licensed in such
state or states to transact the type of insurance business in which it is
engaged and approved as an insurer by the Master Servicer, so long as the claims
paying ability of which is acceptable to the Rating Agencies for pass-through
certificates having the same rating as the Certificates rated by the Rating
Agencies as of the Closing Date.

         "Qualified Substitute Mortgage Loan": A Mortgage Loan substituted by
the Company for a Deleted Mortgage Loan which must, on the date of such
substitution, as confirmed in an Officers' Certificate of the Seller delivered
to the Trustee, (i) have an outstanding principal balance, after deduction of
the principal portion of the monthly payment due in the month of substitution
(or in the case of a substitution of more than one Mortgage Loan for a Deleted
Mortgage Loan, an aggregate outstanding principal balance, after such
deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be paid to the Master Servicer for
deposit in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Section 2.04 hereof; and, (vi) comply with each representation and warranty set
forth in the Mortgage Loan Purchase Agreement (other than representations (xiv),
(xvi), (xxix) and (xxxiii) through (xli).

         "Radian":  Radian Guaranty, Inc. (f/k/a Commonwealth Mortgage Assurance
Company), or its successors or assigns.

         "Radian Insured Loans": The Mortgage Loans included in the Trust Fund
covered by a Radian Lender-Paid PMI Policy, as indicated on the Mortgage Loan
Schedule.


                                       29

<PAGE>




         "Radian Lender-Paid PMI Policy": A Primary Insurance Policy issued by
Radian in accordance with a March 29, 2002 letter between the Seller and Radian.

         "Radian PMI Policy Rate": With respect to any Radian Insured Loan, the
rate per annum at which the related premium on the Radian Lender-Paid PMI Policy
accrues.

         "Rate Increase": If the holder of the Class C Certificates does not
exercise its purchase option as described under Section 9.01 with respect to the
Certificates, on any Distribution Dates after the 10% Clean-Up Call Date, 0.50%
per annum.

         "Rating Agency": Standard & Poor's or Moody's and each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee and Master Servicer. References herein
to the two highest long term debt rating of a Rating Agency shall mean "AA" or
better in the case of Standard & Poor's and "Aa2" or better in the case of
Moody's and references herein to the highest short-term debt rating of a Rating
Agency shall mean "A-1+" in the case of Standard & Poor's and "P-1" in the case
of Moody's, and in the case of any other Rating Agency such references shall
mean such rating categories without regard to any plus or minus.

         "Realized Loss": With respect to each Mortgage Loan or REO Property as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan as of
the date of Cash Liquidation or REO Disposition, plus (ii) interest (and REO
Imputed Interest, if any) at the Net Mortgage Rate from the Due Date as to which
interest was last paid or advanced to Certificateholders up to the date of the
Cash Liquidation or REO Disposition on the Stated Principal Balance of such
Mortgage Loan outstanding during each Due Period that such interest was not paid
or advanced, minus (iii) the proceeds, if any, received during the month in
which such Cash Liquidation or REO Disposition occurred, to the extent applied
as recoveries of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net of the portion thereof reimbursable to the Master Servicer or
any Sub-Servicer with respect to related Advances or Servicing Advances not
previously reimbursed. With respect to each Mortgage Loan which has become the
subject of a Deficient Valuation, the difference between the principal balance
of the Mortgage Loan outstanding immediately prior to such Deficient Valuation
and the principal balance of the Mortgage Loan as reduced by the Deficient
Valuation.

         "Record Date": With respect to each Class of Certificates, other than
the Class A-1 Certificates and each Distribution Date, the last Business Day of
the month immediately preceding the month of the related Distribution Date. With
respect to each Distribution Date and any Class A-1 Certificates which are
Book-Entry Certificates, the Business Day prior to such Distribution Date. With
respect to each Distribution Date and any Class A-1 Certificates which are not
Book-Entry Certificates, the close of business on the last Business Day of the
month preceding the month in which such Distribution Date occurs.

         "Regular Certificate":  Any of the Certificates other than a Residual
Certificate.


                                       30

<PAGE>



         "Relief Act":  The Soldiers' and Sailors' Civil Relief Act of 1940, as
amended.

         "Relief Act Interest Shortfall": With respect to any Distribution Date,
for any Mortgage Loan with respect to which there has been a reduction in the
amount of interest collectible thereon for the most recently ended Due Period as
a result of the application of the Relief Act, the amount by which (i) interest
collectible on such Mortgage Loan during such Due Period is less than (ii) one
month's interest on the Stated Principal Balance of such Mortgage Loan at the
Loan Rate for such Mortgage Loan before giving effect to the application of the
Relief Act.

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

         "REMIC 1": The segregated pool of assets subject hereto (exclusive of
the Net WAC Shortfall Reserve Fund and the Yield Maintenance Agreement) with
respect to which a REMIC election is to be made, conveyed in trust to the
Trustee, for the benefit of the Holders of the REMIC 1 Regular Interests and the
Holders of the Class R Certificates (as holders of the Class R-1 Interest),
consisting of: (i) each Mortgage Loan (exclusive of payments of principal and
interest due on or before the Cut-off Date, if any, received by the Master
Servicer which shall not constitute an asset of the Trust Fund) as from time to
time are subject to this Agreement and all payments under and proceeds of such
Mortgage Loans (exclusive of any prepayment fees and late payment charges
received on the Mortgage Loans), together with all documents included in the
related Mortgage File, subject to Section 2.01; (ii) such funds or assets as
from time to time are deposited in the Custodial Account or the Certificate
Account and belonging to the Trust Fund; (iii) any REO Property; (iv) the
Primary Hazard Insurance Policies, if any, the Primary Insurance Policies, if
any, and all other Insurance Policies with respect to the Mortgage Loans; (v)
[reserved]; and (vi) the Company's interest in respect of the representations
and warranties made by the Seller in the Mortgage Loan Purchase Agreement as
assigned to the Trustee pursuant to Section 2.04 hereof.

         "REMIC 1 Regular Interest LT-1": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-1 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-2": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-2 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-3": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-3 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through


                                       31

<PAGE>



Rate in effect from time to time, and shall be entitled to distributions of
principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.

         "REMIC 1 Regular Interest LT-4": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-4 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-5": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-5 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-6": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-6 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-7": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-7 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-8": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-8 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 1 Regular Interest LT-9": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-9 shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.


                                       32

<PAGE>



         "REMIC 1 Regular Interest LT-P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT-P shall accrue interest
at the related Uncertificated REMIC 1 Pass-Through Rate in effect from time to
time, and shall be entitled to any Prepayment Charges relating to the Mortgage
Loans collected by the Master Servicer and to a distribution of principal,
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto.

         "REMIC 1 Regular Interests": REMIC 1 Regular Interest LT-1, REMIC 1
Regular Interest LT-2, REMIC 1 Regular Interest LT-3, REMIC 1 Regular Interest
LT-4, REMIC 1 Regular Interest LT-5, REMIC 1 Regular Interest LT-6, REMIC 1
Regular Interest LT-7, REMIC 1 Regular Interest LT-8, REMIC 1 Regular Interest
LT-9, and REMIC 1 Regular Interest LT-P.

         "REMIC 2": The segregated pool of assets consisting of all of the REMIC
1 Regular Interests conveyed in trust to the Trustee, for the benefit of REMIC
3, as holder of the REMIC 2 Regular Interests, and the Class R
Certificateholders, as holders of the Class R-2 Interest, pursuant to Article II
hereunder, and all amounts deposited therein, with respect to which a separate
REMIC election is to be made.

         "REMIC 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the Aggregate
Stated Principal Balance of the Mortgage Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest MT-AA minus the Marker Rate, divided by (b) 12.

         "REMIC 2 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 2 Regular Interest MT-AA, REMIC 2 Regular Interest MT-A1, REMIC 2 Regular
Interest MT-A2, REMIC 2 Regular Interest MT-A3, REMIC 2 Regular Interest MT-A4,
REMIC 2 Regular Interest MT-A5, REMIC 2 Regular Interest MT-A6, REMIC 2 Regular
Interest MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3
and REMIC 2 Regular Interest MT-ZZ, minus (ii) the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest MT-A1, REMIC 2
Regular Interest MT-A2, REMIC 2 Regular Interest MT-A3, REMIC 2 Regular Interest
MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2 Regular Interest MT-A6, REMIC 2
Regular Interest MT-M1, REMIC 2 Regular Interest MT-M2 and REMIC 2 Regular
Interest MT-M3, in each case as of such date of determination.

         "REMIC 2 Principal Loss Allocation Amount": With respect to any
Distribution Date and the mortgage loans, an amount equal to (a) the product of
(i) the Aggregate Stated Principal Balance of the Mortgage Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 2
Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-A3, REMIC 2 Regular Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2
Regular Interest MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest
MT-M2 and REMIC 2 Regular Interest MT-M3, and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
MT-A1, REMIC 2 Regular Interest MT-A2,


                                       33

<PAGE>



REMIC 2 Regular Interest MT-A3, REMIC 2 Regular Interest MT-A4, REMIC 2 Regular
Interest MT-A5, REMIC 2 Regular Interest MT-A6, REMIC 2 Regular Interest MT-M1,
REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest MT-M3 and REMIC 2
Regular Interest MT-ZZ.

         "REMIC 2 Overcollateralization Target Amount": 1% of the
Overcollateralization Target Amount.

         "REMIC 2 Regular Interest MT-AA": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest MT-AA shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-A1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A1 shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-A2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A2 shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-A3": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A1 shall accrue
interest at the related Uncertificated REMIC 3 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-A4": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A4 shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-A5": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A5 shall accrue
interest at the related Uncertificated REMIC 2 Pass-




                                       35
<PAGE>

Through Rate in effect from time to time, and shall be entitled to distributions
of principal, subject to the terms and conditions hereof, in an aggregate amount
equal to its initial Uncertificated Principal Balance as set forth in the
Preliminary Statement hereto.

         "REMIC 2 Regular Interest MT-A6": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-A6 shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-M1": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest MT-M1 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-M2": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest MT-M2 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-M3": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest MT-M3 shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-ZZ": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest MT-ZZ shall accrue
interest at the related Uncertificated REMIC 2 Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

         "REMIC 2 Regular Interest MT-IO": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
regular interest in REMIC 2. REMIC 2 Regular Interest MT-IO shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate on its
Uncertificated Notional Amount outstanding from time to time.

         "REMIC 2 Regular Interest MT-P": One of the separate non-certificated
beneficial



                                       36
<PAGE>



ownership interests in REMIC 2 issued hereunder and designated as a "regular
interest" in REMIC 2. REMIC 2 Regular Interest MT-P shall accrue interest at the
related Uncertificated REMIC 2 Pass- Through Rate in effect from time to time,
and shall be entitled to any amounts distributed to REMIC 1 Regular Interest
LT-P (including Prepayment Charges).

         "REMIC 2 Regular Interests": REMIC 2 Regular Interest MT-AA, REMIC 2
Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-A3, REMIC 2 Regular Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2
Regular Interest MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest
MT-M2, REMIC 2 Regular Interest MT-B, REMIC 2 Regular Interest MT-ZZ, REMIC 2
Regular Interest MT-IO and REMIC 2 Regular Interest MT-P.

         "REMIC 3": The segregated pool of assets consisting of all of the REMIC
2 Regular Interests conveyed in trust to the Trustee, for the benefit of the
Holders of the Regular Certificates and the Holders of the Class R Certificates
(as holders of the Class R-3 Interest), pursuant to Article II hereunder, and
all amounts deposited therein, with respect to which a separate REMIC election
is to be made.

         "REMIC Provisions": Provisions of the federal income tax law relating
to real estate mortgage investment conduits, which appear at Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and proposed, temporary and final regulations and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.

         "REMIC Regular Interest": A REMIC 1 Regular Interest, REMIC 2 Regular
Interest or Regular Certificate.

         "Remittance Report": A report prepared by the Master Servicer providing
the information set forth in Exhibit E attached hereto.

         "REO Acquisition": The acquisition by the Master Servicer on behalf of
the Trustee for the benefit of the Certificateholders of any REO Property
pursuant to Section 3.15.

         "REO Disposition": The receipt by the Master Servicer of Insurance
Proceeds, Liquidation Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.

         "REO Imputed Interest": As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage 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 3.15 by any income from the REO
Property treated as a recovery of principal).

         "REO Proceeds": Proceeds, net of directly related expenses, received in
respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property


                                       37
<PAGE>


and of any REO Disposition), which proceeds are required to be deposited into
the Custodial Account as and when received.

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

         "Request for Release": A release signed by a Servicing Officer, in the
form of Exhibits F-1 or F-2 attached hereto.

         "Residual Interest": The sole class of "residual interests" in a REMIC
within the meaning of Section 860G(a)(2) of the Code.

         "Responsible Officer": When used with respect to the Trustee, the
Chairman or Vice Chairman of the Board of Directors or Trustees, the Chairman or
Vice Chairman of the Executive or Standing Committee of the Board of Directors
or Trustees, the President, the Chairman of the Committee on Trust Matters, any
vice president, any assistant vice president, the Secretary, any assistant
secretary, the Treasurer, any assistant treasurer, any trust officer or
assistant trust officer or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also, with respect to a particular matter, any other officer to
whom such matter is referred because of such officer's knowledge of and
familiarity with the particular subject.

         "Seller":  Impac Funding Corporation, or its successor in interest.

         "Servicing Account": The account or accounts created and maintained
pursuant to Section 3.09.

         "Servicing Advances": All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event in the performance by the Master Servicer or any
Sub-Servicer of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS System, (iii) the management
and liquidation of any REO Property, including reasonable fees paid to any
independent contractor in connection therewith, and (iv) compliance with the
obligations under the second paragraph of Section 3.01, Section 3.09 and Section
3.13 (other than any deductible described in the last paragraph thereof).

         "Servicing Guide": The Impac Funding Corporation Servicing Guide
attached hereto as Exhibit K.

         "Servicing Officer": Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans, whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time



                                       38
<PAGE>



to time be amended.

         "Single Certificate": A Regular Certificate of any Class (other than a
Class P Certificate) evidencing an Initial Certificate Principal Balance or
Initial Notional Amount, as applicable, of $1,000, or, in the case of a Class P
Certificate, a Certificate of such Class evidencing an Initial Certificate
Principal Balance of $100.

         "Standard & Poor's": Standard & Poor's Ratings Services, a division of
The McGraw Hill Companies, Inc., or its successor in interest.

         "Startup Day": The day designated as such pursuant to Article X hereof.

         "Stated Principal Balance": With respect to any Mortgage Loan or
related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of principal
payments due on or before such date, whether or not received, minus (ii) the sum
of (a) the principal portion of the Monthly Payments due with respect to such
Mortgage Loan or REO Property during each Due Period ending prior to the most
recent Distribution Date which were received or with respect to which an Advance
was made, and (b) all Principal Prepayments with respect to such Mortgage Loan
or REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO
Proceeds to the extent applied by the Master Servicer as recoveries of principal
in accordance with Section 3.15 with respect to such Mortgage Loan or REO
Property, which were distributed pursuant to Section 4.01 on any previous
Distribution Date, and (c) any Realized Loss with respect thereto allocated
pursuant to Section 4.07 for any previous Distribution Date.

         "Stepdown Date": Is the earlier of (i) the first Distribution Date on
which the Certificate Principal Balances of the Class A Certificates have been
reduced to zero and (ii) the later to occur of (x) the Distribution Date
occurring in March 2007 and (y) the first Distribution Date on which the Credit
Enhancement Percentage of the Class A Certificates (calculated for this purpose
only after taking into account the receipt of principal on the Mortgage Loans,
but prior to any distribution of principal to the Holders of the Certificates)
is greater than or equal to approximately 12.90%.

         "Sub-Servicer": Any Person with which the Master Servicer has entered
into a Sub- Servicing Agreement and which meets the qualifications of a
Sub-Servicer pursuant to Section 3.02.

         "Sub-Servicer Remittance Date": The 18th day of each month, or if such
day is not a Business Day, the immediately preceding Business Day.

         "Sub-Servicing Account": An account established by a Sub-Servicer which
meets the requirements set forth in Section 3.08 and is otherwise acceptable to
the Master Servicer.

         "Sub-Servicing Agreement": The written contract between the Master
Servicer and a Sub- Servicer and any successor Sub-Servicer relating to
servicing and administration of certain Mortgage Loans as provided in Section
3.02.




                                       39
<PAGE>



         "Sub-Servicing Fees": As to each Mortgage Loan, an amount, payable out
of any payment of interest on the Mortgage Loan, equal to interest at the
Sub-Servicing Fee Rate on the Stated Principal Balance of such Mortgage Loan as
of the Due Date in the calendar month preceding the month in which the payment
of the Servicing Fee is due (alternatively, in the event such payment of
interest accompanies a Principal Prepayment in Full made by the Mortgagor,
interest for the number of days covered by such payment of interest).

         "Sub-Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.25%.

         "Substitution Adjustment":  As defined in Section 2.04 hereof.

         "Tax Returns": The federal income tax return on Internal Revenue
Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax
Return, including Schedule Q thereto, Quarterly Notice to Residual Interest
Holders of REMIC Taxable Income or Net Loss Allocation, or any successor forms,
to be filed on behalf of REMIC 1, REMIC 2 and REMIC 3 due to their
classification as REMICs under the REMIC Provisions, together with any and all
other information, reports or returns that may be required to be furnished to
the Certificateholders or filed with the Internal Revenue Service or any other
governmental taxing authority under any applicable provisions of federal, state
or local tax laws.

         "10% Clean-up Call Date": The first Distribution Date upon which the
Aggregate Stated Principal Balance of the Mortgage Loans as of the end of the
related Due Period is less than or equal to 10% of the Aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date.

         "Transfer": Any direct or indirect transfer, sale, pledge,
hypothecation or other form of assignment of any Ownership Interest in a
Certificate.

         "Transferor": Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.

         "Trigger Event": A Trigger Event is in effect with respect to any
Distribution Date if:

                  (1) the percentage obtained by dividing (x) the aggregate
Stated Principal Balance of Mortgage Loans that are 60 or more days delinquent
(including for this purpose any such Mortgage Loans in foreclosure, Mortgage
Loans with respect to which the related Mortgaged Property has been acquired by
the Trust Fund, and Mortgage Loans discharged due to bankruptcy) by (y) the
Aggregate Stated Principal Balance of the Mortgage Loans, in each case, as of
the last day of the previous calendar month, exceeds 50% of the Credit
Enhancement Percentage of the Class A Certificates; or

                  (2) the cumulative amount of Realized Losses incurred on the
Mortgage Loans from the Cut-off Date through the end of the calendar month
immediately preceding such Distribution Date divided by the Aggregate Stated
Principal Balance of the Mortgage Loans as of the Cut-off Date exceeds (i) 0.75%
with respect to any Distribution Date occurring in March 2007 up to and
including the Distribution Date in February 2008, (ii) 0.95% with respect to any
Distribution Date



                                       40
<PAGE>



occurring in March 2008 up to and including the Distribution Date in February
2009, (iii) 1.20% with respect to any Distribution Date occurring in March 2009
up to and including the Distribution Date in February 2010 and (iv) 1.45% with
respect to any Distribution Date occurring in March 2010 and thereafter.

For purposes of the foregoing calculation, a Mortgage Loan is considered "60
days" delinquent if a payment due on the first day of a month has not been
received by the second day of the second following month.

         "Trust Fund": REMIC 1, REMIC 2, REMIC 3, the Yield Maintenance
Agreement and the Net WAC Shortfall Reserve Fund.

         "Trustee": Deutsche Bank National Trust Company, or its successor in
interest, or any successor trustee appointed as herein provided.

         "Trustee's Fee": As to each Mortgage Loan and Distribution Date, an
amount equal to interest at the Trustee Fee Rate on the Stated Principal Balance
of such Mortgage Loan as of the Due Date in the month immediately preceding the
month in which such Distribution Date occurs.

         "Trustee Fee Rate": On each Mortgage Loan, a rate equal to 0.0130% per
annum.

         "Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount, as applicable, of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated
to such REMIC Regular Interests as set forth in Section 1.03).

         "Uncertificated Notional Amount": With respect to REMIC 2 Regular
Interest MT-IO and (i) any date of determination in or before August 2004, the
aggregate Uncertificated Principal Balances of REMIC I Regular Interests LT-2,
LT-3, LT-4, LT-5, LT-6, LT-7, LT-8 and LT-9 for such Distribution Date; (ii) any
date of determination after August 2004 and in or before April 2005, the
aggregate Uncertificated Principal Balances of REMIC I Regular Interests LT-3,
LT-4 LT-5, LT- 6, LT-7, LT-8 and LT-9 for such Distribution Date; (iii) any date
of determination in May 2005, the aggregate Uncertificated Principal Balances of
REMIC I Regular Interests LT-4, LT-5, LT-6, LT-7, LT-8 and LT-9 for such
Distribution Date; (iv) any date of determination after May 2005 and on or
before August 2005, the Uncertificated Principal Balance of REMIC I Regular
Interest LT-5, LT-6, LT-7, LT-8 and LT-9 for such Distribution Date; (v) any
date of determination after August 2005 and on or before October 2005, the
Uncertificated Principal Balance of REMIC I Regular Interest LT-6, LT-7, LT-8
and LT-9 for such Distribution Date; (vi) any date of determination after
October 2005 and on or before December 2005, the Uncertificated Principal
Balance of REMIC I Regular Interest LT-7, LT-8 and LT-9 for such Distribution
Date; (vii) any date of determination in January 2006, the Uncertificated
Principal Balance of REMIC I Regular Interest LT-8 and LT-9 for such
Distribution Date; and (viii) any date of determination in February 2006, the
Uncertificated Principal Balance of REMIC I Regular Interest LT-9 for such
Distribution Date.



                                       41
<PAGE>



         "Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest and REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest MT-IO), the principal amount of such REMIC Regular Interest outstanding
as of any date of determination. As of the Closing Date, the Uncertificated
Principal Balance of each REMIC Regular Interest (other than REMIC 2 Regular
Interest MT-IO) shall equal the amount set forth in the Preliminary Statement
hereto as its initial Uncertificated Principal Balance. On each Distribution
Date, the Uncertificated Principal Balance of each such REMIC Regular Interest
shall be reduced by all distributions of principal made on such REMIC Regular
Interest on such Distribution Date pursuant to Section 4.04 and, if and to the
extent necessary and appropriate, shall be further reduced on such Distribution
Date by Realized Losses as provided in Section 4.05. The Uncertificated
Principal Balance of REMIC 2 Regular Interest MT-ZZ shall be increased by
interest deferrals as provided in Section 4.04. The Uncertificated Principal
Balance of each REMIC Regular Interest shall never be less than zero. REMIC 2
Regular Interest MT-IO will not have an Uncertificated Principal Balance.

         "Uncertificated Pass-Through Rate": The Uncertificated REMIC 1
Pass-Through Rate or Uncertificated REMIC 2 Pass-Through Rate.

         "Uncertificated REMIC 1 Pass-Through Rate": With respect to REMIC 1
Regular Interest LT-1, REMIC 1 Regular Interest LT-2, REMIC 1 Regular Interest
LT-3, REMIC 1 Regular Interest LT-4, REMIC 1 Regular Interest LT-5 REMIC 1
Regular Interest LT-6, REMIC 1 Regular Interest LT-7, REMIC 1 Regular Interest
LT-8, REMIC 1 Regular Interest LT-9 and REMIC 1 Regular Interest LT-P and any
Distribution Date, a per annum rate equal to the average of the Net Mortgage
Rates of the Mortgage Loans, weighted on the basis of the Stated Principal
Balances thereof as of the close of business on the last day of the calendar
month preceding the month in which such Distribution Date occurs.

         "Uncertificated REMIC 1 WAC Rate": With respect to any Distribution
Date, the weighted average of the Uncertificated REMIC 1 Pass-Through Rates for
the REMIC 1 Regular Interests for such Distribution Date.

         "Uncertificated REMIC 2 Pass-Through Rate":

         (a) With respect to REMIC 2 Regular Interest MT-AA, REMIC 2 Regular
Interest MT- A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-A3,
REMIC 2 Regular Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2 Regular
Interest MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest MT-M2,
REMIC 2 Regular Interest MT-M3, REMIC 2 Regular Interest MT-ZZ, and REMIC 2
Regular Interest MT-P and any Distribution Date, a per annum rate equal to the
Net WAC Rate.

         (b) With respect to REMIC 2 Regular Interest MT-IO-A a rate of (i) for
the March 2004 Distribution Date through January 2005 Distribution Date, 1.00%
and (ii) thereafter, 0.00%;

         (c) With respect to REMIC 2 Regular Interet MT-IO-B a rate of (i) for
the March 2004 Distribution Date through February 2006 Distribution Date, 3.50%
and (ii) thereafter, 0.00%.




                                       42
<PAGE>



         "Uninsured Cause": Any cause of damage to property subject to a
Mortgage such that the complete restoration of such property is not fully
reimbursable by the hazard insurance policies or flood insurance policies
required to be maintained pursuant to Section 3.13.

         "United States Person": A citizen or resident of the United States, a
corporation or a partnership (including an entity treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States or any State thereof or the District
of Columbia (except, in the case of a partnership, to the extent provided in
regulations) provided that, for purposes solely of the restrictions on the
transfer of Class R Certificates, no partnership or other entity treated as a
partnership for United States federal income tax purposes shall be treated as a
United States Person unless all persons that own an interest in such partnership
either directly or through any entity that is not a corporation for United
States federal income tax purposes are required by the applicable operative
agreement to be United States Persons or an estate whose income is subject to
United States federal income tax regardless of its source, or 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 such United States Persons have the
authority to control all substantial decisions of the trust. To the extent
prescribed in regulations by the Secretary of the Treasury, which have not yet
been issued, a trust which was in existence on August 20, 1996 (other than a
trust treated as owned by the grantor under subpart E of part I of subchapter J
of chapter 1 of the Code), and which was treated as a United States person on
August 20, 1996 may elect to continue to be treated as a United States person
notwithstanding the previous sentence.

         "Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates, other than the Class A-IO Certificates, and any Distribution Date,
such Certificates' pro rata share, based on the amount of Monthly Interest
Distributable Amount otherwise payable on such Certificate on such Distribution
Date, of (a) any Prepayment Interest Shortfalls, to the extent not covered by
Compensating Interest, and (b) any Relief Act Interest Shortfalls, plus interest
on the amount of previously allocated Unpaid Interest Shortfall Amount on such
classes of Certificates that remains unreimbursed, at the Pass-Through Rate for
such class for the related Accrual Period.

         "Voting Rights": The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. At all times during the term
of this Agreement, (i) 97% of all Voting Rights will be allocated among the
Holders of the Class A Certificates (other than the Class A-IO Certificates),
the Mezzanine Certificates and the Class C Certificates in proportion to the
then outstanding Certificate Principal Balances of their respective
Certificates, (ii) 1% of all Voting Rights will be allocated to the Holders of
the Class A-IO Certificates, (iii) 1% of all Voting Rights will be allocated to
the Holders of the Class P Certificates and (iv) 1% of all Voting Rights will be
allocated to the Holders of the Class R Certificates. The Voting Rights
allocated to any Class of Certificates shall be allocated among all Holders of
the Certificates of such Class in proportion to the outstanding Percentage
Interests in such Class represented thereby.

         "Weighted Average Net Mortgage Rate": The weighted average of the Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.



                                       43
<PAGE>




         "Yield Maintenance Agreement ": The Yield Maintenance Agreement dated
as of the Closing Date between the Yield Maintenance Agreement Provider and the
Trustee for the benefit of the Holders of the Class A-1 Certificates.

         "Yield Maintenance Agreement Provider": Deutsche Bank AG, New York
Branch.

         "Yield Maintenance Agreement Payment Amount": With respect to any
Distribution Date, the amount equal to the aggregate amount payable on that
Distribution Date to the Trust Fund from the Yield Maintenance Agreement
Provider pursuant to the Yield Maintenance Agreement.

         Section 1.02      Determination of LIBOR.

         LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-1 Certificates for any Accrual Period will be determined on each LIBOR
Rate Adjustment Date.

         On each LIBOR Rate Adjustment Date, LIBOR shall be established by the
Trustee and, as to any Accrual Period, will equal the rate for one month United
States dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00
a.m., London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page
3750" means the display designated as page 3750 on the Telerate Service (or such
other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, LIBOR shall be so established
by use of such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 a.m., London time, on the
LIBOR Rate Adjustment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A-1 Certificates then outstanding. The Trustee
will request the principal London office of each of the reference banks to
provide a quotation of its rate. If at least two such quotations are provided,
the rate will be the arithmetic mean of the quotations rounded up to the next
multiple of 1/16%. If on such date fewer than two quotations are provided as
requested, the rate will be the arithmetic mean of the rates quoted by one or
more major banks in New York City, selected by the Trustee after consultation
with the Master Servicer, as of 11:00 a.m., New York City time, on such date for
loans in U.S. Dollars to leading European banks for a period of one month in
amounts approximately equal to the aggregate Certificate Principal Balance of
the Class A-1 Certificates then outstanding. If no such quotations can be
obtained, the rate will be LIBOR for the prior Distribution Date; provided
however, if, under the priorities described above, LIBOR for a Distribution Date
would be based on LIBOR for the previous Distribution Date for the third
consecutive Distribution Date, the Trustee shall select an alternative
comparable index after consultation with the Master Servicer (over which the
Trustee has no control), used for determining one-month Eurodollar lending rates
that is calculated and published (or otherwise made available) by an independent
party.



                                       44
<PAGE>



         The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rate
applicable to the Class A-1 Certificates for the relevant Accrual Period, in the
absence of manifest error, will be final and binding.

         Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by telephone the Pass-Through Rate on the Class A-1 Certificates for
the current and the immediately preceding Accrual Period.

         Section 1.03      Allocation of Certain Interest Shortfalls.

         For purposes of calculating the amount of the Monthly Interest
Distributable Amount for the Class A Certificates, the Mezzanine Certificates
and the Class C Certificates for any Distribution Date, (1) the aggregate amount
of any Net Prepayment Interest Shortfalls and any Relief Act Interest Shortfalls
incurred in respect of the Mortgage Loans for any Distribution Date shall be
allocated first, among the Class C Certificates and Class R Certificates on a
PRO RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate
and, thereafter, among the Class A Certificates and the Mezzanine Certificates
on a PRO RATA basis based on, and to the extent of, one month's interest at the
then applicable respective Pass-Through Rate on the respective Certificate
Principal Balance or Notional Amount, as applicable, of each such Certificate
and (2) the aggregate amount of any Realized Losses incurred for any
Distribution Date shall be allocated among the Class C Certificates on a PRO
RATA basis based on, and to the extent of, one month's interest at the then
applicable Pass-Through Rate on the Notional Amount of each such Certificate.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 1 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated sequentially to REMIC 1 Regular Interest
LT-1, REMIC 1 Regular Interest LT-2, REMIC 1 Regular Interest LT-3, REMIC 1
Regular Interest LT-4, REMIC 1 Regular Interest LT-5, REMIC 1 Regular Interest
LT-6, REMIC 1 Regular Interest LT-7, REMIC 1 Regular Interest LT-8 and REMIC 1
Regular Interest LT-9, in each case to the extent of one month's interest at the
then applicable respective Uncertificated REMIC 1 Pass- Through Rate on the
respective Uncertificated Principal Balance of each such Uncertificated REMIC 1
Regular Interest.

         For purposes of calculating the amount of Uncertificated Accrued
Interest for the Uncertificated REMIC 2 Regular Interests for any Distribution
Date, the aggregate amount of any Net Prepayment Interest Shortfalls and any
Relief Act Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Mortgage Loans,
first, to Uncertificated Accrued Interest payable to REMIC 2 Regular Interest
MT-AA and REMIC 2 Regular Interest MT-ZZ up to an aggregate amount equal to the
REMIC 2 Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC 2 Regular Interest MT-AA, REMIC 2 Regular Interest MT-A1,
REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest MT-A3, REMIC 2 Regular
Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2 Regular



                                       45
<PAGE>



Interest MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest MT-M2,
REMIC 2 Regular Interest, MT-M3 and REMIC 2 Regular Interest MT-ZZ, PRO RATA
based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 2 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 2 Regular
Interest.




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<PAGE>




                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

         Section 2.01.     Conveyance of Mortgage Loans.

         The Company, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign, transfer, sell, set over and
otherwise convey to the Trustee without recourse all the right, title and
interest of the Company in and to the Mortgage Loans identified on the Mortgage
Loan Schedule (exclusive of any prepayment fees and late payment charges
received thereon) and all other assets included or to be included in the Trust
Fund for the benefit of the Certificateholders, including the amount to be
deposited by or on behalf of the Company into the Net WAC Shortfall Reserve
Fund. Such assignment includes all principal and interest received by the Master
Servicer on or with respect to the Mortgage Loans (other than payment of
principal and interest due on or before the Cut-off Date). The Trustee is hereby
authorized and directed to enter into the Yield Maintenance Agreement.

         The Master Servicer hereby acknowledges the receipt by it of cash in an
amount equal to $5,000 (the "Special Deposit"), representing interest at the
Mortgage Rate, for the calendar month of February 2004, for those Mortgage Loans
which do not have Monthly Payments due on March 1, 2004. The Master Servicer
shall hold such amount in the Custodial Account and shall include such amount in
the Available Distribution Amount for the Distribution Date in March 2004.

         In connection with such transfer and assignment, the Company has caused
the Seller to deliver to, and deposit with the Trustee, as described in the
Mortgage Loan Purchase Agreement, with respect to each Mortgage Loan, the
following documents or instruments:

         (i) the original Mortgage Note endorsed without recourse, "Deutsche
Bank National Trust Company, as trustee under the Pooling and Servicing
Agreement relating to Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2004-1" with all intervening endorsements showing an
unbroken chain of endorsements from the originator to the Person endorsing it to
the Trustee or, with respect to any Mortgage Loan as to which the original
Mortgage Note has been permanently lost or destroyed and has not been replaced,
a Lost Note Affidavit;

         (ii) the original recorded Mortgage, noting the presence of the MIN of
the Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon
or, if the original Mortgage has not been returned from the public recording
office, a copy of the Mortgage certified by the Seller or the public recording
office in which such Mortgage has been recorded to be a true and complete copy
of the original Mortgage submitted for recording;

         (iii) unless the Mortgage Loan is registered on the MERS(R) System, a
duly executed original Assignment of the Mortgage, without recourse, in
recordable form to Deutsche Bank



                                       47
<PAGE>



National Trust Company, as trustee," or to "Deutsche Bank National Trust
Company, as trustee for holders of Impac Secured Assets Corp., Mortgage
Pass-Through Certificates, Series 2004-1";

         (iv) the original recorded Assignment or Assignments of the Mortgage
showing an unbroken chain of assignment from the originator thereof to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) or, if any
such Assignment has not been returned from the applicable public recording
office, a copy of such Assignment certified by the Seller to be a true and
complete copy of the original Assignment submitted to the title insurance
company for recording;

         (v) the original title insurance policy, or, if such policy has not
been issued, any one of an original or a copy of the preliminary title report,
title binder or title commitment on the Mortgaged Property with the original
policy of the insurance to be delivered promptly following the receipt thereof;

         (vi) a copy of the related hazard insurance policy; and

         (vii) a true and correct copy of any assumption, modification,
consolidation or substitution agreement.

         The Seller is obligated as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to deliver to the Trustee: (a)
either the original recorded Mortgage, or in the event such original cannot be
delivered by the Seller, a copy of such Mortgage certified as true and complete
by the appropriate recording office, in those instances where a copy thereof
certified by the Seller was delivered to the Trustee pursuant to clause (ii)
above; and (b) either the original Assignment or Assignments of the Mortgage,
with evidence of recording thereon, showing an unbroken chain of assignment from
the originator to the Seller, or in the event such original cannot be delivered
by the Seller, a copy of such Assignment or Assignments certified as true and
complete by the appropriate recording office, in those instances where copies
thereof certified by the Seller were delivered to the Trustee pursuant to clause
(iv) above. However, pursuant to the Mortgage Loan Purchase Agreement, the
Seller need not cause to be recorded any assignment in any jurisdiction under
the laws of which, as evidenced by an Opinion of Counsel delivered by the Seller
to the Trustee and the Rating Agencies, the recordation of such assignment is
not necessary to protect the Trustee's interest in the related Mortgage Loan;
PROVIDED, HOWEVER, notwithstanding the delivery of any Opinion of Counsel, each
assignment shall be submitted for recording by the Seller in the manner
described above, at no expense to the Trust or the Trustee, upon the earliest to
occur of: (i) direction by the Holders of Certificates evidencing at least 25%
of the Voting Rights, (ii) the occurrence of a Event of Default, (iii) the
occurrence of a bankruptcy, insolvency or foreclosure relating to the Seller,
(iv) the occurrence of a servicing transfer as described in Section 7.02 hereof
and (v) if the Seller is not the Master Servicer and with respect to any one
assignment, the occurrence of a bankruptcy, insolvency or foreclosure relating
to the Mortgagor under the related Mortgage.

         Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains the original
Mortgage after it has been recorded, the Seller shall be deemed to have
satisfied its obligations hereunder upon delivery to the Trustee of a copy of



                                       48
<PAGE>



such Mortgage certified by the public recording office to be a true and complete
copy of the recorded original thereof.

         If any Assignment is lost or returned unrecorded to the Trustee because
of any defect therein, the Seller is required, as described in the Mortgage Loan
Purchase Agreement, to prepare a substitute Assignment or cure such defect, as
the case may be, and the Seller shall cause such Assignment to be recorded in
accordance with this section.

         The Seller is required as described in the Mortgage Loan Purchase
Agreement, with respect to the Mortgage Loans, to exercise its best reasonable
efforts to deliver or cause to be delivered to the Trustee within 120 days of
the Closing Date, with respect to the Mortgage Loans, the original or a
photocopy of the title insurance policy with respect to each such Mortgage Loan
assigned to the Trustee pursuant to this Section 2.01.

         In connection with the assignment of any Mortgage Loan registered on
the MERS(R) System, the Seller further agrees that it will cause, at the
Seller's own expense, as of the Closing Date, the MERS(R) System to indicate
that such Mortgage Loans have been assigned by the Seller to the Trustee in
accordance with this Agreement for the benefit of the Certificateholders by
including (or deleting, in the case of Mortgage Loans which are repurchased in
accordance with this Agreement) in such computer files (a) the code in the field
which identifies the specific Trustee and (b) the code in the field "Pool Field"
which identifies the series of the Certificates issued in connection with such
Mortgage Loans. The Company further agrees that it will not, and will not permit
the Master Servicer to, and the Master Servicer agrees that it will not, alter
the codes referenced in this paragraph with respect to any Mortgage Loan during
the term of this Agreement unless and until such Mortgage Loan is repurchased in
accordance with the terms of this Agreement.

         All original documents relating to the Mortgage Loans which are not
delivered to the Trustee are and shall be held by the Master Servicer in trust
for the benefit of the Trustee on behalf of the Certificateholders.

         Except as may otherwise expressly be provided herein, none of the
Company, the Master Servicer or the Trustee shall (and the Master Servicer shall
ensure that no Sub-Servicer shall) assign, sell, dispose of or transfer any
interest in the Trust Fund or any portion thereof, or cause the Trust Fund or
any portion thereof to be subject to any lien, claim, mortgage, security
interest, pledge or other encumbrance.

         It is intended that the conveyance of the Mortgage Loans by the Company
to the Trustee as provided in this Section be, and be construed as, a sale of
the Mortgage Loans as provided for in this Section 2.01 by the Company to the
Trustee for the benefit of the Certificateholders. It is, further, not intended
that such conveyance be deemed a pledge of the Mortgage Loans by the Company to
the Trustee to secure a debt or other obligation of the Company. However, in the
event that the Mortgage Loans are held to be property of the Company, or if for
any reason this Agreement is held or deemed to create a security interest in the
Mortgage Loans, then it is intended that, (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other



                                       49
<PAGE>



applicable jurisdiction; (b) the conveyance provided for in this Section shall
be deemed to be (1) a grant by the Company to the Trustee of a security interest
in all of the Company's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
Insurance Policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof and (C) all proceeds of the conversion, voluntary or involuntary,
of the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Company
to the Trustee of any security interest in any and all of the Seller's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to the property described in the foregoing
clauses (1)(A) through (C); (c) the possession by the Trustee or any other agent
of the Trustee of Mortgage Notes and such other items of property as constitute
instruments, money, negotiable documents or chattel paper shall be deemed to be
"possession by the secured party" or possession by a purchaser or a person
designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and 8-503 thereof); and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. The Company and the
Trustee 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 Mortgage Loans and the REMIC 1 Regular Interests, 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.

         Section 2.02.     Acceptance of the Trust Fund by the Trustee.

         The Trustee acknowledges receipt (subject to any exceptions noted in
the Initial Certification described below), of the documents referred to in
Section 2.01 above and all other assets included in the definition of "Trust
Fund" and declares that it holds and will hold such documents and the other
documents delivered to it constituting the Mortgage Files, and that it holds or
will hold such other assets included in the definition of "Trust Fund" (to the
extent delivered or assigned to the Trustee), in trust for the exclusive use and
benefit of all present and future Certificateholders.

         The Trustee agrees, for the benefit of the Certificateholders, to
review or cause to be reviewed on its behalf, each Mortgage File on or before
the Closing Date to ascertain that all documents required to be delivered to it
are in its possession, and the Trustee agrees to execute and deliver, or cause
to be executed and delivered, to the Company and the Master Servicer on the
Closing Date, with respect to each Mortgage Loan, an Initial Certification in
the form annexed hereto as Exhibit C to the effect that, as to each Mortgage
Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in
full or any Mortgage Loan specifically identified in such certification as not
covered by such certification), (i) all documents required to be delivered to it



                                       50
<PAGE>



pursuant to this Agreement with respect to such Mortgage Loan are in its
possession, (ii) such documents have been reviewed by it and appear regular on
their face and relate to such Mortgage Loan and (iii) based on its examination
and only as to the foregoing documents, the information set forth in items (i),
(ii), (iii)(A) and (iv) of the definition of the "Mortgage Loan Schedule"
accurately reflects information set forth in the Mortgage File. Neither the
Trustee nor the Master Servicer shall be under any duty to determine whether any
Mortgage File should include any of the documents specified in clause (vi) or
(vii) of Section 2.01. Neither the Trustee nor the Master Servicer shall be
under any duty or obligation to inspect, review or examine said documents,
instruments, certificates or other papers to determine that the same are
genuine, enforceable or appropriate for the represented purpose or that they
have actually been recorded, or they are in recordable form or that they are
other than what they purport to be on their face.

         Within 90 days of the Closing Date, with respect to the Mortgage Loans,
the Trustee shall deliver to the Company and the Master Servicer a Final
Certification in the form annexed hereto as Exhibit D evidencing the
completeness of the Mortgage Files, with any applicable exceptions noted
thereon.

         If in the process of reviewing the Mortgage Files and preparing the
certifications referred to above the Trustee finds any document or documents
constituting a part of a Mortgage File to be missing or defective in any
material respect, the Trustee shall promptly notify the Seller, the Master
Servicer and the Company. The Trustee shall promptly notify the Seller of such
defect and request that the Seller cure any such defect within 60 days from the
date on which the Seller was notified of such defect, and if the Seller does not
cure such defect in all material respects during such period, request on behalf
of the Certificateholders that the Seller purchase such Mortgage Loan from the
Trust Fund at the Purchase Price within 90 days after the date on which the
Seller was notified of such defect; provided that if such defect would cause the
Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. It is understood and agreed that the
obligation of the Seller to cure a material defect in, or purchase any Mortgage
Loan as to which a material defect in a constituent document exists shall
constitute the sole remedy respecting such defect available to
Certificateholders or the Trustee on behalf of Certificateholders. The Purchase
Price for the purchased Mortgage Loan shall be deposited or caused to be
deposited upon receipt by the Master Servicer in the Custodial Account and, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee shall release or cause to be released to the
Seller the related Mortgage File and shall execute and deliver such instruments
of transfer or assignment, in each case without recourse, as the Seller shall
require as necessary to vest in the Seller ownership of any Mortgage Loan
released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage File. In furtherance of the
foregoing, if the Seller is not a member of MERS and the Mortgage is registered
on the MERS(R) System, the Master Servicer, at its own expense and without any
right of reimbursement, shall cause MERS to execute and deliver an assignment of
the Mortgage in recordable form to transfer the Mortgage from MERS to the Seller
and shall cause such Mortgage to be removed from registration on the MERS(R)
System in accordance with MERS' rules and regulations.

         Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the



                                       51
<PAGE>



Company.

         (a) The Master Servicer hereby represents and warrants to and covenants
with the Company and the Trustee for the benefit of Certificateholders that:

                  (i) The Master Servicer is, and throughout the term hereof
shall remain, a corporation duly organized, validly existing and in good
standing under the laws of the state of its incorporation (except as otherwise
permitted pursuant to Section 6.02), the Master Servicer is, and shall remain,
in compliance with the laws of each state in which any Mortgaged Property is
located to the extent necessary to perform its obligations under this Agreement,
and the Master Servicer is, and shall remain, approved to sell mortgage loans to
and service mortgage loans for Fannie Mae and Freddie Mac;

                  (ii) The execution and delivery of this Agreement by the
Master Servicer, and the performance and compliance with the terms of this
Agreement by the Master Servicer, will not violate the Master Servicer's
articles of incorporation or bylaws or constitute a default (or an event which,
with notice or lapse of time, or both, would constitute a default) under, or
result in the breach of, any material agreement or other instrument to which it
is a party or which is applicable to it or any of its assets;

                  (iii) The Master Servicer has the full power and authority to
enter into and consummate all transactions contemplated by this Agreement, has
duly authorized the execution, delivery and performance of this Agreement, and
has duly executed and delivered this Agreement;

                  (iv) This Agreement, assuming due authorization, execution and
delivery by the Company and the Trustee, constitutes a valid, legal and binding
obligation of the Master Servicer, enforceable against the Master Servicer in
accordance with the terms hereof, subject to (A) applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the enforcement
of creditors' rights generally, and (B) general principles of equity, regardless
of whether such enforcement is considered in a proceeding in equity or at law;

                  (v) The Master Servicer is not in violation of, and its
execution and delivery of this Agreement and its performance and compliance with
the terms of this Agreement will not constitute a violation of, any law, any
order or decree of any court or arbiter, or any order, regulation or demand of
any federal, state or local governmental or regulatory authority, which
violation is likely to affect materially and adversely either the ability of the
Master Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;

                  (vi) No litigation is pending (other than litigation with
respect to which pleadings or documents have been filed with a court, but not
served on the Master Servicer) or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this Agreement
or is likely to affect materially and adversely either the ability of the Master
Servicer to perform its obligations under this Agreement or the financial
condition of the Master Servicer;




                                       52
<PAGE>



                  (vii) The Master Servicer will comply in all material respects
in the performance of this Agreement with all reasonable rules and requirements
of each insurer under each Insurance Policy;

                  (viii) The execution of this Agreement and the performance of
the Master Servicer's obligations hereunder do not require any license, consent
or approval of any state or federal court, agency, regulatory authority or other
governmental body having jurisdiction over the Master Servicer, other than such
as have been obtained;

                  (ix) No information, certificate of an officer, statement
furnished in writing or report delivered to the Company, any affiliate of the
Company or the Trustee by the Master Servicer in its capacity as Master
Servicer, and not in its capacity as a Seller hereunder, will, to the knowledge
of the Master Servicer, contain any untrue statement of a material fact;

                  (x) The Master Servicer will not waive any Prepayment Charge
unless it is waived in accordance with the standard set forth in Section 3.01;
and

                  (xi) The Master Servicer is a member of MERS in good standing,
and will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered with
MERS.

         It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.03(a) shall survive the execution and
delivery of this Agreement, and shall inure to the benefit of the Company, the
Trustee and the Certificateholders. Upon discovery by the Company, the Trustee
or the Master Servicer of a breach of any of the foregoing representations,
warranties and covenants that materially and adversely affects the interests of
the Company or the Trustee, the party discovering such breach shall give prompt
written notice to the other parties. Notwithstanding the foregoing, within 90
days of the earlier of discovery by the Master Servicer or receipt of notice by
the Master Servicer of the breach of the covenant of the Master Servicer set
forth in Section 2.03(x) above which materially and adversely affects the
interests of the Holders of the Class P Certificates in any Prepayment Charge,
the Master Servicer shall remedy such breach as follows: the Master Servicer
shall 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
Custodial Account (net of any amount actually collected by the Master Servicer
in respect of such Prepayment Charge and remitted by the Master Servicer, for
the benefit of the Holders of the Class P Certificates, in respect of such
Prepayment Charge, into the Custodial Account). The foregoing shall not,
however, limit any remedies available to the Certificateholders, the Company or
the Trustee on behalf of the Certificateholders, pursuant to the Mortgage Loan
Purchase Agreement respecting a breach of any of the representations, warranties
and covenants contained in the Mortgage Loan Purchase Agreement.

         (b) The Company hereby represents and warrants to the Master Servicer
and the Trustee for the benefit of Certificateholders that as of the Closing
Date, the representations and warranties of the Seller with respect to the
Mortgage Loans and the remedies therefor that are contained in the Mortgage Loan
Purchase Agreement are as set forth in Exhibit I hereto.



                                       53
<PAGE>



         It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Mortgage
Files to the Trustee.

         Upon discovery by either the Company, the Master Servicer or the
Trustee of a breach of any representation or warranty set forth in this Section
2.03 which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties.

         Section 2.04.     Representations and Warranties of the Seller.

         The Company hereby assigns to the Trustee for the benefit of
Certificateholders all of its rights (but none of its obligations) in, to and
under the Mortgage Loan Purchase Agreement. Insofar as the Mortgage Loan
Purchase Agreement relates to such representations and warranties and any
remedies provided thereunder for any breach of such representations and
warranties, such right, title and interest may be enforced by the Trustee on
behalf of the Certificateholders. Upon the discovery by the Company, the Master
Servicer or the Trustee of a breach of any of the representations and warranties
made in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan
which materially and adversely affects the interests of the Certificateholders
in such Mortgage Loan, the party discovering such breach shall give prompt
written notice to the other parties. The Trustee shall promptly notify the
Seller of such breach and request that the Seller shall, within 90 days from the
date that the Seller was notified or otherwise obtained knowledge of such
breach, either (i) cure such breach in all material respects or (ii) purchase
such Mortgage Loan from the Trust Fund at the Purchase Price and in the manner
set forth in Section 2.02; provided that if such breach would cause the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure or repurchase must occur within 90 days from the date
such breach was discovered. However, in the case of a breach under the Mortgage
Loan Purchase Agreement, subject to the approval of the Company the Seller shall
have the option to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage Loan if such substitution occurs within two years following the
Closing Date, except that if the breach would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such substitution must occur within 90 days from the date the breach was
discovered if such 90 day period expires before two years following the Closing
Date. In the event that the Seller elects to substitute a Qualified Substitute
Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this Section
2.04, the Trustee shall enforce the obligation of the Seller under the Mortgage
Loan Purchase Agreement to deliver to the Trustee and the Master Servicer, as
appropriate, with respect to such Qualified Substitute Mortgage Loan or Loans,
the original Mortgage Note, the Mortgage, an Assignment of the Mortgage in
recordable form, and such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution, to the extent received by the Master
Servicer or any Sub-Servicer, shall not be part of the Trust Fund and will be
retained by the Master Servicer and remitted by the Master Servicer to the
Seller on the next succeeding Distribution Date. For the month of substitution,
distributions to Certificateholders will include the Monthly Payment due on a
Deleted Mortgage Loan for such month and thereafter the Seller shall be entitled
to retain all amounts received in respect of such Deleted Mortgage Loan. The



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Company shall amend or cause to be amended the Mortgage Loan Schedule for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or
Loans and the Company shall deliver the amended Mortgage Loan Schedule to the
Trustee. Upon such substitution, the Qualified Substitute Mortgage Loan or Loans
shall be subject to the terms of this Agreement in all respects, the Seller
shall be deemed to have made the representations and warranties with respect to
the Qualified Substitute Mortgage Loan contained in the Mortgage Loan Purchase
Agreement as of the date of substitution, and the Company shall be deemed to
have made with respect to any Qualified Substitute Mortgage Loan or Loans, as of
the date of substitution, the representations and warranties set forth in
Exhibit I hereof (other than representations (xiv), (xvi), (xxix) and (xxxiii)
through (xli)).

         In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (the "Substitution Adjustment"), if any, by which the
aggregate principal balance of all such Qualified Substitute Mortgage Loans as
of the date of substitution is less than the aggregate Stated Principal Balance
of all such Deleted Mortgage Loans (in each case after application of the
principal portion of the Monthly Payments due in the month of substitution that
are to be distributed to Certificateholders in the month of substitution). The
Trustee shall enforce the obligation of the Seller under the Mortgage Loan
Purchase Agreement to provide the Master Servicer on the day of substitution for
immediate deposit into the Custodial Account the amount of such shortfall,
without any reimbursement therefor. In accordance with the Mortgage Loan
Purchase Agreement, the Seller shall give notice in writing to the Trustee of
such event, which notice shall be accompanied by an Officers' Certificate as to
the calculation of such shortfall and by an Opinion of Counsel to the effect
that such substitution will not cause (a) any federal tax to be imposed on REMIC
1, REMIC 2 or REMIC 3, including without limitation, any federal tax imposed on
"prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) any portion of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC at
any time that any Certificate is outstanding. The costs of any substitution as
described above, including any related assignments, opinions or other
documentation in connection therewith shall be borne by the Seller.

         Except as expressly set forth herein neither the Trustee nor the Master
Servicer is under any obligation to discover any breach of the above-mentioned
representations and warranties. It is understood and agreed that the obligation
of the Seller to cure such breach, purchase or to substitute for such Mortgage
Loan as to which such a breach has occurred and is continuing shall constitute
the sole remedy respecting such breach available to Certificateholders or the
Trustee on behalf of Certificateholders.

         Section 2.05.     Issuance of Certificates; Conveyance of REMIC
                           Regular Interests and Acceptance of REMIC 2 and REMIC
                           3 by the Trustee.

         (a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to it of the Mortgage Files, subject to the provisions of
Sections 2.01 and 2.02, together with the assignment to it of all other assets
included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such assignment and delivery and in exchange therefor, the



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<PAGE>



Trustee, pursuant to the written request of the Company executed by an officer
of the Company, has executed, authenticated and delivered to or upon the order
of the Company, the Certificates in authorized denominations. The interests
evidenced by the Certificates, constitute the entire beneficial ownership
interest in the Trust Fund.

         (b) The Company, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Company in and
to the REMIC 1 Regular Interests for the benefit of the Holders of the REMIC 2
Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-2 Interest). The Trustee acknowledges receipt of the REMIC 1 Regular
Interests (which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the Holders of the REMIC
2 Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-2 Interest). The interests evidenced by the Class R-2 Interest, together
with the REMIC 2 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 2.

         (c) The Company, concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Company in and
to the REMIC 2 Regular Interests for the benefit of the Holders of the REMIC 3
Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-3 Interest). The Trustee acknowledges receipt of the REMIC 2 Regular
Interests (which are uncertificated) and declares that it holds and will hold
the same in trust for the exclusive use and benefit of the Holders of the REMIC
3 Regular Interests and Holders of the Class R Certificates (as Holders of the
Class R-3 Interest). The interests evidenced by the Class R-3 Interest, together
with the REMIC 3 Regular Interests, constitute the entire beneficial ownership
interest in REMIC 3.

         (d) In exchange for the REMIC 2 Regular Interests and, concurrently
with the assignment to the Trustee thereof, pursuant to the written request of
the Company executed by an officer of the Company, the Trustee has executed,
authenticated and delivered to or upon the order of the Company, the Regular
Certificates in authorized denominations evidencing (together with the Class R-3
Interest) the entire beneficial ownership interest in REMIC 3.

         (e) Concurrently with (i) the assignment and delivery to the Trustee of
REMIC 1 (including the Residual Interest therein represented by the Class R-1
Interest) and the acceptance by the Trustee thereof, (ii) the assignment and
delivery to the Trustee of REMIC 2 (including the Residual Interest therein
represented by the Class R-2 Interest), and (iii) the assignment and delivery to
the Trustee of REMIC 3 (including the Residual Interest therein represented by
the Class R-3 Interest), and the acceptance by the Trustee thereof, the Trustee,
pursuant to the written request of the Company executed by an officer of the
Company, has executed, authenticated and delivered to or upon the order of the
Company, the Class R Certificates in authorized denominations evidencing the
Class R-1 Interest and the Class R-2 Interest and the Class R-3 Interest.





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<PAGE>



                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

         Section 3.01.     Master Servicer to Act as Master Servicer.

         The Master Servicer shall supervise, or take such actions as are
necessary to ensure, the servicing and administration of the Mortgage Loans and
any REO Property in accordance with this Agreement and its normal servicing
practices, which generally shall conform to the standards (i) of the Servicing
Guide, if Impac Funding Corporation is Master Servicer, or (ii) if Impac Funding
Corporation is not the Master Servicer, of an institution prudently servicing
mortgage loans for its own account and shall have full authority to do anything
it reasonably deems appropriate or desirable in connection with such servicing
and administration. To the extent consistent with the foregoing, the Master
Servicer shall waive (or permit a Sub-Servicer to waive) a Prepayment Charge
only if such waiver would maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and 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 it 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.

         The Master Servicer may perform its responsibilities relating to
servicing through other agents or independent contractors, but shall not thereby
be released from any of its responsibilities as hereinafter set forth. The
authority of the Master Servicer, in its capacity as master servicer, and any
Sub-Servicer acting on its behalf, shall include, without limitation, the power
to (i) consult with and advise any Sub-Servicer regarding administration of a
related Mortgage Loan, (ii) approve any recommendation by a Sub-Servicer to
foreclose on a related Mortgage Loan, (iii) supervise the filing and collection
of insurance claims and take or cause to be taken such actions on behalf of the
insured Person thereunder as shall be reasonably necessary to prevent the denial
of coverage thereunder, and (iv) effectuate foreclosure or other conversion of
the ownership of the Mortgaged Property securing a related Mortgage Loan,
including the employment of attorneys, the institution of legal proceedings, the
collection of deficiency judgments, the acceptance of compromise proposals, the
filing of claims under any Insurance Policy and any other matter pertaining to a
delinquent Mortgage Loan. The authority of the Master Servicer shall include, in
addition, the power on behalf of the Certificateholders, the Trustee or any of
them to (i) execute and deliver customary consents or waivers and other
instruments and documents, (ii) consent to transfer of any related Mortgaged
Property and assumptions of the related Mortgage Notes and Security Instruments
(in the manner provided in this Agreement) and (iii) collect any Insurance
Proceeds and Liquidation Proceeds. If permitted under applicable law without
predjudicing any rights of the Trust Fund with respect to any Mortgage Loan, the
Master Servicer, with such documentation as local law requires, acting in its
own name, may pursue claims on behalf of the Trust Fund. Without limiting the
generality of the foregoing, the Master Servicer and any Sub-Servicer acting on
its behalf may, and is hereby authorized, and empowered by the Trustee to,
execute and deliver, on behalf of itself, the Certificateholders or the Trustee
or any of them, any instruments of satisfaction, cancellation, partial



                                       57
<PAGE>



or full release, discharge and all other comparable instruments, with respect to
the related Mortgage Loans, the Insurance Policies and the accounts related
thereto, and the Mortgaged Properties. The Master Servicer may exercise this
power in its own name or in the name of a Sub-Servicer.

         Subject to Section 3.16, the Trustee shall execute, at the written
request of the Master Servicer, and furnish to the Master Servicer and any
Sub-Servicer such documents as are necessary or appropriate to enable the Master
Servicer or any Sub-Servicer to carry out their servicing and administrative
duties hereunder, and the Trustee hereby grants to the Master Servicer a power
of attorney to carry out such duties. The Trustee shall not be liable for the
actions of the Master Servicer or any Sub-Servicers under such powers of
attorney.

         In accordance with the standards of the preceding paragraph, the Master
Servicer shall advance or cause to be advanced funds as necessary for the
purpose of effecting the payment of taxes and assessments on the Mortgaged
Properties, which advances shall be reimbursable in the first instance from
related collections from the Mortgagors pursuant to Section 3.09, and further as
provided in Section 3.11; provided that the Master Servicer shall not be
obligated to make such advance if, in its good faith judgment, the Master
Servicer determines that such advance to be a Nonrecoverable Advance.

         The Master Servicer is authorized and empowered by the Trustee, on
behalf of the Certificateholders and the Trustee, in its own name or in the name
of any Subservicer, when the Master Servicer or such Subservicer, as the case
may be, believes it is appropriate in its best judgment to register any Mortgage
Loan on the MERS(R) System, or cause the removal from the registration of any
Mortgage Loan on the MERS(R) System, to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
assignment and other comparable instruments with respect to such assignment or
re-recording of a Mortgage in the name of MERS, solely as nominee for the
Trustee and its successors and assigns. Any expenses incurred in connection with
the actions described in the preceding sentence shall be borne by the Master
Servicer in accordance with Section 3.17, with no right of reimbursement;
provided, that if, as a result of MERS discontinuing or becoming unable to
continue operations in connection with the MERS System, it becomes necessary to
remove any Mortgage Loan from registration on the MERS System and to arrange for
the assignment of the related Mortgages to the Trustee, then any related
expenses shall be reimbursable to the Master Servicer from the Trust Fund.

         Notwithstanding anything in this Agreement to the contrary, the Master
Servicer shall not (unless the Mortgagor is in default with respect to the
Mortgage Loan or such default is, in the judgment of the Master Servicer,
reasonably foreseeable) make or permit any modification, waiver or amendment of
any term of any Mortgage Loan that would both (i) effect an exchange or
reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury
regulations promulgated thereunder) and (ii) cause any of REMIC 1, REMIC 2 or
REMIC 3 to fail to qualify as a REMIC under the Code or the imposition of any
tax on "prohibited transactions" or "contributions" after the startup date under
the REMIC Provisions.

         The relationship of the Master Servicer (and of any successor to the
Master Servicer under this Agreement) to the Trustee under this Agreement is
intended by the parties to be that of an



                                       58
<PAGE>



independent contractor and not that of a joint venturer, partner or agent.

         Section 3.02.     Sub-Servicing Agreements Between Master Servicer and
                           Sub-Servicers.

         (a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub-Servicers for the servicing and administration of the Mortgage Loans and for
the performance of any and all other activities of the Master Servicer
hereunder; provided, however, that such agreements would not result in a
withdrawal or a downgrading by Standard & Poor's of its rating on any Class of
Certificates. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be 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
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, and in either case shall be a Freddie Mac or Fannie Mae approved
mortgage servicer. Any Sub-Servicing Agreement entered into by the Master
Servicer shall include the provision that such Agreement may be immediately
terminated (x) with cause and without any termination fee by any Master Servicer
hereunder or (y) without cause in which case the Master Servicer shall be
responsible for any termination fee or penalty resulting therefrom. In addition,
each Sub-Servicing Agreement shall provide for servicing of the Mortgage Loans
consistent with the terms of this Agreement. With the consent of the Trustee,
the Master Servicer and the Sub-Servicers may enter into Sub-Servicing
Agreements and make amendments to the Sub- Servicing Agreements or enter into
different forms of Sub-Servicing Agreements providing for, among other things,
the delegation by the Master Servicer to a Sub-Servicer of additional duties
regarding the administration of the Mortgage Loans; 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 Certificateholders, without the consent of the
Holders of Certificates entitled to at least 51% of the Voting Rights. The
parties hereto acknowledge that the initial Sub-Servicer shall be Countrywide.

         The Master Servicer has entered into a Sub-Servicing Agreement with
Countrywide for the servicing and administration of the Mortgage Loans and may
enter into additional Sub-Servicing Agreements with Sub-Servicers acceptable to
the Trustee for the servicing and administration of certain of the Mortgage
Loans.

         (b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall enforce the
obligations of each Sub-Servicer under the related Sub-Servicing Agreement. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Sub-Servicing 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 Master Servicer, in its good faith business judgment, would require
were it the owner of the related Mortgage Loans. The Master Servicer shall pay
the costs of such enforcement at its own expense, but shall be reimbursed
therefor only (i) from a general recovery resulting from such enforcement only
to the extent, if any, that such recovery exceeds all amounts due in respect of
the related Mortgage Loan or (ii) from a specific recovery of costs, expenses or
attorneys' fees against the party



                                       59
<PAGE>



against whom such enforcement is directed.

         (c) The Master Servicer represents that it has entered into a contract
regarding the sale of sub-servicing rights with respect to substantially all of
the Mortgage Loans with GMAC and shall transfer the subservicing of
substantially all of the Mortgage Loans from Countrywide to GMAC on or about
April 30, 2004. The Trustee hereby consents to such transfer.

         (d) The Master Servicer represents that it will cause any Sub-Servicer
to accurately and fully report its borrower credit files to all three credit
repositories in a timely manner.


         Section 3.03.     Successor Sub-Servicers.

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

         Section 3.04.     Liability of the Master Servicer.

         Notwithstanding any Sub-Servicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer and a Sub-Servicer or reference to actions taken through a Sub-Servicer
or otherwise, the Master Servicer shall under all circumstances remain obligated
and primarily liable to the Trustee and Certificateholders for the servicing and
administering of the Mortgage Loans and any REO Property in accordance with the
provisions of Article III without diminution of such obligation or liability by
virtue of such Sub- Servicing Agreements or arrangements or by virtue of
indemnification from the Sub-Servicer and to the same extent and under the same
terms and conditions as if the Master Servicer alone were servicing and
administering the Mortgage Loans. For purposes of this Agreement, the Master
Servicer shall be deemed to have received payments on Mortgage Loans when the
Sub-Servicer has received such payments. The Master Servicer shall be entitled
to enter into any agreement with a Sub-Servicer for indemnification of the
Master Servicer by such Sub-Servicer and nothing contained in this Agreement
shall be deemed to limit or modify such indemnification.

         Section 3.05.     No Contractual Relationship Between Sub-Servicers and
                           Trustee or Certificateholders.

         Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06.



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<PAGE>



The Master Servicer (or Sub-Servicer) shall be liable for the payment of any
franchise taxes which may be assessed by the California Franchise Tax Board in
connection with the activities of the Trust under this Agreement.

         Section 3.06. Assumption or Termination of Sub-Servicing Agreements by
                       Trustee.

         (a) If the Trustee or its designee shall assume the master servicing
obligations of the Master Servicer in accordance with Section 7.02 below, the
Trustee, to the extent necessary to permit the Trustee to carry out the
provisions of Section 7.02 with respect to the Mortgage Loans, shall succeed to
all of the rights and obligations of the Master Servicer under each of the
Sub-Servicing Agreements. In such event, the Trustee or its designee as the
successor master servicer shall be deemed to have assumed all of the Master
Servicer's rights and obligations therein and to have replaced the Master
Servicer as a party to such Sub-Servicing Agreements to the same extent as if
such Sub-Servicing Agreements had been assigned to the Trustee or its designee
as a successor master servicer, except that the Trustee or its designee as a
successor master servicer shall not be deemed to have assumed any obligations or
liabilities of the Master Servicer arising prior to such assumption (other than
the obligation to make any Advances hereunder) and the Master Servicer shall not
thereby be relieved of any liability or obligations under such Sub-Servicing
Agreements arising prior to such assumption. Nothing in the foregoing shall be
deemed to entitle the Trustee or its designee as a successor master servicer at
any time to receive any portion of the servicing compensation provided under
Section 3.17 except for such portion as the Master Servicer would be entitled to
receive.

         (b) In the event that the Trustee or its designee as successor master
servicer for the Trustee assumes the servicing obligations of the Master
Servicer under Section 7.02, upon the reasonable request of the Trustee or such
designee as successor master servicer the Master Servicer shall at its own
expense deliver to the Trustee, or at its written request to such designee,
photocopies of all documents, files and records, electronic or otherwise,
relating to the Sub-Servicing Agreements and the related Mortgage Loans or REO
Property then being serviced and an accounting of amounts collected and held by
it, if any, and will otherwise cooperate and use its reasonable efforts to
effect the orderly and efficient transfer of the Sub-Servicing Agreements, or
responsibilities hereunder to the Trustee, or at its written request to such
designee as successor master servicer.

         Section 3.07.     Collection of Certain Mortgage Loan Payments.

         (a) The Master Servicer will coordinate and monitor remittances by
Sub-Servicers to the Master Servicer with respect to the Mortgage Loans in
accordance with this Agreement.

         (b) The Master Servicer shall make its reasonable efforts to collect or
cause to be collected all payments required under the terms and provisions of
the Mortgage Loans and shall follow, and use its reasonable efforts to cause
Sub-Servicers to follow, collection procedures comparable to the collection
procedures of prudent mortgage lenders servicing mortgage loans for their own
account to the extent such procedures shall be consistent with this Agreement.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive or permit to be waived any late payment charge, prepayment charge,
assumption fee, or any penalty interest in connection with



                                       61
<PAGE>



the prepayment of a Mortgage Loan and (ii) suspend or reduce or permit to be
suspended or reduced regular monthly payments for a period of up to six months,
or arrange or permit an arrangement with a Mortgagor for a scheduled liquidation
of delinquencies. In the event the Master Servicer shall consent to the
deferment of the due dates for payments due on a Mortgage Note, the Master
Servicer shall nonetheless make an Advance or shall cause the related
Sub-Servicer to make an advance to the same extent as if such installment were
due, owing and delinquent and had not been deferred through liquidation of the
Mortgaged Property; PROVIDED, HOWEVER, that the obligation of the Master
Servicer or related Sub-Servicer to make an Advance shall apply only to the
extent that the Master Servicer believes, in good faith, that such advances are
not Nonrecoverable Advances.

         (c) On each Determination Date, with respect to each Mortgage Loan for
which during the related Prepayment Period the Master Servicer has determined
that all amounts which it expects to recover from or on account of each such
Mortgage Loan have been recovered and that no further Liquidation Proceeds will
be received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition.

         The Master 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 related Insurance Policy, follow such collection
procedures as it would follow with respect to mortgage loans comparable to the
Mortgage Loans and held for its own account. The Master Servicer shall not be
required to institute or join in litigation with respect to collection of any
payment (whether under a Mortgage, Mortgage Note, Primary Hazard Insurance
Policy or otherwise or against any public or governmental authority with respect
to a taking or condemnation) if it reasonably believes that it is prohibited by
applicable law from enforcing the provision of the Mortgage or other instrument
pursuant to which such payment is required. The Master Servicer shall be
responsible for preparing and distributing all information statements relating
to payments on the Mortgage Loans, in accordance with all applicable federal and
state tax laws and regulations.

         Section 3.08.     Sub-Servicing Accounts.

         In those cases where a Sub-Servicer is servicing a Mortgage Loan
pursuant to a Sub- Servicing Agreement, the Sub-Servicer will be required to
establish and maintain one or more accounts (collectively, the "Sub-Servicing
Account"). The Sub-Servicing Account shall be an Eligible Account and shall
otherwise be acceptable to the Master Servicer. All amounts held in a
Sub-Servicing Account shall be held in trust for the Trustee for the benefit of
the Certificateholders. Any investment of funds held in such an account shall be
in Permitted Investments maturing not later than the Business Day immediately
preceding the next Sub-Servicer Remittance Date. The Sub- Servicer will be
required to deposit into the Sub-Servicing Account no later than two Business
Days after receipt all proceeds of Mortgage Loans received by the Sub-Servicer,
less its servicing compensation and any unreimbursed expenses and advances, to
the extent permitted by the Sub- Servicing Agreement. On each Sub-Servicer
Remittance Date the Sub-Servicer will be required to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the
Sub-Servicing Account with respect to any Mortgage Loan as of the Sub-Servicer
Remittance Date, after deducting



                                       62
<PAGE>



from such remittance an amount equal to the servicing compensation (including
interest on Permitted Investments) and unreimbursed expenses and advances to
which it is then entitled pursuant to the related Sub-Servicing Agreement, to
the extent not previously paid to or retained by it. In addition, on each
Sub-Servicer Remittance Date the Sub-Servicer will be required to remit to the
Master Servicer any amounts required to be advanced pursuant to the related
Sub-Servicing Agreement. The Sub-Servicer will also be required to remit to the
Master Servicer, within five Business Days of receipt, the proceeds of any
Principal Prepayment made by the Mortgagor, and, on each Sub-Servicer Remittance
Date, the amount of any Insurance Proceeds or Liquidation Proceeds received
during the related Prepayment Period.

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

         The Master Servicer and the Sub-Servicers shall establish and maintain
one or more accounts (the "Servicing Accounts"), and shall deposit and retain
therein all collections from the Mortgagors (or related advances from
Sub-Servicers) for the payment of taxes, assessments, Primary Hazard Insurance
Policy premiums, and comparable items for the account of the Mortgagors, to the
extent that the Master Servicer customarily escrows for such amounts.
Withdrawals of amounts so collected from a Servicing Account may be made only to
(i) effect payment of taxes, assessments, Primary Hazard Insurance Policy
premiums and comparable items; (ii) reimburse the Master Servicer (or a
Sub-Servicer to the extent provided in the related Sub-Servicing Agreement) out
of related collections for any payments made pursuant to Sections 3.01 (with
respect to taxes and assessments), and 3.13 (with respect to Primary Hazard
Insurance Policies); (iii) refund to Mortgagors any sums as may be determined to
be overages; or (iv) clear and terminate the Servicing Account at the
termination of this Agreement pursuant to Section 9.01. As part of its servicing
duties, the Master Servicer or Sub-Servicers shall, if and to the extent
required by law, pay to the Mortgagors interest on funds in Servicing Accounts
from its or their own funds, without any reimbursement therefor.

         Section 3.10.     Custodial Account.

         (a) The Master Servicer shall establish and maintain one or more
accounts (collectively, the "Custodial Account") in which the Master Servicer
shall deposit or cause to be deposited on a daily basis, or as and when received
from the Sub-Servicers, the following payments and collections received or made
by or on behalf of it subsequent to the Cut-off Date , or received by it prior
to the Cut-off Date but allocable to a period subsequent thereto (other than in
respect of principal and interest on the Mortgage Loans due on or before the
Cut-off Date):

                  (i) all payments (including advances by a Sub-Servicer) on
account of principal, including Principal Prepayments, on the Mortgage Loans;

                  (ii) all payments (including advances by a Sub-Servicer) on
account of interest on the Mortgage Loans, net of any portion thereof retained
by the Master Servicer or any Sub- Servicer as Servicing Fees;

                  (iii) all Insurance Proceeds, other than proceeds that
represent reimbursement of costs and expenses incurred by the Master Servicer or
any Sub-Servicer in connection with



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<PAGE>



presenting claims under the related Insurance Policies, Liquidation Proceeds and
REO Proceeds;

                  (iv) all proceeds of any Mortgage Loan or REO Property
repurchased or purchased in accordance with Sections 2.02, 2.04, 3.14 or 9.01;
and all amounts required to be deposited in connection with the substitution of
a Qualified Substitute Mortgage Loan pursuant to Section 2.04; and

                  (v) any amounts required to be deposited pursuant to Section
3.12, 3.13, 3.15 or 3.22.

         The foregoing requirements for deposit in the Custodial Account shall
be exclusive. In the event the Master Servicer shall deposit in the Custodial
Account any amount not required to be deposited therein, it may withdraw such
amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account shall be maintained as a segregated
account, separate and apart from trust funds created for mortgage pass-through
certificates of other series, and the other accounts of the Master Servicer.

         (b) Funds in the Custodial Account may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. The
Master Servicer shall give notice to the Trustee and the Company of the location
of the Custodial Account after any change thereof.

         Section 3.11.     Permitted Withdrawals From the Custodial Account.

         The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.10 that are attributable to the Mortgage Loans for the following
purposes:

         (i) to make deposits into the Certificate Account in the amounts and in
the manner provided for in Section 4.01;

         (ii) to pay to itself, the Company, the Seller or any other appropriate
person, as the case may be, with respect to each Mortgage Loan that has
previously been purchased or repurchased pursuant to Sections 2.02, 2.04, 3.14
or 9.01 all amounts received thereon and not yet distributed as of the date of
purchase or repurchase;

         (iii) to reimburse itself or any Sub-Servicer for Advances not
previously reimbursed, the Master Servicer's or any Sub-Servicer's right to
reimbursement pursuant to this clause (iii) being limited to amounts received
which represent Late Collections (net of the related Servicing Fees) of Monthly
Payments on Mortgage Loans with respect to which such Advances were made and as
further provided in Section 3.15;

         (iv) to reimburse or pay itself, the Trustee or the Company for
expenses incurred by or reimbursable to the Master Servicer, the Trustee or the
Company pursuant to Sections 3.22, 6.03, 8.05 or 10.01(g), except as otherwise
provided in such Sections hereof;




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<PAGE>


         (v) to reimburse itself or any Sub-Servicer for costs and expenses
incurred by or reimbursable to it relating to the prosecution of any claims
pursuant to Section 3.13 that are in excess of the amounts so recovered;

         (vi) to reimburse itself or any Sub-Servicer for unpaid Master
Servicing Fees, Sub- Servicing Fees and unreimbursed Servicing Advances, the
Master Servicer's or any Sub-Servicer's right to reimbursement pursuant to this
clause (vi) with respect to any Mortgage Loan being limited to late recoveries
of the payments for which such advances were made pursuant to Section 3.01 or
Section 3.09 and any other related Late Collections;

         (vii) to pay itself as servicing compensation (in addition to the
Master Servicing Fee and Sub-Servicing Fee), on or after each Distribution Date,
any interest or investment income earned on funds deposited in the Custodial
Account for the period ending on such Distribution Date;

         (viii) to reimburse itself or any Sub-Servicer for any Advance or
Servicing Advance previously made, after a Realized Loss has been allocated with
respect to the related Mortgage Loan if the Advance or Servicing Advance was not
reimbursed pursuant to clauses (iii) and (vi);

         (ix) to pay Radian the premium under the Radian Lender-Paid PMI
Policies; and

         (x) to clear and terminate the Custodial Account at the termination of
this Agreement pursuant to Section 9.01.

         The Master Servicer shall keep and maintain separate accounting records
on a Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the Custodial Account pursuant to such subclauses (ii) through
(x).

         Section 3.12.     Permitted Investments.

         Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount of any loss incurred in respect of any such
investment immediately upon realization of such loss without right of
reimbursement.

         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


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<PAGE>

and (iii) effecting transactions in certain Permitted Investments.

         Section 3.13.     Maintenance of Primary Hazard Insurance.

         (a) The Master Servicer shall cause to be maintained for each Mortgage
Loan primary hazard insurance by a Qualified Insurer or other insurer
satisfactory to the Rating Agencies with extended coverage on the related
Mortgaged Property in an amount equal to the lesser of (i) 100% of the
replacement value of the improvements, as determined by the insurance company,
on such Mortgaged Property or (ii) the unpaid principal balance of the Mortgage
Loan. The Master Servicer shall also cause to be maintained on property acquired
upon foreclosure, or deed in lieu of foreclosure, of any Mortgage Loan, fire
insurance with extended coverage in an amount equal to the replacement value of
the improvements thereon. Any costs incurred in maintaining any insurance
described in this Section 3.13 (other than any deductible described in the last
paragraph hereof) shall be recoverable as a Servicing Advance. The Master
Servicer shall not be obligated to advance any amounts pursuant to this Section
3.13 if, in its good faith judgment, the Master Servicer determines that such
advance would be a Nonrecoverable Advance. Pursuant to Section 3.10, any amounts
collected by the Master Servicer under any such policies (other than amounts to
be applied to the restoration or repair of the related Mortgaged Property or
property thus acquired or amounts released to the Mortgagor in accordance with
the Master Servicer's normal servicing procedures) shall be deposited in the
Custodial Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by the Master Servicer in maintaining any such insurance shall not, for
the purpose of calculating monthly distributions to Certificateholders, be added
to the amount owing under the Mortgage Loan, notwithstanding that the terms of
the Mortgage Loan so permit. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance.

         The Master Servicer shall, or shall cause the related Sub-Servicer to,
exercise its best reasonable efforts to maintain and keep in full force and
effect each Primary Insurance Policy by a Qualified Insurer, or other insurer
satisfactory to the Rating Agencies, with respect to each first lien Mortgage
Loan as to which as of the Cut-Off Date such a Primary Insurance Policy was in
effect (or, in the case of a Qualified Substitute Mortgage Loan, the date of
substitution) and the original principal amount of the related Mortgage Note
exceeded 80% of the Collateral Value in an amount at least equal to the excess
of such original principal amount over 75% of such Collateral Value until the
principal amount of any such first lien Mortgage Loan is reduced below 80% of
the Collateral Value or, based upon a new appraisal, the principal amount of
such first lien Mortgage Loan represents less than 80% of the new appraised
value. The Master Servicer shall, or shall cause the related Sub-Servicer to,
effect the timely payment of the premium on each Primary Insurance Policy. The
Master Servicer and the related Sub-Servicer shall have the power to substitute
for any Primary Insurance Policy another substantially equivalent policy issued
by another Qualified Insurer, PROVIDED, THAT, such substitution shall be subject
to the condition that it will not cause the ratings on the Certificates to be
downgraded or withdrawn, as evidenced in writing from each Rating Agency.

         The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all



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<PAGE>



reasonable aid, evidence and information in the possession of the Master
Servicer or to which the Master Servicer has access with respect to any Radian
Insured Loan.

         In the event of a default by Radian under the Radian Lender-Paid PMI
Policy (a "Replacement Event"), the Master Servicer shall use its best efforts
to obtain a substitute lender-paid primary mortgage insurance policy (a
"Substitute PMI Policy"); PROVIDED, HOWEVER, that the Master Servicer shall not
be obligated, and shall have no liability for failing, to obtain a Substitute
PMI Policy unless such Substitute PMI Policy can be obtained on the following
terms and conditions: (i) the Certificates shall be rated no lower than the
rating assigned by each Rating Agency to the Certificates immediately prior to
such Replacement Event, as evidenced by a letter from each Rating Agency
addressed to the Company, the Master Servicer and the Trustee, (ii) the timing
and mechanism for drawing on such new Substitute PMI Policy shall be reasonably
acceptable to the Master Servicer and the Trustee and (iii) the premiums under
the proposed Substitute PMI Policy shall not exceed such premiums under the
existing Radian Lender-Paid PMI Policy.

         With respect to the Radian PMI Insured Loans covered by a Radian
Lender-Paid PMI Policy, the Master Servicer will confirm with Radian, and Radian
will certify to the Trustee, on or before April 1, 2004, that the Mortgage Loans
indicated on the Mortgage Loan Schedule as being covered by Radian Lender-Paid
PMI Policy are so covered.

         No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a security
instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall cause with respect to the Mortgage Loans and
each REO Property flood insurance (to the extent available and in accordance
with mortgage servicing industry practice) to be maintained. Such flood
insurance shall cover the Mortgaged Property, including all items taken into
account in arriving at the Collateral Value on which the Mortgage Loan was
based, and shall be in an amount equal to the lesser of (i) the Stated Principal
Balance of the related Mortgage Loan and (ii) the minimum amount required under
the terms of coverage to compensate for any damage or loss on a replacement cost
basis, but not more than the maximum amount of such insurance available for the
related Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.

         In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage 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 Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account from its own funds the amount not otherwise payable under
the blanket policy because of



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<PAGE>

such deductible clause. Any such deposit by the Master Servicer shall be made on
the Certificate Account Deposit Date next preceding the Distribution Date which
occurs in the month following the month in which payments under any such policy
would have been deposited in the Custodial Account. Any such deposit shall not
be deemed Servicing Advances and the Master Servicer shall not be entitled to
reimbursement therefor. In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf
of itself, the Trustee and Certificateholders, claims under any such blanket
policy.

         Section 3.14.     Enforcement of Due-on-Sale Clauses; Assumption
                           Agreements.

         The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(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 or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; PROVIDED, HOWEVER, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. The
Master Servicer or the related Sub-Servicer may repurchase a Mortgage Loan at
the Purchase Price when the Master Servicer requires acceleration of the
Mortgage Loan, but only if the Master Servicer is satisfied, as evidenced by an
Officer's Certificate delivered to the Trustee, that either (i) such Mortgage
Loan is in default or default is reasonably foreseeable or (ii) if such Mortgage
Loan is not in default or default is not reasonably foreseeable, such repurchase
will have no adverse tax consequences for the Trust Fund or any
Certificateholder. If the Master Servicer is unable to enforce such
"due-on-sale" clause (as provided in the second preceding sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub-Servicer is
authorized to enter into an assumption and modification agreement 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;
PROVIDED, HOWEVER, that the Master Servicer shall not enter into any assumption
and modification agreement if the coverage provided under the Primary Insurance
Policy, if any, would be impaired by doing so. The Master Servicer shall notify
the Trustee, whenever possible, before the completion of such assumption
agreement, and shall forward to the Trustee the original copy of such assumption
agreement, which copy shall be added by the Trustee to the related Mortgage File
and which 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. In connection with any such assumption agreement, the interest rate on
the related Mortgage Loan shall not be changed and no other material alterations
in the Mortgage Loan shall be made unless such material alteration would not
cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC for
federal income tax purposes, as evidenced by an Opinion of Counsel. The Master
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. Any fee collected by or on behalf of the Master
Servicer for entering into an assumption or substitution of liability agreement
will be retained by or on behalf of the Master Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the Mortgage Rate, the amount of the
Monthly Payment and any other term affecting the amount or timing of payment on
the



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Mortgage Loan) may be changed. The Master Servicer shall not enter into any
substitution or assumption if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a
REMIC under the REMIC Provisions or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy 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. A portion equal to up to
2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub-Servicer as additional servicing compensation.

         Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master 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 any assumption that the Master 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 a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.

         Section 3.15.     Realization Upon Defaulted Mortgage Loans.

         The Master Servicer shall exercise reasonable efforts, consistent with
the procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) 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 the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize proceeds from such defaulted Mortgage Loans in such manner (including
short sales and passing through to the Trust Fund less than the full amount it
expects to receive from the related Mortgage Loan) as will maximize the receipt
of principal and interest by Certificateholders, 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 Master 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 Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Master Servicer through Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
The Master 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.




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<PAGE>



         The proceeds of any Cash Liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds or
Liquidation Proceeds or any income from an REO Property, will be deposited into
the Custodial Account and applied in the following order of priority: first, to
reimburse the Master Servicer or any Sub-Servicer for any related unreimbursed
Servicing Advances, pursuant to Section 3.11(vi) or 3.22; second, to accrued and
unpaid interest on the Mortgage Loan or REO Imputed Interest, at the Mortgage
Rate, to the date of the Cash Liquidation or REO Disposition, or to the Due Date
prior to the Distribution Date on which such amounts are to be distributed if
not in connection with a Cash Liquidation or REO Disposition; and third, 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 Master Servicing Fees or Sub-Servicing
Fees; and second, to interest at the Net Mortgage Rate. The portion of the
recovery so allocated to unpaid Master Servicing Fees or Sub-Servicing Fees
shall be reimbursed to the Master Servicer or any Sub-Servicer pursuant to
Section 3.11(vi). The portions of the recovery so allocated to interest at the
Net Mortgage Rate and to principal of the Mortgage Loan shall be applied as
follows: first, to reimburse the Master Servicer or any Sub-Servicer for any
related unreimbursed Advances in accordance with Section 3.11(iii) or 3.22,
second, payment to Radian in accordance with Sections 3.11(ix) and third, for
payment to the Trustee and distribution to the Certificateholders in accordance
with the provisions of Section 4.01, subject to Section 3.22 with respect to
certain recoveries from an REO Disposition constituting Excess Proceeds. To the
extent the Master Servicer receives additional recoveries following a Cash
Liquidation, the amount of the Realized Loss will be restated, and the
additional recoveries will be passed through the Trust Fund as Liquidation
Proceeds.

         Section 3.16.     Trustee to Cooperate; Release of Mortgage Files.

         Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial 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 Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
canceled Mortgage Note. In connection with the satisfaction of any MOM Loan, the
Master Servicer is authorized to cause the removal from the registration on the
MERS(R) System of such Mortgage. All other documents in the Mortgage File shall
be retained by the Master Servicer to the extent required by applicable law. The
Master Servicer shall provide for preparation of the appropriate instrument of
satisfaction covering any Mortgage Loan which pays in full and the Trustee shall
cooperate in the execution and return of such instrument to provide for its
delivery or recording as may be required. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.




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<PAGE>


         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 Loan, the Trustee shall, upon request
of the Master Servicer and delivery to the Trustee of a Request for Release in
the form attached hereto as Exhibit F-1, release the related Mortgage File to
the Master Servicer and the Trustee shall execute such documents as the Master
Servicer shall prepare and request as being necessary to the prosecution of any
such proceedings. Such Request for Release shall obligate the Master Servicer to
return each document previously requested from the Mortgage File to the Trustee
when the need therefor by the Master Servicer no longer exists; and in any event
within 21 days of the Master Servicer's receipt thereof, unless the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial 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 Master Servicer has delivered to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. Upon receipt of a Request for
Release stating that such Mortgage Loan was liquidated and that all amounts
received or to be received in connection with such liquidation which are
required to be deposited into the Custodial Account have been or will be so
deposited, or that such Mortgage Loan has become an REO Property, a copy of the
Request for Release shall be released by the Trustee to the Master Servicer.

         Upon written request of a Servicing Officer, the Trustee shall execute
and deliver to the Master Servicer any court pleadings, requests for trustee's
sale or other documents prepared by the Master Servicer that are 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. Each such request that such pleadings or
documents be executed by the Trustee shall include a certification signed by a
Servicing Officer 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.

         Section 3.17.     Servicing Compensation.

         As compensation for its activities hereunder, the Master Servicer shall
be entitled to withhold and retain, from deposits to the Custodial Account of
amounts representing payments or recoveries of interest, the Master Servicing
Fees and Sub-Servicing Fees with respect to each Mortgage Loan (less any portion
of such amounts retained by any Sub-Servicer). In addition, the Master Servicer
shall be entitled to recover unpaid Master Servicing Fees and Sub-Servicing Fees
out of related Late Collections to the extent permitted in Section 3.11.

         Each Sub-Servicing Agreement shall permit the related Sub-Servicer to
retain the Sub- Servicer Fees from collections on the related Mortgage Loans, or
shall provide that the Sub-Servicer be paid directly by the Master Servicer from
collections on the related Mortgage Loans. To the



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<PAGE>



extent the Master Servicer directly services a Mortgage Loan, the Master
Servicer shall be entitled to retain the Sub-Servicing Fees for that Mortgage
Loan.

         The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub-Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be transformed in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.

         The Master Servicer also shall be entitled pursuant to Section 3.11 to
receive from the Custodial Account as additional servicing compensation interest
or other income earned on deposits therein, subject to Section 3.23, as well as
any assumption fees, late payment charges and reconveyance fees. The Master
Servicer shall not be entitled to retain any Prepayment Charges. Any Prepayment
Charges shall be paid to the Holders of the Class P Certificates. The Master
Servicer shall be required to pay all expenses incurred by it in connection with
its servicing activities hereunder (including payment of the premiums for any
blanket policy insuring against hazard losses pursuant to Section 3.13 and
servicing compensation of the Sub-Servicer to the extent not retained by it),
and shall not be entitled to reimbursement therefor except as specifically
provided in Section 3.11. The Master Servicing Fee may not be transferred in
whole or in part except in connection with the transfer of all of the Master
Servicer's responsibilities and obligations under this Agreement.

         Section 3.18.     Maintenance of Certain Servicing Policies.

         The Master Servicer shall obtain and maintain at its own expense and
shall cause each Sub- Servicer to obtain and maintain for the duration of this
Agreement a blanket fidelity bond and an errors and omissions insurance policy
covering the Master Servicer's and such Sub-Servicer's officers, employees and
other persons acting on its behalf in connection with its activities under this
Agreement. The amount of coverage shall be at least equal to the coverage
maintained by the Master Servicer or Sub-Servicer in order to be acceptable to
Fannie Mae or Freddie Mac to service loans for it or otherwise in an amount as
is commercially available at a cost that is generally not regarded as excessive
by industry standards. The Master Servicer shall promptly notify the Trustee in
writing of any material change in the terms of such bond or policy. The Master
Servicer shall provide annually to the Trustee a certificate of insurance that
such bond and policy are in effect. If any such bond or policy ceases to be in
effect, the Master Servicer shall, to the extent possible, give the Trustee ten
days' notice prior to any such cessation and shall use its reasonable best
efforts to obtain a comparable replacement bond or policy, as the case may be.

         Section 3.19.     Annual Statement as to Compliance.




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<PAGE>



         Not later than the earlier of (a) March 15 of each calendar year (other
than the calendar year during which the Closing Date occurs) or (b) with respect
to any calendar year during which the Company's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer at its own expense shall deliver to the Trustee, with
a copy to the Rating Agencies, a certificate signed by a Servicing Officer
stating, as to the signers thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof including
the steps being taken by the Master Servicer to remedy such default; (iii) a
review of the activities of each Sub-Servicer during the Sub-Servicer's most
recently ended fiscal year on or prior to such December 31 and its performance
under its Sub-Servicing Agreement has been made under such officer's
supervision; and (iv) to the best of the Servicing Officer's knowledge, based on
his review and the certification of an officer of the Sub-Servicer (unless the
Servicing Officer has reason to believe that reliance on such certification is
not justified), either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.

         Section 3.20.     Annual Independent Public Accountants' Servicing
                           Statement.

         (a) Not later than the earlier of (a) March 15 of each calendar year
(other than the calendar year during which the Closing Date occurs) or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, 15 Business Days before the date on which the
Company's annual report on Form 10-K is required to be filed in accordance with
the Exchange Act and the rules and regulations of the Commission (or, in each
case, if such day is not a Business Day, the immediately preceding Business
Day), the Master Servicer, at its expense, shall cause a firm of independent
public accountants who are members of the American Institute of Certified Public
Accountants and who are KPMG LLP (or a successor thereof) to furnish a statement
to the Master Servicer, which will be provided to the Trustee and the Rating
Agencies, to the effect that, in connection with the firm's examination of the
Master Servicer's financial statements as of the end of such calendar year,
nothing came to their attention that indicated that the Master Servicer was not
in compliance with the provisions of this Agreement except for (i) such
exceptions as such firm believes to be immaterial and (ii) such other exceptions
as are set forth in such statement.

         (b) Not later than the earlier of (a) March 15 of each calendar year
(other than the



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calendar year during which the Closing Date occurs) or (b) with respect to any
calendar year during which the Company's annual report on Form 10-K is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, 15 Business Days before the date on which the Company's annual
report on Form 10-K is required to be filed in accordance with the Exchange Act
and the rules and regulations of the Commission (or, in each case, if such day
is not a Business Day, the immediately preceding Business Day), the Master
Servicer, at its expense, shall or shall cause each Sub-Servicer to cause a
nationally recognized firm of independent certified public accountants to
furnish to the Master Servicer or such Sub-Servicer a report stating that (i) it
has obtained a letter of representation regarding certain matters from the
management of the Master Servicer or such Sub-Servicer which includes an
assertion that the Master Servicer or such Sub- Servicer has complied with
certain minimum mortgage loan servicing standards (to the extent applicable to
commercial and multifamily mortgage loans) identified in the Uniform Single
Attestation Program for Mortgage Bankers established by the Mortgage Bankers
Association of America with respect to the servicing of first and second lien
conventional single family 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. Immediately upon receipt of such report, the Master Servicer shall
or shall cause each Sub-Servicer to furnish a copy of such report to the Trustee
and the Rating Agencies.

         Section 3.21.     Access to Certain Documentation.

         The Master Servicer shall provide, and shall cause any Sub-Servicer to
provide, to the Trustee, access to the documentation in their possession
regarding the related Mortgage Loans and REO Properties and to the
Certificateholders, the FDIC, and the supervisory agents and examiners of the
FDIC (to which the Trustee shall also provide) access to the documentation
regarding the related Mortgage Loans required by applicable regulations, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices of the Master Servicer or the Sub-Servicers
that are designated by these entities; PROVIDED, HOWEVER, that, unless otherwise
required by law, the Trustee, the Master Servicer or the Sub-Servicer shall not
be required to provide access to such documentation if the provision thereof
would violate the legal right to privacy of any Mortgagor; PROVIDED, FURTHER,
HOWEVER, that the Trustee shall coordinate its requests for such access so as
not to impose an unreasonable burden on, or cause an unreasonable interruption
of, the business of the Master Servicer or any Sub-Servicer. The Master
Servicer, the Sub-Servicers and the Trustee shall allow representatives of the
above entities to photocopy any of the documentation and shall provide equipment
for that purpose at a charge that covers their own actual out-of-pocket costs.

         Section 3.22.     Title, Conservation and Disposition of REO Property.

         This Section shall apply only to REO Properties acquired for the
account of REMIC 1 and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from REMIC 1 pursuant to
Sections 2.02, 2.04 or 3.14. In the event that title to any such REO Property is
acquired, the deed or certificate of sale shall be issued to the Trustee, or to
its


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nominee, on behalf of the Certificateholders. The Master Servicer, on behalf of
REMIC 1, shall either sell any REO Property before the close of the third
taxable year following the taxable year in which REMIC 1 acquires ownership of
such REO Property for purposes of Section 860G(a)(8) of the Code or, at the
expense of REMIC 1, request, more than 60 days before the day on which the
three-year grace period would otherwise expire an extension of the three-year
grace period, unless the Master Servicer has delivered to the Trustee an Opinion
of Counsel (which shall not be at the expense of the Trustee), addressed to the
Trustee and the Master Servicer, to the effect that the holding by REMIC 1 of
such REO Property subsequent to the close of the third taxable year following
the taxable year in which REMIC 1 acquires ownership of such REO Property will
not result in the imposition on REMIC 1 of taxes on "prohibited transactions"
thereof, as defined in Section 860F of the Code, or cause any of REMIC 1, REMIC
2 or REMIC 3 to fail to qualify as a REMIC under the REMIC Provisions or
comparable provisions of the laws of the State of California at any time that
any Certificates are outstanding. The Master Servicer shall manage, conserve,
protect and operate each REO Property for the Certificateholders 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 of REMIC 1, REMIC 2 or REMIC
3 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 the REMIC Provisions. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master 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 Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Certificateholders for
the period prior to the sale of such REO Property.

         Any REO Disposition shall be for cash only (unless changes in the REMIC
Provisions made subsequent to the Startup Day allow a sale for other
consideration).

         The Master 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. The Master Servicer shall deposit, or
cause to be deposited, on a daily basis in the Custodial Account all revenues
received with respect to the REO Properties, net of any directly related
expenses incurred or withdraw therefrom funds necessary for the proper
operation, management and maintenance of the REO Property.

         If as of the date of acquisition of title to any REO Property there
remain outstanding unreimbursed Servicing Advances with respect to such REO
Property or any outstanding Advances allocated thereto the Master Servicer, upon
an REO Disposition, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances and any unreimbursed related Advances as well as
any unpaid Master Servicing Fees or Sub-Servicing Fees from proceeds received in
connection with the REO Disposition, as further provided in Section 3.15. The
Master Servicer shall not be obligated to advance any amounts with respect to an
REO Property if, in its good faith judgment, the Master Servicer determines that
such advance would constitute a Nonrecoverable Advance.

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<PAGE>

         The REO Disposition shall be carried out by the Master Servicer at such
price and upon such terms and conditions as the Master Servicer shall determine.

         The Master Servicer shall deposit the proceeds from the REO
Disposition, net of any payment to the Master Servicer as provided above, in the
Custodial Account upon receipt thereof for distribution in accordance with
Section 4.01; provided, that any such net proceeds received by the Master
Servicer which are in excess of the applicable Stated Principal Balance plus all
unpaid REO Imputed Interest thereon through the last day of the month in which
the REO Disposition occurred ("Excess Proceeds") shall be retained by the Master
Servicer as additional servicing compensation.

         With respect to any Mortgage Loan as to which the Master Servicer has
received notice of, or has actual knowledge of, the presence of any toxic or
hazardous substance on the Mortgaged Property, the Master Servicer shall not, on
behalf of the Trustee, either (i) obtain title to the related Mortgaged Property
as a result of or in lieu of foreclosure or otherwise, or (ii) otherwise acquire
possession of, the related Mortgaged Property, unless the Master Servicer has,
at least 30 days prior to taking such action, obtained and delivered to the
Trustee an environmental audit report prepared by a Person who regularly
conducts environmental audits using customary industry standards. The Master
Servicer shall take such action as it deems to be in the best economic interest
of the Trust Fund (other than proceeding against the Mortgaged Property) and is
hereby authorized at such time as it deems appropriate to release such Mortgaged
Property from the lien of the related Mortgage.

         The cost of the environmental audit report contemplated by this Section
3.22 shall be advanced by the Master Servicer as an expense of the Trust Fund,
and the Master Servicer shall be reimbursed therefor from the Custodial Account
as provided in Section 3.11, any such right of reimbursement being prior to the
rights of the Certificateholders to receive any amount in the Custodial Account.

         If the Master Servicer determines, as described above, that it is in
the best economic interest of the Trust Fund to take such actions as are
necessary to bring any such Mortgaged Property in compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Master Servicer shall take such action as it deems to be in the best
economic interest of the Trust Fund. The cost of any such compliance,
containment, clean-up or remediation shall be advanced by the Master Servicer as
an expense of the Trust Fund, and the Master Servicer shall be entitled to be
reimbursed therefor from the Custodial Account as provided in Section 3.11, any
such right of reimbursement being prior to the rights of the Certificateholders
to receive any amount in the Custodial Account.

         Section 3.23.     Additional Obligations of the Master Servicer.

         On each Certificate Account Deposit Date, the Master Servicer shall
deliver to the Trustee for deposit in the Certificate Account from its own funds
and without any right of reimbursement therefor, a total amount equal to the
amount of Compensating Interest for the related Distribution Date.



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         Section 3.24.     Additional Obligations of the Company.

         The Company agrees that on or prior to the tenth day after the Closing
Date, the Company shall provide the Trustee with a written notification,
substantially in the form of Exhibit J attached hereto, relating to each Class
of Certificates, setting forth (i) in the case of each Class of such
Certificates, (a) if less than 10% of the aggregate Certificate Principal
Balance or Notional Amount of such Class of Certificates has been sold as of
such date, the value calculated pursuant to clause (b)(iii) of Exhibit J hereto,
or, (b) if 10% or more of such Class of Certificates has been sold as of such
date but no single price is paid for at least 10% of the aggregate Certificate
Principal Balance or Notional Amount of such Class of Certificates, then the
weighted average price at which the Certificates of such Class were sold and the
aggregate percentage of Certificates of such Class sold, (c) the first single
price at which at least 10% of the aggregate Certificate Principal Balance or
Notional Amount of such Class of Certificates was sold, or (d) if any
Certificates of each Class of Certificates are retained by the Company or an
affiliate corporation, or are delivered to the Seller, the fair market value of
such Certificates as of the Closing Date, (ii) the Prepayment Assumption used in
pricing the Certificates, and (iii) such other information as to matters of fact
as the Trustee may reasonably request to enable it to comply with its reporting
requirements with respect to each Class of such Certificates to the extent such
information can in the good faith judgment of the Company be determined by it.

         Section 3.25.     Exchange Act Reporting.

         (a) The Trustee and the Master Servicer shall reasonably cooperate with
the Company in connection with the Trust's satisfying the reporting requirements
under 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 Commission thereunder, and the Master
Servicer shall sign (or shall cause another entity acceptable to the Commission
to sign) and the Trustee shall file (via the Commission's Electronic Data
Gathering and Retrieval System) such forms on behalf of the Company (or such
other entity). The Company hereby grants to the Trustee a limited power of
attorney to execute any Form 8-K and file each such document on behalf of the
Company. Such power of attorney shall continue until the earlier of (i) receipt
by the Trustee from the Company of written termination of such power of attorney
and (ii) the termination of the Trust. Notwithstanding anything herein to the
contrary, the Master Servicer, and not the Trustee, shall be responsible for
executing each Form 10-K filed on behalf of the Trust.

         (b) Each Form 8-K shall be filed by the Trustee within 15 days after
each Distribution Date, 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 or permitted by the Exchange Act
and the Rules and Regulations of the Commission), the Trustee shall file a Form
10-K, in substance as required by applicable law or applicable Commission staffs
interpretations. The Trustee shall prepare the Form 10-K and provide the Master
Servicer with the Form 10-K no later than March 20th of each year. The Master
Servicer shall execute such Form 10-K upon its receipt and shall provide the
original of such executed Form 10-K to the Trustee no later than March 25th of
each year. Such Form 10-K shall include as exhibits the Master Servicer's annual
statement of compliance described under Section 3.19 and the accountant's report
described under Section



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3.20(a), 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 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. The Form 10-K shall
also include a certification in the form attached hereto as Exhibit L-1 (the
"Certification"), in compliance with Rules 13a-14 and 15d-14 under the Exchange
Act and any additional directives of the Commission, which shall be signed by
the senior officer of the Master Servicer in charge of securitization.

         (c) In addition, the Trustee shall sign a certification (in the form
attached hereto as Exhibit L-2) for the benefit of the Master Servicer and its
officers, directors and Affiliates regarding certain aspects of items 1 through
3 of the Certification (provided, however, that the Trustee shall not undertake
an analysis of any accountant's report attached as an exhibit to the Form 10-K).

         (d) In addition, (i) the Trustee shall indemnify and hold harmless the
Master Servicer and the Company and their officers, directors and Affiliates
from and against any losses, damages, penalties, fines, forfeitures, reasonable
and necessary legal fees and related costs, judgments and other costs and
expenses arising out of or based upon a breach of the Trustee's obligations
under this Section 3.25 caused by the Trustee's negligence, bad faith or willful
misconduct in connection therewith, and (ii) the Master Servicer shall indemnify
and hold harmless the Trustee, the Master Servicer, the Company and their
respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of the Master Servicer's obligations under this Section 3.25 or
the Master Servicer's negligence, bad faith or willful misconduct in connection
therewith. If (i) the indemnification provided for herein is unavailable or
insufficient to hold harmless the Master Servicer, then the Trustee agrees that
it shall contribute to the amount paid or payable by the Master Servicer as a
result of the losses, claims, damages or liabilities of the Master Servicer in
such proportion as is appropriate to reflect the relative fault of the Master
Servicer on the one hand and the Trustee on the other in connection with a
breach of the Trustee's obligations under this Section 3.25 caused by the
Trustee's negligence, bad faith or willful misconduct in connection therewith
and (ii) the indemnification provided for herein is unavailable or insufficient
to hold harmless the Trustee, then the Master Servicer agrees that it shall
contribute to the amount paid or payable by the Trustee as a result of the
losses, claims, damages or liabilities of the Trustee in such proportion as is
appropriate to reflect the relative fault of the Trustee on the one hand and the
Master Servicer on the other in connection with a breach of the Master
Servicer's obligations under this Section 3.25 or the Master Servicer's
negligence, bad faith or willful misconduct in connection therewith.

         (e) In the event the Commission permits separate or split
certifications to be made with respect to the items currently contained in the
Certification, the Trustee shall provide a certification with respect to items 1
and 2 and the Master Servicer shall provide a certification with respect to
items 3, 4 and 5 contained within the Certification, in each case substantially
in the form of the Certification attached as Exhibit L-1, or other form as
indicated by the Commission for this purpose. In addition, the Trustee shall
sign a certification (in the form attached hereto as Exhibit L-3) for the



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benefit of the Master Servicer and its officers, directors and Affiliates
regarding certain aspects of item 3 of the Certification (provided, however,
that the Trustee shall not undertake an analysis of any accountant's report
attached as an exhibit to the Form 10-K).

         (f) Notwithstanding any other provision of the Agreement, the
provisions of this Section 3.25 may be amended by the Master Servicer, the
Company and the Trustee without the consent of the Certificateholders.

         (g) Prior to January 30th of the first year in which the Trustee is
able to do so under applicable law, the Trustee shall file with the Commission a
Form 15D Suspension Notification with respect to the Trust.

         Section 3.26.     Credit Risk Manager Reports.

         The Trustee shall forward to the Seller copies of any reports provided
to the Trustee by the Credit Risk Manager and the Trustee shall forward copies
of any such reports to the Holders of the Certificates upon written request by
such Holders.

         Section 3.27.     Duties of the Credit Risk Manager.

         For the Trustee on behalf of the Certificateholders, the Credit Risk
Manager will provide the Master Servicer and the Trustee with reports and
recommendations concerning Mortgage Loans that are past due, as to which there
has been commencement of foreclosure, as to which there has been forbearance in
exercise of remedies which are in default, as to which the obligor is the
subject of bankruptcy, receivership, or an arrangement of creditors, or as to
which have become REO Properties. Such reports and recommendations will be based
upon information provided to the Credit Risk Manager pursuant to the Credit Risk
Management Agreement and the Credit Risk Manager shall look solely to the Master
Servicer for all information and data (including loss and delinquency
information and data) and loan level information and data relating to the
servicing of the Mortgage Loans.

         Section 3.28.     Limitation Upon Liability of the Credit Risk Manager.

         Neither the Credit Risk Manager, nor any of its directors, officers,
employees, or agents shall be under any liability for any action taken or for
refraining from the taking of any action made in good faith pursuant to this
Agreement, in reliance upon information provided by the Master Servicer under
the Credit Risk Management Agreement, or for errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance or bad faith in its performance of its duties. The Credit
Risk Manager and any director, officer, employee, or agent of the Credit Risk
Manager 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,
and may rely in good faith upon the accuracy of information furnished by the
Master Servicer pursuant to the Credit Risk Management Agreement in the
performance of its duties thereunder and hereunder.




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         Section 3.29.     Removal of the Credit Risk Manager; Successors.

         (a) If the Credit Risk Manager is no longer able to perform its duties
hereunder or under the Credit Risk Management Agreement, the Master Servicer
shall terminate the Credit Risk Manager and give notice to the Trustee of such
termination.

         (b) The Credit Risk Manager may be removed as Credit Risk Manager by
Certificateholders holding not less than 66 2/3% of the Voting Rights, in the
exercise of its or their sole discretion. The Certificateholders shall provide
written notice of the Credit Risk Manager's removal to the Trustee.

         (c) Upon any termination or removal of the Credit Risk Manager or the
appointment of a successor Credit Risk Manager, the Trustee shall give written
notice thereof to the Company, the Master Servicer and each Rating Agency.
Notwithstanding the foregoing, the termination of the Credit Risk Manager
pursuant to this Section 3.29 shall not become effective until the appointment
of a successor Credit Risk Manager. Upon receipt of such notice, the Trustee
shall provide written notice to the Credit Risk Manager and the Master Servicer
of its removal, which shall be effective upon receipt of such notice by the
Credit Risk Manager.




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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

         Section 4.01.     Distributions.

         (a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 5:00 P.M. New York time on each Certificate Account Deposit Date by
wire transfer of immediately available funds an amount equal to the sum of (i)
any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Sections 3.11,
3.13 or 3.23, (iii) all other amounts constituting the Available Distribution
Amount for the immediately succeeding Distribution Date and (iv) any amounts on
deposit in the Custodial Account representing Prepayment Charges collected by
the Master Servicer (and any Master Servicer Prepayment Charge Payment Amounts
paid by, or collected on behalf of the Trust Fund by, the Master Servicer or any
Sub-Servicer), other than any such Prepayment Charges or Master Servicer
Prepayment Charge Payment Amounts relating to Principal Prepayments that
occurred after the end of the related Prepayment Period.

         On each Distribution Date, prior to making any other distributions
referred to in Section 4.01, the Trustee shall withdraw from the Certificate
Account and pay itself the Trustee's Fee and pay the Credit Risk Manager the
Credit Risk Manager Fee for such Distribution Date.

         On each Distribution Date the Trustee shall distribute to each
Certificateholder of record as of the next preceding Record Date (other than as
provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Trustee at least 5
Business Days prior to the related Record Date, or otherwise by check mailed to
such Certificateholder at the address of such Holder appearing in the
Certificate Register, such Certificateholder's share (based on the aggregate of
the Percentage Interests represented by Certificates of the applicable Class
held by such Holder) of the amounts required to be distributed to such Holder
pursuant to this Section 4.01.

         On each Distribution Date, the Trustee shall withdraw from the
Certificate Account that portion of Available Distribution Amount for such
Distribution Date consisting of the Interest Remittance Amount for such
Distribution Date, and make the following disbursements and transfers in the
order of priority described below, in each case to the extent of the Interest
Remittance Amount remaining for such Class for such Distribution Date:

                  (i) to the Holders of the Class A Certificates, pro rata, the
related Monthly Interest Distributable Amount and any Unpaid Interest Shortfall
Amount for each such Class for such Distribution Date;

                  (ii) from the remaining Interest Remittance Amount, to the
Holders of the Class M-1 Certificates the related Monthly Interest Distributable
Amount for such Class for such

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<PAGE>


Distribution Date;

                  (iii) from the remaining Interest Remittance Amount, to the
Holders of the Class M-2 Certificates the related Monthly Interest Distributable
Amount for such Class for such Distribution Date; and

                  (iv) from the remaining Interest Remittance Amount, to the
Holders of the Class M-3 Certificates the related Monthly Interest Distributable
Amount for such Class for such Distribution Date.

         (b) On each Distribution Date (i) prior to the Stepdown Date or (ii) on
or after the Stepdown Date if a Trigger Event is in effect, the Trustee shall
withdraw from the Certificate Account an amount equal to the Principal
Distribution Amount and distribute to the Holders of the Class A Certificates,
other than the Class A-IO Certificates, and the Holders of the Mezzanine
Certificates, distributions in respect of principal to the extent of the
Principal Distribution Amount remaining for such Distribution Date:

                  (i) to the Holders of the Class A-6 Certificates, the Class
A-6 Lockout Distribution Amount for that Distribution Date, until the
Certificate Principal Balance thereof has been reduced to zero; and

                  (ii) from the remaining Principal Distribution Amount,
sequentially to Holders of the Class A-1, Class A-2, Class A-3, Class A-4, Class
A-5, Class A-6, Class M-1, Class M-2 and Class M-3 Certificates, in each case
until the Certificate Principal Balance thereof has been reduced to zero.

         (c) On each Distribution Date (i) on and after the Stepdown Date and
(ii) on which Trigger Event is not in effect, the Trustee shall withdraw from
the Certificate Account an amount equal to the Principal Distribution Amount and
distribute to the Holders of the Class A Certificates, other than the Class A-IO
Certificates, and the Holders of the Mezzanine Certificates, distributions in
respect of principal to the extent of the Principal Distribution Amount
remaining for such Distribution Date:

                  (i) to the Holders of the Class A-6 Certificates, the Class
A-6 Lockout Distribution Amount for that Distribution Date to the extent of the
Class A Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;

                  (ii) from the remaining Class A Principal Distribution Amount,
sequentially to the Holders of the Class A-1, Class A-2, Class A-3, Class A-4,
Class A-5 and Class A-6 Certificates, in each case until the Certificate
Principal Balance thereof has been reduced to zero;

                  (iii) to the Holders of the Class M-1 Certificates, the Class
M-1 Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero;

                  (iv) to the Holders of the Class M-2 Certificates, the Class
M-2 Principal


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Distribution Amount, until the Certificate Principal Balance thereof has been
reduced to zero; and

                  (v) to the Holders of the Class M-3 Certificates, the Class
M-3 Principal Distribution Amount, until the Certificate Principal Balance
thereof has been reduced to zero.

         (d) On each Distribution Date the Net Monthly Excess Cashflow shall be
distributed in the following order of priority, in each case to the extent of
the Net Monthly Excess Cashflow remaining for such Distribution Date:

                  (i) to the Holders of the Class or Classes of Certificates
then entitled to receive distributions in respect of principal, in an amount
equal to any Extra Principal Distribution Amount, payable to such Holders as
part of the Principal Distribution Amount as described under Sections 4.01(b)
and (c) above, as applicable;

                  (ii) to the Holders of the Class M-1 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (iv) to the Holders of the Class M-2 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (vi) to the Holders of the Class M-3 Certificates, in an
amount equal to any Unpaid Interest Shortfall Amount allocable to such
Certificates;

                  (vii) from amounts otherwise payable to the Holders of the
Class C Certificates, to the Net WAC Shortfall Reserve Fund, (I) in an amount
equal to the related Net WAC Shortfall Amount for each class of offered
certificates, other than the Class A-IO Certificates, which amount shall be
distributed pursuant to Section 4.08(c) to the Holders of the Class A-1
Certificates, the Class A-2 Certificates, the Class A-3 Certificates, the Class
A-4 Certificates, the Class A-5 Certificates, the Class A-6 Certificates, the
Class M-1 Certificates, the Class M-2 Certificates and the Class M-3
Certificates, in that order, in each case until the related Net WAC Shortfall
Amount has been reduced to zero, and then (II) in an amount sufficient to
maintain a balance in the Net WAC Shortfall Reserve Fund equal to the Net WAC
Shortfall Reserve Fund Deposit;

                  (viii) to the Holders of the Class C Certificates, the Monthly
Interest Distributable Amount for such Class and the amount of any remaining
Overcollateralization Release Amount for such Distribution Date;

                  (ix) if such Distribution Date follows the Prepayment Period
during which occurs the latest date on which a Prepayment Charge may be required
to be paid in respect of any Mortgage Loans, to the Holders of the Class P
Certificates, in reduction of the Certificate Principal Balance thereof, until
the Certificate Principal Balance thereof is reduced to zero; and

                  (xi) any remaining amounts to the Holders of the Class R
Certificates (in respect of the appropriate Residual Interest).




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         (e) On each Distribution Date, all amounts representing Prepayment
Charges in respect of the Mortgage Loans received during the related Prepayment
Period and any Master Servicer Prepayment Charge Amounts paid by the Master
Servicer during the related Prepayment Period will be withdrawn from the
Certificate Account and distributed by the Trustee to the Holders of the Class P
Certificates and shall not be available for distribution to the Holders of any
other Class of Certificates. The payment of the foregoing amounts to the Holders
of the Class P Certificates shall not reduce the Certificate Principal Balances
thereof.

         (f) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the Company
or the Master Servicer shall have any responsibility therefor except as
otherwise provided by this Agreement or applicable law.

         (g) The Trustee, upon written direction of the Master Servicer, shall
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment and shall not be sold or disposed of prior
to maturity. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer and shall be subject to its withdrawal or
order from time to time. The amount of any losses incurred in respect of any
such investments shall be deposited in the Certificate Account by the Master
Servicer out of its own funds immediately as realized without any right of
reimbursement.

         (h) Except as otherwise provided in Section 9.01, if the Master
Servicer anticipates that a final distribution with respect to any Class of
Certificates will be made on the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month.

         Any funds not distributed to any Holder or Holders of Certificates of
such Class on such Distribution Date because of the failure of such Holder or
Holders to tender their Certificates shall, on such date, be set aside and held
in trust and credited to the account of the appropriate non- tendering Holder or
Holders. If any Certificates as to which notice has been given pursuant to this
Section 4.01(h) shall not have been surrendered for cancellation within six
months after the time specified in such notice, the Trustee shall mail a second
notice to the remaining non-tendering Certificateholders to surrender their
Certificates for cancellation in order to receive the final



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distribution with respect thereto. If within six months after the second notice
all such Certificates shall not have been surrendered for cancellation, the
Trustee shall take reasonable steps as directed by the Company, or appoint an
agent to take reasonable steps, to contact the remaining non-tendering
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the funds in trust and of contacting such
Certificateholders shall be paid out of the assets remaining in the Trust Fund.
If within nine months after the second notice any such Certificates shall not
have been surrendered for cancellation, the Class R Certificateholders shall be
entitled to all unclaimed funds and other assets which remain subject hereto. No
interest shall accrue or be payable to any Certificateholder on any amount held
in trust as a result of such Certificateholder's failure to surrender its
Certificate(s) for final payment thereof in accordance with this Section
4.01(h).

         Section 4.02.     Statements to Certificateholders.

         (a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available on the Trustee's website, which may be obtained by calling the Trustee
at (800) 735-7777, to each Holder of the Regular Certificates, the Master
Servicer and the Rating Agencies, a statement as to the distributions made on
such Distribution Date setting forth:

                  (i) (A) the amount of the distribution made on such
Distribution Date to the Holders of each Class of Regular Certificates (other
than the Class A-IO Certificates), separately identified, allocable to principal
and (B) the amount of the distribution made on such Distribution Date to the
Holders of the Class P Certificates allocable to Prepayment Charges and Master
Servicer Prepayment Charge Payment Amounts;

                  (ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Regular Certificates (other than the Class
P Certificates) allocable to interest, separately identified;

                  (iii) the Pass-Through Rate on each Class of Regular
Certificates (other than the Class P Certificates) for such Distribution Date;

                  (iv) the aggregate amount of Advances for such Distribution
Date;

                  (v) the number and Aggregate Stated Principal Balance of the
Mortgage Loans as of the end of the related Due Period;

                  (vi) the Overcollateralized Amount, the Excess
Overcollateralized Amount, the Overcollateralization Release Amount, the
Overcollateralization Deficiency Amount and the Overcollateralization Target
Amount for such Distribution Date;

                  (vii) the aggregate Certificate Principal Balance or Notional
Amount, as applicable, of each Class of Regular Certificates after giving effect
to the amounts distributed on such Distribution Date (in the case of each Class
of the Mezzanine Certificates, separately identifying any reduction thereof due
to the allocation of Realized Losses thereto);



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<PAGE>



                  (viii) the number and aggregate Stated Principal Balance of
Mortgage Loans (a) delinquent 31 to 60 days, (b) delinquent 61 to 90 days, (c)
delinquent 91 days or more, in each case as of the end of the calendar month
prior to such Distribution Date;

                  (ix) the number, aggregate principal balance and book value of
any REO Properties as of the close of business on the last day of the calendar
month preceding the month in which such Distribution Date occurs;

                  (x) the weighted average remaining term to maturity, weighted
average Mortgage Rate and weighted average Net Mortgage Rate of the Mortgage
Loans as of the close of business on the first day of the calendar month in
which such Distribution Date occurs;

                  (xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;

                  (xii) the aggregate amount of Realized Losses incurred during
the related Prepayment Period and the cumulative amount of Realized Losses;

                  (xiii) the aggregate amount of extraordinary Trust Fund
expenses withdrawn from the Custodial Account or the Certificate Account for
such Distribution Date;

                  (xiv) the aggregate amount of any Prepayment Interest
Shortfalls for such Distribution Date, to the extent not covered by payments by
the Master Servicer or a Sub-Servicer pursuant to Section 3.23, and the
aggregate amount of Relief Act Interest Shortfalls for such Distribution Date;

                  (xv) the Monthly Interest Distributable Amount in respect of
each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date and the Unpaid Interest Shortfall Amount, if any, with respect
to each Class of the Class A Certificates and Mezzanine Certificates for such
Distribution Date;

                  (xvi) (A) the Overcollateralization Target Amount, (B) the
Overcollateralized Amount and (C) the amount, if any, by which the
Overcollateralization Target Amount exceeds the Overcollateralized Amount, in
each case after giving effect to the distribution made on the Regular
Certificates on such Distribution Date;

                  (xvii) the aggregate amount of servicing compensation received
by the Master Servicer with respect to the related Due Period and such other
customary information as the Trustee deems necessary or desirable, or which a
Certificateholder reasonably requests, to enable Certificateholders to prepare
their tax returns;

                  (xviii) the aggregate of any deposits to and withdrawals from
the Net WAC Shortfall Reserve Fund for such Distribution Date and the remaining
amount on deposit in the Net WAC Shortfall Reserve Fund after such deposits and
withdrawals;


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<PAGE>


                  (xix) the Available Distribution Amount for such Distribution
Date; and

                  (xx) amounts paid under the Yield Maintenance Agreement.

         In the case of information furnished pursuant to subclauses (i) and
(ii) above, the amounts shall also be expressed as a dollar amount per Single
Certificate.

         On each Distribution Date the Trustee shall provide Bloomberg Financial
Markets, L.P. ("Bloomberg") CUSIP level factors for each Class of Certificates
as of such Distribution Date, using a format and media mutually acceptable to
the Trustee and Bloomberg.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Certificate, a statement containing the
information set forth in subclauses (i) and (ii) above, 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 and regulations
thereunder as from time to time are in force.

         On each Distribution Date the Trustee shall prepare and make available
on the Trustee's website, which may be obtained by calling the Trustee at (800)
735-7777 (or deliver at the recipient's option), to each Holder of a Class R
Certificate a copy of the reports forwarded to the other Certificateholders on
such Distribution Date.

         Within a reasonable period of time after the end of each calendar year,
the Trustee shall prepare and forward, to each Person who at any time during the
calendar year was a Holder of a Class R Certificate a statement containing the
information provided pursuant to the previous paragraph 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 are in force.

         Section 4.03.     Remittance Reports; Advances by the Master Servicer.

         (a) On the Business Day following each Determination Date, the Master
Servicer shall deliver to the Trustee a report, prepared as of the close of
business on the Determination Date (the "Remittance Report"), in the form of an
electromagnetic tape or disk. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is required by the Trustee for purposes of making the calculations
and preparing the statement described in Sections 4.01 and 4.02, as set forth in
written specifications or guidelines issued by the Trustee from time to time.
The Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer.

         (b) The Master Servicer shall determine the aggregate amount of
Advances required to be made for the related Distribution Date, which shall be
in an aggregate amount equal to the sum



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of (1) the aggregate amount of Monthly Payments (with each interest portion
thereof adjusted to the Mortgage Rate less the sum of the Master Servicing Fee
Rate, the Sub-Servicing Fee Rate and any applicable Radian PMI Policy Rate,
other than Balloon Payments, less the amount of any reductions in the amount of
interest collectable from the Mortgagor pursuant to the Relief Act, on the
Outstanding Mortgage Loans as of the related Due Date, which Monthly Payments
were delinquent as of the close of business as of the related Determination
Date) plus (2) with respect to each Balloon Loan delinquent in respect of its
Balloon Payment as of the close of business on the related Determination Date,
an amount equal to the assumed Monthly Payment (net of the related Master
Servicing Fees and Sub-Servicing Fees) that would have been due on the related
Due Date based on the original principal amortization scheduled for such Balloon
Loan until such Balloon Loan is finally liquidated; provided that no Advance
shall be made if it would be a Nonrecoverable Advance. On or before 4:00 P.M.
New York time on each Certificate Account Deposit Date, the Master Servicer
shall either (i) deposit in the Certificate Account from its own funds, or funds
received therefor from the Sub-Servicers, an amount equal to the Advances to be
made by the Master Servicer or any Sub-Servicers in respect of the related
Distribution Date, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the amounts
held for future distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of (i) and (ii) aggregating the amount
of such Advance. Any portion of the amounts held for future distribution so used
shall be replaced by the Master Servicer by deposit in the Certificate Account
on or before 1:00 P.M. New York time on any future Certificate Account Deposit
Date to the extent that funds attributable to the Mortgage Loans that are
available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
amount of any reimbursement pursuant to Section 3.11 in respect of outstanding
Advances on any Distribution Date shall be allocated to specific Monthly
Payments due but delinquent for previous Due Periods, which allocation shall be
made, to the extent practicable, to Monthly Payments which have been delinquent
for the longest period of time. Such allocations shall be conclusive for
purposes of reimbursement to the Master Servicer from recoveries on related
Mortgage Loans pursuant to Section 3.11. The determination by the Master
Servicer that it has made a Nonrecoverable Advance or that any proposed Advance,
if made, would constitute a Nonrecoverable Advance, shall be evidenced by a
certificate of a Servicing Officer delivered to the Seller and the Trustee with
the Remittance Report. The Trustee shall deposit all funds it receives pursuant
to this Section 4.03 into the Certificate Account.

         (c) In the event that the Master Servicer determines as of any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Master
Servicer pursuant to paragraph (b) above, it shall give notice to the Trustee of
its inability to Advance (such notice may be given by telecopy), not later than
4:00 P.M., New York time, on such date, specifying the portion of such amount
that it will be unable to deposit. Not later than 4:00 P.M., New York time, on
the earlier of (x) two Business Days following such Certificate Account Deposit
Date or (y) the Business Day preceding the related Distribution Date, unless by
such time the Master Servicer shall have directly or indirectly deposited in the
Certificate Account the entire amount of the Advances required to be made for
the related Distribution Date, pursuant to Section 7.01, the Trustee shall (a)
terminate all of the rights and obligations of the Master Servicer under this



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Agreement in accordance with Section 7.01 and (b) assume the rights and
obligations of the Master Servicer hereunder, including the obligation to
deposit in the Certificate Account an amount equal to the Advance for the
immediately succeeding Distribution Date.

         Section 4.04.     Distributions on the REMIC Regular Interests.

         (a) On each Distribution Date, the Trustee shall cause the Available
Distribution Amount, in the following order of priority, to be distributed by
REMIC 1 to REMIC 2 on account of the REMIC 1 Regular Interests or withdrawn from
the Certificate Account and distributed to the Holders of the Class R
Certificates (in respect of the Class R-1 Interest), as the case may be:

         (1) FIRST, to the Holders of REMIC 1 Regular Interest LT-2, REMIC 1
Regular Interest LT-3, REMIC 1 Regular Interest LT-4, REMIC 1 Regular Interest
LT-5, REMIC 1 Regular Interest LT-6, REMIC 1 Regular Interest LT-7, REMIC 1
Regular Interest LT-8 and REMIC 1 Regular Interest LT-9, in an amount equal to

                  (A) the related Uncertificated Accrued Interest for such
Distribution Date, plus

                  (B)      any amounts in respect thereof remaining unpaid from
                           previous Distribution Dates, and

         SECOND, to Holders of REMIC 1 Regular Interest LT-1 and REMIC 1 Regular
Interest LT-P in an amount equal to

                  (A)      the related Uncertificated Accrued Interest for such
                           Distribution Date, plus

                  (B)      any amounts in respect thereof remaining unpaid from
                           previous Distribution Dates;

         (2) to the Holders of REMIC 1 Regular Interests, in an amount equal to
the remainder of the Available Distribution Amount for such Distribution Date
after the distributions made pursuant to clause (1) above, allocated in the
following order of priority:

                  (A)      to the Holders of REMIC 1 Regular Interest LT-P, (i)
                           on each Distribution Date, all amounts representing
                           Prepayment Charges in respect of the Mortgage Loans
                           received during the related Prepayment Period and any
                           Master Servicer Prepayment Charge Payment Amounts
                           paid by the Master Servicer during the related
                           Prepayment Period (such amounts not to reduce the
                           Uncertificated Principal Balance of REMIC 1 Regular
                           Interest LT-P) and (ii) on the Distribution Date
                           immediately following the expiration of the latest
                           Prepayment Charge as identified on the Prepayment
                           Charge Schedule or any Distribution Date thereafter
                           until $100 has been distributed pursuant to this
                           clause (A(ii));

                  (B)      to the Holders of REMIC 1 Regular Interest LT-1,
                           until the Uncertificated



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                           Principal Balance of REMIC 1 Regular Interest LT-1 is
                           reduced to zero;

                  (C)      to the Holders of REMIC 1 Regular Interest LT-2,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-2 is reduced to zero;

                  (D)      to the Holders of REMIC 1 Regular Interest LT-3,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-3 is reduced to zero;

                  (E)      to the Holders of REMIC 1 Regular Interest LT-4,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-4 is reduced to zero;

                  (F)      to the Holders of REMIC 1 Regular Interest LT-5,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-5 is reduced to zero;


                  (G)      to the Holders of REMIC 1 Regular Interest LT-6,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-6 is reduced to zero;


                  (H)      to the Holders of REMIC 1 Regular Interest LT-7,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-7 is reduced to zero;


                  (I)      to the Holders of REMIC 1 Regular Interest LT-8,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-8 is reduced to zero;


                  (J)      to the Holders of REMIC 1 Regular Interest LT-9,
                           until the Uncertificated Principal Balance of REMIC 1
                           Regular Interest LT-9 is reduced to zero; and

                  (K)      any remaining amount to the Holders of the Class R
                           Certificates (in respect of the Class R-1 Interest).

         (b) On each Distribution Date, the Trustee shall cause in the following
order of priority, the following amounts to be distributed by REMIC 2 to REMIC 3
on account of the REMIC 2 Regular Interests or withdrawn from the Certificate
Account and distributed to the Holders of the Class R Certificates (in respect
of the Class R-2 Interest), as the case may be:

         (i) first, to the extent of Available Funds, to the Holders of REMIC 2
Regular Interest MT-IO, in an amount equal to

                  (A)      the related Uncertificated Accrued Interest for such
                           Distribution Date, plus

                  (B)      any amounts in respect thereof remaining unpaid from
                           previous Distribution Dates, and




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                  second, to Holders of REMIC 2 Regular Interest MT-AA, REMIC 2
Regular Interest MT-A1, REMIC 2 Regular Interest MT-A2, REMIC 2 Regular Interest
MT-A3, REMIC 2 Regular Interest MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2
Regular Interest MT-A6, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular Interest
MT-M2, REMIC 2 Regular Interest MT-M3, REMIC 2 Regular Interest MT-ZZ, and REMIC
2 Regular Interest MT-P, PRO RATA, in an amount equal to

                  (A)      the related Uncertificated Accrued Interest for such
                           Distribution Date, plus

                  (B)      any amounts in respect thereof remaining unpaid from
                           the previous Distribution Dates.

Amounts payable as Uncertificated Accrued Interest in respect of REMIC 2 Regular
Interest MT-ZZ shall be reduced when the REMIC 2 Overcollateralized Amount is
less than the REMIC 2 Overcollateralization Target Amount, by the lesser of (x)
the amount of such difference and (y) the Maximum Uncertificated Accrued
Interest Deferral Amount, and such amount will be payable to the Holders of
REMIC 2 Regular Interest MT-A1, REMIC 2 Regular Interest MT-M1, REMIC 2 Regular
Interest MT-M2 and REMIC 2 Regular Interest MT-B in the same proportion as the
Overcollateralization Deficiency Amount is allocated to the Corresponding
Certificates and the Uncertificated Principal Balance of REMIC I Regular
Interest ZZ shall be increased by such amount;

         (ii) to the Holders of REMIC 2 Regular Interest MT-P, (A) on each
Distribution Date, 100% of the amount paid in respect of Prepayment Charges and
Master Servicer Prepayment Charge Payment Amounts on REMIC 1 Regular Interest
LT-P and (B) on the Distribution Date immediately following the expiration of
the latest Prepayment Charge as identified on the Prepayment Charge Schedule or
any Distribution Date thereafter until $100 has been distributed pursuant to
this clause;

         (iii) to the Holders of the REMIC 2 Regular Interests (other than REMIC
2 Regular Interest MT-IO), in an amount equal to the remainder of the Available
Funds for such Distribution Date after the distributions made pursuant to
clauses (i) and (ii) above, allocated as follows:

                  (A) to the Holders of REMIC 2 Regular Interest MT-AA, 98% of
such remainder, until the Uncertificated Principal Balance of such
Uncertificated REMIC 2 Regular Interest is reduced to zero;

                  (B) to the Holders of REMIC 2 Regular Interest MT-A1, REMIC 2
Regular Interest MT-A2, REMIC 2 Regular Interest MT-A3, REMIC 2 Regular Interest
MT-A4, REMIC 2 Regular Interest MT-A5, REMIC 2 Regular Interest MT-A6, REMIC 2
Regular Interest MT-M1, REMIC 2 Regular Interest MT-M2, REMIC 2 Regular Interest
MT-M3, 1% of such remainder, in the same proportion as principal payments are
allocated to the Corresponding Certificates, until the Uncertificated Principal
Balances of such REMIC 2 Regular Interests are reduced to zero;

                  (C) to the Holders of REMIC 2 Regular Interest MT-ZZ, 1% of
such remainder, until the Uncertificated Principal Balance of such REMIC 2
Regular Interest is reduced to zero; and


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                  (D) any remaining amount to the Holders of the Class R
Certificates (in respect of the Class R-2 Interest);

provided, however, that 98% and 2% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated to
Holders of REMIC 2 Regular Interest MT-AA and REMIC 2 Regular Interest MT-ZZ,
respectively.

         Section 4.05.     Allocation of Realized Losses.

         (a) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: first, to Net Monthly Excess
Cashflow, through a distribution of the Extra Principal Distribution Amount for
that Distribution Date; second, to the Overcollateralized Amount by a reduction
of the Certificate Principal Balance of the Class C Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; third, to the
Class M-3 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero; fourth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and fifth, to the Class M-1
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero. All Realized Losses to be allocated to the Certificate Principal
Balances of all Classes on any Distribution Date shall be so allocated after the
actual distributions to be made on such date as provided above. All references
above to the Certificate Principal Balance of any Class of Certificates shall be
to the Certificate Principal Balance of such Class immediately prior to the
relevant Distribution Date, before reduction thereof by any Realized Losses, in
each case to be allocated to such Class of Certificates, on such Distribution
Date.

         Any allocation of Realized Losses to a Mezzanine Certificate on any
Distribution Date shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated. Any allocation of Realized Losses to a Class
C Certificate shall be made by (i) FIRST, reducing the amount otherwise payable
in respect thereof pursuant to Section 4.01(d)(viii), and (ii) SECOND, by
reducing the Certificate Principal Balance thereof by the amount so allocated.
No allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Class A Certificates or the Class P Certificates.

         (b) All Realized Losses on the Mortgage Loans shall be allocated by the
Trustee on each Distribution Date as follows: first, to REMIC 1 Regular Interest
LT-1 until the Uncertificated Principal Balance thereof has been reduced to
zero, second, to REMIC 1 Regular Interest LT-2 until the Uncertificated
Principal Balance thereof has been reduced to zero, third, to REMIC 1 Regular
Interest LT-3 until the Uncertificated Principal Balance thereof has been
reduced to zero, fourth, to REMIC 1 Regular Interest LT-4 until the
Uncertificated Principal Balance thereof has been reduced to zero, fifth, to
REMIC 1 Regular Interest LT-5 until the Uncertificated Principal Balance thereof
has been reduced to zero, sixth, to REMIC 1 Regular Interest LT-6 until the
Uncertificated Principal Balance thereof has been reduced to zero, seventh, to
REMIC 1 Regular Interest LT-7 until the Uncertificated Principal Balance thereof
has been reduced to zero, eighth, to REMIC 1 Regular Interest LT-8 until the
Uncertificated Principal Balance thereof has been reduced to zero, and ninth, to
REMIC 1 Regular Interest LT-9 until the Uncertificated Principal Balance thereof
has been reduced to zero.


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         (c) All Realized Losses on REMIC 1 Regular Interest LT-1, REMIC 1
Regular Interest LT-2, REMIC 1 Regular Interest LT-3, REMIC 1 Regular Interest
LT-4, REMIC 1 Regular Interest LT-5, REMIC 1 Regular Interest LT-6, REMIC 1
Regular Interest LT-7, REMIC 1 Regular Interest LT-8 and REMIC 1 Regular
Interest LT-9 shall be allocated to the following REMIC 2 Regular Interests
(other than REMIC 2 Regular Interest MT-IO) in the specified percentages, as
follows: first to Uncertificated Accrued Interest payable to the REMIC 2 Regular
Interest MT-AA and REMIC 2 Regular Interest MT-ZZ up to an aggregate amount
equal to the REMIC 2 Interest Loss Allocation Amount, 98% and 2% respectively;
second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
MT-AA and REMIC 2 Regular Interest MT-ZZ up to an aggregate amount equal to the
REMIC 2 Principal Loss Allocation Amount, 98% and 2%, respectively; third, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest MT-AA, REMIC 2
Regular Interest MT-M3 and REMIC 2 Regular Interest MT-ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest MT-M3 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC 2 Regular Interest MT-AA, REMIC 2 Regular Interest MT-M2 and
REMIC 2 Regular Interest MT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest MT-M2 has been
reduced to zero; and fifth, to the Uncertificated Principal Balances of REMIC 2
Regular Interest MT-AA, REMIC 2 Regular Interest MT-M1 and REMIC 2 Regular
Interest MT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest MT-M1 has been reduced to zero.

         Section 4.06.   Information Reports to Be Filed by the Master Servicer.

         The Master Servicer or the Sub-Servicers shall file information reports
with respect to the receipt of mortgage interest received in a trade or
business, foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P of the
Code, respectively, and deliver to the Trustee an Officers' Certificate stating
that such reports have been filed. Such reports shall be in form and substance
sufficient to meet the reporting requirements imposed by such Sections 6050H,
6050J and 6050P of the Code.

         Section 4.07.     Compliance with Withholding Requirements.

         Notwithstanding any other provision of this Agreement, the Trustee
shall comply with all federal withholding requirements respecting payments to
Certificateholders of interest or original issue discount on the Mortgage Loans,
that the Trustee reasonably believes are applicable under the Code. The consent
of Certificateholders shall not be required for such withholding. In the event
the Trustee withholds any amount from interest or original issue discount
payments or advances thereof to any Certificateholder pursuant to federal
withholding requirements, the Trustee shall, together with its monthly report to
such Certificateholders pursuant to Section 4.02 hereof, indicate such amount
withheld.




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         Section 4.08.     Net WAC Shortfall Reserve Fund.

         (a) On the Closing Date, the Trustee shall establish and maintain in
its name, in trust for the benefit of Class A Certificates (other than the Class
A-IO Certificates) and the Mezzanine Certificates, the Net WAC Shortfall Reserve
Fund. In addition, on the Closing Date, the Company shall deposit into the Net
WAC Shortfall Reserve Fund an amount equal to the Net WAC Shortfall Reserve Fund
Deposit. The Trustee shall demand payment of all money payable by the Yield
Maintenance Agreement Provider under the Yield Maintenance Agreement. The
Trustee shall deposit in the Net WAC Shortfall Reserve Fund any Yield
Maintenance Agreement Payment Amounts.

         (b) On each Distribution Date, to the extent required, the Trustee
shall make withdrawals from the Net WAC Shortfall Reserve Fund to the extent of
any Yield Maintenance Agreement Payment Amounts and distribute such amounts
first, to the Holders of the Class A-1 Certificates to the extent of any Net WAC
Shortfall Amount on such Certificates and second, to the Holders of the Class C
Certificates.

         (c) On each Distribution Date, the Trustee shall transfer from the
Certificate Account to the Net WAC Shortfall Reserve Fund the amounts specified
pursuant to Sections 4.01(d)(vii). On each Distribution Date, to the extent
required, the Trustee shall make withdrawals from the Net WAC Shortfall Reserve
Fund and use the amounts in the Net WAC Shortfall Reserve Fund, other than
amounts received from the Yield Maintenance Agreement Provider, to make
distributions to the Class A Certificates (other than the Class A-IO
Certificates) and the Mezzanine Certificates, in an amount equal to the amount
of any Net WAC Shortfall Amount on such Certificates. Any such amounts shall be
distributed to the Class A-1, Class A-2, Class A-3, Class A-4, Class A-5, Class
A- 6, Class M-1, Class M-2 and Class M-3 Certificates, in that order, in each
case until the related Net WAC Shortfall Amount has been reduced to zero. Any
such amounts transferred shall be treated for federal tax purposes as amounts
distributed by REMIC 3 to the Holders of the Class C Certificates.

         (d) The Net WAC Shortfall Reserve Fund shall be an Eligible Account.
Amounts held in the Net WAC Shortfall Reserve Fund from time to time shall
continue to constitute assets of the Trust Fund, but not of the REMICs, until
released from the Net WAC Shortfall Reserve Fund pursuant to this Section 4.08.
The Net WAC Shortfall Reserve Fund constitutes an "outside reserve fund" within
the meaning of Treasury Regulation ss. 1.860G-2(h) and is not an asset of any
REMIC. The Holders of the Class C Certificates shall be the owner of the Net WAC
Shortfall Reserve Fund. The Trustee shall keep records that accurately reflect
the funds on deposit in the Net WAC Shortfall Reserve Fund. The Trustee shall,
at the written direction of the Majority Class C Certificateholder, invest
amounts on deposit in the Net WAC Shortfall Reserve Fund in Permitted
Investments. In the absence of written direction to the Trustee from the
Majority Class C Certificateholder, all funds in the Net WAC Shortfall Reserve
Fund shall remain uninvested. On each Distribution Date, the Trustee shall
distribute, not in respect of any REMIC, any interest earned on the Net WAC
Shortfall






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Reserve Fund to the Holders of the Class C Certificates.

         (e) For federal income tax purposes, the Trustee shall treat the right
to receive the Net WAC Shortfall Amount as having a DE MINIMIS value with
respect to the Certificates entitled to receive the Net WAC Shortfall Amount.



                                       95
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                                    ARTICLE V

                                THE CERTIFICATES

         Section 5.01.     The Certificates.

         (a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A and B-1 through B-4. The Certificates will be
issuable in registered form only. The Certificates (other than the Class P
Certificates, the Class C Certificates and the Class R Certificates) will be
issued in minimum denominations of $25,000 Initial Certificate Principal Balance
or Initial Notional Amount, as applicable, and integral multiples of $1 in
excess thereof. The Class C Certificates will be issued in minimum denominations
of $1.00 Initial Notional Amount and integral multiples of $1.00 in excess
thereof. The Class P Certificates and the Class R Certificates will each be
issuable in minimum denominations of any Percentage Interest representing 20.00%
and multiples of 0.01% in excess thereof.

         Upon original issue, the Certificates shall, upon the written request
of the Company executed by an officer of the Company, be executed and delivered
by the Trustee, authenticated by the Trustee and delivered to or upon the order
of the Company upon receipt by the Trustee of the documents specified in Section
2.01. The Certificates shall be executed by manual or facsimile signature on
behalf of the Trustee in its capacity as trustee hereunder by a Responsible
Officer. Certificates bearing the manual or facsimile signatures of individuals
who were at the time they signed the proper officers of the Trustee shall bind
the Trustee, notwithstanding that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Certificates
or did not hold such offices at the date of such Certificates. No Certificate
shall be entitled to any benefit under this Agreement, or be valid for any
purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Trustee by manual signature, and such certificate upon any Certificate shall be
conclusive evidence, and the only evidence, that such Certificate has been duly
authenticated and delivered hereunder. All Certificates issued on the Closing
Date shall be dated the Closing Date and any Certificates delivered thereafter
shall be dated the date of their authentication.

         (b) The Class A Certificates and the Mezzanine Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each of such Book-Entry Certificates through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the




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<PAGE>



Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall transfer the Ownership Interests only in the
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. The Trustee shall not be required to monitor, determine or inquire
as to compliance with the transfer restrictions with respect to the Book-Entry
Certificates, and the Trustee shall have no liability for transfers of Ownership
Interests in the Book Entry Certificates made through the book-entry facilities
of the Depositary or between or among Depositary Participants or Certificate
Owners, made in violation of the applicable restrictions.

         The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of Book-
Entry Certificates with respect to any particular matter shall not be deemed
inconsistent if they are made with respect to different Certificate Owners. The
Trustee may establish a reasonable record date in connection with solicitations
of consents from or voting by Certificateholders and shall give notice to the
Depository of such record date.

         If (i)(A) the Company advises the Trustee in writing that the
Depository is no longer willing or able to properly discharge its
responsibilities as Depository and (B) the Company is unable to locate a
qualified successor or (ii) the Company at its option advises the Trustee in
writing that it elects to terminate the book-entry system through the
Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall, at the expense of the Company, issue the Definitive
Certificates. Neither the Company, the Master Servicer nor the Trustee shall be
liable for any actions taken by the Depository or its nominee, including,
without limitation, any delay in delivery of such instructions and may
conclusively rely on, and shall be protected in relying on, such instructions.
Upon the issuance of Definitive Certificates the Trustee and the Master Servicer
shall recognize the Holders of the Definitive Certificates as Certificateholders
hereunder.

         (c) Each Certificate is intended to be a "security" governed by Article
8 of the Uniform Commercial Code as in effect in the State of New York and any
other applicable jurisdiction, to the extent that any of such laws may be
applicable.



                                       97
<PAGE>

         Section 5.02.    Registration of Transfer and Exchange of Certificates.

         (a) The Trustee shall maintain a Certificate Register in which, subject
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.

         (b) Except as provided in Section 5.02(c), no transfer, sale, pledge or
other disposition of a Class P Certificate, Class C Certificate or a Class R
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Act"), and any applicable state securities laws or is
made in accordance with said Act and laws. In the event that a transfer of a
Class P Certificate, Class C Certificate or Class R Certificate is to be made
under this Section 5.02(b), (i) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee that such
transfer shall be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer, provided that such Opinion
of Counsel will not be required in connection with the initial transfer of any
such Certificate by the Company or any affiliate thereof, to a non-affiliate of
the Company and (ii) the Trustee shall require the transferee to execute a
representation letter, substantially in the form of Exhibit G-1 hereto, and the
Trustee shall require the transferor to execute a representation letter,
substantially in the form of Exhibit G-2 hereto, each acceptable to and in form
and substance satisfactory to the Trustee certifying to the Company and the
Trustee the facts surrounding such transfer, which representation letters shall
not be an expense of the Trustee, the Company or the Master Servicer; PROVIDED,
HOWEVER, that such representation letters will not be required in connection
with any transfer of any such Certificate by the Company to an affiliate of the
Company and the Trustee shall be entitled to conclusively rely upon a
representation (which, upon the request of the Trustee, shall be a written
representation) from the Company of the status of such transferee as an
affiliate of the Company. Any such Certificateholder desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company and
the Master Servicer against any liability that may result if the transfer is not
so exempt or is not made in accordance with such applicable federal and state
laws.

         (c) Notwithstanding the requirements of Section 5.02(b), transfers of
Class P Certificates, Class C Certificates and Class R Certificates may be made
in accordance with this Section 5.02(c) if the prospective transferee of a
Certificate provides the Trustee and the Company with an investment letter
substantially in the form of Exhibit G-3 attached hereto, which investment
letter shall not be an expense of the Trustee, the Company or the Master
Servicer, and which investment letter states that, among other things, such
transferee is a "qualified institutional buyer" as defined under Rule 144A. Such
transfers shall be deemed to have complied with the requirements of Section
5.02(b) hereof; PROVIDED, HOWEVER, that no Transfer of any of the Class P
Certificates, Class C Certificates or Class R Certificates may be made pursuant
to this Section 5.02(c) by the Company.

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<PAGE>

Any such Certificateholder desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Company and the Master Servicer
against any liability that may result if the transfer is not so exempt or is not
made in accordance with such applicable federal and state laws.

         The Trustee shall require an Opinion of Counsel, on which the Trustee,
Company and Master Servicer may rely, from a prospective transferee prior to the
transfer of any Class P Certificate, Class C Certificate or Class R Certificate
to any employee benefit plan or other retirement arrangement, including
individual retirement accounts and Keogh plans, that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") or Section 4975 of
the Code (any of the foregoing, a "Plan"), to a trustee or other Person acting
on behalf of any Plan, or to any other person who is using "plan assets" of any
Plan to effect such acquisition (including any insurance company using funds in
its general or separate accounts that may constitute "plan assets"). Such
Opinion of Counsel must establish to the satisfaction of the Trustee that such
transfer is permissible under applicable law, will not constitute or result in a
prohibited transaction under Section 406 of ERISA and Section 4975 of the Code,
and will not subject the Trustee, the Master Servicer or the Company to any
obligation in addition to those undertaken in this Agreement. Neither the
Company, the Master Servicer nor the Trustee will be required to obtain such
Opinion of Counsel on behalf of any prospective transferee.

         Each beneficial owner of a Class M-1, Class M-2 or Class M-3
Certificate or any interest therein shall be deemed to have represented, by
virtue of its acquisition or holding of that certificate or interest therein,
that either (i) it is not a Plan or a trustee or other Person acting on behalf
of a Plan or using "plan assets" of a Plan to effect such acquisition (including
any insurance company using funds in its general separate accounts that may
constitute "plan assets", (ii) it has acquired and is holding such certificate
in reliance on Prohibited Transaction Exemption 2002-41 (the "Exemption"), and
that it understands that there are certain conditions to the availability of the
Exemption, including that the certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by S&P, Fitch or Moody's,
and the certificate is so rated or (iii) (1) it is an insurance company, (2) the
source of funds used to acquire or hold the certificate or interest therein is
an "insurance company general account," as such term is defined in Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (3) the conditions in Sections I
and III of PTCE 95-60 have been satisfied.

         (d) [Reserved]

         (e) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each


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<PAGE>


Person acquiring any Ownership Interest in a Class R Certificate are expressly
subject to the following provisions:

                  (A) Each Person holding or acquiring any Ownership Interest in
a 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.

                  (B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to it, and
shall not register the Transfer of any Class R Certificate until its receipt of
(I) an affidavit and agreement (a "Transfer Affidavit and Agreement" in the form
attached hereto as Exhibit G-5) from the proposed Transferee, in form and
substance satisfactory to the Trustee representing and warranting, among other
things, that it is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person who is not a
Permitted Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee, and that
it has reviewed the provisions of this Section 5.02 and agrees to be bound by
them, and (II) a certificate, in the form attached hereto as Exhibit G- 4, from
the Holder wishing to transfer the Class R Certificate, in form and substance
satisfactory to the Trustee representing and warranting, among other things,
that no purpose of the proposed Transfer is to impede the assessment or
collection of tax.

                  (C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a Responsible
Officer of the Trustee assigned to this transaction has actual knowledge that
the proposed Transferee is not a Permitted Transferee, no Transfer of an
Ownership Interest in a Class R Certificate to such proposed Transferee shall be
effected.

                  (D) Each Person holding or acquiring any Ownership Interest in
a Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer its
Ownership Interest in a Class R Certificate and (y) not to transfer its
Ownership Interest unless it provides a certificate to the Trustee in the form
attached hereto as Exhibit G-4.

                  (E) Each Person holding or acquiring an Ownership Interest in
a Class R Certificate, by purchasing an Ownership Interest in such Certificate,
agrees to give the Trustee written notice that it is a "pass-through interest
holder" within the meaning of Temporary Treasury Regulations Section
1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership Interest in a Class
R Certificate, if it is "a pass-through interest holder", or is holding an
Ownership Interest in a Class R Certificate on behalf of a "pass-through
interest holder."

         (ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have


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received the Transfer Affidavit and Agreement in the form attached hereto as
Exhibit G-5, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit G-4 and all of such other documents as shall have
been reasonably required by the Trustee as a condition to such registration.
Transfers of the Class R Certificates other than to Permitted Transferees are
prohibited.

         (iii) (A) If any Person other than a Permitted Transferee shall become
a Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Class R
Certificate. The prior Holder shall be entitled to recover from any purported
Holder of a Class R Certificate that was in fact not a Permitted Transferee
under this Section 5.05(b) at the time it became a Holder all payments made on
such Class R Certificate. Each Holder of a Class R Certificate, by acceptance
thereof, shall be deemed for all purposes to have consented to the provisions of
this clause (b) and to any amendment of this Agreement deemed necessary (whether
as a result of new legislation or otherwise) by counsel of the Company to ensure
that the Class R Certificates are not transferred to any Person who is not a
Permitted Transferee and that any transfer of such Class R Certificates will not
cause the imposition of a tax upon the Trust or cause any such REMIC to fail to
qualify as a REMIC. The Trustee shall be under no liability to any Person for
any registration of Transfer of a Class R Certificate that is in fact not
permitted by this Section 5.02 or for making any payments due on such
Certificate to the Holder thereof or for taking any other action with respect to
such Holder under the provisions of this Agreement.

                  (B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section 5.02 and to
the extent that the retroactive restoration of the rights of the Holder of such
Class R Certificate as described in clause (iii)(A) above shall be invalid,
illegal or unenforceable, then the Trustee shall have the right, without notice
to the Holder or any prior Holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Trustee on such terms as the
Trustee may choose. Such purported Transferee shall promptly endorse and deliver
each Class R Certificate in accordance with the instructions of the Trustee.
Such purchaser may be the Trustee itself. The proceeds of such sale, net of the
commissions (which may include commissions payable to the Trustee), expenses and
taxes due, if any, will be remitted by the Trustee to such purported Transferee.
The terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Trustee, and the Trustee shall not be
liable to any Person having an Ownership Interest in a Class R Certificate as a
result of its exercise of such discretion.





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         (iv) The Trustee shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions, all information necessary
to compute any tax imposed (A) as a result of the transfer of an ownership
interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of such
Class R Certificates required to be provided to the Internal Revenue Service and
certain Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Class R Certificate having as among its record Holders at any time
any Person who is a Disqualified Organization. The Trustee may charge and shall
be entitled to reasonable compensation for providing such information as may be
required from those Persons which may have had a tax imposed upon them as
specified in clauses (A) and (B) of this paragraph for providing such
information.

                  (F) Subject to the preceding paragraphs, upon surrender for
registration of transfer of any Certificate at the office of the Trustee
maintained for such purpose, the Trustee shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class of a like aggregate
Percentage Interest. Every Certificate surrendered for transfer shall be
accompanied by notification of the account of the designated transferee or
transferees for the purpose of receiving distributions pursuant to Section 4.01
by wire transfer, if any such transferee desires and is eligible for
distribution by wire transfer.

                  (G) At the option of the Certificateholders, Certificates may
be exchanged for other Certificates of authorized denominations of the same
Class of a like aggregate Percentage Interest, upon surrender of the
Certificates to be exchanged at the office 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
transfer or exchange shall (if so required by the Trustee) be duly endorsed by,
or be accompanied by a written instrument of transfer in the form satisfactory
to the Trustee duly executed by, the Holder thereof or his attorney duly
authorized in writing. In addition, with respect to each Class R Certificate,
the Holder thereof may exchange, in the manner described above, such Class R
Certificate for three separate Certificates, each representing such Holder's
respective Percentage Interest in the Class R-1 Interest, the Class R-2 Interest
and the Class R-3 Interest, respectively, in each case that was evidenced by the
Class R Certificate being exchanged.

                  (H) No service charge shall be made to the Certificateholders
for any transfer or exchange of 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 Certificates.









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                  (I) All Certificates surrendered for transfer and exchange
shall be canceled and retained by the Trustee in accordance with the Trustee's
standard procedures.

         Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.

         If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it 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 the same Class and Percentage Interest. Upon the issuance of any
new Certificate under this Section, 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 shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, 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 Company, the Master Servicer, the Trustee and any agent of any of
them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and neither the Company, the
Master Servicer, the Trustee nor any agent of any of them shall be affected by
notice to the contrary.

         Section 5.05.     Rule 144A Information.

         For so long as any Class P Certificates, Class C Certificates and Class
R Certificates are outstanding and are "restricted securities" within the
meaning of Rule 144(a)(3) of the Securities Act, (1) the Company will provide or
cause to be provided to any Holder of such Certificates and any prospective
purchaser thereof designated by such a Holder, upon the request of such Holder
or prospective purchaser, the information required to be provided to such Holder
or prospective purchaser by Rule 144A(d)(4) under the Securities Act; and (2)
the Company shall update such information from time to time in order to prevent
such information from becoming false and misleading and will take such other
actions as are necessary to ensure that the safe harbor exemption from the
registration requirements of the Securities Act under Rule 144A is and will be
available for resales of such Certificates conducted in accordance with Rule
144A. The Master Servicer shall cooperate with the Company and furnish the
Company such information in the Master Servicer's possession as the Company may
reasonably request.




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                                   ARTICLE VI

                       THE COMPANY AND THE MASTER SERVICER

         Section 6.01.     Liability of the Company and the Master Servicer.

         The Company and the Master Servicer each shall be liable in accordance
herewith only to the extent of the obligations specifically imposed upon and
undertaken by the Company and the Master Servicer herein. Only the Master
Servicer, any successor Master Servicer or the Trustee acting as Master Servicer
shall be liable with respect to the servicing of the Mortgage Loans and the REO
Property for actions taken by any such Person in contravention of the Master
Servicer's duties hereunder.

         Section 6.02.     Merger, Consolidation or Conversion of the Company or
                           the Master Servicer.

         The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will 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, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.

         Any Person into which the Company or the Master Servicer may be merged,
consolidated or converted, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master 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 Master Servicer shall be qualified to sell mortgage loans to and service
mortgage loans for Fannie Mae or Freddie Mac.

         Section 6.03.     Limitation on Liability of the Company, the Master
                           Servicer and Others.

         Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or 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 Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such





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person, against any liability which would otherwise be imposed by reason of
willful misfeasance, bad faith or gross negligence in the performance of duties
or by reason of reckless disregard of obligations and duties hereunder. The
Company, the Master Servicer and any director, officer, employee or agent of the
Company or the Master 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 Company, the Master Servicer and any director,
officer, employee or agent of the Company or the Master Servicer shall be
indemnified and held harmless by the Trust Fund against any loss, liability or
expense incurred in connection with any legal action relating to this Agreement
or the Certificates (including reasonable legal fees and disbursements of
counsel), other than (a) any loss, liability or expense related to Master
Servicer's servicing obligations with respect to any specific Mortgage Loan or
Mortgage Loans (except as any such loss, liability or expense shall be otherwise
reimbursable pursuant to this Agreement) or related to the Master Servicer's
obligations under Section 3.01, or (b) any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Company nor the Master Servicer
shall be under any obligation to appear in, prosecute or defend any legal action
which is not incidental to its respective duties under this Agreement and which
in its opinion may involve it in any expense or liability; PROVIDED, HOWEVER,
that the Company or the Master Servicer may in its sole discretion undertake any
such action which it may deem necessary or desirable with respect to this
Agreement and the rights and duties of the parties hereto and the interests of
the Certificateholders hereunder. In such event, the legal expenses and costs of
such action and any liability resulting therefrom (except any action or
liability related to the Master Servicer's obligations under Section 3.01) shall
be expenses, costs and liabilities of the Trust Fund, and the Company and the
Master Servicer shall be entitled to be reimbursed therefor from the Certificate
Account as provided in Section 3.11, any such right of reimbursement being prior
to the rights of Certificateholders to receive any amount in the Certificate
Account.

         Section 6.04.     Limitation on Resignation of the Master Servicer.

         The Master Servicer shall not resign from the obligations and duties
hereby imposed on it except (a) upon appointment of a successor servicer
reasonably acceptable to the Trustee upon receipt by the Trustee of a letter
from each Rating Agency (obtained by the Master Servicer and at its expense)
that such a resignation and appointment will not, in and of itself, result in a
downgrading of the Certificates or (b) upon determination that its duties
hereunder are no longer permissible under applicable law. Any such determination
permitting the resignation of the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning Master Servicer) to such
effect delivered to the Trustee. No such resignation shall become effective
until the Trustee or a successor servicer shall have assumed the Master
Servicer's responsibilities, duties, liabilities and obligations hereunder.








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         Section 6.05.     Sale and Assignment of Master Servicing.

         The Master Servicer may sell and assign its rights and delegate its
duties and obligations in their entirety as Master Servicer under this
Agreement; PROVIDED, HOWEVER, that: (i) the purchaser or transferee accepting
such assignment and delegation (a) shall be a Person which shall be qualified to
service mortgage loans for Fannie Mae or Freddie Mac; (b) shall, in the case of
successor master servicers only, have a net worth of not less than $10,000,000
(unless otherwise approved by each Rating Agency pursuant to clause (ii) below);
(c) shall be reasonably satisfactory to the Trustee (as evidenced in a writing
signed by the Trustee) as having a comparable servicing ability to that of the
Master Servicer on the Closing Date; (d) shall execute and deliver to the
Trustee an agreement, in form and substance reasonably satisfactory to the
Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by it as master servicer under this Agreement and any custodial
agreement, from and after the effective date of such agreement; (ii) each Rating
Agency shall be given prior written notice of the identity of the proposed
successor to the Master Servicer and each Rating Agency's rating of the
Certificates in effect immediately prior to such assignment, sale and delegation
will not be downgraded or withdrawn as a result of such assignment, sale and
delegation, as evidenced by a letter to such effect obtained by the Master
Servicer at its expense and delivered to the Trustee; and (iii) the Master
Servicer assigning and selling the master servicing shall deliver to the Trustee
an Officer's Certificate and an Opinion of Counsel (at the expense of the Master
Servicer), each stating that all conditions precedent to such action under this
Agreement have been completed and such action is permitted by and complies with
the terms of this Agreement. No such assignment or delegation shall affect any
liability of the Master Servicer arising prior to the effective date thereof.










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                                   ARTICLE VII

                                     DEFAULT

         Section 7.01.     Events of Default.

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

         (i) any failure by the Master Servicer to deposit into the Certificate
Account on each Certificate Account Deposit Date the amounts required to be
deposited therein (other than an Advance) under the terms of this Agreement
which continues unremedied for two (2) Business Days after such amount was
required to be remitted; or

         (ii) any failure on the part of the Master Servicer duly to observe or
perform in any material respect any other of the covenants or agreements on the
part of the Master Servicer contained in the Certificates or in this Agreement
(including any breach of the Master Servicer's representations and warranties
pursuant to Section 2.03(a) which materially and adversely affects the interests
of the Certificateholders) which continues unremedied for a period of 60 days
after the date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee, or to the
Master Servicer and the Trustee by the Holders of Certificates entitled to at
least 25% of the Voting Rights; or

         (iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in an involuntary case under any present or future federal
or state bankruptcy, insolvency or similar law or the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in force
undischarged or unstayed for a period of 60 consecutive days; or

         (iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of debt,
marshaling of assets and liabilities or similar proceedings of or relating to
the Master Servicer or of or relating to all or substantially all of its
property; or

         (v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take advantage of or
otherwise voluntarily commence a case or proceeding under any applicable
bankruptcy, insolvency, reorganization or other similar statute, make an
assignment for the benefit of its creditors, or voluntarily suspend payment of
its obligations; or








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         (vi) the Master Servicer shall fail to deposit in the Certificate
Account on any Certificate Account Deposit Date an amount equal to any required
Advance which continues unremedied for the earlier of (a) a period of two (2)
Business Days or (b) the Business Day immediately preceding the Distribution
Date.

         If an Event of Default described in clauses (i) - (v) of this Section
shall occur, then, and in each and every such case, so long as such Event of
Default shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; PROVIDED, HOWEVER, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Company, terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Trust Fund, other than its rights as a Certificateholder
hereunder; PROVIDED, HOWEVER, that if the Trustee determines (in its sole
discretion) that the failure by the Master Servicer to make any required Advance
was due to circumstances beyond its control, and the required Advance was
otherwise made, the Trustee shall not terminate the Master Servicer. On or after
the receipt by the Master Servicer of such notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master 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 at the
expense of the Master Servicer. The Master Servicer agrees to cooperate with
(and pay any related costs and expenses of) the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the successor
Master Servicer for administration by it of (i) the property and amounts which
are then or should be part of the Trust Fund or which thereafter become part of
the Trust Fund; (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder; (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans; and (iv) all
cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial or the Certificate Account or
thereafter be received with respect to the Mortgage Loans. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Master Servicer to remit








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any amounts received by it or to deliver any documents held by it with respect
to the Mortgage Loans. For purposes of this Section 7.01, the Trustee shall not
be deemed to have knowledge of an Event of Default unless a Responsible Officer
of the Trustee has actual knowledge thereof or unless notice of any event which
is in fact such an Event of Default is received by the Trustee as provided in
Section 11.05 and such notice references the Certificates, the Trust Fund or
this Agreement.

         Section 7.02.     Trustee to Act; Appointment of Successor.

         Within 90 days of the time the Master Servicer receives a notice of
termination pursuant to Section 7.01(i) - (v), the Trustee or its appointed
agent shall be the successor in all respects to the Master Servicer in its
capacity as Master Servicer under this Agreement and the transactions set forth
or provided for herein and shall be subject thereafter to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer including the obligation to make Advances which have been or will be
required to be made (except for the responsibilities, duties and liabilities
contained in Section 2.03 and its obligations to deposit amounts in respect of
losses pursuant to Section 3.12 and 4.01(h)) by the terms and provisions hereof;
and provided further, that any failure to perform such duties or
responsibilities caused by the Master Servicer's failure to provide information
required by Section 4.03 shall not be considered a default by the Trustee
hereunder. As compensation therefor, the Trustee shall be entitled to all funds
relating to the Mortgage Loans which the Master Servicer would have been
entitled to charge to the Custodial Account and the Certificate Account if the
Master Servicer had continued to act hereunder. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section
7.02, then notwithstanding the above, if the Trustee shall be unwilling to so
act, or shall be unable to so act, the Trustee may appoint, or petition a court
of competent jurisdiction or appoint, any established housing and home finance
institution, which is also a Fannie Mae- or Freddie Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall act in such capacity as herein above 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 that permitted the Master Servicer hereunder. Each of the Seller, the
Trustee and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. In no event
shall the successor Master Servicer be liable for the acts or omissions of the
predecessor Master Servicer.

         In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the




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servicing of the Mortgage Loans that are registered with MERS, in which case the
predecessor Master Servicer shall cooperate with the successor Master Servicer
in causing MERS to revise its records to reflect the transfer of servicing to
the successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this Section 7.02. The successor Master Servicer shall cause such
assignment to be delivered to the Trustee promptly upon receipt of the original
with evidence of recording thereon or a copy certified by the public recording
office in which such assignment was recorded.

         Any successor, including the Trustee, to the Master Servicer shall
maintain in force during its term as master servicer hereunder policies and
fidelity bonds to the same extent as the Master Servicer is so required pursuant
to Section 3.18.

         Any successor Master Servicer shall enter into a Credit Risk Management
Agreement with the Credit Risk Manager in substantially the form attached hereto
as Exhibit M.

         Notwithstanding anything else herein to the contrary, in no event shall
the Trustee be liable for any Master Servicing Fee or Sub-Servicing Fee or for
any differential in the amount of the Master Servicing Fee or Sub-Servicing Fee
paid hereunder and the amount necessary to induce any successor Master Servicer
or Sub-Servicer, as applicable, to act as successor Master Servicer or Sub-
Servicer, as applicable, under this Agreement and the transactions set forth or
provided for herein.

         Section 7.03.     Notification to Certificateholders.

         (a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt notice thereof to
Certificateholders and to the Rating Agencies.

         (b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.

         Section 7.04.     Waiver of Events of Default.





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         The Holders representing at least 51% of the Voting Rights of
Certificates affected by a default or Event of Default hereunder, may waive such
default or Event of Default (other than an Event of Default set forth in Section
7.01(vi)); PROVIDED, HOWEVER, that (a) a default or Event of Default under
clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in the second paragraph of Section 11.01 or materially
adversely affect any non-consenting Certificateholder. Upon any such waiver of a
default or Event of Default by the Holders representing the requisite percentage
of Voting Rights of Certificates affected by such default or Event of Default,
such default or Event of Default shall cease to exist and shall be deemed to
have been remedied for every purpose hereunder. No such waiver shall extend to
any subsequent or other default or Event of Default or impair any right
consequent thereon except to the extent expressly so waived. The Master Servicer
shall give notice of any such waiver to the Rating Agencies.

         Section 7.05.     List of Certificateholders.

         Upon written request of three or more Certificateholders of record, for
purposes of communicating with other Certificateholders with respect to their
rights under this Agreement, the Trustee will afford such Certificateholders
access during business hours to the most recent list of Certificateholders held
by the Trustee.


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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

         Section 8.01.     Duties of Trustee.

         The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. If an Event of Default occurs, is continuing and has
not been waived, 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 man would exercise or use under the circumstances in the
conduct of his own affairs. Any permissive right of the Trustee enumerated in
this Agreement shall not be construed as a duty.

         The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them in accordance with the
requirements of this Agreement. If any such instrument is found not to conform
to the requirements of this Agreement in a material manner, the Trustee shall
take such action as it deems appropriate to have the instrument corrected, and
if the instrument is not corrected to the Trustee's satisfaction, the Trustee
will provide notice thereof to the Certificateholders. Notwithstanding the
foregoing, the Trustee shall not be responsible for the accuracy or content of
any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Master Servicer hereunder or any Opinion of
Counsel required hereunder.

         The Trustee shall prepare and file or cause to be filed on behalf of
the Trust Fund any tax return that is required with respect to REMIC 1, REMIC 2
and REMIC 3 pursuant to applicable federal, state or local tax laws.

         The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of REMIC 1, REMIC 2 and REMIC
3 under the REMIC Provisions and to prevent the imposition of any federal, state
or local income, prohibited transaction, contribution or other tax on any of
REMIC 1, REMIC 2 or REMIC 3 to the extent that maintaining such status and
avoiding such taxes are within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.

         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; provided, however, that:



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         (i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the express
provisions of this Agreement, the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, no implied covenants or obligations shall be read into this Agreement
against the Trustee and, in the absence of bad faith on the part of the Trustee,
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;

         (ii) 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 shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and

         (iii) 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 entitled to at least 25% of the Voting
Rights relating to the time, method and place of conducting any proceeding for
any remedy available to the Trustee, or exercising any trust or power conferred
upon the Trustee, under this Agreement.

         Section 8.02.     Certain Matters Affecting the Trustee.

         Except as otherwise provided in Section 8.01:

         (a) The Trustee may conclusively rely upon and shall be fully protected
in acting or refraining from acting in reliance upon any resolution, Officers'
Certificate, certificate of auditors or any other certificate, statement,
instrument, opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document reasonably believed by it to be genuine and to have been
signed or presented by the proper party or parties;

         (b) The Trustee may consult with counsel 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
therewith;

         (c) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement, other than its obligation to
give notice pursuant to 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 the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee security or
indemnity satisfactory to it against the costs, expenses and liabilities which
may be incurred therein or thereby; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event of
Default of


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<PAGE>



which a Responsible Officer of the Trustee's corporate trust department has
actual knowledge (which has not been waived or cured), to exercise such of the
rights and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs;

         (d) 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;

         (e) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiver of all Events of Default which may have occurred, 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 entitled to
at least 25% of the Voting Rights; 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, reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement reasonable expense of every such examination shall be
paid by the Certificateholders requesting the investigation;

         (f) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents, nominees,
custodians or attorneys appointed with due care, and shall not be responsible
for any willful misconduct or negligence on the part of any agent, attorney,
custodian or nominee so appointed;

         (g) The Trustee shall not be required to give any bond or surety with
respect to the execution of the trust created hereby or the powers granted
hereunder; and

         (h) Whenever in the administration of the provisions of this Agreement
the Trustee shall deem it necessary or desirable that a matter be proved or
established prior to taking or suffering any action to be taken hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of gross negligence or bad faith on the part of
the Trustee, be deemed to be conclusively proved and established by a
certificate signed and delivered to the Trustee and such certificate, in the
absence of gross negligence or bad faith on the part of the Trustee, shall be
full warrant to the Trustee for any action taken, suffered or omitted by it
under the provisions of this Agreement upon the faith thereof.

         The Trustee shall have no obligation to invest and reinvest any cash
held in the absence of timely and specific written investment direction from the
Master Servicer. In no event shall the Trustee be liable for the selection of
investments or for investment losses incurred thereon. The


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Trustee shall have no liability in respect of losses incurred as a result of the
liquidation of any investment incurred as a result of the liquidation of any
investment prior to its stated maturity or the failure of the Master Servicer to
provide timely written investment direction.

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

         Section 8.03.    Trustee Not Liable for Certificates or Mortgage Loans.

         The recitals contained herein and in the Certificates (other than the
signature of the Trustee, the authentication of the Trustee on the Certificates,
the acknowledgments of the Trustee contained in Article II) shall be taken as
the statements of the Company and the Trustee assumes no responsibility for
their correctness. The Trustee makes no representations or warranties as to the
validity or sufficiency of this Agreement or of the Certificates (other than the
signature and authentication of the Trustee on the Certificates) or of any
Mortgage Loan or related document, or of MERS or the MERS(R) System. The Trustee
shall not be accountable for the use or application by the Company of any of the
Certificates or of the proceeds of such Certificates, or for the use or
application of any funds paid to the Company or the Master Servicer in respect
of the Mortgage Loans or deposited in or withdrawn from the Custodial Account by
the Master Servicer.

         Section 8.04.     Trustee May Own Certificates.

         The Trustee in its individual or any other capacity (other than as
Trustee hereunder) may become the owner or pledgee of Certificates with the same
rights it would have if it were not Trustee and may otherwise deal with the
parties hereto.

         Section 8.05.     Trustee's Fees.

         On each Distribution Date, the Trustee shall be entitled to withdraw
from the Certificate Account as compensation hereunder the Trustee's Fees. Such
compensation (which shall not be limited by any provision of law in regard to
the compensation of a trustee of an express trust) shall be paid for all
services rendered by it (except as otherwise reimbursed by the Seller pursuant
to a separate fee letter between the Seller and the Trustee) in the execution of
the trusts hereby created and in the exercise and performance of any of the
powers and duties hereunder or of the Trustee. Except as otherwise provided in
this Agreement, the Trustee and any director, officer, employee or agent of the
Trustee shall be indemnified and held harmless by the Trust Fund against any
claim, loss, liability, fee or expense incurred in connection with any Event of
Default, any breach of this Agreement or any claim or legal action (including
any pending or threatened claim or legal action) relating to the acceptance or
administration of its trusts hereunder or the Trustee's performance under



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the Certificates, other than any claim, loss, liability or expense (i) sustained
in connection with this Agreement related to the willful misfeasance, bad faith
or negligence of the Master Servicer in the performance of its duties hereunder
or (ii) incurred in connection with a breach constituting willful misfeasance,
bad faith or negligence of the Trustee in the performance of its duties
hereunder or by reason of reckless disregard of its obligations and duties
hereunder.

         The Master Servicer shall indemnify the Trustee and any director,
officer, employee or agent of the Trustee against any such claim or legal action
(including any pending or threatened claim or legal action), loss, liability,
fee or expense that may be sustained in connection with this Agreement related
to the willful misfeasance, bad faith, or negligence in the performance of the
Master Servicer's duties hereunder.

         The provisions of this Section 8.05 shall survive the resignation or
removal of the Trustee or the termination of this Agreement.

         Section 8.06.     Eligibility Requirements for Trustee.

         The Trustee hereunder shall at all times be a corporation or a national
banking association organized and doing business under the laws of any state or
the United States of America or the District of Columbia, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. In addition, the Trustee shall at all times be acceptable to
the Rating Agency rating the Certificates. If such corporation 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 the combined capital and surplus of such corporation 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 the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
The corporation or national banking association serving as Trustee may have
normal banking and trust relationships with the Seller and their affiliates or
the Master Servicer and its affiliates; PROVIDED, HOWEVER, that such corporation
cannot be an affiliate of the Master Servicer other than the Trustee in its role
as successor to the Master 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 thereof to the Master Servicer; with a
copy to the Rating Agencies; PROVIDED, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions; PROVIDED, HOWEVER, that the resigning
Trustee shall not resign and be discharged from the trusts hereby created until
such time as the



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Rating Agency rating the Certificates approves the successor trustee. Upon
receiving such notice of resignation, the Master Servicer shall promptly appoint
a successor trustee who meets the eligibility requirements of Section 8.06 by
written instrument, in triplicate, one copy of which instrument shall be
delivered to each of the resigning Trustee and to the successor trustee. If no
successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of 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 the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged 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, the
Master Servicer may remove the Trustee and appoint a successor trustee who meets
the eligibility requirements of Section 8.06 by written instrument, in
triplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee.

         The Holders of Certificates entitled to at least 51% of the Voting
Rights, may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Master Servicer, one complete set to the Trustee so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders and the Company by the
Master Servicer.

         Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall not
become effective until acceptance of appointment by the successor trustee as
provided in Section 8.08.

         Section 8.08.     Successor Trustee.

         Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Master Servicer and to its predecessor
trustee 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 predecessor trustee shall after payment of its outstanding fees and
expenses, promptly deliver to the successor trustee all assets and records of
the Trust Fund held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver all 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,


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duties and obligations.

         No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.

         Upon acceptance of appointment by a successor trustee as provided in
this Section, the Master Servicer shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates at their addresses as shown in
the Certificate Register. If the Master Servicer fails to mail such notice
within ten days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Master Servicer.

         Section 8.09.     Merger or Consolidation of Trustee.

         Any state bank or trust company or corporation or national banking
association into which the Trustee may be merged or converted or with which it
may be consolidated or any state bank or trust company or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any state bank or trust company or corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such state bank or trust company or corporation or national
banking association shall be eligible under the provisions of Section 8.06
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.

         Section 8.10.     Appointment of Co-Trustee or Separate Trustee.

         Notwithstanding any other provisions hereof, 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 the same may at the time be located, the
Master 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, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment
without the Master Servicer. No co-trustee or separate trustee hereunder shall
be required to meet the terms of eligibility as a successor trustee under
Section 8.06 hereunder and no notice to Holders of Certificates of the
appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.



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         In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10, all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, 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 Master
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 Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

         Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
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 to, the Trustee. Every
such instrument shall be filed with the Trustee.

         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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                                   ARTICLE IX

                                   TERMINATION

         Section 9.01.     Termination Upon Repurchase or Liquidation of All
                           Mortgage Loans or upon Purchase of Certificates.

         (a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Holder of a 50.01% or greater
Percentage Interest in the Class C Certificates (the "Majority Class C
Certificateholders") or its designee of all Mortgage Loans and each REO Property
in respect thereof remaining in the Trust Fund at a price equal to (a) 100% of
the unpaid principal balance of each Mortgage Loan (other than one as to which a
REO Property was acquired) on the day of repurchase together with accrued
interest on such unpaid principal balance at the Net Mortgage Rate to the first
day of the month in which the proceeds of such repurchase are to be distributed,
plus (b) the appraised value of any REO Property (but not more than the unpaid
principal balance of the related Mortgage Loan, together with accrued interest
on that balance at the Net Mortgage Rate to the first day of the month such
repurchase price is distributed), less the good faith estimate of the Majority
Class C Certificateholders of liquidation expenses to be incurred in connection
with its disposal thereof, such appraisal to be conducted by an appraiser
mutually agreed upon by the Majority Class C Certificateholders and the Trustee
at the expense of the Master Servicer, and (ii) the final payment or other
liquidation (or any Advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund (or the disposition of all REO Property in respect
thereof); PROVIDED, HOWEVER, that in no event shall the trust created hereby
continue beyond the earlier of (i) the Distribution Date occurring in March 2034
and (ii) the expiration of 21 years from the death of the last survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof, and PROVIDED FURTHER, that
the purchase price set forth above shall be increased as is necessary, as
determined by the Majority Class C Certificateholders, to avoid disqualification
of any of REMIC 1, REMIC 2 or REMIC 3 as a REMIC. In the case of any repurchase
by the Majority Class C Certificateholders pursuant to clause (i), the Master
Servicer shall exercise reasonable efforts to cooperate fully with the Trustee
in effecting such repurchase and the transfer of the Mortgage Loans and related
Mortgage Files and related records to the Majority Class C Certificateholders.

         The right of the Majority Class C Certificateholders or its designee to
repurchase all Mortgage Loans pursuant to (i) above shall be conditioned upon
the Aggregate Stated Principal




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Balance of such Mortgage Loans at the time of any such repurchase aggregating an
amount equal to or less than 10% of the Aggregate Stated Principal Balance of
the Mortgage Loans at the Cut-off Date. If such right is exercised, the Majority
Class C Certificateholders upon such repurchase shall provide to the Trustee,
notice of such exercise prior to the Determination Date in the month preceding
the month of purchase and the certification required by Section 3.16.

         Written notice of any termination, specifying the Distribution Date
upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation, shall be given
promptly by the Trustee by letter to the Certificateholders mailed (a) in the
event such notice is given in connection with the Majority Class C
Certificateholder's election to repurchase, not earlier than the 15th day and
not later than the 25th day of the month next preceding the month of such final
distribution or (b) otherwise during the month of such final distribution on or
before the Determination Date in such month, in each case specifying (i) the
Distribution Date upon which final payment of the Certificates will be made upon
presentation and surrender of Certificates at the office of the Trustee therein
designated, (ii) the amount of any such final payment and (iii) that the Record
Date otherwise applicable to such Distribution Date is not applicable, payments
being made only upon presentation and surrender of the Certificates at the
office of the Trustee therein specified. In the event such notice is given in
connection with the Majority Class C Certificateholder or its designee's
election to repurchase, the Majority Class C Certificateholder or its designee
shall deliver to the Trustee for deposit in the Certificate Account on the
Business Day immediately preceding the Distribution Date specified in such
notice an amount equal to the above-described repurchase price payable out of
its own funds. Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall first, pay itself the Trustee's Fees for
such Distribution Date and any other amounts owing to the Trustee under this
Agreement, and second, distribute to the Certificateholders (i) the amount
otherwise distributable on such Distribution Date, if not in connection with the
Majority Class C Certificateholder's election to repurchase, or (ii) if the
Majority Class C Certificateholder elected to so repurchase, an amount
determined as follows: with respect to each Regular Certificate (other than the
Class A-IO Certificates), the outstanding Certificate Principal Balance thereof,
plus with respect to each Regular Certificate (other than the Class P
Certificates), one month's interest thereon at the applicable Pass- Through Rate
and any Unpaid Interest Shortfall Amount, plus with respect to each Mezzanine
Certificate, any unpaid Allocated Realized Loss Amount; and with respect to the
Class R Certificates, the Percentage Interest evidenced thereby multiplied by
the difference, if any, between the above described repurchase price and the
aggregate amount to be distributed to the Holders of the Regular Certificates,
subject to the priorities set forth in Section 4.01. Notwithstanding the
foregoing, by acceptance of the Class R Certificates, the Holders of the Class R
Certificates agree, in connection with any termination hereunder, to assign and
transfer any amounts received in respect of such termination to the Holders of
the Class C Certificates and to pay any such amounts to the Holders of the Class
C Certificates. Upon certification to the Trustee by a Servicing Officer,
following such final deposit, the Trustee shall promptly release the Mortgage
Files as directed by the


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Majority Class C Certificateholder for the remaining Mortgage Loans, and the
Trustee shall execute all assignments, endorsements and other instruments
required by the Majority Class C Certificateholder as being necessary to
effectuate such transfer.

         In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned notice, the Trustee shall give a second 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 of the Certificates shall not have been surrendered
for cancellation, the Trustee shall take reasonable steps as directed by the
Company in writing, or appoint an agent to take reasonable 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
subject hereto. If within nine months after the second notice all the
Certificates shall not have been surrendered for cancellation, the Class R
Certificateholders shall be entitled to all unclaimed funds and other assets
which remain subject hereto.

         Section 9.02.     Termination of REMIC 2 and REMIC 3.

         REMIC 2 shall be terminated on the earlier of the Final Distribution
Date and the date on which it is deemed to receive the last deemed distributions
on the REMIC 1 Regular Interests and the last distribution due on the REMIC 2
Regular Interests and the Class R Certificates (in respect of the Class R-2
Interest) is made. REMIC 3 shall be terminated on the earlier of the Final
Distribution Date and the date on which it is deemed to receive the last deemed
distributions on the REMIC 2 Regular Interests and the last distribution due on
the Regular Certificates and the Class R Certificates (in respect of the Class
R-3 Interest) is made.

         Section 9.03.     Additional Termination Requirements.

         (a) In the event the Majority Class C Certificateholder repurchases the
Mortgage Loans as provided in Section 9.01, the Trust Fund shall be terminated
in accordance with the following additional requirements, unless the Majority
Class C Certificateholder, at its own expense, obtains for the Trustee an
Opinion of Counsel to the effect that the failure of the Trust Fund to comply
with the requirements of this Section 9.03 will not (i) result in the imposition
on the Trust of taxes on "prohibited transactions," as described in Section 860F
of the Code, or (ii) cause either REMIC 1, REMIC 2 or REMIC 3 to fail to qualify
as a REMIC at any time that any Certificate is outstanding:

                  (i) The Trustee shall establish a 90-day liquidation period
for REMIC 1, REMIC 2 and REMIC 3, as the case may be, and specify the first day
of such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations Section 1.860F-1. The Trustee also shall
satisfy all of the requirements of a qualified liquidation for REMIC 1, REMIC 2
and


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REMIC 3, as the case may be, under Section 860F of the Code and regulations
thereunder; and

                  (ii) The Majority Class C Certificateholder shall notify the
Trustee at the commencement of such 90-day liquidation period and, at or prior
to the time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the Trust Fund
in accordance with the terms hereof.

         (b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for REMIC 1, REMIC 2 and REMIC 3 at the expense of
the Trust Fund in accordance with the terms and conditions of this Agreement.


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                                    ARTICLE X

                                REMIC PROVISIONS

         Section 10.01.    REMIC Administration.

         (a) The Trustee shall make an election to treat the Trust Fund as three
REMICs under the Code and, if necessary, under applicable state law. Each such
election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of the REMIC elections in respect of
the Trust Fund, (i) the Class R-1 Interest will constitute the sole class of
"residual interest" in REMIC 1, (ii) the Class R-2 Interest will constitute the
sole class of "residual interest" in REMIC 2, and (iii) the Class R-3 Interest
will constitute the sole class of "residual interest" in REMIC 3, and the
Regular Certificates shall be designated as the "regular interests" in REMIC 3.
The Master Servicer and the Trustee shall not permit the creation of any
"interests" (within the meaning of Section 860G of the Code) in REMIC 1, REMIC 2
or REMIC 3 other than the REMIC 1 Regular Interests and the Class R-1 Interest
(in the case of REMIC 1), the REMIC 2 Regular Interests and the Class R-2
Interest (in the case of REMIC 2), and the Regular Certificates and the Class
R-3 Interest (in the case of REMIC 3). The Trustee will apply for an Employee
Identification Number from the IRS via form SS-4 or any other acceptable method
for each of REMIC 1, REMIC 2 and REMIC 3.

         (b) The Closing Date is hereby designated as the "startup day" of the
Trust Fund within the meaning of Section 860G(a)(9) of the Code.

         (c) The Trustee shall pay out of its own funds, without any right of
reimbursement, any and all expenses relating to any tax audit of the REMICs
(including, but not limited to, any professional fees or any administrative or
judicial proceedings with respect to the REMICs that involve the Internal
Revenue Service or state tax authorities), other than the expense of obtaining
any tax-related Opinion of Counsel except as specified herein. The Trustee, as
agent for the REMICs' tax matters person, shall (i) act on behalf of the REMICs
in relation to any tax matter or controversy involving the Trust Fund and (ii)
represent the Trust Fund in any administrative or judicial proceeding relating
to an examination or audit by any governmental taxing authority with respect
thereto. By their acceptance thereof, the Holder of the largest Percentage
Interest of the Class R Certificates hereby agrees to irrevocably appoint the
Trustee or an Affiliate as its agent to perform all of the duties of the tax
matters person for the REMICs.

         (d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days of the Closing Date) in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of




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reimbursement therefor. The Master Servicer shall provide on a timely basis to
the Trustee or its designee such information with respect to the assets of the
REMICs as is in its possession and reasonably required by the Trustee to enable
it to perform its obligations under this Article X.

         (e) The Trustee shall perform on behalf of the REMICs all reporting and
other tax compliance duties that are the responsibility of the REMICs under the
Code, the REMIC Provisions or other compliance guidance issued by the Internal
Revenue Service or any state or local taxing authority. Among its other duties,
as required by the Code, the REMIC Provisions or other such compliance guidance,
the Trustee shall provide (i) to any Transferor of a Class R Certificate such
information as is necessary for the application of any tax relating to the
transfer of a Class R Certificate to any Person who is not a Permitted
Transferee, (ii) to the Certificateholders such information or reports as are
required by the Code or the REMIC Provisions including reports relating to
interest, original issue discount and market discount or premium (using the
Prepayment Assumption as required) and (iii) to the Internal Revenue Service the
name, title, address and telephone number of the person who will serve as the
representative of the REMICs. The Master Servicer shall provide on a timely
basis to the Trustee such information with respect to the assets of the REMICs,
including, without limitation, the Mortgage Loans, as is in its possession and
reasonably required by the Trustee to enable it to perform its obligations under
this subsection. In addition, the Company shall provide or cause to be provided
to the Trustee, within ten (10) days after the Closing Date, all information or
data that the Trustee reasonably determines to be relevant for tax purposes as
to the valuations and issue prices of the Certificates, including, without
limitation, the price, yield, prepayment assumption and projected cash flow of
the Certificates.

         (f) The Trustee shall take such action and shall cause the REMICs
created hereunder to take such action as shall be necessary to create or
maintain the status thereof as REMICs under the REMIC Provisions (and the Master
Servicer shall assist it, to the extent reasonably requested by it). The Trustee
shall not take any action, cause the Trust Fund to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of the
REMIC 1, REMIC 2 or REMIC 3 as REMICs or (ii) result in the imposition of a tax
upon the REMICs (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC set forth in Section 860G(d) of the Code) (either such event, an "Adverse
REMIC Event") unless the Trustee has received an Opinion of Counsel, addressed
to the Trustee (at the expense of the party seeking to take such action but in
no event at the expense of the Trustee) to the effect that the contemplated
action will not, with respect to the REMICs created hereunder, endanger such
status or result in the imposition of such a tax, nor shall the Master Servicer
take or fail to take any action (whether or not authorized hereunder) as to
which the Trustee has advised it in writing that it has received an Opinion of
Counsel to the effect that an Adverse REMIC Event could occur with respect to
such action. In addition, prior to taking any action with respect to the REMICs
or the assets of the REMICs, or causing the REMICs to take any action, which is
not contemplated under the terms



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of this Agreement, the Master Servicer will consult with the Trustee or its
designee, in writing, with respect to whether such action could cause an Adverse
REMIC Event to occur with respect to the Trust Fund, and the Master Servicer
shall not take any such action or cause the Trust Fund to take any such action
as to which the Trustee has advised it in writing that an Adverse REMIC Event
could occur. The Trustee may consult with counsel to make such written advice,
and the cost of same shall be borne by the party seeking to take the action not
permitted by this Agreement, but in no event shall such cost be an expense of
the Trustee. At all times as may be required by the Code, the Trustee will
ensure that substantially all of the assets of the REMICs created hereunder will
consist of "qualified mortgages" as defined in Section 860G(a)(3) of the Code
and "permitted investments" as defined in Section 860G(a)(5) of the Code.

         (g) In the event that any tax is imposed on "prohibited transactions"
of the REMICs created hereunder as defined in Section 860F(a)(2) of the Code, on
the "net income from foreclosure property" of the REMICs as defined in Section
860G(c) of the Code, on any contributions to the REMICs after the Startup Day
therefor pursuant to Section 860G(d) of the Code, or any other tax is imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Trustee pursuant to Section 10.03 hereof, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X, (ii) to the Master Servicer pursuant to Section 10.03
hereof, if such tax arises out of or results from a breach by the Master
Servicer of any of its obligations under Article III or this Article X, or
otherwise, (iii) to the Master Servicer as provided in Section 3.05 and (iv)
against amounts on deposit in the Certificate Account and shall be paid by
withdrawal therefrom to the extent not required to be paid by the Master
Servicer or the Trustee pursuant to another provision of this Agreement.

         (h) On or before April 15 of each calendar year, commencing April 15,
2004, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.

         (i) The Trustee shall, for federal income tax purposes, maintain books
and records with respect to the REMICs on a calendar year and on an accrual
basis.

         (j) Following the Startup Day, the Trustee shall not accept any
contributions of assets to the REMICs other than in connection with any
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.04
unless it shall have received an Opinion of Counsel to the effect that the
inclusion of such assets in the REMICs will not cause the REMIC 1, REMIC 2 or
REMIC 3 to fail to qualify as REMICs at any time that any Certificates are
outstanding or subject either REMIC 1, REMIC 2 or REMIC 3 to any tax under the
REMIC Provisions or other applicable provisions of federal, state and local law
or ordinances.

         (k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which



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<PAGE>

the REMICs will receive a fee or other compensation for services nor permit the
REMICs to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code.

         Section 10.02.    Prohibited Transactions and Activities.

         None of the Company, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC 1, REMIC 2 or REMIC 3 pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this Agreement), nor acquire any
assets for the Trust Fund (other than REO Property acquired in respect of a
defaulted Mortgage Loan), nor sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain, nor accept any
contributions to the REMICs after the Closing Date (other than a Qualified
Substitute Mortgage Loan delivered in accordance with Section 2.04), unless it
has received an Opinion of Counsel, addressed to the Trustee (at the expense of
the party seeking to cause such sale, disposition, substitution, acquisition or
contribution but in no event at the expense of the Trustee) that such sale,
disposition, substitution, acquisition or contribution will not (a) affect
adversely the status of REMIC 1, REMIC 2 or REMIC 3 as REMICs or (b) cause the
Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.

         Section 10.03.    Master Servicer and Trustee Indemnification.

         (a) The Trustee agrees to indemnify the Trust Fund, the Company, and
the Master Servicer for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Master Servicer, as a result of a breach of the Trustee's covenants set
forth in this Article X.

         (b) The Master Servicer agrees to indemnify the Trust Fund, the Company
and the Trustee for any taxes and costs including, without limitation, any
reasonable attorneys' fees imposed on or incurred by the Trust Fund, the Company
or the Trustee, as a result of a breach of the Master Servicer's covenants set
forth in Article III or this Article X, in each case with respect to compliance
with the REMIC Provisions.



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                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

         Section 11.01.    Amendment.

         This Agreement may be amended from time to time by the Company, the
Master Servicer and the Trustee, without the consent of any of the
Certificateholders, (i) to cure any ambiguity, (ii) to correct or supplement any
provisions herein which may be defective or inconsistent with any other
provisions herein or to correct any error, (iii) to amend this Agreement in any
respect subject to the provisions in clauses (A) and (B) below, or (iv) if such
amendment, as evidenced by an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, is reasonably necessary to
comply with any requirements imposed by the Code or any successor or amendatory
statute or any temporary or final regulation, revenue ruling, revenue procedure
or other written official announcement or interpretation relating to federal
income tax laws or any proposed such action which, if made effective, would
apply retroactively to the Trust Fund at least from the effective date of such
amendment; PROVIDED that such action (except any amendment described in (iv)
above) shall not adversely affect in any material respect the interests of any
Certificateholder (other than Certificateholders who shall consent to such
amendment), as evidenced by (A) an Opinion of Counsel (provided by the Person
requesting such amendment) delivered to the Trustee, and (B) a letter from each
Rating Agency, confirming that such amendment shall not cause it to lower its
rating on any of the Certificates.

         This Agreement may also be amended from time to time by the Company,
the Master Servicer and the Trustee and Holders of Certificates entitled to at
least 66-2/3% of the Voting Rights 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 received on Mortgage Loans which are
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 at least 66-2/3% of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Seller or the
Master Servicer or any affiliate thereof shall be entitled to Voting Rights with
respect to matters described in (i), (ii) and (iii) of this paragraph.

         Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to




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any amendment to this Agreement unless it shall have first received an Opinion
of Counsel (provided by the Person requesting such amendment) to the effect that
such amendment will not result in the imposition of any tax on either REMIC 1,
REMIC 2 or REMIC 3 pursuant to the REMIC Provisions or cause either REMIC 1,
REMIC 2 or REMIC 3 to fail to qualify as a REMIC at any time that any
Certificates are outstanding.

         Promptly after the execution of any such amendment the Trustee shall
furnish a copy of such amendment or a written statement describing the amendment
to each Certificateholder, with a copy to the Rating Agencies.

         It shall not be necessary for the consent of Certificateholders under
this Section 11.01 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.

         Prior to executing any amendment pursuant to this Section, the Trustee
shall be entitled to receive an Opinion of Counsel (provided by the Person
requesting such amendment) to the effect that such amendment is authorized or
permitted by this Agreement. The cost of any Opinion of Counsel delivered
pursuant to this Section 11.01 shall be an expense of the party requesting such
amendment, but in any case shall not be an expense of the Trustee.

         The Trustee may, but shall not be obligated to, enter into any
amendment pursuant to this Section that affects its rights, duties and
immunities under this Agreement or otherwise.

         Section 11.02.    Recordation of Agreement; Counterparts.

         To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer at the expense of the Certificateholders, but only upon
direction of the Company accompanied by 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.



                                      129
<PAGE>

         Section 11.03.    Limitation on Rights of Certificateholders.

         The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
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 expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.

         No Certificateholder shall have any right by virtue of any provision 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 notice of an Event of Default, or of a default
by the Seller or the Trustee in the performance of any obligation hereunder, and
of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates entitled to at least 51% of the Voting Rights shall have
made written request upon 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 is
understood and intended, and 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 of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such 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 equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

         Section 11.04.    Governing Law.

         This Agreement and the Certificates 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.



                                      130
<PAGE>


         Section 11.05.    Notices.

         All demands, notices and direction hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Company, 1401 Dove Street, Newport Beach, California 92660, Attention: General
Counsel, or such other address as may hereafter be furnished to the other
parties hereto in writing; (b) in the case of Impac Funding, 1401 Dove Avenue,
Newport Beach, California 92660, Attention: General Counsel, or such other
address as may hereafter be furnished to the other parties hereto in writing;
(c) in the case of the Trustee, to its Corporate Trust Office, or such other
address as may hereafter be furnished to the other parties hereto in writing; or
(d) in the case of the Rating Agencies, Standard & Poor's, 55 Water Street, 41st
Floor, New York, NY 10041, Attention: Asset Backed Surveillance Department; and
Moody's, Moody's Investors Service, Inc., Residential Mortgage Monitoring
Department, 99 Church Street, New York, New York 10007. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.

         Section 11.06.    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 11.07.    Successors and Assigns.

         The provisions of this Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of the parties hereto, and all
such provisions shall inure to the benefit of the Trustee and the
Certificateholders.

         Section 11.08.    Article and Section Headings.

         The article and Section headings herein are for convenience of
reference only, and shall not limit or otherwise affect the meaning hereof.

         Section 11.09.    Notice to Rating Agencies.

         The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency



                                      131
<PAGE>


referred to below 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 Master Servicer or the
Trustee;

         4. The repurchase or substitution of Mortgage Loans pursuant to Section
2.04;

         5. The final payment to Certificateholders; and

         6. Any change in the location of the Custodial Account or the
Certificate Account.

         In addition, the Trustee shall promptly furnish to the Rating Agency
copies of each report to Certificateholders described in Section 4.02; and the
Master Servicer shall promptly furnish to the Rating Agency copies of each
annual independent public accountants' servicing report received as described in
Section 3.20.

         Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York
10041, Attention: Asset Backed Surveillance Department and (ii) in the case of
Moody's, Residential Mortgage Monitoring Department, 99 Church Street, New York,
New York 10007, or, in each case, such other address as either such Rating
Agency may designate in writing to the parties thereto.



                                      132
<PAGE>



         IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.

                                     IMPAC SECURED ASSETS CORP.,
                                     Company



                                     By:  /s/ Richard J. Johnson
                                        ---------------------------------
                                     Name:    Richard J. Johnson
                                     Title:   Chief Financial Officer


                                     IMPAC FUNDING CORPORATION,
                                     Master Servicer



                                     By:  /s/ Lisa Duehring
                                        ---------------------------------
                                     Name:    Lisa Duehring
                                     Title:   Senior Vice President


                                     DEUTSCHE BANK NATIONAL TRUST
                                     COMPANY,
                                     Trustee



                                     By:  /s/ Alan Sueda
                                        ---------------------------------
                                     Name:    Alan Sueda
                                     Title:   Associate


                                     By:  /s/ Jeremy Conyers
                                        ---------------------------------
                                     Name:    Jeremy Conyers
                                     Title:   Associate




                                      133
<PAGE>



STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )


         On the 27th day of February, 2004, before me, a notary public in and
for said State, personally appeared Richard J. Johnson, known to me to be the
Chief Financial Officer of Impac Secured Assets Corp., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

 ------------------------------
    Notary Public


[Notarial Seal]





                                      134
<PAGE>


STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )


         On the 27th day of February, 2004, before me, a notary public in and
for said State, personally appeared Lisa Duehring, known to me to be a Senior
Vice President of Impac Funding Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

         IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.

 ------------------------------
    Notary Public


[Notarial Seal]






                                      135
<PAGE>

STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )


         On the 27th day of February, 2004, before me, a notary public in and
for said State, personally appeared ___________________, known to me to be a(n)
_______________ of Deutsche Bank National Trust Company, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 ------------------------------
    Notary Public


[Notarial Seal]




                                      136
<PAGE>



STATE OF CALIFORNIA                 )
                                    ) ss.:
COUNTY OF ORANGE                    )


         On the 27th day of February, 2004, before me, a notary public in and
for said State, personally appeared _________________, known to me to be a(n)
__________________ of Deutsche Bank National Trust Company, the entity that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.

 ------------------------------
    Notary Public


[Notarial Seal]





                                       135



<PAGE>

                                    EXHIBIT A

                         FORM OF CLASS A-__ CERTIFICATE

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").

         THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE 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 TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE 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. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.




                                       A-1

<PAGE>



<TABLE>
<CAPTION>

<S>                                                 <C>
Certificate No.__                                   _____% Initial Pass-Through Rate
Class A-____
Date of Pooling and Servicing                       Percentage Interest:____%
Agreement and Cut-off Date:
February 1, 2004
First Distribution Date:                            Aggregate Initial [Certificate Principal Balance]
March 25, 2004                                      [Notional Amount] of the Class A-__ Certificates:
                                                    $__________________

Master Servicer:                                    Initial [Certificate Principal
Impac Funding Corporation                           Balance] [Notional Amount] of this Certificate:
                                                    $__________________

Assumed Final                                       CUSIP:__________
Distribution Date:
[March 25, 2034] [February 25, 2006]

</TABLE>

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-1

         evidencing a percentage interest in the distributions allocable to the
         Class A- ___ Certificates with respect to a Trust Fund consisting
         primarily of a pool of conforming one- to four-family fixed-rate first
         lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial [Certificate Principal Balance] [Notional Amount] of this Certificate by
the aggregate Initial [Certificate Principal Balance] [Notional Amount] of all
Class A-____ Certificates, both as specified above) in certain distributions
with respect to the Trust Fund consisting primarily of an interest in a pool of
conforming one- to four-family fixed-rate first lien mortgage loans (the
"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement


                                       A-2

<PAGE>



dated as specified above (the "Agreement") among the Company, the Master
Servicer and Deutsche Bank National Trust Company, as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
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.

         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 as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of [interest]
[and principal], if any, required to be distributed to Holders of Class
A-____Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
[Certificate Principal Balance] [Notional Amount] of this Certificate is set
forth above. [The Certificate Principal Balance hereof will be reduced to the
extent of distributions allocable to principal and any Realized Losses allocable
hereto.]

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.




                                       A-3

<PAGE>



         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. 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 herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other 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 authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized denominations
evidencing the same Class and 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 Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.


                                       A-4

<PAGE>



         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                       A-5

<PAGE>



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


Dated:   February __, 2004             DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class A-____ Certificates referred to in the
within-mentioned Agreement.


                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory






                                       A-6

<PAGE>



                                   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)

a Percentage Interest evidenced by the within Mortgage Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar 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



                                           ------------------------------------
                                              Signature Guaranteed





                                       A-7

<PAGE>



                            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-8

<PAGE>



                                   EXHIBIT B-1
                         FORM OF CLASS M-[_] CERTIFICATE

         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES, [THE CLASS M-1 CERTIFICATES] [AND THE CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").

         THIS CERTIFICATE SHALL INITIALLY BE ISSUED AS ONE OR MORE CERTIFICATES
REGISTERED IN THE NAME OF THE DEPOSITORY OR ITS NOMINEE AND, EXCEPT AS PROVIDED
BELOW, REGISTRATION OF SUCH CERTIFICATES MAY NOT BE TRANSFERRED BY THE TRUSTEE
EXCEPT TO ANOTHER DEPOSITORY THAT AGREES TO HOLD SUCH CERTIFICATES FOR THE
RESPECTIVE CERTIFICATE OWNERS WITH OWNERSHIP INTERESTS THEREIN. THE CERTIFICATE
OWNERS SHALL HOLD THEIR RESPECTIVE OWNERSHIP INTERESTS IN AND TO EACH OF SUCH
BOOK-ENTRY CERTIFICATES THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY AND,
EXCEPT AS PROVIDED BELOW, SHALL NOT BE ENTITLED TO DEFINITIVE CERTIFICATES IN
RESPECT OF SUCH OWNERSHIP INTERESTS. ALL TRANSFERS BY CERTIFICATE OWNERS OF
THEIR RESPECTIVE OWNERSHIP IN THE 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 TRANSFER THE OWNERSHIP INTERESTS ONLY IN THE 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. THE TRUSTEE SHALL
NOT BE REQUIRED TO MONITOR, DETERMINE OR INQUIRE AS TO COMPLIANCE WITH THE
TRANSFER RESTRICTIONS WITH RESPECT TO THE BOOK-ENTRY CERTIFICATES, AND THE
TRUSTEE SHALL HAVE NO LIABILITY FOR TRANSFERS OF OWNERSHIP INTERESTS IN THE
BOOK-ENTRY CERTIFICATES MADE THROUGH THE BOOK-ENTRY FACILITIES OF THE DEPOSITORY
OR BETWEEN OR AMONG DEPOSITORY PARTICIPANTS OR CERTIFICATE OWNERS, MADE IN
VIOLATION OF THE APPLICABLE RESTRICTIONS.

         ANY TRANSFEREE SHALL BE DEEMED TO HAVE MADE THE
REPRESENTATION SET FORTH IN SECTION 5.02(C) OF THE POOLING AND
SERVICING AGREEMENT.



                                      B-1-1

<PAGE>



<TABLE>
<CAPTION>

<S>                                                     <C>
Certificate No.______                                   _______% Initial Pass-Through Rate

Class M-[__] Mezzanine                                  Aggregate Initial Certificate Principal
                                                        Balance of the Class M-[__] Certificates:
                                                        $_______________

Date of Pooling and Servicing                           Initial Certificate Principal Balance of this
Agreement and Cut-off Date:                             Certificate:

February 1, 2004                                        $__________________

First Distribution Date:                                CUSIP:______________
March 25, 2004

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:

-------------
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-1

         evidencing a percentage interest in any distributions allocable to the
         Class M-[__] Certificates with respect to the Trust Fund consisting
         primarily of a pool of conforming one- to four-family fixed-rate first
         lien mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that Cede & Co. is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class M-[__] Certificates, both as
specified above) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of conforming one- to four-family fixed-rate
first lien mortgage loans (the "Mortgage Loans"), formed and sold by Impac
Secured Assets Corp. (hereinafter called the "Company," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Company, the Master Servicer and Deutsche Bank
National Trust Company, as trustee (the


                                      B-1-2

<PAGE>



"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. 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.

         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 as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class
M-[__]Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Any transferee shall be deemed to have made the representation set
forth in Section 5.02(c) of the Agreement.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal and any Realized Losses allocable hereto.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.


                                      B-1-3

<PAGE>



         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. 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 herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other 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 authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized denominations
evidencing the same Class and 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 Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.


                                      B-1-4

<PAGE>



         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                      B-1-5

<PAGE>



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


Dated:   February __, 2004             DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class M-[_] Certificates referred to in the
within-mentioned Agreement.


                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory





                                      B-1-6

<PAGE>



                                   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)

a Percentage Interest evidenced by the within Mortgage Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar 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



                                           ------------------------------------
                                              Signature Guaranteed





                                      B-1-7

<PAGE>



                            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-1-8

<PAGE>



                                   EXHIBIT B-2
                          FORM OF CLASS C CERTIFICATES


         THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A,
CLASS M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE AGREEMENT
(AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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 (THE "CODE").

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.





                                      B-2-1

<PAGE>



<TABLE>
<CAPTION>

<S>                                                        <C>
Certificate No. 1

Class C                                                    Aggregate Initial Notional Amount of the
                                                           Class C Certificates:
                                                           $__________________

Date of Pooling and Servicing                              Initial Notional Amount
Agreement and Cut-off Date:                                of this Certificate ("Denomination"):
February 1, 2004                                           $______________

First Distribution Date:                                   Initial Certificate Principal Balance of
March 25, 2004                                             this Certificate ("Denomination"):
                                                           $______________

Master Servicer:                                           CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:                           Percentage Interest of this Certificate:
______________                                             100.00%
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-1

         evidencing percentage interest in the distributions allocable to the
         Class C Certificates with respect to a Trust Fund consisting primarily
         of a pool of conforming one- to four- family fixed-rate first lien
         mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other or obligation
secured by or payable from payments on the Certificates.

         This certifies that __________ is the registered owner of the
Percentage Interest evidenced by this Class C Certificate (obtained by dividing
the Original Class C Certificate by the Original Class Certificate Principal
Balance) in certain distributions with respect to a Trust consisting primarily
of the Mortgage Loans deposited by Impac Secured Assets Corp. (the "Company").
The Trust was created pursuant to a Pooling and Servicing Agreement dated as of
February 1, 2004 (the "Agreement") among the Company, Impac Funding Corporation,
as master servicer (the "Master Servicer"), and Deutsche Bank National Trust
Company, as Trustee (the "Trustee"). To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement.


                                      B-2-2

<PAGE>



This Class C Certificate is issued under and is subject to the terms, provisions
and conditions of the Agreement, to which Agreement the Holder of this Class C
Certificate by virtue of the acceptance hereof assents and by which such Holder
is bound.

         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 as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class C
Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is


                                      B-2-3

<PAGE>



exempt from the registration requirements under said Act and such laws. In the
event that a transfer is to be made in reliance upon an exemption from the Act
and such laws, in order to assure compliance with the act and such laws, the
Certificateholder desiring to effect such transfer and such Certificateholder's
prospective transferee shall each certify to the Trustee and the Company in
writing the facts surrounding the transfer. In the event that such a transfer is
not to be made pursuant to Rule 144A of the act, there shall be delivered to the
Trustee and the Company of an Opinion of Counsel that such transfer may be made
pursuant to an exemption from the Act, which Opinion of Counsel shall not be
obtained at the expense of the Trustee, the Master Servicer or the Company; or
there shall be delivered to the Trustee and the Company a transferor certificate
by the transferor and an investment letter shall be executed by the transferee.
The Holder hereof desiring to effect such transfer shall, and does hereby agree
to, indemnify the Trustee and the Company 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.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. 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 herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other 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 authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.

         The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized


                                      B-2-4

<PAGE>



denominations evidencing the same Class and 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 Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect, thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                      B-2-5

<PAGE>



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


Dated:   February __, 2004             DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class C Certificates referred to in the
within-mentioned Agreement.


                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory






                                      B-2-6

<PAGE>


                                   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)

a Percentage Interest evidenced by the within Mortgage Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar 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



                                           ------------------------------------
                                              Signature Guaranteed






                                      B-2-7

<PAGE>



                            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-2-8

<PAGE>



                                   EXHIBIT B-3
                           FORM OF CLASS P CERTIFICATE


         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS 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").

         THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). ANY RESALE OR TRANSFER OF THIS CERTIFICATE WITHOUT
REGISTRATION THEREOF UNDER THE ACT MAY ONLY BE MADE IN A TRANSACTION EXEMPTED
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND IN ACCORDANCE WITH THE
PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.

         NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT (EACH A "PLAN") SUBJECT TO THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), SHALL BE MADE EXCEPT IN COMPLIANCE
WITH THE PROCEDURES DESCRIBED HEREIN.





                                      B-3-1

<PAGE>



<TABLE>
<CAPTION>
<S>                                                        <C>
Certificate No. 1

Class P                                                    Aggregate Initial Certificate Principal
                                                           Balance of the Class P Certificates:
                                                           $100.00

Date of Pooling and Servicing                              Initial Certificate Principal Balance
Agreement and Cut-off Date:                                of this Certificate ("Denomination"):
February 1, 2004                                           $100.00

First Distribution Date:                                   Percentage Interest of this Certificate:
March 25, 2004                                             100.00%

Master Servicer:                                           CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:
</TABLE>

---------------


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-1


         evidencing a percentage interest in any distributions allocable to the
         Class P Certificates with respect to the Trust Fund consisting
         primarily of a pool of one- to four-family fixed-rate first lien
         mortgage loans formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that ____________ is the registered owner of the
Percentage Interest evidenced by this Class P Certificate (obtained by dividing
the Denomination of this Class P Certificate by the Original Class Certificate
Principal Balance) in certain distributions with respect to a Trust Fund
consisting primarily of a pool of one- to four-family fixed-rate first lien
mortgage loans (the "Mortgage Loans"), formed and sold by Impac Secured Assets
Corp. (hereinafter called the "Company," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement") among the Company, the Master Servicer and Deutsche Bank National
Trust


                                      B-3-2

<PAGE>



Company, as trustee (the "Trustee"), a summary of certain of the pertinent
provisions of which is set forth hereafter. 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.

         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 as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last Business Day of the month
immediately preceding the month of such Distribution Date (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of Prepayment
Charges and principal, if any) required to be distributed to Holders of Class P
Certificates on such Distribution Date.

         Distributions on this Certificate will be made either by the Trustee or
by a Paying Agent appointed by the Trustee either in immediately available funds
(by wire transfer or otherwise) for the account of the Person entitled thereto
if such Person shall have so notified the Trustee or such Paying Agent at least
5 Business Days prior to the related Record Date, or by check mailed to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.

         Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal allocable hereto.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including


                                      B-3-3

<PAGE>



without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company 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.

         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. 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 herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an assignment in the form below or other 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 authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.


                                      B-3-4

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized denominations
evidencing the same Class and 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 Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01% Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respects hereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans an
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.




                                      B-3-5

<PAGE>



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


Dated:   February __, 2004             DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class P Certificates referred to in the
within-mentioned Agreement.


                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory







                                      B-3-6

<PAGE>



                                   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.

         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-3-7

<PAGE>



                            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-3-8

<PAGE>



                                   EXHIBIT B-4
                           FORM OF CLASS R CERTIFICATE

         THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED
STATES PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).

         SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL 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 (THE "CODE").

         NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(C) OF THE
AGREEMENT OR AN OPINION OF COUNSEL AS PROVIDED IN SECTION 5.02(C) THAT THE
PURCHASE OF THIS CERTIFICATE IS PERMISSIBLE UNDER APPLICABLE LAW, WILL NOT
CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY
OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN
THE POOLING AND SERVICING AGREEMENT (THE "AGREEMENT").

         THIS CLASS R CERTIFICATE HAS NO PRINCIPAL BALANCE, DOES NOT
BEAR INTEREST AND WILL NOT RECEIVE ANY DISTRIBUTIONS EXCEPT AS
PROVIDED HEREIN.

         ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE
MADE ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY
INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE
FOREGOING, (B) ANY ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE, (C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(A)(2)(C) OF THE CODE, (ANY
SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN
REFERRED TO AS A "DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED
ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR
COLLECTION OF TAX AND (3) SUCH TRANSFEREE


                                      B-4-1

<PAGE>



SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF
THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE, EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.






                                      B-4-2

<PAGE>



<TABLE>
<CAPTION>

<S>                                                       <C>
Certificate No. 1

Class R Senior

Date of Pooling and, Servicing
Agreement and Cut-off Date:
February 1, 2004                                           Percentage Interest:  100.00%

First Distribution Date:
March 25, 2004                                             CUSIP:

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:
----------------
</TABLE>


                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2004-1

         evidencing a percentage interest in any distributions allocable to the
         Class R Certificates with respect to a Trust Fund consisting primarily
         of a pool of one- to four-family fixed-rate first lien mortgage loans
         formed and sold by IMPAC SECURED ASSETS CORP.

         This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Impac Secured Assets
Corp., the Master Servicer, the Trustee referred to below or any of their
affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by Impac
Secured Assets Corp., the Master Servicer, the Trustee or any of their
affiliates. None of the Company, the Master Servicer or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.

         This certifies that ________________ is the registered owner of the
Percentage Interest evidenced by this Certificate stated above in certain
distributions with respect to a Trust Fund, consisting primarily of a pool of
one- to four-family fixed-rate first lien mortgage loans (the


                                      B-4-3

<PAGE>



"Mortgage Loans"), formed and sold by Impac Secured Assets Corp. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Pooling
and Servicing Agreement dated as specified above (the "Agreement") among the
Company, the Master Servicer and Deutsche Bank National Trust Company, as
trustee (the "Trustee"), a summary of certain of the pertinent provisions of
which is set forth hereafter. 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 principal balance or pass-through rate
and will be entitled to distributions only to the Patent 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 office or agency maintained by the Trustee.

         This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Mortgage Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").

         As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Trustee, the Company and the Master Servicer of advances
made, or certain expenses incurred, by either of them.

         No transfer of a Certificate of this Class shall be made unless such
transfer is made pursuant to an effective registration statement under the Act
and any applicable state securities laws or is exempt from the registration
requirements under said Act and such laws. In the event that a transfer is to be
made in reliance upon an exemption from the Act and such laws, in order to
assure compliance with the Act and such laws, the Certificateholder desiring to
effect such transfer and such Certificateholder's prospective transferee shall
each certify to the Trustee and the Company in writing the facts surrounding the
transfer. In the event that such a transfer is not to be made pursuant to Rule
144A of the Act, there shall be delivered to the Trustee and the Company of an
Opinion of Counsel that such transfer may be made pursuant to an exemption from
the Act, which Opinion of Counsel shall not be obtained at the expense of the
Trustee, the Master Servicer or the Company; or there shall be delivered to the
Trustee and the Company a transferor certificate by the transferor and an
investment letter shall be executed by the transferee. The Holder hereof
desiring to effect such transfer shall, and does hereby agree to, indemnify the
Trustee and the Company 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.


                                      B-4-4

<PAGE>



         No transfer of this Certificate to a Plan subject to ERISA or Section
4975 of the Code, any Person acting, directly or indirectly, on behalf of any
such Plan or any person using Plan Assets to acquire this Certificate shall be
made except in accordance with Section 5.02(c) of the Agreement.

         Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions of the Agreement, including but not limited to the
restrictions that (i) each person holding or acquiring any Ownership Interest in
this Certificate must be a Permitted Transferee, (ii) no Ownership Interest, in
this Certificate may be transferred without delivery to the Trustee of (a) a
transfer affidavit of the proposed transferee and (b) a transfer certificate of
the transferor, each of such documents to be in the form described in the
Agreement, (iii) each person holding or acquiring any Ownership Interest in this
Certificate must agree to require a transfer affidavit and to deliver a transfer
certificate to the Trustee as required pursuant to the Agreement, (iv) each
person holding or acquiring an Ownership Interest in this Certificate must agree
not to transfer an Ownership Interest in this Certificate if it has actual
knowledge that the proposed transferee is not a Permitted Transferee and (v) any
attempted or purported transfer of any Ownership Interest in this Certificate in
violation of such restrictions will be absolutely null and void and will vest no
rights in the purported transferee. Pursuant to the Agreement, the Trustee will
provide the Internal Revenue Service and any pertinent persons with the
information needed to compute the tax imposed under the applicable tax laws on
transfers of residual interests to disqualified organizations, if any person
other than a Permitted Transferee acquires an Ownership Interest on a Class R
Certificate in violation of the restrictions mentioned above.

         The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66-2/3% of the Percentage Interests of
each Class of Certificates affected thereby. 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 herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of 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 upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee, duly endorsed by, or accompanied
by an, assignment in the form below or other 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 authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.


                                      B-4-5

<PAGE>



         The Certificates are issuable only as registered Certificates without
coupons in Classes and 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 authorized denominations
evidencing the same Class and 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 Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.

         This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.

         The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the purchase by the Holder of at least 50.01 % Percentage Interest in the
Class C Certificates (the "Majority Class C Certificateholder") from the Trust
Fund of all remaining Mortgage Loans and each REO Property, in respect thereof
remaining in the Trust Fund, thereby effecting early retirement of the
Certificates and (ii) the final payment or other liquidation (or any Advance
with respect thereto) of the last Mortgage Loan remaining in the Trust Fund (or
the disposition of all REO Property in respect thereof). The Agreement permits,
but does not require, the Majority Class C Certificateholder to purchase at a
price determined as provided in the Agreement all remaining Mortgage Loans and
all REO Property; provided, that any such option may only be exercised on the
Distribution Date after the aggregate Stated Principal Balance of the Mortgage
Loans as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the aggregate Stated Principal
Balance of the Mortgage Loans at the Cut-off Date.

         Unless the certificate of authentication hereon has been executed by
the Trustee, by manual signature, this Certificate shall not be entitled to any
benefit under the Agreement or be valid for any purpose.






                                      B-4-6

<PAGE>


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


Dated:   February __, 2004             DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory



                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

         This is one of the Class R Certificates referred to in the
within-mentioned Agreement.


                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY,
                                       as Trustee

                                       By:
                                          --------------------------------
                                       Authorized Signatory





                                      B-4-7

<PAGE>



                                   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)

a Percentage Interest evidenced by the within Mortgage Pass-Through Certificate
and hereby authorizes the transfer of registration of such interest to assignee
on the Certificate Register of the Trust Fund.

                  I (We) further direct the Certificate Registrar 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-4-8

<PAGE>



                            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-4-9

<PAGE>



                                    EXHIBIT C

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION



                                                   February __, 2004



Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

          Re:  Pooling and Servicing Agreement, dated as of February 1, 2004
               among Impac Secured Assets Corp., Impac Funding Corporation, and
               Deutsche Bank National Trust Company, Mortgage Pass-Through
               Certificates Series 2004-1
               ----------------------------------------------------------------


Ladies and Gentlemen:

         In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement, the undersigned, as Trustee, hereby certifies that as to
each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage
Loan paid in full or listed on the attachment hereto) it has reviewed the
Mortgage File and the Mortgage Loan Schedule and has determined that: (i) all
documents required to be included in the Mortgage File are in its possession;
(ii) such documents have reviewed by it and appear regular on their face and
relate to such Mortgage Loan; and (iii) based on examination by it, and only as
to such documents, the information set forth in items (iii)(A) and (iv) of the
definition or description of "Mortgage Loan Schedule" is correct.

         The trustee has made no independent examination of any documents
contained in each Mortgage File beyond the review specifically required in the
above-referenced Pooling and Servicing Agreement. The Trustee makes no
representation that any documents specified in clause (vi) of Section 2.01
should be included in any Mortgage File. The Trustee makes no representations as
to and shall not be responsible to verify: (i) the validity, legality,
sufficiency, enforceability, due authorization, recordability or genuineness of
any of the documents contained in each Mortgage File of any of the Mortgage
Loans identified on the Mortgage Loan Schedule, (ii) the collectability,
insurability, effectiveness or suitability of any such Mortgage Loan, or (iii)
the existence of any assumption, modification, written assurance or substitution
agreement with respect to any Mortgage File if no such documents appear in the
Mortgage File delivered to the Trustee.




                                       C-1

<PAGE>



         Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.


                                     DEUTSCHE BANK NATIONAL TRUST
                                     COMPANY



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



                                       C-2

<PAGE>



                                    EXHIBIT D

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                   February __, 2004

Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

         Re:      Pooling and Servicing Agreement, dated as of February 1, 2004
                  among Impac Secured Assets Corp., Impac Funding Corporation,
                  and Deutsche Bank National Trust Company, Mortgage
                  Pass-Through Certificates Series 2004-1
                  -------------------------------------------------------------

Ladies and Gentlemen:

                  In accordance with Section 2.02 of the above-captioned Pooling
and Servicing Agreement, the undersigned, as Trustee, hereby certifies that as
to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any
Mortgage Loan paid in full or listed on the attachment hereto) it has received
the documents set forth in Section 2.01.

                  The Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Pooling and Servicing Agreement. The Trustee
makes no representation that any documents specified in clause (vi) of Section
2.01 should be included in any Mortgage File. The Trustee makes no
representations as to and shall not be responsible to verify: (i) the validity,
legality, sufficiency, enforceability, due authorization, recordability or
genuineness of any of the documents contained in each Mortgage File of any of
the Mortgage Loans identified on the Mortgage Loan Schedule, (ii) the
collectability, insurability, effectiveness or suitability of any such Mortgage
Loan or (iii) the existence of any assumption, modification, written assurance
or substitution agreement with respect to any Mortgage File if no such documents
appear in the Mortgage File delivered to the Trustee.

                  Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Pooling and
Servicing Agreement.


                                   DEUTSCHE BANK NATIONAL TRUST
                                   COMPANY

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


                                       D-1

<PAGE>



                                    EXHIBIT E

                            FORM OF REMITTANCE REPORT

                             (Provided Upon Request)






                                       D-2

<PAGE>



                                   EXHIBIT F-1

                               REQUEST FOR RELEASE
                                  (for Trustee)

LOAN INFORMATION

                  Name of Mortgagor:
                                            -----------------------------

                  Master Servicer
                  Loan No.:
                                            -----------------------------

TRUSTEE

                  Name:
                                            -----------------------------

                  Address:
                                            -----------------------------



                  Trustee
                  Mortgage File No.:
                                            -----------------------------

REQUEST FOR REQUESTING DOCUMENTS (check one):

1. Mortgage Loan Liquidated.
                           (The Master Servicer hereby certifies that all
                           proceeds of foreclosure, insurance or other
                           liquidation have been finally received and deposited
                           into the Custodial Account to the extent required
                           pursuant to the Pooling and Servicing Agreement.)

2.                Mortgage Loan in Foreclosure.

3.                Mortgage Loan Repurchased Pursuant to Section 9.01 of the
                  Pooling and Servicing Agreement.

4.                Mortgage Loan Repurchased Pursuant to Article II of the
                  Pooling and Servicing Agreement.
                           (The Master Servicer hereby certifies that the
                           repurchase price has been deposited into the
                           Custodial Account pursuant to the Pooling and
                           Servicing Agreement.)




                                      F-1-1

<PAGE>



5. Other (explain).
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                  The undersigned Master Servicer hereby acknowledges that it
has received from the Trustee for the Holders of Mortgage Pass-Through
Certificates, Series 2004-1, the documents referred to below (the "Documents").
All capitalized terms not otherwise defined in this Request for Release shall
have the meanings given them in the Pooling and Servicing Agreement, dated as of
February 1, 2004 (the "Pooling and Servicing Agreement"), among Impac Secured
Assets Corp., Impac Funding Corporation and the Trustee.

( )  Promissory Note dated _________________, 200_, in the original principal
     sum of $__________, made by __________________, payable to, or endorsed to
     the order of, the Trustee.

( )  Mortgage recorded on _________________________ as instrument no.
     ___________ in the County Recorders Office of the County of
     ______________________, State of _____________________ in book/reel/docket
     of official records at page/image _______________.

( )  Deed of Trust recorded on ____________________ as instrument
     no._____________ in the County Recorder's Office of the County of
     ______________________, State of _____________________in book/reel/docket
     __________________ of official records at page/image ________________.

( )  Assignment of Mortgage or Deed of Trust to the Trustee, recorded on
     _______________ as instrument no. ______________ in the County Recorder's
     Office of the County of ________________, State of ___________________ in
     book/reel/docket ____________ of official records at page/image
     ___________.

( )  Other documents, including any amendments, assignments or other assumptions
     of the Mortgage Note or Mortgage.

                  ( )
                     -----------------------------------------------------------

                  ( )
                     -----------------------------------------------------------

                  ( )
                     -----------------------------------------------------------


                                      F-1-2

<PAGE>



                  ( )
                     -----------------------------------------------------------

                  The undersigned Master Servicer hereby acknowledges and agrees
as follows:

                           (1) The Master Servicer shall hold and retain
                  possession of the Documents in trust for the benefit of the
                  Trustee, solely for the purposes provided in the Agreement.

                           (2) The Master Servicer shall not cause or knowingly
                  permit the Documents to become subject to, or encumbered by,
                  any claim, liens, security interest, charges, writs of
                  attachment or other impositions nor shall the Master Servicer
                  assert or seek to assert any claims or rights of setoff to or
                  against the Documents or any proceeds thereof.

                           (3) The Master Servicer shall return each and every
                  Document previously requested from the Mortgage File to the
                  Custodian when the need therefor no longer exists, unless the
                  Mortgage Loan relating to the Documents has been liquidated
                  and the proceeds thereof have been remitted to the Custodial
                  Account and except as expressly provided in the Agreement.

                           (4) The Documents and any proceeds thereof, including
                  any proceeds of proceeds, coming into the possession or
                  control of the Master Servicer shall at all times be earmarked
                  for the account of the Trustee, and the Master Servicer shall
                  keep the Documents and any proceeds separate and distinct from
                  all other property in the Master Servicer's possession,
                  custody or control.

                                        IMPAC FUNDING CORPORATION

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



Date: _________________, 200_




                                      F-1-3

<PAGE>



                                   EXHIBIT F-2

                               REQUEST FOR RELEASE
                          [Mortgage Loans Paid in Full]

                     OFFICER'S CERTIFICATE AND TRUST RECEIPT
                       MORTGAGE PASS-THROUGH CERTIFICATES
                                  SERIES 2004-1


_____________________________________ HEREBY CERTIFIES THAT HE/SHE IS AN OFFICER
OF THE MASTER SERVICER, HOLDING THE OFFICE SET FORTH BENEATH HIS/HER SIGNATURE,
AND HEREBY FURTHER CERTIFIES AS FOLLOWS:

WITH RESPECT TO THE MORTGAGE LOANS, AS THE TERM IS DEFINED IN THE POOLING AND
SERVICING AGREEMENT DESCRIBED IN THE ATTACHED SCHEDULE:

ALL PAYMENTS OF PRINCIPAL, PREMIUM (IF ANY), AND INTEREST HAVE BEEN MADE.


LOAN NUMBER:                               BORROWER'S NAME:
            ----------------------------                   ---------------------

COUNTY:
       ----------------------------------------------

WE HEREBY CERTIFY THAT ALL AMOUNTS RECEIVED IN CONNECTION WITH SUCH PAYMENTS,
WHICH ARE REQUIRED TO BE DEPOSITED IN THE CUSTODIAL ACCOUNT PURSUANT TO SECTION
3.10 OF THE POOLING AND SERVICING AGREEMENT, HAVE BEEN OR WILL BE CREDITED.



_________ ____________                     DATED:
                                                 -------------------------------


//       VICE PRESIDENT

//       ASSISTANT VICE PRESIDENT




                                      F-2-1

<PAGE>



                                   EXHIBIT G-1

                     FORM OF INVESTOR REPRESENTATION LETTER

                                                 ___________,200__


Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-1

          Re:      Impac Secured Assets Corp.
                   Mortgage Pass-Through Certificates Series 2004-1, Class __
                   ----------------------------------------------------------

Ladies and Gentlemen:

         ______________ (the "Purchaser") intends to purchase from
______________ (the "Seller") $_________ Initial Certificate Principal Balance
of Mortgage Pass-Through Certificates, Series 2004-1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of February 1, 2004 among Impac
Secured Assets Corp., as company (the "Company"), Impac Funding Corporation, as
master servicer and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Purchaser hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:

                           1. The Purchaser understands that (a) the
                  Certificates have not been and will not be registered or
                  qualified under the Securities Act of 1933, as amended (the
                  "Act") or any state securities law, (b) the Company is not
                  required to so register or qualify the Certificates, (c) the
                  Certificates may be resold only if registered and qualified
                  pursuant to the provisions of the Act or any state securities
                  law, or if an exemption from such registration and
                  qualification is available, (d) the Pooling and Servicing
                  Agreement contains restrictions regarding the transfer of the
                  Certificates and (e) the Certificates will bear a legend to
                  the foregoing effect.

                           2. The Purchaser is acquiring the Certificates for
                  its own account for investment only and not with a view to or
                  for sale in connection with any distribution thereof in any
                  manner that would violate the Act or any applicable state
                  securities laws.


                                      G-1-1

<PAGE>



                           3. The Purchaser is (a) a substantial, sophisticated
                  institutional investor having such knowledge and experience in
                  financial and business matters, and, in particular, in such
                  matters related to securities similar to the Certificates,
                  such that it is capable of evaluating the merits and risks of
                  investment in the Certificates, (b) able to bear the economic
                  risks of such an investment and (c) an "accredited investor"
                  within the meaning of Rule 501 (a) promulgated pursuant to the
                  Act.

                           4. The Purchaser has been furnished with, and has had
                  an opportunity to review (a) [a copy of the Private Placement
                  Memorandum, dated February 27, 2004, relating to the
                  Certificates (b)] a copy of the Pooling and Servicing
                  Agreement and [(b)] [(c)] such other information concerning
                  the Certificates, the Mortgage Loans and the Company as has
                  been requested by the Purchaser from the Company or the Seller
                  and is relevant to the Purchaser's decision to purchase the
                  Certificates. The Purchaser has had any questions arising from
                  such review answered by the Company or the Seller to the
                  satisfaction of the Purchaser. [If the Purchaser did not
                  purchase the Certificates from the Seller in connection with
                  the initial distribution of the Certificates and was provided
                  with a copy of the Private Placement Memorandum (the
                  "Memorandum") relating to the original sale (the "Original
                  Sale") of the Certificates by the Company, the Purchaser
                  acknowledges that such Memorandum was provided to it by the
                  Seller, that the Memorandum was prepared by the Company solely
                  for use in connection with the Original Sale and the Company
                  did not participate in or facilitate in any way the purchase
                  of the Certificates by the Purchaser from the Seller, and the
                  Purchaser agrees that it will look solely to the Seller and
                  not to the Company with respect to any damage, liability,
                  claim or expense arising out of, resulting from or in
                  connection with (a) error or omission, or alleged error or
                  omission, contained in the Memorandum, or (b) any information,
                  development or event arising after the date of the
                  Memorandum.]

                           5. The Purchaser has not and will not nor has it
                  authorized or will it authorize any person to (a) offer,
                  pledge, sell, dispose of or otherwise transfer any
                  Certificate, any interest in any Certificate or any other
                  similar security to any person in any manner, (b) solicit any
                  offer to buy or to accept a pledge, disposition of other
                  transfer of any Certificate, any interest in any Certificate
                  or any other similar security from any person in any manner,
                  (c) otherwise approach or negotiate with respect to any
                  Certificate, any interest in any Certificate or any other
                  similar security with any person in any manner, (d) make any
                  general solicitation by means of general advertising or in any
                  other manner or (e) take any other action, that (as to any of
                  (a) through (e) above) would constitute a distribution of any
                  Certificate under the Act, that would render the disposition
                  of any Certificate a violation of Section 5 of the Act or any
                  state securities law, or that would require registration or
                  qualification pursuant thereto. The Purchaser will not sell or
                  otherwise transfer any of the Certificates, except in
                  compliance with the provisions of the Pooling and Servicing
                  Agreement.



                                      G-1-2

<PAGE>




                                       Very truly yours,



                                       (Purchaser)

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






                                      G-1-3

<PAGE>



                                   EXHIBIT G-2

                    FORM OF TRANSFEROR REPRESENTATION LETTER



                                               ______________,200___



Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-1

       Re:      Impac Secured Assets Corp.
                Mortgage Pass-Through Certificates, Series 2004-1, Class _
                ----------------------------------------------------------

Ladies and Gentlemen:

         In connection with the sale by ___________ (the "Seller") to ________
(the "Purchaser") of $_________ Initial Certificate Principal Balance of
Mortgage Pass-Through Certificates, Series 2004-1, Class _____ (the
"Certificates"), issued pursuant to the Pooling and Servicing Agreement (the
"Pooling and Servicing Agreement"), dated as of February 1, 2004 among Impac
Secured Assets Corp., as company (the "Company"), Impac Funding Corporation, as
master servicer and Deutsche Bank National Trust Company, as trustee (the
"Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:

         Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act in any
manner set forth in the


                                      G-2-1

<PAGE>



foregoing sentence with respect to any Certificate. The Seller has not and will
not sell or otherwise transfer any of the Certificates, except in compliance
with the provisions of the Pooling and Servicing Agreement.


                                        Very truly yours,



                                        (Seller)

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





                                      G-2-2

<PAGE>



                                   EXHIBIT G-3

                   FORM OF RULE 144A INVESTMENT REPRESENTATION


             Description of Rule 144A Securities, including numbers:

                           Impac Secured Assets Corp.
                       Mortgage Pass-Through Certificates
                       Series 2004-1, Class ____, No. ____


                  The undersigned seller, as registered holder (the
"Transferor"), intends to transfer the Rule 144A Securities described above to
the undersigned buyer (the "Buyer").

                  1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the
Transferor hereby certifies the following facts: Neither the Transferor nor
anyone acting on its behalf has offered, transferred, pledged, sold or otherwise
disposed of the Rule 144A Securities, any interest in the Rule 144A Securities
or any other similar security to, or solicited any offer to buy or accept a
transfer, pledge or other disposition of the Rule 144A Securities, or otherwise
approached or negotiated with respect to the Rule 144A Securities, any interest
in the Rule 144A Securities 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, which would constitute a
distribution of the Rule 144A Securities under the Securities Act of 1933, as
amended (the "1933 Act"), or which would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require registration
pursuant thereto, and that the Transferor has not offered the Rule 144A
Securities to any person other than the Buyer or another "qualified
institutional buyer" as defined in Rule 144A under the 1933 Act.

                  2. The Buyer warrants and represents to, and covenants with,
the Transferor, the Trustee and the Master Servicer pursuant to Section 5.02 of
the Pooling and Servicing Agreement as follows:

                           a. The Buyer understands that the Rule 144A
                  Securities have not been registered under the 1933 Act or the
                  securities laws of any state.

                           b. The Buyer considers itself a substantial,
                  sophisticated institutional investor having such knowledge and
                  experience in financial and business matters that it is
                  capable of evaluating the merits and risks of investment in
                  the Rule 144A Securities.

                           c. The Buyer has been furnished with all information
                  regarding the Rule 144A Securities that it has requested from
                  the Transferor, the Trustee or the Master Servicer.


                                      G-3-1

<PAGE>



                           d. Neither the Buyer nor anyone acting on its behalf
                  has offered, transferred, pledged, sold or otherwise disposed
                  of the Rule 144A Securities, any interest in the Rule 144A
                  Securities or any other similar security to, or solicited any
                  offer to buy or accept a transfer, pledge or other disposition
                  of the Rule 144A Securities, any interest in the Rule 144A
                  Securities or any other similar security from, or otherwise
                  approached or negotiated with respect to the Rule 144A
                  Securities, any interest in the Rule 144A Securities 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 Rule 144A Securities under
                  the 1933 Act or that would render the disposition of the Rule
                  144A Securities a violation of Section 5 of the 1933 Act or
                  require registration pursuant thereto, nor will it act, nor
                  has it authorized or will it authorize any person to act, in
                  such manner with respect to the Rule 144A Securities.

                           e. The Buyer is a "qualified institutional buyer" as
                  that term is defined in Rule 144 under the 1933 Act and has
                  completed either of the forms of certification to that effect
                  attached hereto as Annex 1 or Annex 2. The Buyer is aware that
                  the sale to it is being made in reliance on Rule 144A. The
                  Buyer is acquiring the Rule 144A Securities for its own
                  account or the account of other qualified institutional
                  buyers, understands that such Rule 144 Securities 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
                  1933 Act.

                  3. The Buyer warrants and represents to, and covenants with,
the Transferor, the Servicer and the Company that either (1) the Buyer is not an
employee benefit plan within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA") ("Plan"), or a plan
within the meaning of Section 4975(e)(1) of the Internal Revenue Code of 1986
(the "Code") (also a "Plan"), and the Buyer is not directly or indirectly
purchasing the Rule 144A Securities on behalf of, as investment manager of, as
named fiduciary of, as trustee of, or with assets of a Plan, or (2) the Buyer
has provided the Trustee with the opinion letter required by section 5.02(c) of
the Pooling and Servicing Agreement.

                  4. This document 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 document.



                                      G-3-2

<PAGE>



                  IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.





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

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

Taxpayer Identification:                            Taxpayer Identification:

No.                                                 No.

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





                                      G-3-3

<PAGE>



                                                          ANNEX 1 TO EXHIBIT G-3
                                                          ----------------------


            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
            --------------------------------------------------------

             [For Buyers Other Than Registered Investment Companies]

         The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:

         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 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $____________________1 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.

____     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 statement, 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.


--------
         1 Buyer must own and/or invest on a discretionary basis at least
$100,000,000 in securities unless Buyer is a dealer, and, in that case, Buyer
must own and/or invest on a discretionary basis at least $10,000,000 in
securities.


                                      G-3-4

<PAGE>



____     BROKER-DEALER.  The Buyer is a dealer registered pursuant to Section 15
         of the Securities Exchange Act of 1934.

____     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 ADVISER.  The Buyer is an investment adviser registered
         under the Investment Advisers Act of 1940.

____     SBIC.  The 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.  The Buyer is a business development
         company as defined  in Section 202(a)(22) of the Investment Advisers
         Act of 1940.

____     TRUST FUND. The Buyer is a trust fund whose trustee is a bank or trust
         company and whose participants are exclusively (a) plans 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, or (b) employee benefit plans within the
         meaning of Title I of the Employee Retirement Income Security Act of
         1974, but is not a trust fund that includes as participants individual
         retirement accounts or H.R. 10 plans.

         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) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) 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. 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


                                      G-3-5

<PAGE>



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.

         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.

___      ___               Will the Buyer be purchasing the Rule 144A
Yes      No                Securities only for the Buyer's own account?

         6. If the answer to the foregoing question is "no", the Buyer agrees
that, in connection with any purchase of securities sold to the Buyer for the
account of a third party (including any separate account) in reliance on Rule
144A, the Buyer will only purchase for the account of a third party that at the
time is a "qualified institutional buyer" within the meaning of Rule 144A. In
addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.

         7. 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 Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.





                                          Print Name of Buyer

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

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





                                      G-3-6

<PAGE>



                                                          ANNEX 2 TO EXHIBIT G-3

            QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A

              [For Buyers That Are Registered Investment Companies]


                  The undersigned hereby certifies as follows in connection with
the Rule 144A Investment Representation to which this Certification is attached:

                  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 ("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, 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.

____      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) bank deposit notes and certificates
of deposit, (iii) loan participations, (iv) repurchase agreements, (v)
securities owned but subject to a repurchase agreement and (vi) currency,
interest rate and commodity swaps.



                                      G-3-7

<PAGE>



                  5. The Buyer is familiar with Rule 144A and understands that
each of the parties to which this certification is made 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. The undersigned will notify each of the parties to which
this certification is made of any changes in the information and conclusions
herein. Until such notice, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification by the undersigned as of the
date of such purchase.




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

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


                                         IF AN ADVISER:


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

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





                                      G-3-8

<PAGE>



                                   EXHIBIT G-4

                         FORM OF TRANSFEROR CERTIFICATE

                              ______________, 200__


Impac Secured Assets Corp.
1401 Dove Street
Newport Beach, California 92660

Deutsche Bank National Trust Company
1761 East St. Andrew Place
Santa Ana, California 92705
Attention: Impac Secured Assets Corp. Series 2004-1

               Re:  Impac Secured Assets Corp. Mortgage Pass-Through
                    Certificates Series 2004-1, Class R
                    -----------------------------------------------
Ladies and Gentlemen:

                  This letter is delivered to you in connection with the sale by
________________________ (the "Seller") to
__________________________________________ (the "Purchaser") of a ____%
Percentage Interest in the Mortgage Pass-Through Certificates, Series 2004-1,
Class R (the "Certificates"), issued pursuant to Section 5.02 of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
February 1, 2004, among Impac Secured Assets Corp., as company (the "Company"),
Impac Funding Corporation, as master servicer and Deutsche Bank National Trust
Company, as trustee (the "Trustee"). All terms used herein and not otherwise
defined shall have the meaning set forth in the Pooling and Servicing Agreement.
The Seller hereby certifies, represents and warrants to, and covenants with, the
Company and the Trustee that:

                  1. No purpose of the Seller relating to the sale of the
Certificates by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.

                  2. The Seller understands that the Purchaser has delivered to
the Trustee and the Master Servicer a transfer affidavit and agreement in the
form attached to the Pooling and Servicing Agreement as Exhibit G-5. The Seller
does not know or believe that any representation contained therein is false.

                  3. The Seller has at the time of the transfer conducted a
reasonable investigation of the financial condition of the Purchaser as
contemplated by Treasury Regulations Section 1.860E-


                                      G-4-1

<PAGE>



1(c)(4)(i) and, as a result of that investigation, the Seller has determined
that the Purchaser has historically paid its debts as they have become due and
has found no significant evidence to indicate that the Purchaser will not
continue to pay its debts as they become due in the future. The Seller
understands that the transfer of the Certificates may not be respected for
United States income tax purposes (and the Seller may continue to be liable for
United States income taxes associated therewith) unless the Seller has conducted
such an investigation.

                  4. The Seller has no actual knowledge that the proposed
Transferee is a Disqualified Organization, an agent of a Disqualified
Organization or a Non-United States Person.


                                              Very truly yours,



                                              --------------------------------
                                              (Seller)

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





                                      G-4-2

<PAGE>



                                   EXHIBIT G-5

                    FORM OF TRANSFER AFFIDAVIT AND AGREEMENT


STATE OF            )
                    :ss.:
COUNTY OF           )

         ___________________, being first duly sworn, deposes, represents and
warrants:

         1. That he/she is [Title of Officer] of [Name of Owner], a [savings
institution] [corporation] duly organized and existing under the laws of [the
State of __________] [the United States], (the "Owner"), (record or beneficial
owner of the Class R Certificates (the "Class R Certificates") on behalf of
which he/she makes this affidavit and agreement). This Class R Certificates were
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement") dated as of February 1, 2004 among Impac Secured Assets
Corp., as company, Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Deutsche Bank National Trust Company, as trustee (the
"Trustee").

         2. That the Owner (i) is not and will not be a "disqualified
organization" as of _____________ [date of transfer] within the meaning of
Section 860E(e)(5) of the Internal Revenue Code of 1986, as amended (the
"Code"), (ii) will endeavor to remain other than a disqualified organization for
so long as it retains its ownership interest in the Class R Certificates, and
(iii) is acquiring the Class R Certificates for its own account or for the
account of another Owner from which it has received an affidavit and agreement
in substantially the same form as this affidavit and agreement. (For this
purpose, a "disqualified organization" means the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for Freddie Mac, a majority of whose board of
directors is not selected by any such governmental entity) or any foreign
government, international organization or any agency or instrumentality of such
foreign government or organization, any rural electric or telephone cooperative,
or any organization (other than certain farmers' cooperatives) that is generally
exempt from federal income tax unless such organization is subject to the tax on
unrelated business taxable income).

         3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R Certificates to disqualified organizations under the Code,
that applies to all transfers of Class R Certificates after March 31, 1988; (ii)
that such tax would be on the transferor, or, if such transfer is through an
agent (which person includes a broker, nominee or middleman) for a disqualified
organization, on the agent; (iii) that the person otherwise liable for the tax
shall be relieved of liability for the tax if the transferee furnishes to such
person an affidavit that the transferee is not a disqualified organization and,
at the time of transfer, such person does not have actual knowledge that the
affidavit is false; and (iv) that the Class R Certificates may be "noneconomic
residual


                                      G-5-1

<PAGE>



interests" within the meaning of Treasury regulations promulgated pursuant to
the Code and that the transferor of a noneconomic residual interest will remain
liable for any taxes due with respect to the income on such residual interest,
unless no significant purpose of the transfer was to impede the assessment or
collection of tax.

         4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class R Certificates if at any time during the taxable year of
the pass-through entity a disqualified organization is the record holder of an
interest in such entity. (For this purpose, a "pass through entity" includes a
regulated investment company, a real estate investment trust or common trust
fund, a partnership, trust or estate, and certain cooperatives.)

         5. That the Owner is aware that the Trustee will not register the
transfer of any Class R Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.

         6. That the Owner has reviewed the restrictions set forth on the face
of the Class R Certificates and the provisions of Section 5.02(f) of the Pooling
and Servicing Agreement under which the Class R Certificates were issued (in
particular, clause (iii)(A) and (iii)(B) of Section 5.02(f) which authorize the
Trustee to deliver payments to a person other than the Owner and negotiate a
mandatory sale by the Trustee in the event the Owner holds such Certificates in
violation of Section 5.02(f)). The Owner expressly agrees to be bound by and to
comply with such restrictions and provisions.

         7. That the Owner 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 Class R Certificates will only be
owned, directly or indirectly, by an Owner that is not a disqualified
organization.

         8.       The Owner's Taxpayer Identification Number is _____________.

         9. This affidavit and agreement relates only to the Class R
Certificates held by the owner and not to any other holder of the Class R
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R Certificates.

         10. That no purpose of the Owner relating to the transfer of any of the
Class R Certificates by the Owner is or will be to impede the assessment or
collection of any tax.

         11. That the Owner has no present knowledge or expectation that it will
be unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R Certificate
that the Owner intends to pay taxes associated with holding such Class R


                                      G-5-2

<PAGE>



Certificate as they become due, fully understanding that it may incur tax
liabilities in excess of any cash flows generated by the Class R Certificate.

         12. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R Certificates remain outstanding.

         13. The Owner 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, provided that
with respect to any partnership or other entity treated as a partnership for
United States federal income tax purposes, all persons that own an interest in
such partnership either directly or through any entity that is not a corporation
for United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate or trust whose
income from sources without the United States is includible 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.

         14. (a) The Certificates (i) are not being acquired by, and will not be
transferred to, any employee benefit plan within the meaning of section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA") or
other retirement arrangement, including individual retirement accounts and
annuities, Keogh plans and bank collective investment funds and insurance
company general or separate accounts in which such plans, accounts or
arrangements are invested, that is subject to ERISA or Section 4975 of the
Internal Revenue Code of 1986 (the "Code") (any of the foregoing, a "Plan"),
(ii) are not being acquired with "plan assets" of a Plan within the meaning of
the Department of Labor ("DOL") regulation, 29 C.F.R. ss. 2510.3-101 or
otherwise under ERISA, and (iii) will not be transferred to any entity that is
deemed to be investing in plan assets within the meaning of the DOL regulation,
29 C.F.R. ss. 2510.3-101 or otherwise under ERISA; or

                  (b) The Owner will provide the Trustee with an opinion of
counsel, as specified in Section 5.02(c) of the Pooling and Servicing Agreement,
acceptable to and in form and substance satisfactory to the Trustee to the
effect that the purchase of Certificates is permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction under
ERISA or Section 4975 of the Code and will not subject the Trustee, the Company
or the Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.

         In addition, the Owner hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Owner will not transfer such Certificates to any Plan or person unless either
such Plan or person meets the requirements set forth in either (a) or (b) above.

         Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.


                                      G-5-3

<PAGE>



         IN WITNESS WHEREOF, the Owner has caused this instrument to be executed
on its behalf, by its [Title of Officer] and its corporate seal to be hereunto
attached, attested by its [Assistant] Secretary, this ______ day of
_____________, _____.



                                                    [NAME OF OWNER]


                                           By:
                                              --------------------------------
                                                    [Name of Officer]
                                                    [Title of Officer]

[Corporate Seal]

ATTEST:


--------------------------------
[Assistant] Secretary

         Personally appeared before me the above-named [Name of Officer], known
or proved to me to be the same person who executed the foregoing instrument and
to be the [Title of Officer] of the Owner, and acknowledged to me that such
person executed the same as such person's free act and deed and the free act and
deed of the Owner.

         Subscribed and sworn before me this ____ day of ___________, 200__.




                                          --------------------------------
                                                 NOTARY PUBLIC

                                          COUNTY OF_________________________
                                          STATE OF___________________________
                                          My Commission expires the ____ day of
                                          __________, 200__.





                                      G-5-4

<PAGE>



                                    EXHIBIT H

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

(In accordance with Rule 202 of Regulation S-T, this Mortgage Loan Schedule, is
being filed in paper pursuant to a continuing hardship exemption.)






                                      G-5-5

<PAGE>



                                    EXHIBIT I

                      SELLER REPRESENTATIONS AND WARRANTIES


Seller's Representations Assigned by Company to Trustee

         Representations and Warranties. Pursuant to the Mortgage Loan Purchase
Agreement, the Seller has made certain representations and warranties to the
Company. The Seller shall confirm such representations and warranties and shall
deliver a Seller's Warranty Certificate and an Officer's Certificate on the
Closing Date (i) reaffirming such representations and warranties and (ii)
specifically restating and reaffirming the following representations and
warranties as of such date. The following representations are, pursuant to the
Pooling and Servicing Agreement, assigned by the Company to the Trustee for the
benefit of the Certificateholders, together with the related repurchase rights
specified in the Mortgage Loan Purchase Agreement. Pursuant to the Mortgage Loan
Purchase Agreement, the Seller's Warranty Certificate and related Officer's
Certificate, the Seller affirms each such representation and warranty and
agrees, consents to and acknowledges the assignment thereof to the Trustee. All
capitalized terms herein shall have the meanings assigned in the Pooling and
Servicing Agreement and the Seller's Warranty Certificate, as applicable.

         The Seller hereby represents and warrants to the Company and Trustee,
as to each Mortgage Loan, that as of the Closing Date or as of such other date
specifically provided herein:

                           (i) the information set forth in the Mortgage Loan
                  Schedule hereto is true and correct in all material respects;

                           (ii) the terms of the Mortgage Note and the Mortgage
                  have not been impaired, waived, altered or modified in any
                  respect, except by written instruments, (i) if required by law
                  in the jurisdiction where the Mortgaged Property is located,
                  or (ii) to protect the interests of the Trustee on behalf of
                  the Certificateholders;

                           (iii) the Mortgage File for each Mortgage Loan
                  contains a true and complete copy of each of the documents
                  contained in such Mortgage File, including all amendments,
                  modifications and, if applicable, waivers and assumptions that
                  have been executed in connection with such Mortgage Loan;

                           (iv) immediately prior to the transfer to the
                  Purchaser, the Seller was the sole owner of beneficial title
                  and holder of each Mortgage and Mortgage Note relating to the
                  Mortgage Loans and is conveying the same free and clear of any
                  and all liens, claims, encumbrances, participation interests,
                  equities, pledges, charges or security interests of any nature
                  and the Seller has full right and authority to sell or assign
                  the same pursuant to this Agreement;



                                       I-1

<PAGE>



                           (v) each Mortgage is a valid and enforceable first
                  lien on the property securing the related Mortgage Note and
                  each Mortgaged Property is owned by the Mortgagor in fee
                  simple (except with respect to common areas in the case of
                  condominiums, PUDs and DE MINIMIS PUDs) or by leasehold for a
                  term longer than the term of the related Mortgage, subject
                  only to (i) the lien of current real property taxes and
                  assessments, (ii) covenants, conditions and restrictions,
                  rights of way, easements and other matters of public record as
                  of the date of recording of such Mortgage, such exceptions
                  being acceptable to mortgage lending institutions generally or
                  specifically reflected in the appraisal obtained in connection
                  with the origination of the related Mortgage Loan or referred
                  to in the lender's title insurance policy delivered to the
                  originator of the related Mortgage Loan and (iii) other
                  matters to which like properties are commonly subject which do
                  not materially interfere with the benefits of the security
                  intended to be provided by such Mortgage;

                           (vi) no payment of principal of or interest on or in
                  respect of any Mortgage Loan is 30 or more days past due;

                           (vii) there is no mechanics' lien or claim for work,
                  labor or material affecting the premises subject to any
                  Mortgage which is or may be a lien prior to, or equal with,
                  the lien of such Mortgage except those which are insured
                  against by the title insurance policy referred to in (xii)
                  below;

                           (viii) as of the Cut-off Date, (i) no Mortgage Loan
                  had been 30 days or more delinquent more than once during the
                  preceding 12 months, (ii) no Mortgage Loan had been delinquent
                  for 60 days or more during the preceding 12 months and (iii)
                  to Seller's knowledge, there was no delinquent tax or
                  assessment lien against the property subject to any Mortgage,
                  except where such lien was being contested in good faith and a
                  stay had been granted against levying on the property;

                           (ix) there is no valid offset, defense or
                  counterclaim to any Mortgage Note or Mortgage, including the
                  obligation of the Mortgagor to pay the unpaid principal and
                  interest on such Mortgage Note;

                           (x) to Seller's knowledge, except to the extent
                  insurance is in place which will over such damage, the
                  physical property subject to any Mortgage is free of material
                  damage and is in good repair and there is no proceeding
                  pending or threatened for the total or partial condemnation of
                  any Mortgaged Property;

                           (xi) each Mortgage Loan complies in all material
                  respects with applicable local, state and federal laws,
                  including, without limitation, usury, equal credit
                  opportunity, real estate settlement procedures, the Federal
                  Truth In Lending Act and disclosure laws, including, but not
                  limited to, any applicable predatory lending laws. The
                  consummation of the transactions contemplated hereby,
                  including without


                                       I-2

<PAGE>



                  limitation, the receipt of interest by the owner of such
                  Mortgage Loan or the holders of Certificates secured thereby,
                  will not involve the violation of any such laws. Each Mortgage
                  Loan is being serviced in all material respects in accordance
                  with applicable local, state and federal laws, including,
                  without limitation, the Federal Truth In Lending Act and other
                  consumer protection laws, real estate settlement procedures,
                  usury, equal credit opportunity and disclosure laws;

                           (xii) a lender's title insurance policy (on an ALTA
                  or CLTA form) or binder, or other assurance of title customary
                  in the relevant jurisdiction therefor in a form acceptable to
                  Fannie Mae or Freddie Mac, was issued on the date that each
                  Mortgage Loan was created by a title insurance company which,
                  to the best of Seller's knowledge, was qualified to do
                  business in the jurisdiction where the related Mortgaged
                  Property is located, insuring the Seller and its successors
                  and assigns that the Mortgage is a first priority lien on the
                  related Mortgaged Property in the original principal amount of
                  the Mortgage Loan. Seller is the sole insured under such
                  lender's title insurance policy, and such policy, binder or
                  assurance is valid and remains in full force and effect, and
                  each such policy, binder or assurance shall contain all
                  applicable endorsements including a negative amortization
                  endorsement, if applicable;

                           (xiii) in the event the Mortgage constitutes a deed
                  of trust, either a trustee, duly qualified under applicable
                  law to serve as such, has been properly designated and
                  currently so serves and is named in the Mortgage or if no duly
                  qualified trustee has been properly designated and so serves,
                  the Mortgage contains satisfactory provisions for the
                  appointment of such trustee by the holder of the Mortgage at
                  no cost or expense to such holder, and no fees or expenses are
                  or will become payable by Purchaser to the trustee under the
                  deed of trust, except in connection with a trustee's sale
                  after default by the mortgagor;

                           (xiv) (i) the Loan-to-Value Ratio of each Mortgage
                  Loan at origination was not more than 100.00%; (ii) except
                  with regard to 0.09% of the Mortgage Loans, each Mortgage Loan
                  with a Loan-to-Value Ratio at origination in excess of 80.00%
                  will be insured by one of the following: (a) a Primary
                  Insurance Policy issued by a private mortgage insurer or (b) a
                  Radian Lender-Paid PMI Policy. Each Primary Insurance Policy
                  will insure against default under each insured Mortgage Note
                  as follows: (i) for which the outstanding principal balance at
                  origination of such Mortgage Loan is greater than or equal to
                  80.01 % and up to and including 90.00% of the lesser of the
                  Appraised Value and the sales price, such Mortgage Loan is
                  covered by a Primary Insurance Policy in an amount equal to at
                  least 12.00% of the Allowable Claim and (ii) for which the
                  outstanding principal balance at origination of such Mortgage
                  Loan exceeded 90.00% of the lesser of the Appraised Value and
                  the sales price, such Mortgage Loan is covered by a Primary
                  Insurance Policy in an amount equal to at least 30.00% of the
                  Allowable Claim. Each Radian Lender-Paid PMI Policy will
                  insure against default under each insured Mortgage Note
                  related to


                                       I-3

<PAGE>



                  a covered Mortgage Loan as follows: (i) for which the
                  outstanding principal balance at origination of such Mortgage
                  Loan is at least 80.01% and up to and including 95.00% of the
                  lesser of the Appraised Value and the sales price, such
                  Mortgage Loan is covered by such Radian Lender-Paid PMI Policy
                  in an amount equal to at least 22.00% of the Allowable Claim
                  and (ii) for which the outstanding principal balance at
                  origination of such Mortgage Loan is at least 95.01% and up to
                  and including 97.00% of the lesser of the Appraised Value and
                  the sales price, such Mortgage Loan is covered by such Radian
                  Lender-Paid PMI Policy in an amount equal to at least 35.00%
                  of the Allowable Claim. The "Appraised Value" is the appraised
                  value of the related Mortgaged Property at the time of
                  origination of such Mortgage Loan. The "Allowable Claim"for
                  any Mortgage Loan covered by a Primary Insurance Policy or a
                  Radian Lender-Paid PMI Policy is the current principal balance
                  of such Mortgage Loan plus accrued interest and allowable
                  expenses at the time of the claim;

                           (xv) at the time of origination, each Mortgaged
                  Property was the subject of an appraisal which conforms to the
                  Seller's underwriting requirements, and a complete copy of
                  such appraisal is contained in the Mortgage File;

                           (xvi) on the basis of a representation by the
                  borrower at the time of origination of the Mortgage Loans, at
                  least 76.04% of the Mortgage Loans (by aggregate principal
                  balance) will be secured by Mortgages on owner-occupied
                  primary residence properties;

                           (xvii) neither the Seller nor any servicer of the
                  related Mortgage Loans has advanced funds or knowingly
                  received any advance of funds by a party other than the
                  Mortgagor, directly or indirectly, for the payment of any
                  amount required by the Mortgage, except for (i) interest
                  accruing from the date of the related Mortgage Note or date of
                  disbursement of the Mortgage Loan proceeds, whichever is
                  later, to the date which precedes by 30 days the first Due
                  Date under the related Mortgage Note, and (ii) customary
                  advances for insurance and taxes;

                           (xviii) each Mortgage Note, the related Mortgage and
                  other agreements executed in connection therewith are genuine,
                  and each is the legal, valid and binding obligation of the
                  maker thereof, enforceable in accordance with its terms except
                  as such enforcement may be limited by bankruptcy, insolvency,
                  reorganization or other similar laws affecting the enforcement
                  of creditor's rights generally and by general equity
                  principles (regardless of whether such enforcement is
                  considered in a proceeding in equity or at law); and, to the
                  best of Seller's knowledge, all parties to each Mortgage Note
                  and the Mortgage had legal capacity to execute the Mortgage
                  Note and the Mortgage and each Mortgage Note and Mortgage has
                  been duly and properly executed by the Mortgagor;



                                       I-4

<PAGE>



                           (xix) to the extent required under applicable law,
                  each conduit seller and subsequent mortgagee or servicer of
                  the Mortgage Loans was authorized to transact and do business
                  in the jurisdiction in which the related Mortgaged Property is
                  located at all times when it held or serviced the Mortgage
                  Loan; and any obligations of the holder of the related
                  Mortgage Note, Mortgage and other loan documents have been
                  complied with in all material respects; servicing of each
                  Mortgage Loan has been in accordance with the servicing
                  standard set forth in Section 3.01 of the Pooling and
                  Servicing Agreement and the terms of the Mortgage Notes, the
                  Mortgage and other loan documents, whether the creation of
                  such Mortgage Loan and servicing was done by the Seller, its
                  affiliates, or any third party which created the Mortgage Loan
                  on behalf of, or sold the Mortgage Loan to, any of them, or
                  any servicing agent of any of the foregoing;

                           (xx) the related Mortgage Note and Mortgage contain
                  customary and enforceable provisions such as to render the
                  rights and remedies of the holder adequate for the realization
                  against the Mortgaged Property of the benefits of the
                  security, including realization by judicial, or, if
                  applicable, non-judicial foreclosure, and, to Seller's
                  knowledge, there is no homestead or other exemption available
                  to the Mortgagor which would interfere with such right to
                  foreclosure;

                           (xxi) except with respect to holdbacks required by
                  certain Mortgage Loans which holdbacks create a fund for (i)
                  the repair of Mortgaged Property due to damage from adverse
                  weather conditions, or (ii) the completion of new
                  construction, or both, the proceeds of the Mortgage Loans have
                  been fully disbursed, there is no requirement for future
                  advances thereunder and any and all requirements as to
                  completion of any on-site or off-site improvements and as to
                  disbursements of any escrow funds therefor have been complied
                  with; and all costs, fees and expenses incurred in making,
                  closing or recording the Mortgage Loan have been paid, except
                  recording fees with respect to Mortgages not recorded as of
                  the Closing Date;

                           (xxii) as of the Closing Date, the improvements on
                  each Mortgaged Property securing a Mortgage Loan is insured
                  (by an insurer which is acceptable to the Seller) against loss
                  by fire and such hazards as are covered under a standard
                  extended coverage endorsement in the locale in which the
                  Mortgaged Property is located, in an amount which is not less
                  than the lesser of the maximum insurable value of the
                  improvements securing such Mortgage Loan or the outstanding
                  principal balance of the Mortgage Loan, but in no event in an
                  amount less than an amount that is required to prevent the
                  Mortgagor from being deemed to be a co-insurer thereunder; if
                  the improvement on the Mortgaged Property is a condominium
                  unit, it is included under the coverage afforded by a blanket
                  policy for the condominium project; if upon origination of the
                  related Mortgage Loan, the improvements on the Mortgaged
                  Property were in an area identified as a federally designated
                  flood area, a flood insurance policy is in effect in an amount
                  representing coverage not less than the least


                                       I-5

<PAGE>



                  of (i) the outstanding principal balance of the Mortgage Loan,
                  (ii) the restorable cost of improvements located on such
                  Mortgaged Property or (iii) the maximum coverage available
                  under federal law; and each Mortgage obligates the Mortgagor
                  thereunder to maintain the insurance referred to above at the
                  Mortgagor's cost and expense;

                           (xxiii) there is no monetary default existing under
                  any Mortgage or the related Mortgage Note and there is no
                  material event which, with the passage of time or with notice
                  and the expiration of any grace or cure period, would
                  constitute a default, breach or event of acceleration; and
                  neither the Seller, any of its affiliates nor any servicer of
                  any related Mortgage Loan has taken any action to waive any
                  default, breach or event of acceleration; no foreclosure
                  action is threatened or has been commenced with respect to the
                  Mortgage Loan;

                           (xxiv) to Seller's knowledge, no Mortgagor, at the
                  time of origination of the applicable Mortgage, was a debtor
                  in any state or federal bankruptcy or insolvency proceeding;

                           (xxv) each Mortgage Loan was originated or funded by
                  (a) a savings and loan association, savings bank, commercial
                  bank, credit union, insurance company or similar institution
                  which is supervised and examined by a federal or state
                  authority (or originated by (i) a subsidiary of any of the
                  foregoing institutions which subsidiary is actually supervised
                  and examined by applicable regulatory authorities or (ii) a
                  mortgage loan correspondent of any of the foregoing and that
                  was originated pursuant to the criteria established by any of
                  the foregoing) or (b) a mortgagee approved by the Secretary of
                  Housing and Urban Development pursuant to sections 203 and 211
                  of the National Housing Act, as amended;

                           (xxvi) all inspections, licenses and certificates
                  required to be made or issued with respect to all occupied
                  portions of the Mortgaged Property and, with respect to the
                  use and occupancy of the same, including, but not limited to,
                  certificates of occupancy and fire underwriting certificates,
                  have been made or obtained from the appropriate authorities;

                           (xxvii) to Seller's knowledge, the Mortgaged Property
                  and all improvements thereon comply with all requirements of
                  any applicable zoning and subdivision laws and ordinances;

                           (xxviii) no instrument of release or waiver has been
                  executed in connection with the Mortgage Loans, and no
                  Mortgagor has been released, in whole or in part, except in
                  connection with an assumption agreement which has been
                  approved by the primary mortgage guaranty insurer, if any, and
                  which has been delivered to the Trustee;



                                                        I-6

<PAGE>



                           (xxix) except with respect to 0.36% of the Mortgage
                  Loans (by aggregate principal balance) which provide for a
                  balloon payment, each Mortgage Note contains provisions
                  providing for its full amortization by the end of its original
                  term and is payable on the first day of each month in monthly
                  installments of principal and interest, with interest payable
                  in arrears, over an original term of not more than 30 years;

                           (xxx) no Mortgage Loan was originated based on an
                  appraisal of the related Mortgaged Property made prior to
                  completion of construction of the improvements thereon unless
                  a certificate of completion was obtained prior to closing of
                  the Mortgage Loan;

                           (xxxi) each of the Mortgaged Properties consists of a
                  single parcel of real property with a detached single-family
                  residence erected thereon, or a two- to four-family dwelling,
                  or an individual condominium unit in a condominium project or
                  a townhouse, a condohotel, an individual unit in a PUD or an
                  individual unit in a DE MINIMIS PUD;

                           (xxxii) no Mortgaged Property consists of a single
                  parcel of real property with a cooperative housing development
                  erected thereon. Any condominium unit, PUD or DE MINIMIS PUD
                  conforms with Progressive Loan Series Program requirements
                  regarding such dwellings or is covered by a waiver confirming
                  that such condominium unit, PUD or DE MINIMIS PUD is
                  acceptable to the Seller;

                           (xxxiii) as of the Cut-off Date, the Mortgage Rate of
                  each Mortgage Loan was not less than 4.375% per annum and not
                  more than 10.385% per annum, and the weighted average Mortgage
                  Rate of the Mortgage Loans was approximately 7.019% per annum;

                           (xxxiv) measured by principal balance, no more than
                  1.21% of the Mortgage Loans are secured by an individual unit
                  in a condominium project or hi-rise, at least 14.90% of the
                  Mortgage Loans are secured by real property with two-to-four
                  family residences, at least 5.45% of the Mortgage Loans are
                  secured by real properties in planned unit developments, at
                  least 6.32% of the Mortgage Loans are secured by real property
                  with a condominium erected thereon; and at least 71.81% of the
                  Mortgage Loans are secured by real property with a detached
                  single-family residence erected thereon, including DE MINIMIS
                  PUDs;

                           (xxxv) as of the Cut-off Date, the remaining term to
                  scheduled maturity of each Mortgage Loan is not less than 170
                  months and not more than 360 months;

                           (xxxvi) as of the Cut-off Date, no more than 40.52%
                  (by aggregate principal balance) of the Mortgage Loans are
                  cash-out refinances;


                                       I-7

<PAGE>



                           (xxxvii) as of the Cut-off Date, no more than 10.52%
                  (by aggregate principal balance) of the Mortgage Loans are
                  rate and term refinances;

                           (xxxviii) as of the Cut-off Date, no fewer than
                  48.96% (by aggregate principal balance) of the Mortgage Loans
                  are purchase money loans;

                           (xxxix) as of the Cut-off Date, no more than 41.23%
                  and 17.82% of the Mortgage Loans (by aggregate principal
                  balance) are secured by properties located in the states of
                  California and Florida, respectively;

                           (xl) as of the Cut-off Date, the principal balances
                  of the Mortgage Loans range from approximately $21,294 to
                  approximately $999,000, and the average unpaid principal
                  balance is $187,603.

                           (xli) with respect to Mortgaged Properties at the
                  time of origination of the related Mortgage Loans, measured by
                  aggregate unpaid principal balance as of the Cut-off Date, at
                  least 76.04% of the Mortgaged Properties are owner occupied
                  primary residences, no more than 2.24% of the Mortgaged
                  Properties are second homes and no more than 21.72% of the
                  Mortgaged Properties are investor owned properties;

                           (xlii) as of the Cut-off Date, none of the Mortgage
                  Loans (by aggregate principal balance) are Buydown Mortgage
                  Loans;

                           (xliii) each Mortgage Loan constitutes a "qualified
                  mortgage" under Section 860G(a)(3 )(A) of the Code and
                  Treasury Regulation Section 1.860G-2(a)(1);

                           (xliv) with respect to each Mortgage Loan directly
                  originated by the Seller (and not through a third-party broker
                  or other third party) as of the Closing Date, to the best of
                  Seller's knowledge, there has been no fraud, misrepresentation
                  or dishonesty with respect to the origination of any Mortgage
                  Loan;

                           (xlv) no selection procedure reasonably believed by
                  the Seller to be adverse to the interests of the
                  Certificateholders was utilized in selecting the Mortgage
                  Loans;

                           (xlvi) no Mortgage Loan is subject to the Home
                  Ownership and Equity Protection Act of 1994 or any comparable
                  state law;

                           (xlvii) no proceeds from any Mortgage Loan were used
                  to finance single-premium credit insurance policies;



                                       I-8

<PAGE>



                           (xlviii) no Mortgage Loan provides for payment of a
                  Prepayment Charge on Principal Prepayments made more than five
                  years from the date of the first contractual Due Date of the
                  related Mortgage Loan; and

                           (xlix) none of the Mortgage Loans is a "high cost
                  home loan" as defined in the Georgia Fair Lending Act, as
                  amended (the "Georgia Act"), the New York Predatory Lending
                  Law, codified as N.Y. Banking Law ss.6-I, N.Y. Gen. Bus. Law
                  ss.771-a, and N.Y. Real Prop. Acts Law ss.1302 (together, the
                  "New York Act"), the Arkansas Home Loan Protection Act, as
                  amended (the "Arkansas Act"), or Kentucky Revised Statutes
                  ss.360.100, as amended (the "Kentucky Act"); and all the
                  Mortgage Loans that are subject to the Georgia Act, the New
                  York Act, the Arkansas Act and the Kentucky Act comply with
                  the requirements of each such act. Each Mortgage Loan for
                  which the related Mortgaged Property is located in the State
                  of Georgia was originated prior to October 1, 2002, or on or
                  after March 9, 2003.




                                       I-9

<PAGE>



                                    EXHIBIT J

      FORM OF NOTICE UNDER SECTION 3.24 OF POOLING AND SERVICING AGREEMENT


February __, 2004


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

                  Re:      Impac Secured Assets Corp.
                           Mortgage Pass-Through Certificates
                           Series 2004-1
                           --------------------------------

                  Pursuant to Section 3.25 of the Pooling and Servicing
Agreement, dated as of February 1, 2004, relating to the Certificates referenced
above, the undersigned does hereby notify you that:

                  (a) The prepayment assumption used in pricing the Certificates
with respect to the Mortgage Loans in Series 2004-1 consisted of a Prepayment
Assumption (the "Prepayment Assumption") of ____% per annum.

                  (b) With respect to each Class of Certificates comprising the
captioned series, set forth below is (i), the first price, as a percentage of
the Certificate Principal Balance or Notional Amount of each Class of
Certificates, at which 10% of the aggregate Certificate Principal Balance or
Notional Amount of each such Class of Certificates was first sold at a single
price, if applicable, or (ii) if more than 10% of a Class of Certificates have
been sold but no single price is paid for at least 10% of the aggregate
Certificate Principal Balance or Notional Amount of such Class of Certificates,
then the weighted average price at which the Certificates of such Class were
sold expressed as a percentage of the Certificate Principal Balance or Notional
Amount of such Class of Certificates, (iii) if less than 10% of the aggregate
Certificate Principal Balance or Notional Amount of a Class of Certificates has
been sold, the purchase price for each such Class of Certificates paid by
Deutsche Bank Securities Inc. (the "Underwriter"), expressed as a percentage of
the Certificate Principal Balance or Notional Amount of such Class of
Certificates calculated by: (1) estimating the fair market value of each such
Class of Certificates as of February 27, 2004; (2) adding such estimated fair
market value to the aggregate purchase prices of each Class of Certificates
described in clause (i) or (ii) above; (3) dividing each of the fair market
values determined in clause (1) by the sum obtained in clause (2); (4)
multiplying the quotient obtained for each Class of Certificates in clause (3)
by the purchase price paid by the Underwriter for all the Certificates purchased
by it; and (5) for each Class of Certificates, dividing the product obtained
from such Class of Certificates in clause (4) by the


                                       J-1

<PAGE>



initial Certificate Principal Balance or Notional Amount of such Class of
Certificates or (iv) the fair market value (but not less than zero) as of the
Closing Date of each Certificate of each Class of Certificates retained by the
Company or an affiliate corporation, or delivered to the seller:

SERIES 2004-1
-------------
Class A-1:        ____%
Class A-2:        ____%
Class A-3:        ____%
Class A-4:        ____%
Class A-5:        ____%
Class A-6:        ____%
Class A-IO:       ____%
Class M-1:        ____%
Class M-2:        ____%
Class M-3:        ____%
Class P:          ____%
Class C:          ____%
Class R:          ____%

                  The prices and values set forth above do not include accrued
interest with respect to periods before the closing.


                                          IMPAC SECURED ASSETS CORP.

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






                                       J-2

<PAGE>



                                    EXHIBIT K

                              IMPAC SERVICING GUIDE

                             (Provided Upon Request)



                                       K-1

<PAGE>



                                   EXHIBIT L-1

            FORM CERTIFICATION TO BE PROVIDED BY THE MASTER SERVICER
                                 WITH FORM 10-K

        Re:      Impac Secured Assets Corp.,
                 Mortgage Pass-Through Certificates, Series 2004-1

                  I, [Identify the certifying individual], certify that:

                  1. I have reviewed this annual report on Form 10-K, and all
reports on Form 8-K containing distribution or servicing reports filed in
respect of periods included in the year covered by this annual report, of Impac
Secured Assets Corp.;

                  2. Based on my knowledge, the information in these 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, or similar, agreement, for inclusion in these reports is
included in these reports;

                  4. I am responsible for reviewing the activities performed by
the servicer under the pooling and servicing, or similar, agreement and based
upon my knowledge and the annual compliance review required under that
agreement, and except as disclosed in the reports, the servicer has fulfilled
its obligations under that 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, or similar,
agreement, that is included in these reports.

         In giving the certifications above, I have reasonably relied on
information provided to me by the following unaffiliated parties: [the Trustee
and Sub-Servicers]

Date: __________________

____________________________________
[Signature]
[Title]
[Company]


                                       L-1

<PAGE>




                                   EXHIBIT L-2

                            FORM CERTIFICATION TO BE
              PROVIDED TO MASTER SERVICER BY THE INDENTURE TRUSTEE

       Re:      Impac Secured Assets Corp.,
                Mortgage Pass-Through Certificates, Series 2004-1

                  I, [Identify the certifying individual], a [______________] of
Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

                  1. I have reviewed the annual report on Form 10-K for the
fiscal year [__], and all reports on Form 8-K containing distribution reports
filed in respect of periods included in the year covered by that annual report,
of the Issuer relating to the above-referenced trust;

                  2. Based on my knowledge, the information in these
distribution reports 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 that annual report; and

                  3. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Agreement is included in these
distribution reports.

                  Capitalized terms used but not defined herein have the
meanings ascribed to them in the Pooling and Servicing Agreement, dated
February1, 2004 (the "Agreement"), among Impac Secured Assets Corp., as Company,
Impac Funding Corporation, as Master Servicer, and Deutsche Bank National Trust
Company, as Trustee.

                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY, as Trustee

                                       By:__________________________
                                       Name:
                                       Title:
                                       Date:




                                       L-2

<PAGE>



                                   EXHIBIT L-3

                            FORM CERTIFICATION TO BE
                   PROVIDED TO MASTER SERVICER BY THE TRUSTEE

        Re:      Impac Secured Assets Corp.,
                 Mortgage Pass-Through Certificates, Series 2004-1


                  I, [Identify the certifying individual], a [_________________]
of Deutsche Bank National Trust Company, as Trustee, hereby certify to Impac
Funding Corporation and its officers, directors and affiliates, and with the
knowledge and intent that they will rely upon this certification, that:

                  1. Based on my knowledge, the distribution information
required to be provided by the Trustee under the Agreement is included in these
distribution reports.

         Capitalized terms used but not defined herein have the meanings
ascribed to them in the Pooling and Servicing Agreement, dated February 1, 2004
(the "Agreement"), among Impac Secured Assets Corp., as Company, Impac Funding
Corporation, as Master Servicer, and Deutsche Bank National Trust Company, as
Trustee.

                                       DEUTSCHE BANK NATIONAL TRUST
                                       COMPANY, as Trustee

                                       By:__________________________
                                       Name:
                                       Title:
                                       Date:



                                       L-3

<PAGE>


                                    EXHIBIT M

                    FORM OF CREDIT RISK MANAGEMENT AGREEMENT

                             [Provided Upon Request]


                                       M-1