Document:

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

                           IMPAC SECURED ASSETS CORP.,
                                    Company,

                            IMPAC FUNDING CORPORATION
                                Master Servicer,

                                       and

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
                                     Trustee

                         POOLING AND SERVICING AGREEMENT

                           Dated as of October 1, 2001

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

                       Mortgage Pass-Through Certificates

                                  Series 2001-7

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

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----

<S>                                                                                                            <C>
ARTICLE I

DEFINITIONS.......................................................................................................5
Section 1.01.     Defined Terms...................................................................................5
         Accrual Period...........................................................................................5
         Addition Notice..........................................................................................5
         Advance..................................................................................................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
         Buydown Funds............................................................................................6
         Buydown Mortgage Loan....................................................................................7
         Cash Liquidation.........................................................................................7
         Certificate..............................................................................................7
         Certificate Account......................................................................................7
         Certificate Account Deposit Date.........................................................................7
         Certificateholder........................................................................................7
         Certificate Owner........................................................................................7
         Certificate Principal Balance............................................................................7
         Certificate Register.....................................................................................8
         Class....................................................................................................8
         Class A Certificate......................................................................................8
         Class A-I-1 Certificate..................................................................................8
         Class A-I-2 Certificate..................................................................................8
         Class A-I-3 Certificate..................................................................................8
         Class A-I-4 Certificate..................................................................................8
         Class A-II Certificate...................................................................................8
         Class A-IO Certificate...................................................................................8
         Class A Principal Distribution Amount....................................................................9
         Class B Certificate......................................................................................9
         Class B Principal Distribution Amount....................................................................9
         Class C Certificate.....................................................................................10

<PAGE>

         Class M-1 Certificate...................................................................................10
         Class M-1 Principal Distribution Amount.................................................................10
         Class M-2 Certificate...................................................................................10
         Class M-2 Principal Distribution Amount.................................................................11
         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..............................................................................................12
         Company.................................................................................................12
         Compensating Interest...................................................................................12
         Corporate Trust Office..................................................................................12
         Corresponding Certificate...............................................................................12
         Current Specified Overcollateralization Percentage......................................................12
         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...............................................................................13
         Distribution Date.......................................................................................14
         Due Date................................................................................................14
         Due Period..............................................................................................14
         Eligible Account........................................................................................14
         Event of Default........................................................................................14
         Excess Overcollateralized Amount........................................................................14
         Excess Proceeds.........................................................................................15
         Extra Principal Distribution Amount.....................................................................15
         Fannie Mae..............................................................................................15
         FDIC....................................................................................................15
         Fitch...................................................................................................15
         Freddie Mac.............................................................................................15
         Funding Date............................................................................................15
         Funding Period..........................................................................................15
         GMAC....................................................................................................15
         Group I Loan............................................................................................15
         Group II Loan...........................................................................................15

<PAGE>

         Group I Marker Rate.....................................................................................15
         Group II Marker Rate....................................................................................16
         Group II Net WAC Rate...................................................................................17
         Group I Principal Fraction..............................................................................17
         Group II Principal Fraction.............................................................................17
         Initial Certificate Principal Balance...................................................................17
         Initial Mortgage Loans..................................................................................17
         Initial Notional Amount.................................................................................17
         Insurance Policy........................................................................................17
         Insurance Proceeds......................................................................................17
         Interest Coverage Account...............................................................................18
         Interest Coverage Amount................................................................................18
         Interest Remittance Amount..............................................................................18
         Late Collections........................................................................................18
         LIBOR...................................................................................................18
         LIBOR Business Day......................................................................................18
         LIBOR Rate Adjustment Date..............................................................................18
         Liquidated Mortgage Loan................................................................................18
         Liquidation Proceeds....................................................................................18
         Loan-to-Value Ratio.....................................................................................18
         Lost Note Affidavit.....................................................................................19
         Majority Class C Certificateholder......................................................................19
         Master Servicer.........................................................................................19
         Master Servicer Prepayment Charge Payment Amount........................................................19
         Master Servicing Fees...................................................................................19
         Master Servicing Fee Rate...............................................................................19
         Maximum Uncertificated Accrued Interest Deferral Amount.................................................19
         Mezzanine Certificate...................................................................................20
         Mezzanine Net WAC Rate..................................................................................20
         Monthly Interest Distributable Amount...................................................................21
         Monthly Payment.........................................................................................21
         Moody's.................................................................................................21
         Mortgage................................................................................................21
         Mortgage File...........................................................................................21
         Mortgage Loan...........................................................................................21
         Mortgage Loan Purchase Agreement........................................................................21
         Mortgage Loan Schedule..................................................................................21
         Mortgage Note...........................................................................................23
         Mortgage Rate...........................................................................................23
         Mortgaged Property......................................................................................23
         Mortgagor...............................................................................................23
         Net Liquidation Proceeds................................................................................23
         Net Mortgage Rate.......................................................................................23
         Net Monthly Excess Cashflow.............................................................................23
         Net Prepayment Interest Shortfall.......................................................................23
         Net WAC Rate............................................................................................23

<PAGE>

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

<PAGE>

         REMIC 1.................................................................................................33
         REMIC 1 Regular Interest LT1A...........................................................................33
         REMIC 1 Regular Interest LT1B...........................................................................33
         REMIC 1 Regular Interest LT1C...........................................................................33
         REMIC 1 Regular Interest LT1D...........................................................................33
         REMIC 1 Regular Interest LT1E...........................................................................33
         REMIC 1 Regular Interest LT1P...........................................................................34
         REMIC 1 Regular Interests...............................................................................34
         REMIC 2.................................................................................................34
         REMIC 2 Group 1 Interest Loss Allocation Amount.........................................................34
         REMIC 2 Group 2 Interest Loss Allocation Amount.........................................................34
         REMIC 2 Group 1 Overcollateralized Amount...............................................................34
         REMIC 2 Group 2 Overcollateralized Amount...............................................................34
         REMIC 2 Group 1 Principal Loss Allocation Amount........................................................35
         REMIC 2 Group 2 Principal Loss Allocation Amount........................................................35
         REMIC 2 Overcollateralization Target Amount.............................................................35
         REMIC 2 Regular Interest LT2A-IO........................................................................35
         REMIC 2 Regular Interest LT2-1AA........................................................................35
         REMIC 2 Regular Interest LT2-AI1........................................................................35
         REMIC 2 Regular Interest LT2-AI2........................................................................36
         REMIC 2 Regular Interest LT2-AI3........................................................................36
         REMIC 2 Regular Interest LT2-AI4........................................................................36
         REMIC 2 Regular Interest LT2-1M1........................................................................36
         REMIC 2 Regular Interest LT2-1B.........................................................................36
         REMIC 2 Regular Interest LT2-1ZZ........................................................................36
         REMIC 2 Regular Interest LT2-2AA........................................................................36
         REMIC 2 Regular Interest LT2-AII........................................................................37
         REMIC 2 Regular Interest LT2-2M1........................................................................37
         REMIC 2 Regular Interest LT2-2M2........................................................................37
         REMIC 2 Regular Interest LT2-2B.........................................................................37
         REMIC 2 Regular Interest LT2-2ZZ........................................................................37
         REMIC 2 Regular Interest LT2P...........................................................................37
         REMIC 2 Regular Interests...............................................................................38
         REMIC 3.................................................................................................38
         REMIC Provisions........................................................................................38
         REMIC Regular Interest..................................................................................38
         Remittance Report.......................................................................................38
         REO Acquisition.........................................................................................38
         REO Disposition.........................................................................................38
         REO Imputed Interest....................................................................................38
         REO Proceeds............................................................................................38
         REO Property............................................................................................39
         Request for Release.....................................................................................39
         Residual Interest.......................................................................................39
         Responsible Officer.....................................................................................39
         Seller..................................................................................................39

<PAGE>

         Servicing Account.......................................................................................39
         Servicing Advances......................................................................................39
         Servicing Guide.........................................................................................39
         Servicing Officer.......................................................................................39
         Single Certificate......................................................................................39
         Standard & Poor's.......................................................................................40
         Startup Day.............................................................................................40
         Stated Principal Balance................................................................................40
         Stepdown Date...........................................................................................40
         Subsequent Cut-off Date.................................................................................40
         Subsequent Mortgage Loan................................................................................40
         Subsequent Mortgage Loan Purchase Agreement.............................................................40
         Subsequent Transfer Date................................................................................40
         Subsequent Transfer Instrument..........................................................................41
         Sub-Servicer............................................................................................41
         Sub-Servicer Remittance Date............................................................................41
         Sub-Servicing Account...................................................................................41
         Sub-Servicing Agreement.................................................................................41
         Sub-Servicing Fees......................................................................................41
         Sub-Servicing Fee Rate..................................................................................41
         Substitution Adjustment.................................................................................41
         Tax Returns.............................................................................................41
         Transfer................................................................................................41
         Transferor..............................................................................................41
         Trigger Event...........................................................................................41
         Trust Fund..............................................................................................42
         Trustee.................................................................................................42
         Trustee's Fee...........................................................................................42
         Trustee Fee Rate........................................................................................42
         Uncertificated Accrued Interest.........................................................................42
         Uncertificated Notional Amount..........................................................................42
         Uncertificated Principal Balance........................................................................43
         Uncertificated Pass-Through Rate........................................................................43
         Uncertificated REMIC 1 Pass-Through Rate................................................................43
         Uncertificated REMIC 2 Pass-Through Rate................................................................43
         Uninsured Cause.........................................................................................44
         United States Person....................................................................................44
         Unpaid Interest Shortfall Amount........................................................................44
         Voting Rights...........................................................................................45
         Weighted Average Net Mortgage Rate......................................................................45
         Wendover................................................................................................45
Section 1.02      Determination of LIBOR.........................................................................45
Section 1.03      Allocation of Certain Interest Shortfalls......................................................46

<PAGE>

ARTICLE II

CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES................................................................................48
Section 2.01.     Conveyance of Mortgage Loans...................................................................48
Section 2.02.     Acceptance of the Trust Fund by the Trustee....................................................51
Section 2.03.     Representations, Warranties and Covenants of the Master Servicer and the
                  Company........................................................................................53
Section 2.04.     Representations and Warranties of the Seller...................................................55
Section 2.05.     Issuance of Certificates; Conveyance of  REMIC Regular Interests and
                  Acceptance of REMIC 2 and REMIC 3 by the Trustee...............................................57
Section 2.06.     Conveyance of the Subsequent Mortgage Loans....................................................58

ARTICLE III

ADMINISTRATION AND SERVICING
OF THE TRUST FUND................................................................................................62
Section 3.01.     Master Servicer to Act as Master Servicer......................................................62
Section 3.02.     Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................63
Section 3.03.     Successor Sub-Servicers........................................................................65
Section 3.04.     Liability of the Master Servicer...............................................................65
Section 3.05.     No Contractual Relationship Between Sub-Servicers and Trustee or
                  Certificateholders.............................................................................65
Section 3.06.     Assumption or Termination of Sub-Servicing Agreements by Trustee...............................66
Section 3.07.     Collection of Certain Mortgage Loan Payments...................................................66
Section 3.08.     Sub-Servicing Accounts.........................................................................67
Section 3.09.     Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................68
Section 3.10.     Custodial Account..............................................................................68
Section 3.11.     Permitted Withdrawals From the Custodial Account...............................................69
Section 3.12.     Permitted Investments..........................................................................70
Section 3.13.     Maintenance of Primary Hazard Insurance........................................................71
Section 3.14.     Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................73
Section 3.15.     Realization Upon Defaulted Mortgage Loans......................................................75
Section 3.16.     Trustee to Cooperate; Release of Mortgage Files................................................76
Section 3.17.     Servicing Compensation.........................................................................77
Section 3.18.     Maintenance of Certain Servicing Policies......................................................78
Section 3.19.     Annual Statement as to Compliance..............................................................78
Section 3.20.     Annual Independent Public Accountants' Servicing Statement.....................................79

Section 3.21.     Access to Certain Documentation................................................................79
Section 3.22.     Title, Conservation and Disposition of REO Property............................................80
Section 3.23.     Additional Obligations of the Master Servicer..................................................82

<PAGE>

Section 3.24.     Additional Obligations of the Company..........................................................82
Section 3.25.     Periodic Filings with the Securities and Exchange Commission; Additional
                  Information....................................................................................82
Section 3.26.     Administration of Buydown Funds................................................................83

ARTICLE IV

PAYMENTS TO CERTIFICATEHOLDERS...................................................................................84
Section 4.01.     Distributions..................................................................................84
Section 4.02.     Statements to Certificateholders...............................................................89
Section 4.03.     Remittance Reports; Advances by the Master Servicer............................................92
Section 4.04.     Pre-Funding Account............................................................................93
Section 4.05.     Interest Coverage Account......................................................................94
Section 4.06.     Distributions on the REMIC Regular Interests...................................................96
Section 4.07.     Allocation of Realized Losses..................................................................99
Section 4.08.     Information Reports to Be Filed by the Master Servicer........................................100
Section 4.09.     Compliance with Withholding Requirements......................................................101

ARTICLE V

THE CERTIFICATES................................................................................................102
Section 5.01.     The Certificates..............................................................................102
Section 5.02.     Registration of Transfer and Exchange of Certificates.........................................104
Section 5.03.     Mutilated, Destroyed, Lost or Stolen Certificates.............................................108
Section 5.04.     Persons Deemed Owners.........................................................................109
Section 5.05.     Rule 144A Information.........................................................................109

ARTICLE VI

THE COMPANY AND THE MASTER SERVICER.............................................................................110
Section 6.01.     Liability of the Company and the Master Servicer..............................................110
Section 6.02.     Merger, Consolidation or Conversion of the Company or the Master Servicer
                   .............................................................................................110
Section 6.03.     Limitation on Liability of the Company, the Master Servicer and Others........................110
Section 6.04.     Limitation on Resignation of the Master Servicer..............................................111
Section 6.05.     Sale and Assignment of Master Servicing.......................................................112

<PAGE>

ARTICLE VII

DEFAULT.........................................................................................................113
Section 7.01.     Events of Default.............................................................................113
Section 7.02.     Trustee to Act; Appointment of Successor......................................................115
Section 7.03.     Notification to Certificateholders............................................................116
Section 7.04.     Waiver of Events of Default...................................................................116
Section 7.05.     List of Certificateholders....................................................................116

ARTICLE VIII

CONCERNING THE TRUSTEE..........................................................................................117
Section 8.01.     Duties of Trustee.............................................................................117
Section 8.02.     Certain Matters Affecting the Trustee.........................................................118
Section 8.03.     Trustee Not Liable for Certificates or Mortgage Loans.........................................119
Section 8.04.     Trustee May Own Certificates..................................................................120
Section 8.05.     Trustee's Fees................................................................................120
Section 8.06.     Eligibility Requirements for Trustee..........................................................121
Section 8.07.     Resignation and Removal of the Trustee........................................................121
Section 8.08.     Successor Trustee.............................................................................122
Section 8.09.     Merger or Consolidation of Trustee............................................................122
Section 8.10.     Appointment of Co-Trustee or Separate Trustee.................................................123

ARTICLE IX

TERMINATION.....................................................................................................125
Section 9.01.     Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
                  Purchase of Certificates......................................................................125
Section 9.02.     Termination of REMIC 2 and REMIC 3............................................................127
Section 9.03.     Additional Termination Requirements...........................................................127

ARTICLE X

REMIC PROVISIONS................................................................................................129
Section 10.01.    REMIC Administration..........................................................................129

<PAGE>

Section 10.02.    Prohibited Transactions and Activities........................................................132
Section 10.03.    Master Servicer and Trustee Indemnification...................................................132

ARTICLE XI

MISCELLANEOUS PROVISIONS........................................................................................133
Section 11.01.    Amendment.....................................................................................133
Section 11.02.    Recordation of Agreement; Counterparts........................................................134
Section 11.03.    Limitation on Rights of Certificateholders....................................................134
Section 11.04.    Governing Law.................................................................................135
Section 11.05.    Notices.......................................................................................135
Section 11.06.    Severability of Provisions....................................................................136
Section 11.07.    Successors and Assigns........................................................................136
Section 11.08.    Article and Section Headings..................................................................136
Section 11.09.    Notice to Rating Agencies.....................................................................136
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Signatures
Acknowledgments

<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 3.25
Exhibit K         Impac Funding Corporation Servicing Guide
Exhibit L         Addition Notice
Exhibit M         Subsequent Transfer Instrument
</TABLE>

<PAGE>

         This Pooling and Servicing Agreement, dated and effective as of October
1, 2001, is entered into among Impac Secured Assets Corp., as company (the
"Company"), Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., 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 twelve classes of
certificates, designated as (i) the Class A-I-1, Class A-I-2, Class A-I-3, Class
A-I-4, Class A-II and Class A-IO Certificates, (ii) the Class M-1 Certificates,
(iii) the Class M-2 Certificates, (iv) the Class B Certificates, (v) the Class P
Certificates, (vi) the Class C Certificates and (vii) 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 (exclusive of the Pre-Funding Account
and the Interest Coverage Account) 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>
                        Uncertificated REMIC 1         Initial Uncertificated            Assumed Final
    Designation            Pass-Through Rate              Principal Balance            Maturity Date (1)
                           -----------------              -----------------            -----------------

<S>                     <C>                           <C>                              <C>
       LT1A                    Variable(2)            $     174,998,250.47                February 2032
       LT1B                    Variable(2)            $           1,309.94                February 2032
       LT1C                    Variable(2)            $             440.06                February 2032
       LT1D                    Variable(2)            $      20,000,000.00                February 2032
       LT1E                    Variable(2)            $       5,000,000.00                February 2032
       LT1P                    Variable(2)            $             100.00                February 2032
</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 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.

                                       1

<PAGE>

                                     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>
                        Uncertificated REMIC 2         Initial Uncertificated               Assumed Final
    Designation           Pass-Through Rate               Principal Balance               Maturity Date (1)
    -----------           -----------------               -----------------               -----------------
<S>                     <C>                         <C>                                   <C>
      LT2-1AA                Variable(2)            $      146,713,351.79                   February 2032
      LT2-AI1                Variable(2)            $          349,000.00                   February 2032
      LT2-AI2                Variable(2)            $          178,000.00                   February 2032
      LT2-AI3                Variable(2)            $          220,000.00                   February 2032
      LT2-AI4                Variable(2)            $          660,250.00                   February 2032
      LT2-1M1                Variable(2)            $           48,655.22                   February 2032
      LT2-1M2                Variable(2)            $           29,941.67                   February 2032
      LT2-1B                 Variable(2)            $           11,228.13                   February 2032
      LT2-1ZZ                Variable(2)            $        1,497,075.02                   February 2032
      LT2-2AA                Variable(2)            $       49,286,648.67                   February 2032
      LT2-AII                Variable(2)            $          472,750.00                   February 2032
      LT2-2M1                Variable(2)            $           16,344.78                   February 2032
      LT2-2M2                Variable(2)            $           10,058.33                   February 2032
      LT2-2B                 Variable(2)            $            3,771.87                   February 2032
      LT2-2ZZ                Variable(2)            $          502,924.99                   February 2032
      LT2A-IO                Variable(2)                       N/A(3)                       February 2032
       LT2P                  Variable(2)            $              100.00                   February 2032
</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 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 LT2A-IO will not have Uncertificated Principal
         Balances, but will accrue interest on their respective Uncertificated
         Notional Amounts outstanding from time to time which shall equal the
         Uncertificated Principal Balance of (a) REMIC 1 Regular Interest LT1D
         and REMIC 1 Regular Interest LT1E up to and including the Distribution
         Date in April 2002, and (b) REMIC 1 Regular Interest LT1D for each
         Distribution Date thereafter.

                                        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-I-1           $       34,900,000.00                   Variable(2)                 February 2032
         Class A-I-2           $       17,800,000.00                   Variable(2)                 February 2032
         Class A-I-3           $       22,000,000.00                   Variable(2)                 February 2032
         Class A-I-4           $       66,025,000.00                   Variable(2)                 February 2032
         Class A-II            $       47,275,000.00                   Variable(2)                 February 2032
         Class A-IO                       N/A (4)                      Variable(2)                 February 2032
          Class M-1            $         6,500,000.00                  Variable(2)                 February 2032
          Class M-2            $         4,000,000.00                  Variable(2)                 February 2032
           Class B             $         1,500,000.00                  Variable(2)                 February 2032
           Class C             $                 0.47(3)               Variable(2)                 February 2032
           Class P             $               100.00                     N/A(5)                   February 2032
</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 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>

         Using the Structuring Assumptions (as defined in the Prospectus
Supplement) and assuming prepayments at 0% of the Prepayment Assumption, no
losses or delinquencies on the Mortgage Loans, and a Required
Overcollateralization amount of $0, the final scheduled Distribution Date on
each Class of Certificates would be as follows: (i) for the Class A-I-1
Certificates, the Distribution Date in August 2016; (ii) for the Class A-I-2
Certificates, the Distribution Date in November 2019; (iii) for the Class A-I-3
Certificates, the Distribution Date in July 2023; (iv) for the Class A-IO
Certificates, the Distribution Date in April 2004; and (v) for the Class A-I-4,
Class A-II, Class M, Class B and Class C Certificates, the Distribution Date in
February 2032.

         Due to Realized Losses, principal prepayments (including Principal
Prepayments, liquidations of defaulted Mortgage Loans, repurchases of Mortgage
Loans) and other differences between the Structuring Assumptions and the actual
behavior that the Mortgage Loans will exhibit during the period that they are
held in the Trust Fund, the final scheduled Distribution Date on each Class of
Certificates may be substantially earlier or later than the dates indicated in
the preceding paragraph. The failure of any Class of Certificates to be retired
on or before the applicable date indicated in the preceding paragraph shall not
constitute an Event of Default or a breach by any party hereto, nor shall any
Certificateholder (or the Trustee on behalf of any Certificateholder) be
entitled to any remedy for such failure. The termination of the Trust Fund and
the final distribution on any Class of the Certificates shall only occur in
accordance with the provisions of Section 4.02 and Article IX of this Agreement.

                                        4

<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-I-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. Accrued Certificate Interest on the Class
A-I-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-I-1 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-I-1 Certificates (i) with respect to the Distribution
Date in November 2001, the period commencing the Closing Date and ending on the
day preceding the Distribution Date in November 2001, and (ii) with respect to
any Distribution Date after the Distribution Date in November 2001, 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.

         "Addition Notice": With respect to the transfer of Subsequent Mortgage
Loans to the Trust Fund pursuant to Section 2.06, a notice of the Company's
designation of the Subsequent Mortgage Loans to be sold to the Trust Fund and
the aggregate Stated Principal Balance of such Subsequent Mortgage Loans as of
the Subsequent Cut-off Date. The Addition Notice shall be given not later than
three Business Days prior to the related Subsequent Transfer Date and shall be
substantially in the form attached hereto as Exhibit L.

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

         "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 sum of (i) any Realized Losses
allocated to such Class of Certificates on any Distribution Date and (ii) 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.

                                        5

<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, (iv) any amounts deposited into the Certificate Account from the
Pre-Funding Account and the Interest Coverage Account pursuant to Sections 4.04
and 4.05 of this Agreement and (v) 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 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 Section 2.02, 2.04, 3.14,
3.22 or 3.24, 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.

         "Buydown Funds": Any amount contributed by the seller of a Mortgaged
Property, the Company or other source in order to enable the Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in the early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund prior to
deposit into the Custodial or Certificate Account.

                                        6

<PAGE>

         "Buydown Mortgage Loan": Any Mortgage Loan as to which a specified
amount of interest is paid out of related Buydown Funds in accordance with a
related buydown agreement.

         "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.

         "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 Bankers Trust
Company of California, N.A., in trust for registered holders of Impac Secured
Assets Corp., Mortgage Pass-Through Certificates, Series 2001-7, 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

                                        7

<PAGE>

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-I-1, Class A-I-2, Class
A-I-3, Class A-I-4, Class A-II or Class A-IO Certificates.

         "Class A-I-1 Certificate": Any one of the Class A-I-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 Regular Interest in REMIC 3.

         "Class A-I-2 Certificate": Any one of the Class A-I-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 Regular Interest in REMIC 3.

         "Class A-I-3 Certificate": Any one of the Class A-I-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 Regular Interest in REMIC 3.

         "Class A-I-4 Certificate": Any one of the Class A-I-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 Regular Interest in REMIC 3.

         "Class A-II Certificate": Any one of the Class A-II 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 Regular Interest in REMIC 3.

         "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-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 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
November 2001 through October 2002, a per annum rate equal to the excess of (i)
the Weighted Average Net Mortgage Rate over (ii) the excess (but not less than
zero) of (x) the Weighted Average Net Mortgage Rate over (y) 8.00% per annum;

                                        8

<PAGE>

                  (B) in the case of the Distribution Dates beginning in
November 2002 through April 2003, a per annum rate equal to the excess of (i)
the Weighted Average Net Mortgage Rate over (ii) the excess (but not less than
zero) of (x) the Weighted Average Net Mortgage Rate over (y) 7.00% per annum;

                  (C) in the case of the Distribution Dates beginning in May
2003 through October 2003, a per annum rate equal to the excess of (i) the
Weighted Average Net Mortgage Rate over (ii) the excess (but not less than zero)
of (x) the Weighted Average Net Mortgage Rate over (y) 5.00% per annum;

                  (D) in the case of the Distribution Dates beginning in
November 2003 through April 2004, a per annum rate equal to the excess of (i)
the Weighted Average Net Mortgage Rate over (ii) the excess (but not less than
zero) of (x) the Weighted Average Net Mortgage Rate over (y) 4.00% per annum;
and

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

         "Class A Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class A 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 the amount on deposit in the Pre-Funding Account (less any
investment income transferred to the Interest Coverage Account) and (b) 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 the amount on deposit in the Pre-Funding Account
multiplied by the sum of (A) approximately 12.00% and (B) the Current Specified
Overcollateralization Percentage.

         "Class B Certificate": Any one of the Class B 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 Regular Interest in REMIC 3.

         "Class B Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class B 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 the amount on deposit in the Pre-Funding Account and (b) the

                                        9

<PAGE>

sum of (1) the Certificate Principal Balance of the Class A Certificates (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 (4)
the sum of 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 the amount on deposit in the Pre-Funding Account
multiplied by the Current Specified Overcollateralization Percentage.

         "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 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 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 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
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 the amount on deposit in the Pre-Funding Account, and (b) the sum of
(1) the Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount on such
Distribution Date) and (2) 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 the amount on deposit
in the Pre-Funding Account multiplied by the sum of (A) approximately 5.50% and
(B) the Current Specified Overcollateralization 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 Regular Interest in REMIC 3.

                                       10

<PAGE>

         "Class M-2 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the 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 the amount on deposit in the Pre-Funding Account, and (b) the sum of
(1) the Certificate Principal Balance of the Class A Certificates (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 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 the amount on deposit in the Pre-Funding Account multiplied by the
sum of (A) approximately 1.50% and (B) the Current Specified
Overcollateralization 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-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 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":  October 30, 2001.

         "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.

                                       11

<PAGE>

         "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 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
2001-6.

         "Corresponding Certificate": With respect to:

                  (i)      REMIC 2 Regular  Interest  LT2-AI1,  the Class  A-I-1
                           Certificates,

                  (ii)     REMIC 2 Regular  Interest  LT2-AI2,  the Class  A-I-2
                           Certificates,

                  (iii)    REMIC 2 Regular  Interest  LT2-AI3,  the Class  A-I-3
                           Certificates,

                  (iv)     REMIC 2 Regular  Interest  LT2-AI4,  the Class  A-I-4
                           Certificates,

                  (v)      REMIC 2 Regular  Interest  LT2-AII,  the  Class  A-II
                           Certificates,

                  (vi)     REMIC 2 Regular  Interest LT2-1M1 and REMIC 2 Regular
                           Interest LT2-2M1, the Class M-1 Certificates,

                  (vii)    REMIC 2 Regular Interest LT2-1M2 and REMIC 2 Regular
                           Interest LT2-2M2, the Class M-2 Certificates,

                  (viii)   REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular
                           Interest LT2-2B, the Class B Certificates, and

                  (ix)     REMIC  2   Regular   Interest   LT2P,   the  Class  P
                           Certificates.

         "Current Specified Overcollateralization 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).

                                       12

<PAGE>

         "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":  October 1, 2001.

         "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.

         "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

                                       13

<PAGE>

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 either 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 November 2001.

         "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 (and
F-1 by Fitch if rated by Fitch) 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 with 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 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

                                       14

<PAGE>

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.

         "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.

         "Fitch":  Fitch, Inc., or its successor in interest.

         "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.

         "Funding Period": The period from the Closing Date until the earliest
of (i) the date on which the amount on deposit in the Pre-Funding Account
(exclusive of investment income) is reduced to zero or (ii) December 31, 2001.

         "GMAC": GMAC Mortgage Corporation.

         "Group I Loan": Any Mortgage Loan identified as a Group I Loan on the
Mortgage Loan Schedule.

         "Group II Loan": Any Mortgage Loan identified as a Group II Loan on the
Mortgage Loan Schedule.

         "Group I 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
LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3,
REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-1M1, REMIC 2
Regular Interest LT2-1M2, 2 Regular Interest LT2-1B, and REMIC 2 Regular
Interest LT2-1ZZ, with the rate on REMIC 2 Regular Interest LT2-AI1 subject to a
cap equal to the lesser of (x) LIBOR plus 0.22% per annum and (y) the Group I
Net WAC Rate for the purpose of this calculation; with the rate on REMIC 2
Regular Interest LT2-AI2 subject to a cap equal to the lesser of (x) 4.25% per
annum and (y) the Group I Net WAC Rate for the purpose of this calculation; with
the rate on REMIC 2 Regular Interest LT2-AI3 subject to a cap equal to the
lesser of (x) 4.92% per annum and (y) the Group I Net WAC Rate for the purpose
of this calculation; with the rate on REMIC 2 Regular Interest LT2-AI4 subject
to a cap equal to (A) in the case of any Distribution Date up to and including
the Optional Termination Date, the lesser of (x) 6.32% per annum and (y) the
Group I Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 6.82% per annum and

                                       15

<PAGE>

(y) the Group I Net WAC Rate for the purpose of this calculation; with the rate
on REMIC 2 Regular Interest LT2-1M1 subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 6.41% per annum and (y) the Mezzanine Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 6.91% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2-1M2 subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 6.66% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.16% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest LT2-1B subject to a cap equal to (A) in the case of any
Distribution Date up to and including the Optional Termination Date, the lesser
of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of
any Distribution Date after the Optional Termination Date, the lesser of (x)
7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation; and with the rate on REMIC 2 Regular Interest LT2-1ZZ subject to a
cap of zero for the purpose of this calculation; provided, however, that for
this purpose, calculations of the Uncertificated REMIC 2 Pass-Through Rate and
the related caps with respect to REMIC 2 Regular Interest LT2-AI1 shall be
multiplied by a fraction, the numerator of which is the actual number of days in
the Accrual Period and the denominator of which is 30.

         "Group II 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 LT2-AII, REMIC 2 Regular Interest LT2-2M1, REMIC 2 Regular Interest
LT2-2M2, REMIC 2 Regular Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ;
with the rate on REMIC 2 Regular Interest LT2-AII subject to a cap equal to (A)
in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 6.75% per annum and (y) the Group II Net WAC
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 7.25% per annum and (y) the Group II Net WAC Rate for
the purpose of this calculation; with the rate on REMIC 2 Regular Interest
LT2-1M1 subject to a cap equal to (A) in the case of any Distribution Date up to
and including the Optional Termination Date, the lesser of (x) 6.41% per annum
and (y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution Date
after the Optional Termination Date, the lesser of (x) 6.91% per annum and (y)
the Mezzanine Net WAC Rate for the purpose of this calculation; with the rate on
REMIC 2 Regular Interest LT2-1M2 subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 6.66% per annum and (y) the Mezzanine Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 7.16% per annum and (y) the Mezzanine Net WAC Rate for the purpose of this
calculation; with the rate on REMIC 2 Regular Interest LT2-1B subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation; and with the rate on
REMIC 2 Regular Interest LT2-2ZZ subject to a cap of zero for the purpose of
this calculation.

                                       16

<PAGE>

         "Group I Net WAC Rate": With respect to each Distribution Date through
and including the Distribution Date in April 2004, the Net WAC Rate and for each
Distribution Date thereafter, the weighted average of the Net Mortgage Rates of
the Group I 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.

         "Group II Net WAC Rate": With respect to each Distribution Date through
and including the Distribution Date in April 2004, the Net WAC Rate and for each
Distribution Date thereafter, the weighted average of the Net Mortgage Rates of
the Group II 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.

         "Group I Principal Fraction": With respect to any Distribution Date, a
fraction equal to (x) the Principal Remittance Amount received from the Group I
Loans for such Distribution Date over (y) the Principal Remittance Amount
received from all of the Mortgage Loans for such Distribution Date.

         "Group II Principal Fraction": With respect to any Distribution Date, a
fraction equal to (x) the Principal Remittance Amount received from the Group II
Loans for such Distribution Date over (y) the Principal Remittance Amount
received from all of the Mortgage Loans for such Distribution Date.

         "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 Mortgage Loans": Any of the Mortgage Loans included in the
Trust Fund as of the Closing Date. The aggregate principal balance of the
Initial Mortgage Loans as of the Cut-off Date is equal to $165,132,376.

         "Initial Notional Amount": With respect to the Class A-IO Certificates,
$25,000,000 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.

         "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.

                                       17

<PAGE>

         "Interest Coverage Account": The account established and maintained
pursuant to Section 4.05.

         "Interest Coverage Amount": The amount to be paid by the Company to the
Trustee for deposit in the Interest Coverage Account on the Closing Date
pursuant to Section 4.05, which amount is $848,801.

         "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-I-1 Certificates, the arithmatic 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.

                                       18

<PAGE>

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

         "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
for the calendar month preceding the month in which the payment 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
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) the sum of (I) accrued interest at
the Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular
Interest LT2-1ZZ for such Distribution Date on a balance equal to the excess of
(i) the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-1ZZ and
(ii) the REMIC 2 Group 1 Overcollateralized Amount for such Distribution Date
and (II) accrued interest at the Uncertificated REMIC 2 Pass-Through Rate
applicable to REMIC 2 Regular Interest LT2-2ZZ for such Distribution Date on a
balance equal to the excess of (i) the Uncertificated Principal Balance of REMIC
2 Regular Interest LT2-2ZZ and (ii) the REMIC 2 Group 2 Overcollateralized
Amount for such Distribution Date, over (b) the sum of (I) Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2-AI1, with the rate on REMIC 2
Regular Interest LT2-AI1 subject to a cap equal to the lesser of (x) LIBOR plus
0.22% per annum and (y) the Group I Net WAC Rate, (II) Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2-AI2, with the rate on REMIC 2 Regular
Interest LT2-AI2 subject to a cap equal to the lesser of (x) 4.25% per annum and
(y) the Group I Net WAC Rate, (III) Uncertificated Accrued Interest on REMIC 2
Regular Interest LT2-AI3, with the rate on REMIC 2 Regular Interest LT2-AI3
subject to a cap equal to the lesser of (x) 4.92% per annum and (y) the Group I
Net WAC Rate, (IV) Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2-AI4, with the rate on REMIC 2 Regular Interest LT2-AI4 subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 6.32% per annum and (y) the Group 1
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 6.82% per annum and (y) the Group I

                                       19

<PAGE>

Net WAC Rate, (V) Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2-1M1 with the rate on REMIC 2 Regular Interest LT2-1M1 subject to a cap equal
to (A) in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 6.41% per annum and (y) the Mezzanine Net
WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 6.91% per annum and (y) the Mezzanine Net
WAC Rate for the purpose of this calculation, (VI) Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2-1M2, with the rate on REMIC 2 Regular
Interest LT2-1M2 subject to a cap equal to (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.66%
per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 7.16%
per annum and (y) the Mezzanine Net WAC Rate for the purpose of calculation,
(VII) Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-1B, with
the rate on REMIC 2 Regular Interest LT2-1B subject to a cap equal to (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) 7.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.50% per annum and (y) the Mezzanine Net WAC Rate for the purpose
of this calculation, (VIII) Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2-AII, with the rate on REMIC 2 Regular Interest LT2-AII subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 6.75% per annum and (y) the Group
II Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 7.25% per annum and (y) the Group II Net WAC
Rate for the purpose of this calculation, (IX) Uncertificated Accrued Interest
on REMIC 2 Regular Interest LT2-2M1 with the rate on REMIC 2 Regular Interest
LT2-2M1 subject to a cap equal to (A) in the case of any Distribution Date up to
and including the Optional Termination Date, the lesser of (x) 6.41% per annum
and (y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution Date
after the Optional Termination Date, the lesser of (x) 6.91% per annum and (y)
the Mezzanine Net WAC Rate for the purpose of this calculation, (X)
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2-2M2, with the
rate on REMIC 2 Regular Interest LT2-2M2 subject to a cap equal to (A) in the
case of any Distribution Date up to and including the Optional Termination Date,
the lesser of (x) 6.66% per annum and (y) the Mezzanine Net WAC Rate and (B) in
the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.16% per annum and (y) the Mezzanine Net WAC Rate for the purpose
of this calculation, and (XI) Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2-2B, with the rate on REMIC 2 Regular Interest LT2-2B subject to a
cap equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.00% per annum and (y) the
Mezzanine Net WAC Rate and (B) in the case of any Distribution Date after the
Optional Termination Date, the lesser of (x) 7.50% per annum and (y) the
Mezzanine Net WAC Rate for the purpose of this calculation.

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

         "Mezzanine Net WAC Rate": (A) For the November 2001 Distribution Date
through the April 2004 Distribution Date, a per annum rate equal to (1) the Net
WAC Rate and (B) for each Distribution Date thereafter, the lesser of (1) the
weighted average of the Net Mortgage Rates of the Group I Loans as of the first
day of the month preceding the month in which such Distribution Date occurs and
(2) the weighted average of the Net Mortgage Rates of the Group II

                                       20

<PAGE>

Loans as of the first day of the month preceding the month in which such
Distribution Date occurs.

         "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 offered certificates, other than
the Class A-I-1 Certificates, will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The amount of accrued interest for the Class
A-I-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, Section 2.04 or Section 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 October 1, 2001, 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

                                       21

<PAGE>

Qualified Substitute Mortgage Loans) (and, for purposes of the Trustee pursuant
to Section 2.02, in 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 (or
Subsequent Cut-off Date, with respect to a Subsequent Mortgage Loan);

         (ix) the principal balance as of the Cut-off Date (or Subsequent
Cut-off Date, with respect to a Subsequent Mortgage Loan);

         (x) the Mortgage Rate as of the Cut-off Date (or Subsequent Cut-off
Date, with respect to a Subsequent Mortgage Loan);

         (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;

                                       22

<PAGE>

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

         (xxi) the documentation type;

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

         (xxiii) whether the Mortgage Loan is a Group I Loan or a Group II Loan.

         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,
Servicing 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 Servicing Fee Rate, the Trustee Fee Rate and
the Advisor's Fee Rate, 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, (B) the Unpaid Interest Shortfall Amounts for the Class A
Certificates and (C) 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 each class of the Class A Certificates
(other than the Class A-IO Certificates) and each Class of the Mezzanine
Certificates and each REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest LT2A-IO) and any Distribution Date, a

                                       23

<PAGE>

per annum rate (but not less than zero) equal to the weighted average of (x) the
Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest LT1C and
REMIC 1 Regular Interest LT1P for such Distribution Date and (y) the excess, if
any, of (i) the Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1
Regular Interest LT1D for such Distribution Date over (ii) (A) in the case of
the Distribution Dates beginning in November 2001 and ending in April 2004, the
applicable Class A-IO Rate, and (B) in the case of any Distribution Date
thereafter, 0.00% per annum and (z) the excess, if any, of (i) the
Uncertificated REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular
Interest LT1E for such Distribution Date over (ii) (A) in the case of the
Distribution Dates beginning in November 2001 and ending in April 2002, 8.00%
per annum, and (B) in the case of any Distribution Date thereafter, 0.00% per
annum, weighted, in the case of clause (x), on the basis of the aggregate
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1P, and in the case of clause (y), on the basis of the Uncertificated
Principal Balance of REMIC 1 Regular Interest LT1D, and in the case of clause
(z), on the basis of the Uncertificated Principal Balance of REMIC 1 Regular
Interest LT1E, respectively.

         "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 in April 2002, an amount equal to the
Uncertificated Principal Balances of REMIC 1 Regular Interest LT1E, and with
respect to any Distribution Date immediately prior to any Distribution Date in
April 2004, an amount equal to the Uncertified Principal Balance of REMIC 1
Regular Interest LTD1D. 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.

         "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.

         "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

                                       24

<PAGE>

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.

         "Original Pre-Funded Amount": The amount deposited by the Trustee in
the Pre-Funding Account on the Closing Date, which amount is $34,867,724.

         "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, $1,000,000.

         "Overcollateralized Amount": With respect to any Distribution Date, the
amount, if any, by which (i) the sum of 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 the Pre-Funded Amount 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-I-1 Certificates, the lesser of (x) LIBOR plus 0.22%
per annum and (y) the Group I Net WAC Rate;

                                       25

<PAGE>

         (ii) the Class A-I-2 Certificates, the lesser of (x) 4.25% per annum
and (y) the Group I Net WAC Rate;

         (iii) the Class A-I-3 Certificates, the lesser of (x) 4.92% per annum
and (y) the Group I Net WAC Rate;

         (iv) the Class A-I-4 Certificates, [(A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.32%
per annum and (y) the Group I Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 6.82%
per annum and (y) the Group I Net WAC Rate;

         (v) the Class A-II Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.75%
per annum and (y) the Group II Net WAC Rate and (B) in the case of any
Distribution Date after the Optional termination Date, the lesser of (x) 7.25%
per annum and (y) the Group II Net WAC Rate ;

         (vi) the Class A-IO Certificates, 100% of the interest on REMIC 2
Regular Interest LT2A-IO;

         (vii) the Class M-1 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.41%
per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 6.91%
per annum and (y) the Mezzanine Net WAC Rate;

         (viii) the Class M-2 Certificates, (A) in the case of any Distribution
Date up to and including the Optional Termination Date, the lesser of (x) 6.66%
per annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any
Distribution Date after the Optional Termination Date, the lesser of (x) 7.16%
per annum and (y) the Mezzanine Net WAC Rate;

         (ix) the Class B Certificates, (A) in the case of any Distribution Date
up to and including the Optional Termination Date, the lesser of (x) 7.00% per
annum and (y) the Mezzanine Net WAC Rate and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) 7.50% per annum and
(y) the Mezzanine Net WAC Rate; and

         (x) 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 (P) below, and the denominator of
which is (y) the aggregate of the Uncertificated Principal Balances of the REMIC
2 Regular Interests. 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 LT2-1AA minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1AA;

                                       26

<PAGE>

                  (B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI1 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI1;

                  (C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI2 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI2;

                  (D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI3 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI3;

                  (E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AI4 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AI4;

                  (F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1M1 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1M1;

                  (G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1M2 minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1M2;

                  (H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1B minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1B;

                  (I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-1ZZ minus the Group I Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-1ZZ;

                  (J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2AA minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2AA;

                  (K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-AII minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-AII;

                  (L) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2M1 minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2M1;

                  (M) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2M2 minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2M2;

                                       27

<PAGE>

                  (N) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2B minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2B;

                  (O) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2-2ZZ minus the Group II Marker Rate, applied to an amount
equal to the Uncertificated Principal Balance of REMIC 2 Regular Interest
LT2-2ZZ; and

                  (P) 100% of the interest on REMIC 2 Regular Interest LT2P.

         The Class P 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 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

                                       28

<PAGE>

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 (and by Fitch if rated by Fitch) 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
and Fitch in their respective highest long-term ratings available and rated AAAm
or AAAm-G by Standard & Poor's, including any such funds for which Bankers Trust
Company of California, N.A. 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.

         "Pre-Funded Amount": The amount on deposit in the Pre-Funding Account
on any date of determination.

         "Pre-Funding Account": The account established and maintained pursuant
to Section 4.04.

         "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).

                                       29

<PAGE>

         "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 related 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, 3.14 or 3.22, 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 connection with a termination of the Trust Fund to occur
on such Distribution Date.

         "Prospectus Supplement": That certain Prospectus Supplement dated
October 25, 2001 relating to the public offering of the Class A Certificates and
the Mezzanine Certificates.

                                       30

<PAGE>

         "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, 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.

         "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.

         "Radian Lender-Paid PMI Policy": A Primary Insurance Policy issued by
Radian in accordance with a May 1, 2000 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.

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<PAGE>

         "Rating Agency": Standard & Poor's, Fitch 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, "AA" or better in the case of Fitch 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, F-1 in the case of Fitch 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-I-1 Certificates) and each Distribution Date, the last Business Day
of the month immediately preceding the month of the related Distribution Date.
For each Distribution Date and the Class A-I-1 Certificates, the Business Day
prior to such Distribution Date. If the Class A-I-1 Certificate is no longer a
Book-Entry Certificate, the Record Date shall be the last Business Day of the
month immediately preceding the month of the related Distribution Date.

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

         "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 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.

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<PAGE>

         "REMIC 1": The segregated pool of assets, 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 LT1A": 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 LT1A 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 LT1B": 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 LT1B 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 LT1C": 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 LT1C 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 LT1D": 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 LT1D 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 LT1E": 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 LT1E shall accrue interest
at the related Uncertificated REMIC 1

                                       33

<PAGE>

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 LT1P": 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 LT1P 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 LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C, REMIC 1 Regular Interest
LT1D, REMIC 1 Regular Interest LT1E and REMIC 1 Regular Interest LT1P.

         "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 Group 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group 1 Loans and related REO Properties then
outstanding and the Pre-Funded Amount and (ii) the Uncertificated REMIC 2
Pass-Through Rate for REMIC 2 Regular Interest LT2-1AA minus the Group I Marker
Rate, divided by (b) 12.

         "REMIC 2 Group 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group II Loans and related REO Properties then
outstanding and the Pre-Funded Amount and (ii) the Uncertificated REMIC 2
Pass-Through Rate for REMIC 2 Regular Interest LT2-2AA minus the Group II Marker
Rate, divided by (b) 12.

         "REMIC 2 Group 1 Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1, REMIC 2
Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular
Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest
LT2-1ZZ, minus (ii) the aggregate of the Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2
Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular
Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2 and REMIC 2 Regular Interest
LT2-1B, in each case as of such date of determination.

         "REMIC 2 Group 2 Overcollateralized Amount": With respect to any date
of determination, (i) 1% of the aggregate Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2
Regular Interest LT2-2M1,

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<PAGE>

REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest LT2-2B and REMIC 2
Regular Interest LT2-2ZZ, minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular Interest LT2-2B,
in each case as of such date of determination.

         "REMIC 2 Group 1 Principal Loss Allocation Amount": With respect to any
Distribution Date and the Group I Loans, an amount equal to (a) the product of
(i) the aggregate Principal Balance of the Group I Loans and related REO
Properties then outstanding and the Pre-Funded Amount 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 LT2-AI1, REMIC 2
Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest
LT2-AI4,REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2 and
REMIC 2 Regular Interest LT2-1B, and the denominator of which is the aggregate
of the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AI1,
REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2
Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular
Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest
LT2-1ZZ.

         "REMIC 2 Group 2 Principal Loss Allocation Amount": With respect to any
Distribution Date and the Group II Loans, an amount equal to (a) the product of
(i) the aggregate Principal Balance of the Group II Loans and related REO
Properties then outstanding and the Pre-Funded Amount 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 LT2-AII, REMIC 2
Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular
Interest LT2-2B, and the denominator of which is the aggregate of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-AII, REMIC 2
Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular
Interest LT2-2B.

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

         "REMIC 2 Regular Interest LT2A-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 LT2A-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 LT2-1AA": 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 LT2-1AA
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 LT2-AI1": 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 LT2-AI1
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

                                       35

<PAGE>

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 LT2-AI2": 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 LT2-AI2
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 LT2-AI3": 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 LT2-AI3
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 LT2-AI4": 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 LT2-AI4
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 LT2-1M1": 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 LT2-1M1
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 LT2-1B": 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 LT2-1B 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 LT2-1ZZ": 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 LT2-1ZZ
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 LT2-2AA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in

                                       36

<PAGE>

REMIC 2. REMIC 2 Regular Interest LT2-2AA 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 LT2-AII": 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 LT2-AII
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 LT2-2M1": 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 LT2-2M1
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 LT2-2M2": 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 LT2-2M2
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 LT2-2B": 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 LT2-2B 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 LT2-2ZZ": 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 LT2-2ZZ
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 LT2P": 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 LT2P 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 LT1P (including Prepayment Charges).

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<PAGE>

         "REMIC 2 Regular Interests": REMIC 2 Regular Interest LT21AA, REMIC 2
Regular Interest LT2A-IO, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LTA-AI2, REMIC 2 Regular Interest LTA-AI3, REMIC 2 Regular Interest
LTA-AI4, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2,
REMIC 2 Regular Interest LT2-1B, REMIC 2 Regular Interest LT2-1ZZ, REMIC 2
Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest
LT2-2B, REMIC 2 Regular Interest LT2-2ZZ and REMIC 2 Regular Interest LT2P.

         "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 REMIC 3 Regular Interest.

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

                                       38

<PAGE>

         "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,
(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 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.

                                       39

<PAGE>

         "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 (or Subsequent Cut-off Date, as
applicable), 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": The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in November 2004 and (y) the first Distribution Date for which
the aggregate Certificate Principal Balance of the Mezzanine Certificates
divided by 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 the amount on deposit in the
Pre-Funding Account is greater than or equal to 12.00%.

         "Subsequent Cut-off Date": With respect to those Subsequent Mortgage
Loans sold to the Trust Fund pursuant to a Subsequent Transfer Instrument, the
later of (i) first day of the month in which the related Subsequent Transfer
Date occurs or (ii) the date of origination of such Mortgage Loan.

         "Subsequent Mortgage Loan": A Mortgage Loan sold by the Company to the
Trust Fund pursuant to Section 2.06, such Mortgage Loan being identified on the
Mortgage Loan Schedule attached to a Subsequent Transfer Instrument.

         "Subsequent Mortgage Loan Purchase Agreement": The agreement among
Impac Funding Corporation, as seller, Impac Mortgage Holdings, Inc., as
guarantor, and the Company, as purchaser, and all amendments thereof and
supplements thereto, regarding the transfer of the Subsequent Mortgage Loans by
the Seller to the Company.

         "Subsequent Transfer Date": With respect to each Subsequent Transfer
Instrument, the date on which the related Subsequent Mortgage Loans are sold to
the Trust Fund.

                                       40

<PAGE>

         "Subsequent Transfer Instrument": Each Subsequent Transfer Instrument,
dated as of a Subsequent Transfer Date, executed by the Trustee at the written
direction of the Company and the Company substantially in the form attached
hereto as Exhibit M, by which Subsequent Mortgage Loans are transferred to the
Trust Fund.

         "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.

         "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 for
the calendar month preceding the month in which the payment 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.

         "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

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<PAGE>

         (i) 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 and Mortgage Loans with respect to which the related Mortgaged
Mroperty has been acquired by the Trust) as of the close of business on the last
day of the preceding calendar month exceeds 2.25% (in the case of the 36th
Distribution Date through the 60th Distribution Date) or 3.25% (in the case of
any Distribution Date thereafter) of the aggregate Stated Principal Balance of
the Mortgage Loans as of such Distribution Date (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); or

         (ii) in the case of any Distribution Date after the 36th Distribution
Date, 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 exceeds 10.00% of the sum of (x) the aggregate
Certificate Principal Balance of the Mezzanine Certificates (or, if the
Certificate Principal Balances of the Class A Certificates have been reduced to
zero, the aggregate Certificate Principal Balance of the Mezzanine Certificates
other than the Class of Mezzanine Certificates with the highest payment
priority) after giving effect to distributions that would be made on such
Distribution Date if no Trigger Event were in effect and (y) the
Overcollateralized Amount.

         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 and REMIC 3.

         "Trustee": Bankers Trust Company of California, N.A., 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 plus any amounts in the
Pre-Funding Account, a rate equal to 0.01% 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 each of REMIC 2
Regular Interest LT2A-IO and any Distribution Date prior to and including the
Distribution Date prior to and including the Distribution Date in April 2002,
the Uncertificated Principal Balances of REMIC 1

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Regular Interest LT1D and LT1E, and any Distribution Date thereafter, the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D for such
Distribution Date.

         "Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest and REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest LT2A-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 LT2A-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 REMIC
Regular Interest shall be reduced by all distributions of principal made on such
REMIC Regular Interest on such Distribution Date pursuant to Section 4.06 and,
if and to the extent necessary and appropriate, shall be further reduced on such
Distribution Date by Realized Losses as provided in Section 4.07. The
Uncertificated Principal Balance of each of REMIC 2 Regular Interest LT2-1ZZ and
REMIC 2 Regular Interest LT2-2ZZ shall each be increased by interest deferrals
as provided in Section 4.06. The Uncertificated Principal Balance of each REMIC
Regular Interest shall never be less than zero. REMIC 2 Regular Interest LT2A-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 LT1A, REMIC 1 Regular Interest LT1D, REMIC 1 Regular Interest
LT1E, and REMIC 1 Regular Interest LT1P 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. With respect to REMIC 1 Regular Interest LT1B and
any Distribution Date, a per annum rate equal to the average of the Net Mortgage
Rates of the Group I 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. With respect
to REMIC 1 Regular Interest LT1C and any Distribution Date, a per annum rate
equal to the average of the Net Mortgage Rates of the Group II 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 2 Pass-Through Rate":

         (a) With respect to REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular
Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest
LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-1ZZ,
REMIC 2 Regular Interest LT2- 2AA, REMIC 2 Regular Interest LT2-1M1, REMIC 2
Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B, REMIC 2 Regular
Interest LT2-1ZZ, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest
LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest LT2-2B,
REMIC 2 Regular Interest LT2-2ZZ and REMIC 2 Regular Interest LT2P and any
Distribution Date prior to and including the Distribution Date in April 2004, a
per annum rate equal to the Net WAC Rate. With respect to REMIC 2 Regular
Interest LT2-1AA,

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<PAGE>

REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2
Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular
Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular Interest
LT2-1B, REMIC 2 Regular Interest LT2-1ZZ and REMIC 2 Regular Interest LT2P and
any Distribution Date after the Distribution Date in April 2004, a per annum
rate equal to the Uncertificated REMIC 1 Pass-Through Rate of the Uncertificated
REMIC 1 Regular Interest LT1B. With respect to REMIC 2 Regular Interest LT2-2AA,
REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest LT2-2M1, REMIC 2
Regular Interest LT2-2M2, REMIC 2 Regular Interest LT2-2B and REMIC 2 Regular
Interest LT2-2ZZ and any Distribution Date after the Distribution Date in April
2004, a per annum rate equal to the Uncertificated REMIC 1 Pass-Through Rate of
the Uncertificated REMIC 1 Regular Interest LT1C.

         (b) With respect to REMIC 2 Regular Interest LT2A-IO and the first 30
Distribution Dates, the Class A-IO Rate, and 0.00% per annum thereafter.

         "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 and Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such

                                       44

<PAGE>

preceding Distribution Date, to the extent permitted by law, 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.

         "Wendover": Wendover Funding, Inc.

         Section 1.02      Determination of LIBOR.

         LIBOR applicable to the calculation of the Pass-Through Rate on the
Class A-I-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-I-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

                                       45

<PAGE>

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-I-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 (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.

         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-I-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-I-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 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 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 first with respect to any Group I Loan, to
REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such shortfall, and with respect to any Group II Loan, to REMIC 1
Regular Interest LT1A and REMIC 1 Regular Interest LT1C, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such shortfall, second to REMIC 1 Regular Interest LT1E, and
third, to REMIC 1 Regular Interest LT1D, in each case to the extent of one
month's interest at

                                       46

<PAGE>

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 Group I Loans,
first, to Uncertificated Accrued Interest payable to REMIC 2 Regular Interest
LT2-1AA and REMIC 2 Regular Interest LT2-1ZZ up to an aggregate amount equal to
the REMIC 2 Group 1 Interest Loss Allocation Amount, 98% and 2% respectively,
and thereafter among REMIC 2 Regular Interest LT2A-IO, REMIC 2 Regular Interest
LT2-1AA, REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2,
REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2
Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular
Interest, LT2-1B and REMIC 2 Regular Interest LT2-1ZZ, 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, and (ii)
with respect to the Group II Loans, first, to Uncertificated Accrued Interest
payable to REMIC 2 Regular Interest LT2-2AA and REMIC 2 Regular Interest LT2-2ZZ
up to an aggregate amount equal to the REMIC 2 Group 2 Interest Loss Allocation
Amount, 98% and 2%, respectively, and thereafter among REMIC 2 Regular Interest
LT2A-IO, REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII,
REMIC 2 Regular LT2-2M1, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular
Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ, 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.

                                       47

<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. 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 or Subsequent Cut-off Date, as applicable).

         The Master Servicer hereby acknowledges the receipt by it of cash in an
amount equal to $362,467.50 (the "Special Deposit"), representing interest at
the Mortgage Rate, for the calendar month of October 2001, for those Mortgage
Loans which do not have Monthly Payments due on November 1, 2001. 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
November 2001.

         The Trustee hereby acknowledges the receipt by it of the Pre-Funded
Amount and the Interest Coverage Amount.

         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 Initial Mortgage Loan,
and as described in the Subsequent Mortgage Loan Purchase Agreement, with
respect to each Subsequent Mortgage Loan, the following documents or
instruments:

         (i) the original Mortgage Note endorsed without recourse, "Bankers
Trust Company of California, N.A., as trustee under the Pooling and Servicing
Agreement relating to Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2001-7" 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 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;

                                       48

<PAGE>

         (iii) a duly executed original Assignment of the Mortgage, without
recourse, in recordable form to "Bankers Trust Company of California, N.A., as
trustee," or to "Bankers Trust Company of California, N.A., as trustee for
holders of Impac Secured Assets Corp., Mortgage Pass-Through Certificates,
Series 2001-7";

         (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, 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 Initial Mortgage Loans, and will be obligated as
described in the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent 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 ( or the
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans), 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

                                       49

<PAGE>

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
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 (or the Subsequent Mortgage Loan Purchase Agreement, as
applicable), 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 Initial Mortgage Loans, and will be required as
described in the Subsequent Mortgage Loan Purchase Agreement, with respect to
the Subsequent 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 Initial Mortgage Loans, or the Subsequent Transfer
Date, with respect to the Subsequent 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.

         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 and the REMIC 1 Regular Interests 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 and the REMIC 1 Regular Interests by the Company
to the Trustee to secure a debt or other obligation of the Company. However, in
the event that the Mortgage Loans and the REMIC 1 Regular Interests 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 and the REMIC 1
Regular Interests, 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

                                       50

<PAGE>

Commercial Code and the Uniform Commercial Code of any other 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, (C) the REMIC 1 Regular Interests and (D) 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 (D); (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

                                       51

<PAGE>

the Closing Date, with respect to each Initial Mortgage Loan, or the Subsequent
Transfer Date, with respect to each Subsequent 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 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 Initial
Mortgage Loans, (or Subsequent Transfer Date, with respect to the Subsequent
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

                                       52

<PAGE>

released pursuant hereto and at such time the Trustee shall have no further
responsibility with respect to the related Mortgage File.

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

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<PAGE>

                  (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;

                  (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; and

                  (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.

         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 or the Subsequent Mortgage Loan Purchase Agreement respecting
a breach of any of the representations, warranties and covenants contained in
the Mortgage Loan Purchase Agreement or the Subsequent Mortgage Loan Purchase
Agreement.

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<PAGE>

         (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 or the Subsequent Mortgage Loan Purchase Agreement are as set
forth in Exhibit I hereto.

         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 and the Subsequent Mortgage Loan
Purchase Agreement. Insofar as the Mortgage Loan Purchase Agreement (and the
Subsequent Mortgage Loan Purchase Agreement, with respect to the Subsequent
Mortgage Loans) 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 (and the
Subsequent Mortgage Loan Purchase Agreement, with respect to any Subsequent
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

                                       55

<PAGE>

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 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.

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<PAGE>

         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
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-1 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-1 Interest). The interests evidenced by the Class R-2 Interest, together
with the Regular Certificates, 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

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<PAGE>

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.

         Section 2.06.     Conveyance of the Subsequent Mortgage Loans.

         (a) Subject to the conditions set forth in paragraph (b) below in
consideration of the Trustee's delivery on the Subsequent Transfer Dates to or
upon the written order of the Company of all or a portion of the balance of
funds in the Pre-Funding Account, the Company shall on any Subsequent Transfer
Date sell, transfer, assign, set over and convey without recourse to the Trust
Fund but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Company in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Company on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.01 and the other items in
the related Mortgage Files; provided, however, that the Company reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Trustee for deposit in the mortgage pool by
the Company of the Subsequent Mortgage Loans identified on the Mortgage Loan
Schedule shall be absolute and is intended by the Company, the Master Servicer,
the Trustee and the Certificateholders to constitute and to be treated as a sale
of the Subsequent Mortgage Loans by the Company to the Trust Fund. The related
Mortgage File for each Subsequent Mortgage Loan shall be delivered to the
Trustee at least three (3) Business Days prior to the related Subsequent
Transfer Date.

         The purchase price paid by the Trustee from amounts released from the
Pre-Funding Account shall be one-hundred percent (100%) of the aggregate Stated
Principal Balance of the Subsequent Mortgage Loans so transferred (as identified
on the Mortgage Loan Schedule provided by the Company). This Agreement shall
constitute a fixed-price purchase contract in accordance with Section
860G(a)(3)(A)(ii) of the Code.

         (b) The Company shall transfer to the Trustee for deposit in the
mortgage pool the Subsequent Mortgage Loans and the other property and rights
related thereto as described in

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<PAGE>

paragraph (a) above, and the Trustee shall release funds from the Pre-Funding
Account, only upon the satisfaction of each of the following conditions on or
prior to the related Subsequent Transfer Date:

                  (i) the Company shall have provided the Trustee and the Rating
         Agencies with a timely Addition Notice and shall have provided any
         information reasonably requested by the Trustee with respect to the
         Subsequent Mortgage Loans;

                  (ii) the Company shall have delivered to the Trustee a duly
         executed Subsequent Transfer Instrument, which shall include a Mortgage
         Loan Schedule listing the Subsequent Mortgage Loans, and the Master
         Servicer, in its capacity as Originator, shall have delivered a
         computer file containing such Mortgage Loan Schedule to the Trustee at
         least three (3) Business Days prior to the related Subsequent Transfer
         Date;

                  (iii) as of each Subsequent Transfer Date, as evidenced by
         delivery of the Subsequent Transfer Instrument, substantially in the
         form of Exhibit M, the Company shall not be insolvent nor shall it have
         been rendered insolvent by such transfer nor shall it be aware of any
         pending insolvency;

                  (iv) such sale and transfer shall not result in a material
         adverse tax consequence to the Trust Fund or the Certificateholders;

                  (v) the Funding Period shall not have terminated;

                  (vi) the Company shall not have selected the Subsequent
         Mortgage Loans in a manner that it believed to be adverse to the
         interests of the Certificateholders;

                  (vii) the Company shall have delivered to the Trustee a
         Subsequent Transfer Instrument confirming the satisfaction of the
         conditions precedent specified in this Section 2.06 and, pursuant to
         the Subsequent Transfer Instrument, assigned to the Trustee without
         recourse for the benefit of the Certificateholders all the right, title
         and interest of the Company, in, to and under the Subsequent Mortgage
         Loan Purchase Agreement, to the extent of the Subsequent Mortgage
         Loans;

                  (viii) with respect to the last Subsequent Transfer Date, the
         Company shall have delivered to the Trustee a letter from an
         Independent accountant (with copies provided to each Rating Agency)
         stating that the characteristics of the Subsequent Mortgage Loans
         conform to the statistical characteristics set forth in paragraphs
         (c)(iii), (vi) and (ix) and (d) below; and

                  (ix) the Company shall have delivered to the Trustee an
         Opinion of Counsel addressed to the Trustee and the Rating Agencies
         with respect to the transfer of the Subsequent Mortgage Loans
         substantially in the form of the Opinion of Counsel

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<PAGE>

         delivered to the Trustee on the Closing Date regarding the true sale of
         the Subsequent Mortgage Loans.

         (c) The obligation of the Trust Fund to purchase a Subsequent Mortgage
Loan on any Subsequent Transfer Date is subject to the satisfaction of the
conditions set forth in the immediately following paragraph and the accuracy of
the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) the Subsequent Mortgage Loan will each be a fixed-rate Mortgage Loan
with a first lien on the related Mortgaged Property; (ii) no Subsequent Mortgage
Loan will have a maturity date later than January, 2031; (iii) no Subsequent
Mortgage Loan will have a credit score less than 600; (iv) the transfer of such
Subsequent Mortgage Loans into the mortgage pool during the Funding Period will
not result in the certificates receiving lower credit ratings from the Ratings
Agencies upon termination of the Funding Period than the ratings that were
obtained at the time of the initial offering of the Certificates; (v) such
Subsequent Mortgage Loan may not be 30 or more days delinquent as of the last
day of the month preceding the Subsequent Cut-off Date; (vi) the original term
to stated maturity of such Subsequent Mortgage Loan will not be less than 177
months and will not exceed 360 months; (vii) if the Subsequent Mortgage Loan has
a loan-to-value ratio greater than 80.00%, it is covered by a Primary Insurance
Policy or the Radian Lender-Paid PMI Policy; (viii) no Subsequent Mortgage Loan
will be a buydown mortgage loan; (ix) no Subsequent Mortgage Loan will have a
first Due Date prior to July 1, 2001 or after February 1, 2002; and (x) such
Subsequent Mortgage Loan shall have been underwritten in accordance with the
criteria set forth under "The Mortgage Pool--Underwriting Standards" in the
Prospectus Supplement.

         (d) In addition, the Subsequent Mortgage Loans will as of the
Subsequent Cut-off Date: (i) not have more than 5% of the Subsequent Mortgage
Loan be balloon loans; (ii) have been serviced by the Master Servicer since
origination or the date of purchase; (iii) have a weighted average mortgage rate
of approximately 8.500%; (iv) have no more than approximately 1% of the
Subsequent Mortgage Loans (by aggregate Stated Principal Balance as of the
Subsequent Cut-off Date) be secured by Mortgaged Properties located in any one
zip code; (v) have a weighted average credit score of approximately 678; (vi)
not have more than approximately 42% and 17% of such Subsequent Mortgage Loans
concentrated in the states of California and Florida, respectively; (vii) have
no less than 85% of the Mortgaged Properties be owner occupied; (viii) have no
less than 70% of the Mortgaged Properties be single family detached; and (ix)
have no more than 30% of the Mortgage Loans be cashout refinance.

         (e) Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by any Rating Agency if the inclusion of any such Subsequent Mortgage
Loan would adversely affect the ratings of any Class of Certificates. At least
one (1) Business Day prior to the Subsequent Transfer Date, each Rating Agency
shall notify the Trustee as to which Subsequent Mortgage Loans, if any, shall
not be included in the transfer on the Subsequent Transfer Date; provided,
however, that the Master Servicer, in its capacity as Originator, shall have
delivered to each Rating Agency at least three (3) Business Days prior to such
Subsequent Transfer Date a

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<PAGE>

computer file acceptable to each Rating Agency describing the characteristics
specified in paragraphs (c) and (d) above.

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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 under the following circumstances: (i) such waiver is standard and
customary in servicing similar Mortgage Loans and (ii) such waiver would, in the
reasonable judgement of the Master Servicer, maximize recovery of total proceeds
taking into account the value of such Prepayment Charge and the related Mortgage
Loan and, if such waiver is made in connection with a refinancing of the related
Mortgage Loan, such refinancing is 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. 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 or full release, discharge
and all other comparable instruments,

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<PAGE>

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.

         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 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

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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 Wendover.

         The Master Servicer has entered into a Sub-Servicing Agreement with
Wendover 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 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 the Mortgage Loans
with GMAC and shall transfer the subservicing of the Initial Mortgage Loans from
Wendover to GMAC on or about January 1, 2002 and with respect to the Subsequent
Mortgage Loans, no later than three months after they are transferred to the
trust. 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.

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         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. 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.

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         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 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

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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 one Business
Day 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

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any Mortgage Loan as of the Sub-Servicer Remittance Date, after deducting 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 Subsequent Transfer
Date, with respect to the Subsequent Mortgage Loans), or received by it prior to
the Cut-off Date (or Subsequent Transfer 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 or Subsequent Transfer Date):

                  (i) all payments (including advances by a Sub-Servicer) on
account of principal, including Principal Prepayments, on the Mortgage Loans and
all Prepayment Charges collected on the Mortgage Loans (and any Master Servicer
Prepayment Charge Payment

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Amounts paid by, or collected on behalf of the Trust Fund by, the Master
Servicer or any Sub-Servicer);

                  (ii) all payments (including advances by a Sub-Servicer) on
account of interest on the Mortgage Loans, including Buydown Funds, if any, 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 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, 3.24 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,
3.24 or 9.01 all amounts received thereon and not yet distributed as of the date
of purchase or repurchase;

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         (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;

         (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

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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.

         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 (or Subsequent Transfer Date, with
respect to the Subsequent Mortgage Loans) 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

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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 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.

         The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all 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 November 15, 2001, 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

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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 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

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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 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.

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         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) 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.

         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 Servicing Fees; and second, to interest
at the Net Mortgage Rate. The portion of the recovery so allocated to unpaid
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.

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         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. 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.

         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

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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 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 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 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. 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

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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
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.

         Within 120 days after December 31 of each year, commencing on the first
December 31 following the first anniversary of the Closing Date, 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

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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) Within 120 days after December 31 of each year, commencing on the
first December 31 following the first anniversary of the Closing Date, 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 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) Within 120 days after December 31 of each year, commencing December
2001, 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,

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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 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

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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 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.

         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

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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.

         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.     Periodic Filings with the Securities and Exchange
                           Commission; Additional Information.

         The Trustee shall prepare or cause to be prepared for filing with the
Commission any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed with the Commission pursuant
to the Securities Exchange Act of 1934, as amended, and shall solicit any and
all proxies of the Certificateholders whenever such proxies are required

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to be solicited, pursuant to the Securities Exchange Act of 1934, as amended.
The Company shall promptly file, and exercise its reasonable best efforts to
obtain a favorable response to, no-action requests with, or other appropriate
exemptive relief from, the Commission seeking the usual and customary exemption
from such reporting requirements granted to issuers of securities similar to the
Certificates. Fees and expenses incurred by the Trustee in connection with this
Section shall not be reimbursable from the Trust Fund.

         The Master Servicer and the Company each agree to promptly furnish to
the Trustee, from time to time upon request, such further information, reports
and financial statements within their respective control related to this
Agreement and the Mortgage Loans as the Trustee reasonably deems appropriate to
prepare and file all necessary reports with the Commission.

         Section 3.26.     Administration of Buydown Funds.

         (a) With respect to any Buydown Mortgage Loan, the Sub-Servicer has
deposited Buydown Funds in an account that satisfies the requirements for a
Sub-Servicing Account (the "Buydown Account"). The Master Servicer shall cause
the Sub-Servicing Agreement to require that upon receipt from the Mortgagor of
the amount due on a Due Date for each Buydown Mortgage Loan, the Sub-Servicer
will withdraw from the Buydown Account the predetermined amount that, when added
to the amount due on such date from the Mortgagor, equals the full Monthly
Payment and transmit that amount in accordance with the terms of the
Sub-Servicing Agreement to the Master Servicer together with the related payment
made by the Mortgagor or advanced by the Sub-Servicer.

         (b) If the Mortgagor on a Buydown Mortgage Loan prepays such loan in
its entirety during the period (the "Buydown Period") when Buydown Funds are
required to be applied to such Buydown Mortgage Loan, the Sub-Servicer shall be
required to withdraw from the Buydown Account and remit any Buydown Funds
remaining in the Buydown Account in accordance with the related buydown
agreement. The amount of Buydown Funds which may be remitted in accordance with
the related buydown agreement may reduce the amount required to be paid by the
Mortgagor to fully prepay the related Mortgage Loan. If the Mortgagor on a
Buydown Mortgage Loan defaults on such Mortgage Loan during the Buydown Period
and the property securing such Buydown Mortgage Loan is sold in the liquidation
thereof (either by the Master Servicer or the insurer under any related Primary
Insurance Policy), the Sub-Servicer shall be required to withdraw from the
Buydown Account the Buydown Funds for such Buydown Mortgage Loan still held in
the Buydown Account and remit the same to the Master Servicer in accordance with
the terms of the Sub-Servicing Agreement for deposit in the Custodial Account
or, if instructed by the Master Servicer, pay to the insurer under any related
Primary Insurance Policy if the Mortgaged Property is transferred to such
insurer and such insurer pays all of the loss incurred in respect of such
default. Any amount so remitted pursuant to the preceding sentence will be
deemed to reduce the amount owed on the Mortgage Loan.

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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, 3.22 or 3.23, (iii) any amounts deposited into the Certificate Account
from the Pre-Funding Account and the Interest Coverage Account pursuant to
Sections 4.04 and 4.05 of this Agreement, (iv) all other amounts constituting
the Available Distribution Amount for the immediately succeeding Distribution
Date and (v) 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 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 Distribution Date:

                  (i) to the Holders of the Class A-IO Certificates, the related
Monthly Interest Distributable Amount for each such Class for such Distribution
Date;

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                  (ii) to the Holders of the Class A-IO Certificates, the
related Unpaid Interest Shortfall Amount, if any, for each such Class for such
Distribution Date;

                  (iii) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-I-1, Class A-I-2,
Class A-I-3 and Class A-I-4 Certificates, pro rata, the related Monthly Interest
Distributable Amount for such Class for such Distribution Date, and (b) from the
remaining Interest Remittance Amount in respect of the Group II Loans, to the
Holders of the Class A-II Certificates, the related Monthly Interest
Distributable Amount for such Class for such Distribution Date;

                  (iv) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-I-1, Class A-I-2,
Class A-I-3 and Class A-I-4, pro rata, the related Unpaid Interest Shortfall for
such Class for such Distribution Date, and (b) from the remaining Interest
Remittance Amount in respect of the Group II Loans, to the Holders of the Class
A-II Certificates, the related Unpaid Interest Shortfall for such Class for such
Distribution Date;

                  (v) (a) from the remaining Interest Remittance Amount in
respect of the Group I Loans, to the Holders of the Class A-II Certificates, any
remaining Unpaid Interest Shortfall for such Class for such Distribution Date,
and (b) from the remaining Interest Remittance Amount in respect of the Group II
Loans, to the Holders of the Class A-I-1, Class A-I-2, Class A-I-3 and Class
A-I-4 Certificates, pro rata, any remaining Unpaid Interest Shortfall for such
Class for such Distribution Date;

                  (vi) to the Holders of the Class M-1 Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date;

                  (vii) to the Holders of the Class M-2 Certificates, the
Monthly Interest Distributable Amount for such Class for such Distribution Date;
and

                  (viii) to the Holders of the Class B Certificates, the Monthly
Interest Distributable Amount for such Class for such Distribution Date.

         (b) On each Distribution Date (x) prior to the Stepdown Date or (y) on
which 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 Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:

                  (i) first, (a) to the Class A-I-1 Certificates, the Class
A-I-2 Certificates, the Class A-I-3 Certificates and the Class A-I-4
Certificates, sequentially, in that order, the Group I Principal Fraction of the
Principal Distribution Amount for such Distribution Date and (b) to the holders
of the Class A-II Certificates, the Group II Principal Fraction of the Principal
Distribution Amount for such Distribution Date from the Group II Loans, in each
case until the Certificate

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Principal Balances thereof are reduced to zero; provided that if on any
Distribution Date, the Class A-I Certificates or Class A-II Certificates are no
longer outstanding, the Principal Distribution Amount will be allocated to the
Class A-II Certificates and Class A-I Certificates, respectively, in the order
described above;

                  (ii) second, to the holders of the Class M-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero;

                  (iii) third, to the holders of the Class M-2 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; and

                  (iv) fourth, to the holders of the Class B Certificates, until
the Certificate Principal Balance thereof has been reduced to zero.

         (c) On each Distribution Date (x) on or after the Stepdown Date and (y)
on which a 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 Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:

                  (i) first, the Class A Principal Distribution Amount shall be
distributed as follows:

                           (A) to the Class A-I-1 Certificates, the Class A-I-2
         Certificates, the Class A-I-3 Certificates and the Class A-I-4
         Certificates, sequentially, in that order, the Group I Principal
         Fraction of the Class A Principal Distribution Amount, in each case
         until the Certificate Principal Balances thereof are reduced to zero,
         and

                           (B) to the holders of the Class A-II Certificates,
         the Group II Principal Fraction of the Class A Principal Distribution
         Amount, until the Certificate Principal Balance thereof is reduced to
         zero;

provided that if on any Distribution Date, the Class A-I Certificates or Class
A-II Certificates are no longer outstanding, the Class A Principal Distribution
Amount will be allocated to the Class A-II Certificates and Class A-I
Certificates, respectively, in the order described above, in each case until the
Certificate Principal Balances thereof are reduced to zero;

                  (ii) second, 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;

                  (iii) third, to the holders of the Class M-2 Certificates, the
Class M-2 Principal Distribution Amount until the Certificate Principal Balance
thereof has been reduced to zero; and

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                  (iv) fourth, to the holders of the Class B Certificates, the
Class B 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 Section 4.01(b) or
Section 4.01(c) above, as applicable;

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

                  (iii) to the Holders of the Class M-1 Certificates, in an
amount equal to the Allocated Realized Loss Amount allocable to such
Certificates;

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

                  (v) to the Holders of the Class M-2 Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such Certificates;

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

                  (vii) to the Holders of the Class B Certificates, in an amount
equal to the Allocated Realized Loss Amount allocable to such Certificates;

                  (viii) to the Holders of the Class C Certificates, interest
equal to the Monthly Interest Distributable Amount for such Class and principal
equal to 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

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

         (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

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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, 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 Trustee 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 Trustee 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

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non-tendering Certificateholders to surrender their Certificates for
cancellation in order to receive the final 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, http://www-apps.gis.deutsche-bank.com/invr
(or deliver at the recipient's option), 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:

                  (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;

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                  (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);

                  (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 and the number and aggregate Stated
Principal Balance of the Subsequent Mortgage Loans added during the preceding
Prepayment Period;

                  (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 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) when the Stepdown Date or a Trigger Event has occurred;

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                  (xviii) 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;

                  (xix) the amount withdrawn from the Pre-Funding Account and
the Interest Coverage Account and used to make payments to Certificateholders on
that Distribution Date, the amount remaining on deposit following such
Distribution Date, and the amount withdrawn from the Pre-Funding Account used to
buy Subsequent Mortgage Loans prior to such Distribution Date; and

                  (xx) the Available Distribution Amount for such Distribution
Date.

         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, http://www-apps.gis.deutsche-bank.com/invr (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.

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         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 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 related Debt Service Reductions or 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 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
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

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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
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.     Pre-Funding Account.

         (a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Pre-Funding Account,, Bankers Trust Company of California, National
Association, as trustee for the registered holders of Impac Secured Assets
Corp., Mortgage Pass-Through Certificates, Series 2001-7" (the "Pre-Funding
Account"). The Trustee shall, promptly upon receipt, deposit in the Pre-Funding
Account and retain therein the Original Pre-Funded Amount remitted on the
Closing Date to the Trustee by the Company. Funds deposited in the Pre-Funding
Account shall be held in trust by the Trustee for the Certificateholders for the
uses and purposes set forth herein.

         (b) The Trustee will invest funds deposited in the Pre-Funding Account
as directed by the Master Servicer in writing in Permitted Investments with a
maturity date (i) no later than the Business Day immediately preceding the date
on which such funds are required to be withdrawn from such account pursuant to
this Agreement, if a Person other than the Trustee or an Affiliate manages or
advises such investment, (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 or an Affiliate manages or advises such investment or (iii) within one
(1) Business Day of the Trustee's receipt thereof. For federal income tax
purposes, the Master Servicer shall be the owner of the Pre-Funding Account and
shall report all items of income, deduction, gain or loss arising therefrom. All
income and gain realized from investment of funds deposited in the Pre-Funding
Account shall be transferred to the Interest Coverage Account at the following
times: (i) on the Business Day immediately preceding each Distribution Date, if
a Person other than the Trustee or

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an Affiliate of the Trustee manages or advises such investment, or on each
Distribution Date, if the Trustee or an Affiliate of the Trustee manages or
advises such investment, (ii) on the Business Day immediately preceding each
Subsequent Transfer Date, if a Person other than the Trustee or an Affiliate of
the Trustee manages or advises such investment, or on each Subsequent Transfer
Date, if the Trustee or an Affiliate of the Trustee manages or advises such
investment or (iii) within one (1) Business Day of the Trustee's receipt
thereof. Such transferred funds shall not constitute income and gain for
purposes of Section 4.05(b) hereof. The Master Servicer shall deposit in the
Pre-Funding Account the amount of any net loss incurred in respect of any such
Permitted Investment immediately upon realization of such loss without any right
of reimbursement therefor. At no time will the Pre-Funding Account be an asset
of any REMIC created hereunder.

         (c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by
the Trustee as follows:

                  (i) On any Subsequent Transfer Date, the Trustee shall
withdraw from the Pre- Funding Account an amount equal to 100% of the Stated
Principal Balances of the Subsequent Mortgage Loans transferred and assigned to
the Trustee for deposit in the mortgage pool on such Subsequent Transfer Date
and pay such amount to or upon the order of the Company upon satisfaction of the
conditions set forth in Section 2.06 with respect to such transfer and
assignment;

                  (ii) If the amount on deposit in the Pre-Funding Account
(exclusive of investment income) has not been reduced to zero during the Funding
Period, on the day immediately following the termination of the Funding Period,
the Trustee shall deposit into the Certificate Account any amounts remaining in
the Pre-Funding Account (exclusive of investment income) for distribution in
accordance with the terms hereof;

                  (iii) To withdraw any amount not required to be deposited in
the Pre-Funding Account or deposited therein in error; and

                  (iv) To clear and terminate the Pre-Funding Account upon the
earlier to occur of (A) the Distribution Date immediately following the end of
the Funding Period and (B) the termination of this Agreement, with any amounts
remaining on deposit therein being paid to the Holders of the Certificates then
entitled to distributions in respect of principal.

         Withdrawals pursuant to clauses (i), (ii) and (iii) shall be treated as
contributions of cash to REMIC 1 on the date of withdrawal.

         Section 4.05.     Interest Coverage Account.

         (a) No later than the Closing Date, the Trustee shall establish and
maintain a segregated trust account that is an Eligible Account, which shall be
titled "Interest Coverage Account, Bankers Trust Company of California, National
Association, as trustee for the

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registered holders of Impac Secured Assets Corp., Mortgage Pass-Through
Certificates, Series 2001-7" (the "Interest Coverage Account"). The Trustee
shall, promptly upon receipt, deposit in the Interest Coverage Account and
retain therein the Interest Coverage Amount remitted on the Closing Date to the
Trustee by the Company. Funds deposited in the Interest Coverage Account shall
be held in trust by the Trustee for the Certificateholders for the uses and
purposes set forth herein.

         (b) For federal income tax purposes, the Master Servicer shall be the
owner of the Interest Coverage Account and shall report all items of income,
deduction, gain or loss arising therefrom. At no time will the Interest Coverage
Account be an asset of any REMIC created hereunder. All income and gain realized
from investment of funds deposited in the Interest Coverage Account shall be for
the sole and exclusive benefit of the Master Servicer and shall be remitted by
the Trustee to the Master Servicer no later than the first Business Day
following receipt of such income and gain by the Trustee. The Master Servicer
shall deposit in the Interest Coverage Account the amount of any net loss
incurred in respect of any such Permitted Investment immediately upon
realization of such loss.

         (c) On each Distribution Date during the Funding Period and on the
Distribution Date immediately following the end of the Funding Period, the
Trustee shall withdraw from the Interest Coverage Account and deposit in the
Certificate Account an amount equal to 30 days' interest on the excess, if any,
of the Original Pre-Funded Amount over the aggregate Principal Balance of
Subsequent Mortgage Loans that both (i) had a Due Date during the Due Period
relating to such Distribution Date and (ii) had a Subsequent Cut-off Date prior
to the first day of the month in which such Distribution Date occurs, at a per
annum rate equal to the weighted average of the Net Mortgage Rates of the
Mortgage Loans, plus the Trustee's Fee Rate. Such withdrawal and deposit shall
be treated as a contribution of cash by the Master Servicer to REMIC 1 on the
date thereof. Immediately following any such withdrawal and deposit, and
immediately following the conveyance of any Subsequent Mortgage Loans to the
Trust on any Subsequent Transfer Date, the Trustee shall withdraw from the
Interest Coverage Account and remit to the Master Servicer or its designee an
amount equal to the excess, if any, of the amount remaining in such Interest
Coverage Account over the amount that would be required to be withdrawn
therefrom (assuming sufficient funds therein) pursuant to the preceding sentence
on each subsequent Distribution Date, if any, that will occur during the Funding
Period or that will be the Distribution Date immediately following the end of
the Funding Period, if no Subsequent Mortgage Loans were acquired by the Trust
Fund after the end of the Prepayment Period relating to the current Distribution
Date.

         (d) Upon the earliest of (i) the Distribution Date immediately
following the end of the Funding Period, (ii) the reduction of the Certificate
Principal Balances of the Certificates to zero or (iii) the termination of this
Agreement in accordance with Section 9.01, any amount remaining on deposit in
the Interest Coverage Account after distributions pursuant to paragraph (c)
above shall be withdrawn by the Trustee and paid to the Master Servicer or its
designee.

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         Section 4.06.     Distributions on the REMIC Regular Interests.

         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 LT1E, and then to
REMIC 1 Regular Interest LT1D, in an amount equal to (A) the 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 LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular
Interest LT1C and REMIC 1 Regular Interest LT1P in an amount equal to (A) the
Uncertificated Accrued Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous Distribution Dates; and

         (2) second, 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 LT1P, 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);

                  (B) with respect to the Group I Loans, to the Holders of REMIC
1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such amount, until the Uncertificated Principal Balance of those
REMIC 1 Regular Interests are reduced to zero;

                  (C) with respect to the Group II Loans, to the Holders of
REMIC Regular Interest LT1A and REMIC 1 Regular Interest LTIC, its respective
proportion (based on its Uncertificated Principal Balance in relation to such
Loan Group) of such amount, until the Uncertificated Principal Balance of those
REMIC 1 Regular Interests are reduced to zero;

                  (D) to the Holders of REMIC 1 Regular Interest LT1E until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1E is reduced to
zero;

                  (E) to the Holders of REMIC 1 Regular Interest LT1D, until the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D is reduced to
zero; and

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

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         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 will be distributed by REMIC 1 to
the Holders of REMIC 1 Regular Interest LT1P. The payment of the foregoing
amounts to the Holders of REMIC 1 Regular Interest LT1P shall not reduce the
Uncertificated Principal Balance thereof.

         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 A-IO, in an amount equal to (A) the Uncertificated Accrued
Interest for such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates and then to Holders of REMIC 2
Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1, REMIC 2 Regular
Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2 Regular Interest
LT2-AI4, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular Interest LT2-1M2,
REMIC 2 Regular Interest LT2-1B, REMIC 2 Regular Interest LT2-1ZZ, REMIC 2
Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LT2-2M1, REMIC 2 Regular Interest LT2-2-2M2, REMIC 2 Regular Interest
LT2-2B, REMIC 2 Regular Interest LT2-2ZZ and REMIC 2 Regular Interest LT2P, PRO
RATA, in an amount equal to (A) the 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 LT2-1ZZ and REMIC 2 Regular
Interest LT2-2ZZ shall be reduced when the sum of REMIC 2 Group 1
Overcollateralized Amount and REMIC 2 Group 2 Overcollateralized Amount is less
than the REMIC 2 Overcollateralization Target Amount, by the lesser or (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 LT2-AI1, REMIC 2 Regular Interest LT-2-AI2, REMIC 2 Regular
Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest
LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B,
REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular Interest LT2-2MI, REMIC 2
Regular Interest LT2-2M2 and REMIC 2 Regular Interest LT2-2B in the same
proportion as the Overcollateralization Increase Amount is allocated to the
Corresponding Certificates;

         (ii) second, to the Holders of REMIC 2 Regular Interests, in an amount
equal to the remainder of the Available Funds for such Distribution Date after
the distributions made pursuant to clause (i) above, allocated as follows:

                  (a) with respect to the Group I Loans, to the Holders of REMIC
2 Regular Interest LT2-1AA, 98.00% of such remainder, until the Uncertificated
Principal Balance of such Uncertificated REMIC 2 Regular Interest is reduced to
zero, and with respect to the Group II

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Loans, to the Holders of REMIC 2 Regular Interest LT2-2AA, 98.00% of such
remainder, until the Uncertificated Principal Balance of such Uncertificated
REMIC 2 Regular Interest is reduced to zero;

                  (b) with respect to the Group I Loans, to the Holders of REMIC
2 Regular Interest LT2-AI1, REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular
Interest LT2-AI3, REMIC 2 Regular Interest LT2-AI4, REMIC 2 Regular Interest
LT2-1M1, REMIC 2 Regular Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B,
1.00% 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; and with respect
to the Group II Loans, to the Holders of REMIC 2 Regular Interest LT2-AII, REMIC
2 Regular Interest LT2-2M1, REMIC 2 Regular Interest LT2-2M2 and REMIC 2 Regular
Interest LT2-2B, 1.00% 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) with respect to the Group 1 Loans, to the Holders of REMIC
2 Regular Interest LT2-1ZZ, 1.00% of such remainder, until the Uncertificated
Principal Balance of such REMIC 2 Regular Interest is reduced to zero, and with
respect to the Group II Loans, to the Holders of REMIC 2 Regular Interest
LT2-2ZZ, 1.00% of such remainder, until the Uncertificated Principal Balance of
such REMIC 2 Regular Interest is reduced to zero;

                  (d) to the Holders of REMIC 2 Regular Interest LT2P, 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; then

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

         (iii) third, to REMIC 2 Regular Interest LT2P, 100% of the amount paid
in respect of Prepayment Charges and Master Servicer Prepayment Charge Payment
Amounts on REMIC 1 Regular Interest LT1P;

provided, however, that with respect to the Group I Loans, 98.00% and 2.00% of
any principal payments that are attributable to an Overcollateralization Release
Amount shall be allocated to Holders of REMIC 2 Regular Interest LT2-1AA and
REMIC 2 Regular Interest LT2-1ZZ, respectively, to the extent the principal
balance of the Group I Loans exceeds the sum of the Uncertificated Principal
Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-AI1,
REMIC 2 Regular Interest LT2-AI2, REMIC 2 Regular Interest LT2-AI3, REMIC 2
Regular Interest LT2-AI4, REMIC 2 Regular Interest LT2-1M1, REMIC 2 Regular
Interest LT2-1M2, REMIC 2 Regular Interest LT2-1B and REMIC 2 Regular Interest
LT2-1ZZ immediately following payments pursuant to (c) above but prior to any
payments pursuant to this proviso, and with respect to the Group II Loans,
98.00% and 2.00% of any principal payments

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that are attributable to an Overcollateralization Release Amount shall be
allocated to Holders of REMIC 2 Regular Interest LT2-2AA and REMIC 2 Regular
Interest LT2-2ZZ, respectively, to the extent the principal balance of the Group
II Loans exceeds the sum of the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2-2AA, REMIC 2 Regular Interest LT2-AII, REMIC 2 Regular
Interest LT2-2MI, REMIC 2 Regular Interest LT2-2M2, REMIC 2 Regular Interest
LT2-2B and REMIC 2 Regular Interest LT2-2ZZ immediately following payments
pursuant to (c) above but prior to any payments pursuant to this proviso.

         Section 4.07.     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; second, to the Class C Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; third, to the Class B 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 reducing the amount otherwise payable in respect
thereof pursuant to Section 4.01(d)(viii). 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: with respect to Realized Losses on
the Group 1 Loans, first to REMIC 1 Regular Interest LT1A and REMIC 1 Regular
Interest LT1B, its respective proportion (based on its Uncertificated Principal
Balance in relation to such Loan Group) of such Realized Loss, and with respect
to Realized Losses on the Group II Loans, to REMIC 1 Regular Interest LT1A and
REMIC 1 Regular Interest LT1C, its respective proportion (based on its
Uncertificated Principal Balance in relation to such Loan Group) of such
Realized Loss, until the Uncertificated Principal Balance has been reduced to
zero, second to REMIC 1 Regular Interest LT1E, and third to REMIC 1 Regular
Interest LT1D until the Uncertificated Principal Balance has been reduced to
zero.

         (c) All Realized Losses on the REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1D shall be

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deemed to have been allocated in the specified percentages, as follows: with
respect to Realized Losses on the Group I Loans, first to Uncertificated Accrued
Interest payable to the REMIC 2 Regular Interest LT2-1AA and REMIC 2 Regular
Interest LT2-1ZZ up to an aggregate amount equal to the REMIC 2 Group 1 Interest
Loss Allocation Amount, 98% and 2% respectively; second, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-1AA and REMIC 2 Regular
Interest LT2-1ZZ up to an aggregate amount equal to the REMIC 2 Group 1
Principal Loss Allocation Amount, 98% and 2%, respectively; third, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2
Regular Interest LT2-1B and REMIC 2 Regular Interest LT2-1ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2-1B has been reduced to zero; fourth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest
LT2-1M2 and REMIC 2 Regular Interest LT2-1ZZ, 98%, 1% and 1%, respectively,
until the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-1M2
has been reduced to zero; and fifth, to the Uncertificated Principal Balances of
REMIC 2 Regular Interest LT2-1AA, REMIC 2 Regular Interest LT2-1M1 and REMIC 2
Regular Interest LT2-1ZZ, 98%, 1% and 1%, respectively, until the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2-1M1 has been reduced to zero,
and with respect to Realized Losses on the Group II Loans, first, to
Uncertificated Accrued Interest payable to the REMIC 2 Regular Interest LT2-2AA
and REMIC 2 Regular Interest LT2-2ZZ up to an aggregate amount equal to the
REMIC 2 Group 2 Interest Loss Allocation Amount, 98% and 2%, respectively;
second, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2-2AA and REMIC 2 Regular Interest LT2-2ZZ up to an aggregate amount equal to
the REMIC 2 Group 2 Principal Loss Allocation Amount, 98% and 2% respectively;
third, to the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2-2AA, REMIC 2 Regular Interest LT2-2B and REMIC 2 Regular Interest LT2-2ZZ,
98%, 1% and 1% respectively, until the Uncertificated Principal Balance of REMIC
2 Regular Interest LT2-2B has been reduced to zero; fourth, to the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2-2AA, REMIC 2
Regular Interest LT2-2M2 and REMIC 2 Regular Interest LT2-2ZZ, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2-2M2 has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2-2AA, REMIC 2 Regular Interest
LT2-2M1 and REMIC 2 Regular Interest LT2-2ZZ, 98%, 1% and 1% respectively, until
the Uncertificated Principal Balance of REMIC 2 Regular Interest LT2-2M1 has
been reduced to zero.

         Section 4.08.     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.

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         Section 4.09.     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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                                    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 Depository Participant or brokerage firm representing such

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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.

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         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. Any such Certificateholder desiring to

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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 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 Section 406 of 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 violate the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code, will not cause the assets of
the Trust Fund to constitute "plan assets" within the meaning of 29 C.F.R.
'2510.3-101, 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.

         (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 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

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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 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

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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.

         (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

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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.

                  (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

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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 person, against any liability which would
otherwise be imposed by

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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

         (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

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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 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

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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.

         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.

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

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         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.

         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:

         (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

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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 which a Responsible Office 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

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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.

         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.

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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 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 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.

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         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 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.

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         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, 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

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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.

         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.

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         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% 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 January 2032 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), 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 Balance of such Mortgage Loans at the time of any
such repurchase aggregating an amount equal to or less than 10% of the sum of
the aggregate Stated Principal Balance of the Initial Mortgage Loans at the
Cut-off Date and the Original Pre-Funded Amount. If such right is exercised, the

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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 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.

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         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 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

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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 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

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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 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

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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,
2002, 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 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.

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         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 2.03), 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 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

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<PAGE>

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.

         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

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<PAGE>

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.

         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, Impac Funding, 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

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<PAGE>

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:
Residential Mortgage Surveillance Group; Fitch, Fitch, Inc., One State Street,
30th Floor, New York, New York 10004, Attention: Mortgage Backed Securities
Department, Impac 2001-6; and Moody's, Moody's Investors Service, Inc., ABS
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 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;

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<PAGE>

         4.  The repurchase or substitution of Mortgage Loans pursuant to
             Section 2.03;

         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
and (ii) in the case of Moody's, ABS 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.

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<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:
   -------------------------------------------------------
Name:  Richard J. Johnson
Title: Chief Financial Officer

IMPAC FUNDING CORPORATION,
Master Servicer

By:
   ---------------------------------------------------------
Name:  Ronald Morrison
Title: Secretary

BANKERS TRUST COMPANY OF
 CALIFORNIA, N.A.
Trustee

By:
   ------------------------------------------------------
Name:  James F. Noriega
Title: Associate

                                       138

<PAGE>

STATE OF CALIFORNIA     )
                        )  ss.:
COUNTY OF ORANGE        )

         On the 30th day of October, 2001 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]

                                       139

<PAGE>

STATE OF CALIFORNIA     )
                        )  ss.:
COUNTY OF ORANGE        )

         On the 30th day of October, 2001, before me, a notary public in and for
said State, personally appeared Ronald Morrison, known to me to be a Secretary
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]

                                       140

<PAGE>

STATE OF CALIFORNIA     )
                        )  ss.:
COUNTY OF ORANGE        )

         On the 30th day of October, 2001, before me, a notary public in and for
said State, personally appeared James F. Noriega, known to me to be an Associate
of Bankers Trust Company of California, N.A., the corporation 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]

                                       141

<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>

Certificate No.__                     _____% Pass-Through Rate
Class A-____

Date of Pooling and Servicing         Percentage Interest:____%
Agreement and Cut-off Date:
October 1, 2001

First Distribution Date:              Aggregate Initial [Certificate Principal
November 25, 2001                     Balance][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:
__________ 25, 20__
[April 25, 2004]

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2001-7

     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
conventional 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

                                       A-2

<PAGE>

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 Bankers Trust Company of California, N.A., 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] [Notional Amount] 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 if 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:   October __, 2001             BANKERS TRUST COMPANY OF
                                               CALIFORNIA, N.A.,
                                               as Trustee

                                      By:___________________________________
                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This is one of the Class A-____ Certificates referred to in the within-
mentioned Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      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

<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][B] 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.

                                      B-1-1

<PAGE>

Certificate No.______                 _______% Pass-Through Rate

Class [M-_][B] Subordinate            Aggregate Initial [Certificate Principal
                                      Balance] [Notional Amount] of the Class
                                      [M-__][B] Certificates:
                                      $_____________

Date of Pooling and Servicing         Initial [Certificate Principal Balance]
Agreement and Cut-off Date:           [Notional Amount] of this Certificate:
October 1, 2001                       $__________________

First Distribution Date:              CUSIP:______________
November 25, 2001

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:
January 25, 2032

                       MORTGAGE PASS-THROUGH CERTIFICATE,
                                  Series 2001-7

     evidencing a percentage  interest in any distributions  allocable to
     the Class  [M-__] [B]  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] [Notional Amount] of this Certificate by the
aggregate Initial [Certificate Principal Balance] [Notional Amount] of all Class
[M-_][B] 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

                                      B-1-2

<PAGE>

(the "Agreement") among the Company, the Master Servicer and Bankers Trust
Company of California, N.A., 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 [M-__][B] 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] [Notional Amount] 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.

     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-1-3

<PAGE>

without limitation reimbursement to the Trustee, the Company and the Master
Servicer of advances made, or certain expenses incurred, by either of them.

     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
Certifrcateholders 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.

     This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.

                                      B-1-4

<PAGE>

     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 if 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:   October __, 2001             BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      as Trustee

                                      By:_____________________________________
                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This is one of the Class [M-_][B] Certificates referred to in the
within-mentioned Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      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 B 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>

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"):
October 1, 2001                        $______________

First Distribution Date:               Initial Certificate Principal Balance of
November 25, 2001                      this Certificate ("Denomination"):
                                       $______________

Master Servicer:                       CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:       Percentage Interest of this Certificate:
January 25, 2032                       100.00%

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2001-7

     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
October 1, 2001 (the "Agreement") among the Company, Impac Funding Corporation,
as master servicer (the "Master Servicer"), and Bankers Trust Company of
California, N.A., as Trustee (the "Trustee"). To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the

                                      B-2-2

<PAGE>

Agreement. 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(d) 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 if 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:   October __, 2001             BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      as Trustee

                                      By:_______________________________________
                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This is one of the Class C Certificates referred to in the within-
mentioned Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      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)

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

<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>

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"):
October 1, 2001                       $100.00

First Distribution Date:              Percentage Interest of this Certificate:
November 25, 2001                     100.00%

Master Servicer:                      CUSIP:
Impac Funding Corporation

Assumed Final Distribution Date:
January 25, 2032

                        MORTGAGE PASS-THROUGH CERTIFICATE
                                  SERIES 2001-7
                                     Class P

     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 Bankers Trust Company of
California,

                                      B-3-2

<PAGE>

N.A., 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(d) 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
Certifrcateholders 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 if 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:   October __, 2001             BANKERS TRUST COMPANY OF
                                               CALIFORNIA, N.A.,
                                               as Trustee

                                      By:_______________________________________
                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This is one of the Class P Certificates referred to in the within-
mentioned Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      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

<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(E) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE 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

                                      B-4-1

<PAGE>

IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE 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>

Certificate No. 1

Class R Senior

Date of Pooling and, Servicing
Agreement and Cut-off Date:
October 1, 2001                          Percentage Interest:  100.00%

First Distribution Date:
November 25, 2001                        CUSIP:

Master Servicer:
Impac Funding Corporation

Assumed Final Distribution Date:
January 25, 2032

                       MORTGAGE PASS-THROUGH CERTIFICATE,
                                  SERIES 2001-7

     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 Bankers Trust Company of California, N.A., 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 Corporate Trust Office or the office or agency maintained by the Trustee in
California.

     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(d) 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 know
edge 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 if 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:   October __, 2001             BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      as Trustee

                                      By:_______________________________________
                                      Authorized Signatory

                          CERTIFICATE OF AUTHENTICATION
                          -----------------------------

     This is one of the Class R Certificates referred to in the within-
mentioned Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.,
                                      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)

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

<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.

<PAGE>

                                    EXHIBIT C

                     FORM OF TRUSTEE'S INITIAL CERTIFICATION

                                                           October__, 2001

Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

     Re:  Pooling and Servicing Agreement, dated as of October 1, 2001
          among Impac Secured Assets Corp., Impac Funding Corporation,
          and Bankers Trust Company of California, N.A., Mortgage
          Pass-Through Certificates Series 2001-7
          -------------------------------------------------------------

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) base on examination by it, and only as
to such documents, the information set forth in items (i), (ii), (iii) (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.

<PAGE>

     Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Pooling and Servicing
Agreement.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.

                                      By:_______________________________________
                                      Name:
                                      Title:

                                       C-2

<PAGE>

                                    EXHIBIT D

                       FORM OF TRUSTEE FINAL CERTIFICATION

                                                              October __, 2001

Impac Funding Corporation
1401 Dove Street
Newport Beach, California 92660

    Re:   Pooling and Servicing Agreement, dated as of October 1, 2001
          among Impac Secured Assets Corp., Impac Funding Corporation,
          and Bankers Trust Company of California, N.A., Mortgage
          Pass-Through Certificates Series 2001-7
          -------------------------------------------------------------

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.

                                      BANKERS TRUST COMPANY OF
                                      CALIFORNIA, N.A.

                                      By:_______________________________________
                                      Name:
                                      Title:

                                       D-1

<PAGE>

                                    EXHIBIT E

                            FORM OF REMITTANCE REPORT

                             (Provided Upon Request)

<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 2001-7, 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
October 1, 2001 (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 assume
          ions 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 2001-7

_____________________________________ 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

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

Attention: Impac Secured Assets Corp. Series 2001-7

         Re:   Impac Secured Assets Corp.
               Mortgage Pass-Through Certificates Series 2001-7, Class
               -------------------------------------------------------

Ladies and Gentlemen:

     ______________ (the "Purchaser") intends to purchase from ______________
(the "Seller") $_________ Initial Certificate Principal Balance of Mortgage
Pass-Through Certificates, Series 2001-7, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 1, 2001 among Impac Secured Assets
Corp., as company (the "Company"), Impac Funding Corporation, as master servicer
and Bankers Trust Company of California, N.A., 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.

                                      G-1-1

<PAGE>

               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.

               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 October 30, 2001, 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,

                                      G-1-2

<PAGE>

          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.

                                     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

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

Attention: Impac Secured Assets Corp. Series 2001-7

         Re:   Impac Secured Assets Corp.
               Mortgage Pass-Through Certificates, Series 2001-7, 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 2001-7, Class _____ (the "Certificates"),
issued pursuant to the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of October 1, 2001 among Impac Secured Assets
Corp., as company (the "Company"), Impac Funding Corporation, as master servicer
and Bankers Trust Company of California, N.A., as trustee (the "Trustee"). The
Seller hereby certifies, represents and warrants to, a 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 2001-7, 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's
purchase of the Rule 144A Securities will not result in a prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code.

          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

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa A, California 92705

Attention: Impac Secured Assets Corp. Series 2001-7

             Re:   Impac Secured Assets Corp.
                   Mortgage Pass-Through Certificates
                   Series 2001-7. 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 2001-7, Class R (the "Certificates"), issued pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of October 1, 2001, among Impac Secured Assets Corp., as
company (the "Company"), Impac Funding Corporation, as master servicer and
Bankers Trust Company of California, N.A., 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 October 1, 2001 among Impac Secured Assets
Corp., as company, Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., 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

                                      G-5-1

<PAGE>

that the affidavit is false; and (iv) that the Class R Certificates may be
"noneconomic residual 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

                                      G-5-2

<PAGE>

Class R Certificate that the Owner intends to pay taxes associated with holding
such Class R 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 Section 406 of 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, the Company and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Master Servicer 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.

                                      G-5-3

<PAGE>

     Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.

                                     G-5-4

<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-5-5

<PAGE>

                                    EXHIBIT H

                             MORTGAGE LOAN SCHEDULE

                             (Provided Upon Request)

<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 Officers' 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 Certifrcateholders, 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 Certifrcateholders;

     (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 cover 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) to the best of Seller's knowledge, each Mortgage Loan at the time it
     was made complied in all material respects with applicable state and
     federal laws, including, without limitation, usury, equal credit
     opportunity and disclosure laws; and each Mortgage Loan is being serviced
     in all material respects in accordance with applicable state and federal
     laws, including, without limitation, usury, equal credit opportunity and
     disclosure laws;

                                       I-2

<PAGE>

     (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 _______ %; (ii) except with respect to approximately ______%
     of the Mortgage Loans (by aggregate outstanding principal balance as of the
     Cut-off Date), each Mortgage Loan with a Loan-to-Value Ratio at origination
     in excess of 80.00% will be insured by one of the following: (i) a Primary
     Insurance Policy issued by a private mortgage insurer or (ii) 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 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 a covered Mortgage Loan as follows: (A) for which the outstanding
     principal balance at origination of such Mortgage Loan is at least 80.01 %
     and up and including 89.99% 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, (B)
     for which the outstanding principal balance at origination of such Mortgage
     Loan is at least 90.00% 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

                                       I-3

<PAGE>

     25.00% of the Allowable Claim and (C) 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 PMI
     Pool 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 _______% 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 creditors' 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;

     (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

                                       I-4

<PAGE>

     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 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;

                                       I-5

<PAGE>

     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;

     (xxix) except with respect to __________% 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;

                                       I-6

<PAGE>

     (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 _______% per annum and not more than _________% per
     annum, and the weighted average Mortgage Rate of the Mortgage Loans was
     approximately ____________% per annum;

     (xxxiv) measured by principal balance, no more than ________% ofthe
     Mortgage Loans are secured by an individual unit in a condominium project
     or hi-rise, and at least________% 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 ____ months and not more than [360]
     months;

     (xxxvi) as of the Cut-off Date, no more than _________% (by aggregate
     principal balance) of the Mortgage Loans are cash-out refinances;

     (xxxvi) as of the Cut-off Date, no more than ___________% (by aggregate
     principal balance) of the Mortgage Loans are rate and term refinances;

     (xxxviii) as of the Cut-off Date, no fewer than _______% (by aggregate
     principal balance) of the Mortgage Loans are purchase money loans;

     (xxxix) as of the Cut-off Date, no more than __________% and ______% 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 $_________ to approximately $___________, and the
     average unpaid principal balance is $___________.

     (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 ________% of the Mortgaged Properties are
     owner occupied primary residences, no more than ____________% of the
     Mortgaged Properties are second homes and no more than ________% 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;

                                       I-7

<PAGE>

     (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; and

     (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.

                                       I-8

<PAGE>

                                    EXHIBIT J

      FORM OF NOTICE UNDER SECTION 3.25 OF POOLING AND SERVICING AGREEMENT

                                October __, 2001

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705

          Re: Impac Secured Assets Corp.
              Mortgage Pass-Through Certificates
              Series 2001-7
              ----------------------------------

          Pursuant to Section 3.25 of the Pooling and Servicing Agreement, dated
as of October 1, 2001, 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 2001-7 consisted of a Prepayment
Assumption (the "Prepayment Assumption") of 100% 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 Bear,
Stearns & Co. 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 October, 2001; (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 initial Certificate Principal Balance or
Notional Amount of such Class of Certificates or

                                       J-1

<PAGE>

(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 2001-7
-------------
Class A-I-1:      ____%
Class A-I-2:      ____%
Class A-1-3:      ____%
Class A-I-4:      ____%
Class A-II:       ____%
Class A-IO:       ____%
Class M-1:        ____%
Class M-2:        ____%
Class B:          ____%

          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

                                 ADDITION NOTICE

                                                   November __, 2001

Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

Impac Funding Corporation
1401 Dove Street
Newport Beach, CA  92660

     RE:  Pooling and Servicing Agreement, dated as of October 1, 2001 (the
          "Pooling and Servicing Agreement"), among Impac Funding Corporation,
          as Master Servicer (the "Master Servicer"), Bankers Trust Company of
          California, N.A., as Trustee (the "Trustee") and Impac Secured Assets
          Corp., as Company (the "Company) relating to Impac Secured Assets
          Corp., Mortgage Pass-Through Certificates, Series 2001-7 Subsequent
          Transfer
          ---------------------------------------------------------------------

Ladies and Gentlemen:

          Pursuant to Section 2.06 of the Pooling and Servicing Agreement,
Company has designated Subsequent Mortgage Loans to be transfered to the Trustee
on November __, 2001, with an approximate aggregate principal balance of
$__________. Capitalized terms not otherwise defined herein have the meaning set
forth in the Pooling and Servicing Agreement.

          Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.

                                     Very truly yours,

                                     IMPAC SECURED ASSETS CORP.

                                     By: _____________________________________
                                     Name:    Richard J. Johnson
                                     Title:   Chief Financial Officer

                                                        L-1

<PAGE>

ACKNOWLEDGED AND AGREED:

BANKERS TRUST COMPANY OF
CALIFORNIA, N.A., as Trustee.

By:     _____________________________________
Name:   James Noriega
Title:  Associate

IMPAC FUNDING CORPORATION

By:     _____________________________________
Name:   Lisa Duehring
Title:  Senior Vice President

                                       L-2

<PAGE>

                                    EXHIBIT M

                         SUBSEQUENT TRANSFER INSTRUMENT

                             (Provided Upon Request)

                                       M-1IMPAC CMB TRUST SERIES 2001-3

                                     Issuer

                                       and

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

                                Indenture Trustee

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

                                    INDENTURE

                          Dated as of October 30, 2001

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

                        COLLATERALIZED ASSET-BACKED BONDS

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

<PAGE>

                                TABLE OF CONTENTS
                                -----------------
Section                                                                    Page
-------                                                                    ----

 ARTICLE I

Definitions
    Section 1.01   Definitions.................................................2
    Section 1.02   Incorporation by Reference of Trust Indenture Act...........2
    Section 1.03   Rules of Construction.......................................2

    ARTICLE II

    Original Issuance of Bonds.................................................4
    Section 2.01   Form........................................................4
    Section 2.02   Execution, Authentication and Delivery......................4
    Section 2.03   Acceptance of Mortgage Loans by Indenture Trustee...........4
    Section 2.04   Acceptance of Derivative Contracts and Special
                   Certificate Cap Contract by Indenture Trustee...............6
    Section 2.05   Conveyance of the Subsequent Mortgage Loans.................6

ARTICLE III

    Covenants..................................................................9
    Section 3.01   Collection of Payments With Respect to the Mortgage Loans...9
    Section 3.02   Maintenance of Office or Agency.............................9
    Section 3.03   Money for Payments to be Held in Trust: Paying Agent........9
    Section 3.04   Existence..................................................10
    Section 3.05   Payment of Principal and Interest..........................11
    Section 3.06   Protection of Trust Estate.................................14
    Section 3.07   Opinions as to Trust Estate................................15
    Section 3.08   Performance of Obligations.................................15
    Section 3.09   Negative Covenants.........................................15
    Section 3.10   Annual Statement as to Compliance..........................16
    Section 3.11   the Pre-funding Account....................................16
    Section 3.12   Representations and Warranties Concerning the Mortgage
                   Loans......................................................18
    Section 3.13   Amendments to Servicing Agreement..........................18
    Section 3.14   Master Servicer as Agent and Bailee of the Indenture
                   Trustee....................................................18
    Section 3.15   Investment Company Act.....................................18
    Section 3.16   Issuer May Consolidate, Etc................................18
    Section 3.17   Successor or Transferee....................................20
    Section 3.18   No Other Business..........................................20
    Section 3.19   No Borrowing...............................................20
    Section 3.20   Guarantees, Loans, Advances and Other Liabilities..........21

                                        i

<PAGE>

    Section 3.21   Capital Expenditures.......................................21
    Section 3.22   Determination of Bond Interest Rate........................21
    Section 3.23   Restricted Payments........................................21
    Section 3.24   Notice of Events of Default................................21
    Section 3.25   Further Instruments and Acts...............................21
    Section 3.26   Statements to Bondholders..................................21
    Section 3.27   Grant of the Subsequent Mortgage Loans.....................22
    Section 3.28   Certain Representations Regarding the Trust Estate.........22
    Section 3.29   Replacement Derivative Contracts...........................23
    Section 3.30   Allocation of Realized Losses..............................23

ARTICLE IV

    the Bonds; Satisfaction and Discharge of Indenture........................25
    Section 4.01   the Bonds..................................................25
    Section 4.02   Registration of and Limitations On
              Transfer and Exchange of Bonds; Appointment
                   of Bond Registrar and Certificate Registrar................25
    Section 4.03   Mutilated, Destroyed, Lost or Stolen Bonds.................26
    Section 4.04   Persons Deemed Owners......................................27
    Section 4.05   Cancellation...............................................27
    Section 4.06   Book-entry Bonds...........................................27
    Section 4.07   Notices to Depository......................................28
    Section 4.08   Definitive Bonds...........................................28
    Section 4.09   Tax Treatment..............................................29
    Section 4.10   Satisfaction and Discharge of Indenture....................29
    Section 4.11   Application of Trust Money.................................30
    Section 4.12   [Reserved].................................................30
    Section 4.13   Repayment of Monies Held by Paying Agent...................30
    Section 4.14   Temporary Bonds............................................30
    Section 4.15   Representation Regarding Erisa.............................31

    ARTICLE V

Default and Remedies
    Section 5.01   Events of Default..........................................32
    Section 5.02   Acceleration of Maturity; Rescission and Annulment.........32
    Section 5.03   Collection of Indebtedness and Suits for
                   Enforcement by Indenture Trustee...........................33
    Section 5.04   Remedies; Priorities.......................................35
    Section 5.05   Optional Preservation of the Trust Estate..................36
    Section 5.06   Limitation of Suits........................................36
    Section 5.07   Unconditional Rights of Bondholders to Receive Principal
                   and Interest...............................................37
    Section 5.08   Restoration of Rights and Remedies.........................37
    Section 5.09   Rights and Remedies Cumulative.............................37

                                                   ii

<PAGE>

    Section 5.10   Delay or Omission Not a Waiver.............................38
    Section 5.11   [Reserved].................................................38
    Section 5.12   Waiver of Past Defaults....................................38
    Section 5.13   Undertaking for Costs......................................38
    Section 5.14   Waiver of Stay or Extension Laws...........................38
    Section 5.15   Sale of Trust Estate.......................................39
    Section 5.16   Action On Bonds............................................40
    Section 5.17   Performance and Enforcement of Certain Obligations.........40

    ARTICLE VI

the Indenture Trustee
    Section 6.01   Duties of Indenture Trustee................................42
    Section 6.02   Rights of Indenture Trustee................................43
    Section 6.03   Individual Rights of Indenture Trustee.....................43
    Section 6.04   Indenture Trustee's Disclaimer.............................44
    Section 6.05   Notice of Event of Default.................................44
    Section 6.06   Reports by Indenture Trustee to Holders and Tax
                   Administration.............................................44
    Section 6.07   Compensation and Indemnity.................................44
    Section 6.08   Replacement of Indenture Trustee...........................45
    Section 6.09   Successor Indenture Trustee by Merger......................45
    Section 6.10   Appointment of Co-indenture Trustee or Separate
                   Indenture Trustee..........................................46
    Section 6.11   Eligibility; Disqualification..............................47
    Section 6.12   Preferential Collection of Claims Against Issuer...........47
    Section 6.13   Representations and Warranties.............................47
    Section 6.14   Directions to Indenture Trustee............................48
    Section 6.15   the Agents.................................................48

    ARTICLE VII

Bondholders' Lists and Reports
    Section 7.01   Issuer to Furnish Indenture Trustee Names and
                   Addresses of Bondholders...................................49
    Section 7.02   Preservation of Information; Communications to
                   Bondholders................................................49
    Section 7.03   Reports of Issuer..........................................49
    Section 7.04   Reports by Indenture Trustee...............................50
    Section 7.05   Statements to Bondholders..................................50

    ARTICLE VIII

Accounts, Disbursements and Releases
    Section 8.01   Collection of Money........................................53
    Section 8.02   Trust Accounts.............................................53
    Section 8.03   Officer's Certificate......................................53
    Section 8.04   Termination Upon Distribution to Bondholders...............54
    Section 8.05   Release of Trust Estate....................................54

                                       iii

<PAGE>

    Section 8.06   Surrender of Bonds Upon Final Payment......................54
    Section 8.07   Optional Redemption of the Bonds...........................54

    ARTICLE IX

Supplemental Indentures
    Section 9.01   Supplemental Indentures Without Consent of Bondholders.....56
    Section 9.02   Supplemental Indentures With Consent of Bondholders........57
    Section 9.03   Execution of Supplemental Indentures.......................58
    Section 9.04   Effect of Supplemental Indenture...........................59
    Section 9.05   Conformity With Trust Indenture Act........................59
    Section 9.06   Reference in Bonds to Supplemental Indentures..............59

    ARTICLE X

Miscellaneous
    Section 10.01  Compliance Certificates and Opinions.......................60
    Section 10.02  Form of Documents Delivered to Indenture Trustee...........61
    Section 10.03  Acts of Bondholders........................................62
    Section 10.04  Notices Etc., to Indenture Trustee Issuer and Rating
                   Agencies...................................................62
    Section 10.05  Notices to Bondholders; Waiver.............................63
    Section 10.06  Conflict With Trust Indenture Act..........................63
    Section 10.07  Effect of Headings.........................................64
    Section 10.09  Separability...............................................64
    Section 10.10  [Reserved].................................................64
    Section 10.11  Legal Holidays.............................................64
    Section 10.12  Governing Law..............................................64
    Section 10.13  Counterparts...............................................64
    Section 10.14  Recording of Indenture.....................................64
    Section 10.15  Issuer Obligation..........................................64
    Section 10.16  No Petition................................................65
    Section 10.17  Inspection.................................................65

    EXHIBITS

    Exhibit A- 1   --   Form of Class A Bonds
    Exhibit A- 2   --   Form of Class M and Class B Bonds
    Exhibit B      --   Mortgage Loan Schedule
    Exhibit C      --   Form of Initial Certification
    Exhibit D      --   Form of Final Certification
    Exhibit E      --   Derivative Contracts
    Exhibit F      --   Special Certificate Cap Contract
    Exhibit G      --   Addition Notice
    Exhibit H      --   Subsequent Transfer Instrument

                                       iv

<PAGE>

    Appendix A     --   Definitions

                                        v

<PAGE>

          This Indenture, dated as of October 30, 2001, is entered into between
Impac CMB Trust Series 2001-3, a Delaware business trust, as Issuer (the
"Issuer"), and Bankers Trust Company of California, N.A., a national banking
association, as Indenture Trustee (the "Indenture Trustee").

                                WITNESSETH THAT:

          Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Issuer's
Collateralized Asset-Backed Bonds, Series 2001-3 (the "Bonds").

                                 GRANTING CLAUSE

          The Issuer hereby Grants to the Indenture Trustee at the Closing Date,
as trustee for the benefit of the Holders of the Bonds, all of the Issuer's
right, title and interest in and to whether now existing or hereafter created by
(a) the Mortgage Loans, Eligible Substitute Mortgage Loans and the proceeds
thereof and all rights under the Related Documents; (b) all funds on deposit
from time to time in the Collection Account allocable to the Mortgage Loans
excluding any investment income from such funds; (c) all funds on deposit from
time to time in the Payment Account and in all proceeds thereof, (d) all funds
on deposit from time to time in the Pre-Funding Account and in all proceeds
thereof; (e) all rights under (i) the Mortgage Loan Sale and Contribution
Agreement as assigned to the Issuer, with respect to the Initial Mortgage Loans,
and the Subsequent Mortgage Loan Sale and Contribution Agreement as assigned to
the Issuer, with respect to the Subsequent Mortgage Loans, (ii) the Servicing
Agreement and any Subservicing Agreements, (iii) any title, hazard and primary
insurance policies with respect to the Mortgaged Properties, (iv) the rights
with respect to the Derivative Contracts and the Special Certificate Cap
Contract as assigned to the Issuer; and (f) all present and future claims,
demands, causes and chooses in action in respect of any or all of the foregoing
and all payments on or under, and all proceeds of every kind and nature
whatsoever in respect of, any or all of the foregoing and all payments on or
under, and all proceeds of every kind and nature whatsoever in the conversion
thereof, voluntary or involuntary, into cash or other liquid property, all cash
proceeds, accounts, accounts receivable, notes, drafts, acceptances, checks,
deposit accounts, rights to payment of any and every kind, and other forms of
obligations and receivables, instruments and other property which at any time
constitute all or part of or are included in the proceeds of any of the
foregoing (collectively, the "Trust Estate" or the "Collateral").

          The foregoing Grant is made in trust to secure the payment of
principal of and interest on, and any other amounts owing in respect of, the
Bonds, equally and ratably without prejudice, priority or distinction, and to
secure compliance with the provisions of this Indenture, all as provided in this
Indenture.

          The Indenture Trustee, as trustee on behalf of the Holders of the
Bonds, acknowledges such Grant, accepts the trust under this Indenture in
accordance with the provisions hereof and agrees to perform its duties as
Indenture Trustee as required herein.

<PAGE>

                                    ARTICLE I

                                   Definitions

     Section 1.01 DEFINITIONS. For all purposes of this Indenture, except as
otherwise expressly provided herein or unless the context otherwise requires,
capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Definitions attached hereto as Appendix A which is
incorporated by reference herein. All other capitalized terms used herein shall
have the meanings specified herein.

     Section 1.02 INCORPORATION BY REFERENCE OF TRUST INDENTURE ACT. Whenever
this Indenture refers to a provision of the Trust Indenture Act (the "TIA"), the
provision is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:

          "Commission" means the Securities and Exchange Commission.

          "indenture securities" means the Bonds.

          "indenture security holder" means a Bondholder.

          "indenture to be qualified" means this Indenture.

          "indenture trustee" or "institutional trustee" means the Indenture
     Trustee.

          "obligor" on the indenture securities means the Issuer and any other
     obligor on the indenture securities.

     All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rules and
have the meanings assigned to them by such definitions.

     Section 1.03 RULES OF CONSTRUCTION. Unless the context otherwise requires:

               (i) a term has the meaning assigned to it;

               (ii) an accounting term not otherwise defined has the meaning
     assigned to it in accordance with generally accepted accounting principles
     as in effect from time to time;

               (iii) "or" is not exclusive;

               (iv) "including" means including without limitation; and

               (v) words in the singular include the plural and words in the
     plural include the singular;

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<PAGE>

               (vi) any agreement, instrument or statute defined or referred to
     herein or in any instrument or certificate delivered in connection herewith
     means such agreement, instrument or statute as from time to time amended,
     modified or supplemented and includes (in the case of agreements or
     instruments) references to all attachments thereto and instruments
     incorporated therein; references to a Person are also to its permitted
     successors and assigns.

                                        3

<PAGE>

                                   ARTICLE II

                           Original Issuance of Bonds

     Section 2.01 FORM. The Class A Bonds, and Class M Bonds and Class B Bonds,
together with the Indenture Trustee's certificate of authentication, shall be in
substantially the form set forth in Exhibits A-1 and A-2 to this Indenture,
respectively, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture.

     The Bonds shall be typewritten, printed, lithographed or engraved or
produced by any combination of these methods (with or without steel engraved
borders).

     The terms of the Bonds set forth in Exhibits A-1 and A-2 to this Indenture
are part of the terms of this Indenture.

     Section 2.02 EXECUTION, AUTHENTICATION AND DELIVERY. The Bonds shall be
executed on behalf of the Issuer by any of its Authorized Officers. The
signature of any such Authorized Officer on the Bonds may be manual or
facsimile.

     Bonds bearing the manual or facsimile signature of individuals who were at
any time Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Bonds or did not hold
such offences at the date of such Bonds.

     The Indenture Trustee shall upon Issuer Request authenticate and deliver
the Class A-1, Class A-2, Class M-1, Class M-2 and Class B-2 Bonds for original
issue in an aggregate initial principal amount of $397,000,000. The Class A-1
Bonds shall be issued in an aggregate initial principal amount of $260,000,000,
the Class A-2 Bonds shall be issued in an aggregate initial principal amount of
$64,000,000, the Class M-1 Bonds shall be issued in an aggregate initial
principal amount of $32,000,000, the Class M-2 Bonds shall be issued in an
aggregate initial principal amount of $21,000,000 and the Class B Bonds shall be
issued in an aggregate initial principal amount of $20,000,000.

     Each of the Bonds shall be dated the date of its authentication. The Bonds
shall be issuable as registered Bonds and the Bonds shall be issuable in the
minimum initial Bond Principal Balances of $25,000 and in integral multiples of
$1 in excess thereof.

     No Bond shall be entitled to any benefit under this Indenture or be valid
or obligatory for any purpose, unless there appears on such Bond a certificate
of authentication substantially in the form provided for herein executed by the
Indenture Trustee by the manual signature of one of its authorized signatories,
and such certificate upon any Bond shall be conclusive evidence, and the only
evidence, that such Bond has been duly authenticated and delivered hereunder.

     Section 2.03 ACCEPTANCE OF MORTGAGE LOANS BY INDENTURE TRUSTEE. (a) The
Indenture Trustee acknowledges receipt of, subject to the exceptions it notes
pursuant to the procedures described below, the documents (or certified copies
thereof) referred to in Section 2.1(b) of the (i)

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<PAGE>

Mortgage Loan Sale and Contribution Agreement and (ii) the Subsequent Mortgage
Loan Sale and Contribution Agreement, and declares that it holds and will
continue to hold those documents and any amendments, replacements or supplements
thereto and all other assets of the Trust Estate as Indenture Trustee in trust
for the use and benefit of all present and future Holders of the Bonds. No later
than 45 days after the Closing Date, with respect to the Initial Mortgage Loans,
or the Subsequent Transfer Date, with respect to the Subsequent Mortgage Loans,
(or, with respect to any Eligible Substitute Mortgage Loan, within 5 days after
the receipt by the Indenture Trustee thereof and, with respect to any documents
received beyond 45 days after the Closing Date or Subsequent Transfer Date, as
applicable, promptly thereafter), the Indenture Trustee agrees, for the benefit
of the Bondholders, to review each Mortgage File delivered to it and to execute
and deliver, or cause to be executed and delivered, to the Seller and the Master
Servicer an Initial Certification in the form annexed hereto as Exhibit C. In
conducting such review, the Indenture Trustee will ascertain whether all
required documents described in Section 2.1(b) of (i) the Mortgage Loan Sale and
Contribution Agreement, with respect to the Initial Mortgage Loans, and (ii) the
Subsequent Mortgage Loan Sale and Contribution Agreement, with respect to the
Subsequent Mortgage Loans, have been executed and received and whether those
documents relate, determined on the basis of the Mortgagor name, original
principal balance and loan number, to the Mortgage Loans it has received, as
identified in Exhibit B to this Indenture, as supplemented (PROVIDED, HOWEVER,
that with respect to those documents described therein, the Indenture Trustee's
obligations shall extend only to documents actually delivered pursuant to such
subclause). In performing any such review, the Indenture Trustee may
conclusively rely on the purported due execution and genuineness of any such
document and on the purported genuineness of any signature thereon. If the
Indenture Trustee finds any document constituting part of the Mortgage File not
to have been executed or received, or to be unrelated to the Mortgage Loans
identified in Exhibit B to this Indenture or to appear to be defective on its
face, the Indenture Trustee shall promptly notify the Seller of such finding and
the Seller's obligation to cure such defect or repurchase or substitute for the
related Mortgage Loan.

     (b) No later than 180 days after the Closing Date (with respect to the
Initial Mortgage Loans) and Subsequent Transfer Date (with respect to the
Subsequent Mortgage Loans), the Indenture Trustee will review, for the benefit
of the Bondholders, the Mortgage Files and will execute and deliver or cause to
be executed and delivered to the Seller, a Final Certification in the form
annexed hereto as Exhibit D. In conducting such review, the Indenture Trustee
will ascertain whether an original of each document described in subclauses
(b)(ii)-(iv) of Section 2.1 of (i) the Mortgage Loan Sale and Contribution
Agreement, with respect to the Initial Mortgage Loans, and (ii) the Subsequent
Mortgage Loan Sale and Contribution Agreement, with respect to the Subsequent
Mortgage Loans, required to be recorded has been returned from the recording
office with evidence of recording thereon or a certified copy has been obtained
from the recording office. If the Indenture Trustee finds any document
constituting part of the Mortgage File has not been received, or to be
unrelated, determined on the basis of the Mortgagor name, original principal
balance and loan number, to the Mortgage Loans identified in Exhibit B to this
Indenture or to appear defective on its face, the Indenture Trustee shall
promptly notify the Seller.

     (c) Upon deposit of the Repurchase Price in the Payment Account, the
Indenture Trustee shall release to the Seller the related Mortgage File and
shall execute and deliver all instruments of transfer or assignment, without
recourse, furnished to it by the Seller as are necessary to vest in the Seller
title to and rights under the related Mortgage Loan. Such purchase shall be
deemed to have

                                        5

<PAGE>

occurred on the date on which certification of the deposit of the Repurchase
Price in the Payment Account was received by the Indenture Trustee. The
Indenture Trustee shall amend the applicable Mortgage Loan Schedule to reflect
such repurchase and shall promptly notify the Master Servicer and the Rating
Agencies of such amendment

     Section 2.04 ACCEPTANCE OF DERIVATIVE CONTRACTS AND SPECIAL CERTIFICATE CAP
CONTRACT BY INDENTURE TRUSTEE. (a) The Indenture Trustee acknowledges receipt of
the Derivative Contracts and the Special Certificate Cap Contract and declares
that it holds and will continue to hold these documents and any amendments
replacements or supplements thereto and all other assets of the Trust Estate as
Indenture Trustee in trust for the use and benefit of all present and future
Holders of the Bonds. The Indenture Trustee shall enforce the Derivative
Contracts and the Special Certificate Cap Contract in accordance with their
terms.

     Section 2.05 CONVEYANCE OF THE SUBSEQUENT MORTGAGE LOANS. (a) Subject to
the conditions set forth in paragraph (b) below and in consideration of the
Indenture Trustee's delivery on the Subsequent Transfer Dates, to or upon the
written order of the Depositor of, all or a portion of the balance of funds in
the Pre-Funding Account, the Depositor shall on any Subsequent Transfer Date
sell, transfer, assign, set over and convey without recourse to the Trust Estate
but subject to the other terms and provisions of this Agreement all of the
right, title and interest of the Depositor in and to (i) the Subsequent Mortgage
Loans identified on the Mortgage Loan Schedule attached to the related
Subsequent Transfer Instrument delivered by the Depositor on such Subsequent
Transfer Date, (ii) all interest accruing thereon on and after the Subsequent
Cut-off Date and all collections in respect of interest and principal due after
the Subsequent Cut-off Date and (iii) all items with respect to such Subsequent
Mortgage Loans to be delivered pursuant to Section 2.03 and the other items in
the related Mortgage Files; provided, however, that the Depositor reserves and
retains all right, title and interest in and to principal received and interest
accruing on the Subsequent Mortgage Loans prior to the related Subsequent
Cut-off Date. The transfer to the Indenture Trustee for deposit in the Mortgage
Pool by the Depositor of the Subsequent Mortgage Loans identified on the
Mortgage Loan Schedule shall be absolute and is intended by the Depositor, the
Master Servicer, the Indenture Trustee and the Bondholders to constitute and to
be treated as a sale of the Subsequent Mortgage Loans by the Depositor to the
Trust Estate. The related Mortgage File for each Subsequent Mortgage Loan shall
be delivered to the Indenture Trustee at least three (3) Business Days prior to
the related Subsequent Transfer Date.

     The purchase price paid by the Indenture Trustee from amounts released from
the Pre-Funding Account shall be one-hundred percent (100%) of the aggregate
Stated Principal Balance of the Subsequent Mortgage Loans so transferred (as
identified on the Mortgage Loan Schedule provided by the Depositor).

     (b) The Depositor shall transfer to the Indenture Trustee for deposit in
the mortgage pool the Subsequent Mortgage Loans and the other property and
rights related thereto as described in paragraph (a) above, and the Indenture
Trustee shall release funds from the Pre-Funding Account, only upon the
satisfaction of each of the following conditions on or prior to the related
Subsequent Transfer Date:

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<PAGE>

          (i) the Depositor shall have provided the Indenture Trustee and the
     Rating Agencies with a timely Addition Notice and shall have provided any
     information reasonably requested by the Indenture Trustee with respect to
     the Subsequent Mortgage Loans;

          (ii) the Depositor shall have delivered to the Indenture Trustee a
     duly executed Subsequent Transfer Instrument, which shall include a
     Mortgage Loan Schedule listing the Subsequent Mortgage Loans, and the
     Master Servicer, in its capacity as Originator, shall have delivered a
     computer file containing such Mortgage Loan Schedule to the Indenture
     Trustee at least three (3) Business Days prior to the related Subsequent
     Transfer Date;

          (iii) as of each Subsequent Transfer Date, as evidenced by delivery of
     the Subsequent Transfer Instrument, substantially in the form of Exhibit H,
     the Depositor shall not be insolvent nor shall it have been rendered
     insolvent by such transfer nor shall it be aware of any pending insolvency;

          (iv) such sale and transfer shall not result in a material adverse tax
     consequence to the Trust Estate or the Bondholders;

          (v) the Funding Period shall not have terminated;

          (vi) the Depositor shall not have selected the Subsequent Mortgage
     Loans in a manner that it believed to be adverse to the interests of the
     Bondholders;

          (vii) the Depositor shall have delivered to the Indenture Trustee a
     Subsequent Transfer Instrument confirming the satisfaction of the
     conditions precedent specified in this Section 2.05 and, pursuant to the
     Subsequent Transfer Instrument, assigned to the Indenture Trustee without
     recourse for the benefit of the Bondholders all the right, title and
     interest of the Depositor, in, to and under the Subsequent Mortgage Loan
     Purchase Agreement, to the extent of the Subsequent Mortgage Loans; and

          (viii) the Depositor shall have delivered to the Indenture Trustee an
     Opinion of Counsel addressed to the Indenture Trustee and the Rating
     Agencies with respect to the transfer of the Subsequent Mortgage Loans
     substantially in the form of the Opinion of Counsel delivered to the
     Indenture Trustee on the Closing Date regarding the true sale of the
     Subsequent Mortgage Loans.

     (c) The obligation of the Trust Estate to purchase a Subsequent Mortgage
Loan on any Subsequent Transfer Date is subject to the satisfaction of the
conditions set forth in the immediately following paragraph and the accuracy of
the following representations and warranties with respect to each such
Subsequent Mortgage Loan determined as of the applicable Subsequent Cut-off
Date: (i) such Subsequent Mortgage Loan may not be 30 or more days delinquent as
of the last day of the month preceding the Subsequent Cut-off Date; (ii) the
original term to stated maturity of such Subsequent Mortgage Loan will not be
less than 170 months and will not exceed 360 months; (iii) each Subsequent
Mortgage Loan must be an adjustable rate mortgage loan with a first lien or a
fixed- rate loan with a second lien; (iv) if the Subsequent Mortgage Loan has a
loan-to-value ratio greater than 80.00%, it is covered by a Primary Insurance
Policy or the Radian Lender-Paid PMI Policy; (v)

                                        7

<PAGE>

no Subsequent Mortgage Loan will have a first payment date occurring before
January 1, 2001 or after February 1, 2002; (vi) the latest maturity date of any
Subsequent Mortgage Loan will be no later than January, 2032; (vii) none of the
Subsequent Mortgage Loans will be buydown loans; (viii) no Subsequent Mortgage
Loan will have a credit score of less than 600; (ix) the Subsequent Mortgage
Loan will have a Mortgage Rate ranging from aproximately 3.625% per annum to
approximately 17.00% per annum; and (x) such Subsequent Mortgage Loan shall have
been underwritten in accordance with the criteria set forth under "The Mortgage
Pool--Underwriting Standards" in the Prospectus Supplement.

     (d) In addition, following the purchase of any Subsequent Mortgage Loan by
the Trust, the Subsequent Mortgage Loans will as of the Subsequent Cut-off Date:
(i) have no more than 0.90% of the Subsequent Mortgage Loans be balloon loans;
(ii) have a weighted average Mortgage Rate of approximately 7.165%; (iii) will
consist of Mortgage Loans with Prepayment Charges representing no less than
approximately 58.28% of the Pool Balance; (iv) have no more than approximately
1% of the Subsequent Mortgage Loans (by aggregate Stated Principal Balance as of
the Subsequent Cut- off Date) be secured by Mortgaged Properties located in any
one zip code; (v) have a weighted average credit score of approximately 681;
(vii) not have more than 71% of such Mortgage Loans concentrated in the states
of California; (viii) no less than 92.06% of the Mortgaged Properties be owner
occupied; (ix) no less than 68.16% of the Mortgaged Properties be single family
detached; and (x) no more than 22.36% of the Mortgage Loans be cashout
refinance.

     (e) Notwithstanding the foregoing, any Subsequent Mortgage Loan may be
rejected by any Rating Agency if the inclusion of any such Subsequent Mortgage
Loan would adversely affect the ratings of any Class of Certificates. At least
one (1) Business Day prior to the Subsequent Transfer Date, each Rating Agency
shall notify the Indenture Trustee as to which Subsequent Mortgage Loans, if
any, shall not be included in the transfer on the Subsequent Transfer Date;
provided, however, that the Master Servicer, in its capacity as Originator,
shall have delivered to each Rating Agency at least three (3) Business Days
prior to such Subsequent Transfer Date a computer file acceptable to each Rating
Agency describing the characteristics specified in paragraphs (c) and (d) above.

                                        8

<PAGE>

                                   ARTICLE III

                                    Covenants

     Section 3.01 COLLECTION OF PAYMENTS WITH RESPECT TO THE MORTGAGE LOANS. The
Indenture Trustee shall establish and maintain an Eligible Account (the "Payment
Account") in which the Indenture Trustee shall, subject to the terms of this
paragraph, deposit, on the same day as it is received from the Master Servicer,
each remittance received by the Indenture Trustee with respect to the Mortgage
Loans. The Indenture Trustee shall make all payments of principal of and
interest on the Bonds, subject to Section 3.03 as provided in Section 3.05
herein from monies on deposit in the Payment Account.

     Section 3.02 MAINTENANCE OF OFFICE OR AGENCY. The Issuer will maintain an
office or agency where, subject to satisfaction of conditions set forth herein,
Bonds maybe surrendered for registration of transfer or exchange, and where
notices and demands to or upon the Issuer in respect of the Bonds and this
Indenture may be served. The Issuer hereby initially appoints the Indenture
Trustee to serve as its agent for the foregoing purposes. If at any time the
Issuer shall fail to maintain any such office or agency or shall fail to furnish
the Indenture Trustee with the address thereof, such surrenders may be made at
the office of the Indenture Trustee located at 123 Washington Street, New York,
New York 10006, and notices and demands may be made or served at the Corporate
Trust Office, and the Issuer hereby appoints the Indenture Trustee as its agent
to receive all such surrenders, notices and demands.

     Section 3.03 MONEY FOR PAYMENTS TO BE HELD IN TRUST: PAYING AGENT. (a) As
provided in Section 3.01, all payments of amounts due and payable with respect
to any Bonds that are to be made from amounts withdrawn from the Payment Account
pursuant to Section 3.01 shall be made on behalf of the Issuer by the Indenture
Trustee or by the Paying Agent, and no amounts so withdrawn from the Payment
Account for payments of Bonds shall be paid over to the Issuer except as
provided in this Section 3.03. The Issuer hereby appoints the Indenture Trustee
as its Paying Agent.

     The Issuer will cause each Paying Agent other than the Indenture Trustee to
execute and deliver to the Indenture Trustee an instrument in which such Paying
Agent shall agree with the Indenture Trustee (and if the Indenture Trustee acts
as Paying Agent it hereby so agrees), subject to the provisions of this Section
3.03, that such Paying Agent will:

               (i) hold all sums held by it for the payment of amounts due with
     respect to the Bonds in trust for the benefit of the Persons entitled
     thereto until such sums shall be paid to such Persons or otherwise disposed
     of as herein provided and pay such sums to such Persons as herein provided;

               (ii) give the Indenture Trustee notice of any default by the
     Issuer of which it has actual knowledge in the making of any payment
     required to be made with respect to the Bonds;

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<PAGE>

               (iii) at any time during the continuance of any such default,
     upon the written request of the Indenture Trustee, forthwith pay to the
     Indenture Trustee all sums so held in trust by such Paying Agent;

               (iv) immediately resign as Paying Agent and forthwith pay to the
     Indenture Trustee all sums held by it in trust for the payment of Bonds if
     at any time it ceases to meet the standards required to be met by a Paying
     Agent at the time of its appointment;

               (v) comply with all requirements of the Code with respect to the
     withholding from any payments made by it on any Bonds of any applicable
     withholding taxes imposed thereon and with respect to any applicable
     reporting requirements in connection therewith; and

               (vi) not commence a bankruptcy proceeding against the Issuer in
     connection with this Indenture.

     The Issuer may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, by Issuer Request
direct any Paying Agent to pay to the Indenture Trustee all sums held in trust
by such Paying Agent, such sums to be held by the Indenture Trustee upon the
same trusts as those upon which the sums were held by such Paying Agent; and
upon such payment by any Paying Agent to the Indenture Trustee, such Paying
Agent shall be released from all further liability with respect to such money.

     Subject to applicable laws with respect to escheat of funds, any money held
by the Indenture Trustee or any Paying Agent in trust for the payment of any
amount due with respect to any Bond and remaining unclaimed for one year after
such amount has become due and payable shall be discharged from such trust and
be paid to the Issuer on Issuer Request; and the Holder of such Bond shall
thereafter, as an unsecured general creditor, look only to the Issuer for
payment thereof (but only to the extent of the amounts so paid to the Issuer),
and all liability of the Indenture Trustee or such Paying Agent with respect to
such trust money shall thereupon cease; PROVIDED, HOWEVER, that the indenture
Trustee or such Paying Agent, before being required to make any such repayment,
shall at the expense and direction of the Issuer cause to be published once, in
an Authorized Newspaper published in the English language, notice that such
money remains unclaimed and that, after a date specified therein which shall not
be less than 30 days from the date of such publication, any unclaimed balance of
such money then remaining will be repaid to the Issuer. The Indenture Trustee
may also adopt and employ, at the expense and direction of the Issuer, any other
reasonable means of notification of such repayment (including, but not limited
to, mailing notice of such repayment to Holders whose Bonds have been called but
have not been surrendered for redemption or whose right to or interest in monies
due and payable but not claimed is determinable from the records of the
Indenture Trustee or of any Paying Agent, at the last address of record for each
such Holder).

     Section 3.04 EXISTENCE. The Issuer will keep in full effect its existence,
rights and franchises as a business trust under the laws of the State of
Delaware (unless it becomes, or any successor Issuer hereunder is or becomes,
organized under the laws of any other state or of the United States of America,
in which case the Issuer will keep in full effect its existence, rights and
franchises under the laws of such other jurisdiction) and will obtain and
preserve its qualification

                                       10

<PAGE>

to do business in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the
Bonds, the Mortgage Loans and each other instrument or agreement included in the
Trust Estate.

     Section 3.05 PAYMENT OF PRINCIPAL AND INTEREST. (a) On each Payment Date
from amounts on deposit in the Payment Account in accordance with Section 8.02
hereof, the Indenture Trustee shall pay to the Persons specified in clauses (b)
and (c) below, to the extent provided therein, the Available Funds for such
Payment Date.

     (b) On each Payment Date, the portion of the Available Funds consisting of
the Interest Remittance Amount shall be distributed in the following order of
priority, in each case to the extent of the Interest Remittance Amount:

               (i) to the Holders of the Class A-1 Bonds, the related Accrued
     Bond Interest for such Class for such Payment Date;

               (ii) to the Holders of the Class A-1 Bonds, the related Unpaid
     Interest Shortfall, if any, for such Class for such Payment Date;

               (iii) to the Holders of the Class A-2 Bonds, the related Accrued
     Bond Interest for such Class for such Payment Date;

               (iv) to the Holders of the Class A-2 Bonds, the related Unpaid
     Interest Shortfall for such Class for such Payment Date;

               (v) to the Holders of the Class M-1 Bonds, the related Accrued
     Bond Interest for such Class for such Payment Date;

               (vi) to the Holders of the Class M-2 Bonds, the related Accrued
     Bond Interest for such Class for such Payment Date; and

               (vii) to the Holders of the Class B Bonds, the related Accrued
     Bond Interest for such Class for such Payment Date.

     (c) On each Payment Date, the Holders of each Class of Bonds shall be
entitled to receive distributions in respect of principal to the extent of the
Principal Distribution Amount on a pro rata basis, based on the Bond Principal
Balance thereof, in reduction of the Bond Principal Balance thereof, until the
Bond Principal Balances thereof have been reduced to zero. An allocation of
principal distributions on a "pro rata" basis among various Classes of Bonds
means an allocation to each of those Classes of Bonds on the basis of its then
outstanding Bond Principal Balance prior to giving effect to distributions to be
made on that Payment Date.

     (d) On each Payment Date, any Net Monthly Excess Cashflow shall be paid as
follows:

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<PAGE>

               (i) to the Holders of the Class or Classes of Bonds 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 in clause (c) above;

               (ii) to the Holders of the Class A-2 Bonds, in an amount equal to
     the Allocated Realized Loss Amount for the Class A-2 Bonds;

               (iii) to the Holders of the Class M-1 Bonds, in an amount equal
     to the Unpaid Interest Shortfall for such Bonds;

               (iv) to the Holders of the Class M-1 Bonds, in an amount equal to
     the Allocated Realized Loss Amount for the Class M-1 Bonds;

               (v) to the Holders of the Class M-2 Bonds, in an amount equal to
     the Unpaid Interest Shortfall for such Bonds;

               (vi) to the Holders of the Class M-2 Bonds, in an amount equal to
     the Allocated Realized Loss Amount for the Class M-2 Bonds;

               (vii) to the Holders of the Class B Bonds, in an amount equal to
     the Unpaid Interest Shortfall for such Bonds;

               (viii) to the Holders of the Class B Bonds, in an amount equal to
     the Allocated Realized Loss Amount for the Class B Bonds;

               (ix) to the holders of the Class A-1 Bonds, Class A-2 Bonds,
     Class M-1 Bonds, Class M-2 Bonds and Class B Bonds, in that order, any
     Basis Risk Shortfall Carry- Forward Amount for such payment date, to the
     extent not covered by the Derivative Contracts;

               (x) to the Indenture Trustee for amounts owing the Indenture
     Trustee hereunder (other than the Indenture Trustee Fee) remaining unpaid;
     and

               (xi) any remaining amounts will be distributed to the Certificate
     Paying Agent, as designee of the Issuer, for the benefit of the Holders of
     the Trust Certificates.

     (e) On each Payment Date, the Net Derivative Contract Payment Amount with
respect to such Payment Date shall be distributed in the following order of
priority, in each case to the extent of amounts available:

               (i) first, to the Class A-1 Bondholders, any Basis Risk Shortfall
     Carry- Forward Amount for such Payment Date;

               (ii) second, to the Class A-2 Bondholders, any Basis Risk
     Shortfall Carry- Forward Amount for such Payment Date;

                                       12

<PAGE>

               (iii) third, to the Class M-1 Bondholders, any Basis Risk
     Shortfall Carry-Forward Amount for such Payment Date;

               (iv) fourth, to the Class M-2 Bondholders, any Basis Risk
     Shortfall Carry-Forward Amount for such Payment Date;

               (v) fifth, to the Class B Bondholders, any Basis Risk Shortfall
     Carry-Forward Amount for such Payment Date; and

               (vi) sixth, any remaining amounts will be distributed to the
     Certificate Paying Agent, as designee of the Issuer, for the benefit of the
     Holders of the Trust Certificates.

     (f) On each Payment Date any amounts received in respect of the Special
Certificate Cap Contract shall be distributed to the Certificate Paying Agent,
as designee of the Issuer, for the benefit of the Holders of the Trust
Certificates.

     (g) Each distribution with respect to a Book-Entry Bond 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 Bond
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 Bond Owners
that it represents. None of the Indenture Trustee, the Bond Registrar, the
Paying Agent, the Depositor or the Master Servicer shall have any responsibility
therefor except as otherwise provided by this Indenture or applicable law.

     (h) On each Payment Date, the Certificate Paying Agent shall deposit in the
Certificate Distribution Account all amounts it received pursuant to this
Section 3.05 for the purpose of distributing such funds to the
Certifrcateholders.

     (i) Any installment of interest or principal, if any, payable on any Bond
that is punctually paid or duly provided for by the Issuer on the applicable
Payment Date shall, if such Holder shall have so requested at least five
Business Days prior to the related Record Date, be paid to each Holder of record
on the preceding Record Date, by wire transfer to an account specified in
writing by such Holder reasonably satisfactory to the Indenture Trustee as of
the preceding Record Date or in all other cases or if no such instructions have
been delivered to the Indenture Trustee, by check to such Bondholder mailed to
such Holder's address as it appears in the Bond Register in the amount required
to be distributed to such Holder on such Payment Date pursuant to such Holder's
Bonds; PROVIDED, HOWEVER, that the Indenture Trustee shall not pay to such
Holders any amount required to be withheld from a payment to such Holder by the
Code.

     (j) The principal of each Bond shall be due and payable in full on the
Final Scheduled Payment Date for such Bond as provided in the forms of Bond set
forth in Exhibits A-1 and A-2 to this Indenture. All principal payments on the
Bonds shall be made to the Bondholders entitled thereto in accordance with the
Percentage Interests represented by such Bonds. Upon notice to the Indenture

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Trustee by the Issuer, the Indenture Trustee shall notify the Person in whose
name a Bond is registered at the close of business on the Record Date preceding
the Final Scheduled Payment Date or other final Payment Date (including any
final Payment Date resulting from any redemption pursuant to Section 8.07
hereof). Such notice shall to the extent practicable be mailed no later than
five Business Days prior to such Final Scheduled Payment Date or other final
Payment Date and shall specify that payment of the principal amount and any
interest due with respect to such Bond at the Final Scheduled Payment Date or
other final Payment Date will be payable only upon presentation and surrender of
such Bond and shall specify the place where such Bond may be presented and
surrendered for such final payment. No interest shall accrue on the Bonds on or
after the Final Scheduled Payment Date or any such other final Payment Date.

     The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.05 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

     Section 3.06 PROTECTION OF TRUST ESTATE. (a) The Issuer will from time to
time prepare, execute and deliver all such supplements and amendments hereto and
all such financing statements, continuation statements, instruments of further
assurance and other instruments, and will take such other action necessary or
advisable to:

               (i) maintain or preserve the lien and security interest (and the
     priority thereof) of this Indenture or carry out more effectively the
     purposes hereof;

               (ii) perfect, publish notice of or protect the validity of any
     Grant made or to be made by this Indenture;

               (iii) cause the Issuer or Master Servicer to enforce any of the
     rights to the Mortgage Loans; or

               (iv) preserve and defend title to the Trust Estate and the rights
     of the Indenture Trustee and the Bondholders in such Trust Estate against
     the claims of all persons and parties.

     (b) Except as otherwise provided in this Indenture, the Indenture Trustee
shall not remove any portion of the Trust Estate that consists of money or is
evidenced by an instrument, certificate or other writing from the jurisdiction
in which it was held at the date of the most recent Opinion of Counsel delivered
pursuant to Section 3.07 hereof (or from the jurisdiction in which it was held
as described in the Opinion of Counsel delivered on the Closing Date pursuant to
Section 3.07(a) hereof, or if no Opinion of Counsel has yet been delivered
pursuant to Section 3.07(b) hereof, unless the Indenture Trustee shall have
first received an Opinion of Counsel to the effect that the lien and security
interest created by this Indenture with respect to such property will continue
to be maintained after giving effect to such action or actions).

     The Issuer hereby designates the Indenture Trustee its agent and
attorney-in-fact to sign any financing statement, continuation statement or
other instrument required to be signed pursuant to this Section 3.06 upon the
Issuer's preparation thereof and delivery to the Indenture Trustee.

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     Section 3.07 OPINIONS AS TO TRUST ESTATE. (a) On the Closing Date, the
Issuer shall furnish to the Indenture Trustee and the Owner Trustee an Opinion
of Counsel either stating that, in the opinion of such counsel, such action has
been taken with respect to the recording and filing of this Indenture, any
indentures supplemental hereto, and any other requisite documents, and with
respect to the execution and filing of any financing statements and continuation
statements, as are necessary to perfect and make effective the lien and first
priority security interest in the Collateral and reciting the details of such
action, or stating that, in the opinion of such counsel, no such action is
necessary to make such lien and first priority security interest effective.

     (b) On or before April 15 in each calendar year, beginning in 2002, the
Issuer shall furnish to the Indenture Trustee an Opinion of Counsel at the
expense of the Issuer either stating that, in the opinion of such counsel, such
action has been taken with respect to the recording, filing, re- recording and
refiling of this Indenture, any indentures supplemental hereto and any other
requisite documents and with respect to the execution and filing of any
financing statements and continuation statements as is necessary to maintain the
lien and first priority security interest in the Collateral and reciting the
details of such action or stating that in the opinion of such counsel no such
action is necessary to maintain such lien and security interest. Such Opinion of
Counsel shall also describe the recording, filing, re-recording and refiling of
this Indenture, any indentures supplemental hereto and any other requisite
documents and the execution and filing of any financing statements and
continuation statements that will, in the opinion of such counsel, be required
to maintain the lien and security interest in the Collateral until December 31
in the following calendar year.

     Section 3.08 PERFORMANCE OF OBLIGATIONS. (a) The Issuer will punctually
perform and observe all of its obligations and agreements contained in this
Indenture, the Basic Documents and in the instruments and agreements included in
the Trust Estate.

     (b) The Issuer may contract with other Persons to assist it in performing
its duties under this Indenture, and any performance of such duties by a Person
identified to the Indenture Trustee in an Officer's Certificate of the Issuer
shall be deemed to be action taken by the Issuer.

     (c) The Issuer will not take any action or permit any action to be taken by
others which would release any Person from any of such Person's covenants or
obligations under any of the documents relating to the Mortgage Loans or under
any instrument included in the Trust Estate, or which would result in the
amendment, hypothecation, subordination, termination or discharge of, or impair
the validity or effectiveness of, any of the documents relating to the Mortgage
Loans or any such instrument, except such actions as the Master Servicer is
expressly permitted to take in the Servicing Agreement. The Indenture Trustee,
as pledgee of the Mortgage Loans, shall be able to exercise the rights of the
Issuer to direct the actions of the Master Servicer pursuant to the Servicing
Agreement.

     Section 3.09 NEGATIVE COVENANTS. So long as any Bonds are Outstanding, the
Issuer shall not:

               (i) except as expressly permitted by this Indenture, sell,
     transfer, exchange or otherwise dispose of the Trust Estate, unless
     directed to do so by the Indenture Trustee;

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               (ii) claim any credit on, or make any deduction from the
     principal or interest payable in respect of, the Bonds (other than amounts
     properly withheld from such payments under the Code) or assert any claim
     against any present or former Bondholder by reason of the payment of the
     taxes levied or assessed upon any part of the Trust Estate;

               (iii) (A) permit the validity or effectiveness of this Indenture
     to be impaired, or permit the lien of this Indenture to be amended,
     hypothecated, subordinated, terminated or discharged, or permit any Person
     to be released from any covenants or obligations with respect to the Bonds
     under this Indenture except as may be expressly permitted hereby, (B)
     permit any lien, charge, excise, claim, security interest, mortgage or
     other encumbrance (other than the lien of this Indenture) to be created on
     or extend to or otherwise arise upon or burden the Trust Estate or any part
     thereof or any interest therein or the proceeds thereof or (C) permit the
     lien of this Indenture not to constitute a valid first priority security
     interest in the Trust Estate; or

               (iv) waive or impair, or fail to assert rights under, the
     Mortgage Loans, or impair or cause to be impaired the Issuer's interest in
     the Mortgage Loans, the Mortgage Loan Sale and Contribution Agreement or in
     any Basic Document, if any such action would materially and adversely
     affect the interests of the Bondholders.

     Section 3.10 ANNUAL STATEMENT AS TO COMPLIANCE. The Issuer will deliver to
the Indenture Trustee, within 120 days after the end of each fiscal year (which,
for the Issuer, is the calendar year) of the Issuer (commencing with the fiscal
year 2001), an Officer's Certificate stating, as to the Authorized Officer
signing such Officer's Certificate, that:

               (i) a review of the activities of the Issuer during such year and
     of its performance under this Indenture has been made under such Authorized
     Officer's supervision; and

               (ii) to the best of such Authorized Officer's knowledge, based on
     such review, the Issuer has complied with all conditions and covenants
     under this Indenture throughout such year, or, if there has been a default
     in its compliance with any such condition or covenant, specifying each such
     default known to such Authorized Officer and the nature and status thereof.

     Section 3.11 THE PRE-FUNDING ACCOUNT. (a) No later than the Closing Date,
the Indenture Trustee shall establish and maintain a segregated trust account
that is an Eligible Account, which shall be titled "Pre-Funding Account, Bankers
Trust Company of California, National Association, as indenture trustee for the
registered holders of IMH Assets Corp., Collateralized Asset-Backed Bonds,
Series 2001-3" (the "Pre-Funding Account"). The Indenture Trustee shall,
promptly upon receipt, deposit in the Pre-Funding Account and retain therein the
Original Pre-Funded Amount remitted on the Closing Date to the Indenture Trustee
by the Depositor. Funds deposited in the Pre-Funding Account shall be held in
trust by the Indenture Trustee for the Bondholders for the uses and purposes set
forth herein.

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     (b) The Indenture Trustee will invest funds deposited in the Pre-Funding
Account, as directed by the Master Servicer in writing, in Eligible Investments
with a maturity date (i) no later than the Business Day immediately preceding
the date on which such funds are required to be withdrawn from such account
pursuant to this Indenture, if a Person other than the Indenture Trustee or an
Affiliate manages or advises such investment, (ii) no later than the date on
which such funds are required to be withdrawn from such account pursuant to this
Indenture, if the Indenture Trustee or an Affiliate manages or advises such
investment or (iii) within one (1) Business Day of the Indenture Trustee's
receipt thereof. For federal income tax purposes, the Master Servicer shall be
the owner of the Pre-Funding Account and shall report all items of income,
deduction, gain or loss arising therefrom. All income and gain realized from
investment of funds deposited in the Pre-Funding Account shall be included in
Available Funds at the following times: (i) on the Business Day immediately
preceding each Payment Date, if a Person other than the Indenture Trustee or an
Affiliate of the Indenture Trustee manages or advises such investment, or on
each Payment Date, if the Indenture Trustee or an Affiliate of the Indenture
Trustee manages or advises such investment, (ii) on the Business Day immediately
preceding each Subsequent Transfer Date, if a Person other than the Indenture
Trustee or an Affiliate of the Indenture Trustee manages or advises such
investment, or on each Subsequent Transfer Date, if the Indenture Trustee or an
Affiliate of the Indenture Trustee manages or advises such investment or (iii)
within one (1) Business Day of the Indenture Trustee's receipt thereof. The
Master Servicer shall deposit in the Pre-Funding Account the amount of any net
loss incurred in respect of any such Eligible Investment immediately upon
realization of such loss without any right of reimbursement therefor.

     (c) Amounts on deposit in the Pre-Funding Account shall be withdrawn by the
Indenture Trustee as follows:

          (i) On any Subsequent Transfer Date, the Indenture Trustee shall
withdraw from the Pre-Funding Account an amount equal to 100% of the Stated
Principal Balances of the Subsequent Mortgage Loans transferred and assigned to
the Indenture Trustee for deposit in the Mortgage Pool on such Subsequent
Transfer Date and pay such amount to or upon the order of the Issuer upon
satisfaction of the conditions set forth in Section 2.05 with respect to such
transfer and assignment;

          (ii) If the amount on deposit in the Pre-Funding Account has not been
reduced to zero during the Funding Period, on the day immediately following the
termination of the Funding Period, the Indenture Trustee shall deposit into the
Payment Account any amounts remaining in the Pre-Funding Account for
distribution in accordance with the terms hereof;

          (iii) To withdraw any amount not required to be deposited in the
Pre-Funding Account or deposited therein in error; and

          (iv) To clear and terminate the Pre-Funding Account upon the earlier
to occur of (A) the Payment Date immediately following the end of the Funding
Period and (B) the termination of this Indenture, with any amounts remaining on
deposit therein being paid to the Holders of the Bonds then entitled to
distributions in respect of principal.

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     Section 3.12 REPRESENTATIONS AND WARRANTIES CONCERNING THE MORTGAGE LOANS.
The Indenture Trustee, as pledgee of the Mortgage Loans, has the benefit of the
representations and warranties made by the Seller in (i) the Mortgage Loan Sale
and Contribution Agreement concerning the Seller and the Initial Mortgage Loans
and (ii) the Subsequent Mortgage Loan Sale and Contribution Agreement concerning
the Seller and the Subsequent Mortgage Loans, and the Mortgage Loan Sale and
Contribution Agreement and the Subsequent Mortgage Loan Sale and Contribution
Agreement to the same extent as though such representations and warranties were
made directly to the Indenture Trustee. If a Responsible Officer of the
Indenture Trustee has actual knowledge of any breach of any representation or
warranty made by the Seller in the Mortgage Loan Sale and Contribution Agreement
or in the Subsequent Mortgage Loan Sale and Contribution Agreement, the
Indenture Trustee shall promptly notify the Seller of such finding and the
Seller's obligation to cure such defect or repurchase or substitute for the
related Mortgage Loan.

     Section 3.13 AMENDMENTS TO SERVICING AGREEMENT. The Issuer covenants with
the Indenture Trustee that it will not enter into any amendment or supplement to
the Servicing Agreement without the prior written consent of the Indenture
Trustee.

     Section 3.14 MASTER SERVICER AS AGENT AND BAILEE OF THE INDENTURE TRUSTEE.
Solely for purposes of perfection under Section 9-305 of the Uniform Commercial
Code or other similar applicable law, rule or regulation of the state in which
such property is held by the Master Servicer, the Issuer and the Indenture
Trustee hereby acknowledge that the Master Servicer is acting as badge of the
Indenture Trustee in holding amounts on deposit in the Collection Account, as
well as its bailee in holding any Related Documents released to the Master
Servicer, and any other items constituting a part of the Trust Estate which from
time to time come into the possession of the Master Servicer. It is intended
that, by the Master Servicer's acceptance of such bailee arrangement, the
Indenture Trustee, as a secured party of the Mortgage Loans, will be deemed to
have possession of such Related Documents, such monies and such other items for
purposes of Section 9-305 of the Uniform Commercial Code of the state in which
such property is held by the Master Servicer. The Indenture Trustee shall not be
liable with respect to such documents, monies or items while in possession of
the Master Servicer.

     Section 3.15 INVESTMENT COMPANY ACT. The Issuer shall not become an
"investment company" or be under the "control" of an "investment company" as
such terms are defined in the Investment Company Act of 1940, as amended (or any
successor or amendatory statute), and the rules and regulations thereunder
(taking into account not only the general definition of the term "investment
company" but also any available exceptions to such general definition);
PROVIDED, HOWEVER, that the Issuer shall be in compliance with this Section 3.15
if it shall have obtained an order exempting it from regulation as an
"investment company" so long as it is in compliance with the conditions imposed
in such order.

     Section 3.16 ISSUER MAY CONSOLIDATE, ETC. (a) The Issuer shall not
consolidate or merge with or into any other Person, unless:

               (i) the Person (if other than the Issuer) formed by or surviving
     such consolidation or merger shall be a Person organized and existing under
     the laws of the United States of America or any state or the District of
     Columbia and shall expressly assume, by an

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     indenture supplemental hereto, executed and delivered to the Indenture
     Trustee, in form reasonably satisfactory to the Indenture Trustee, the due
     and punctual payment of the principal of and interest on all Bonds, and all
     other amounts payable to the Indenture Trustee, the payment to the
     Certificate Paying Agent of all amounts due to the Certifrcateholders, and
     the performance or observance of every agreement and covenant of this
     Indenture on the part of the Issuer to be performed or observed, all as
     provided herein;

               (ii) immediately after giving effect to such transaction, no
     Event of Default shall have occurred and be continuing;

               (iii) the Rating Agencies shall have notified the Issuer that
     such transaction shall not cause the rating of the Bonds to be reduced,
     suspended or withdrawn or to be considered by either Rating Agency to be
     below investment grade;

               (iv) the Issuer shall have received an Opinion of Counsel (and
     shall have delivered a copy thereof to the Indenture Trustee) to the effect
     that such transaction will not (A) result in a "substantial modification"
     of the Bonds under Treasury Regulation section 1.1001-3, or adversely
     affect the status of the Bonds as indebtedness for federal income tax
     purposes, or (B) if 100% of the Certificates are not owned by IMH Assets
     Corp., cause the Trust to be subject to an entity level tax for federal
     income tax purposes;

               (v) any action that is necessary to maintain the lien and
     security interest created by this Indenture shall have been taken; and

               (vi) the Issuer shall have delivered to the Indenture Trustee an
     Officer's Certificate and an Opinion of Counsel each stating that such
     consolidation or merger and such supplemental indenture comply with this
     Article III and that all conditions precedent herein provided for or
     relating to such transaction have been complied with (including any filing
     required by the Exchange Act), and that such supplemental indenture is
     enforceable.

     (b) The Issuer shall not convey or transfer any of its properties or
assets, including those included in the Trust Estate, to any Person, unless:

               (i) the Person that acquires by conveyance or transfer the
     properties and assets of the Issuer the conveyance or transfer of which is
     hereby restricted shall (A) be a United States citizen or a Person
     organized and existing under the laws of the United States of America or
     any state thereof, (B) expressly assume, by an indenture supplemental
     hereto, executed and delivered to the Indenture Trustee, in form
     satisfactory to the Indenture Trustee, the due and punctual payment of the
     principal of and interest on all Bonds and the performance or observance of
     every agreement and covenant of this Indenture on the part of the Issuer to
     be performed or observed, all as provided herein, (C) expressly agree by
     means of such supplemental indenture that all right, title and interest so
     conveyed or transferred shall be subject and subordinate to the rights of
     the Holders of the Bonds, (D) unless otherwise provided in such
     supplemental indenture, expressly agree to indemnify, defend and hold
     harmless the Issuer and the Indenture Trustee against and from any loss,
     liability or expense arising under or related to this Indenture and the
     Bonds and (E) expressly agree by

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     means of such supplemental indenture that such Person (or if a group of
     Persons, then one specified Person) shall make all filings with the
     Commission (and any other appropriate Person) required by the Exchange Act
     in connection with the Bonds;

               (ii) immediately after giving effect to such transaction, no
     Default or Event of Default shall have occurred and be continuing;

               (iii) the Rating Agencies shall have notified the Issuer that
     such transaction shall not cause the rating of the Bonds to be reduced,
     suspended or withdrawn;

               (iv) the Issuer shall have received an Opinion of Counsel (and
     shall have delivered a copy thereof to the Indenture Trustee) to the effect
     that such transaction will not (A) result in a "substantial modification"
     of the Bonds under Treasury Regulation section 1.1001-3, or adversely
     affect the status of the Bonds as indebtedness for federal income tax
     purposes, or (B) if 100% of the Certificates are not owned by IMH Assets
     Corp., cause the Trust to be subject to an entity level tax for federal
     income tax purposes;

               (v) any action that is necessary to maintain the lien and
     security interest created by this Indenture shall have been taken; and

               (vi) the Issuer shall have delivered to the Indenture Trustee an
     Officer's Certificate and an Opinion of Counsel each stating that such
     conveyance or transfer and such supplemental indenture comply with this
     Article III and that all conditions precedent herein provided for relating
     to such transaction have been complied with (including any filing required
     by the Exchange Act).

     Section 3.17 SUCCESSOR OR TRANSFEREE. (a) Upon any consolidation or merger
of the Issuer in accordance with Section 3.16(a), the Person formed by or
surviving such consolidation or merger (if other than the Issuer) shall succeed
to, and be substituted for, and may exercise every right and power of, the
Issuer under this Indenture with the same effect as if such Person had been
named as the Issuer herein.

     (b) Upon a conveyance or transfer of all the assets and properties of the
Issuer pursuant to Section 3.16(b), the Issuer will be released from every
covenant and agreement of this Indenture to be observed or performed on the part
of the Issuer with respect to the Bonds immediately upon the delivery of written
notice to the Indenture Trustee of such conveyance or transfer and approval of
such transaction given by the Indenture Trustee.

     Section 3.18 NO OTHER BUSINESS. The Issuer shall not engage in any business
other than financing, purchasing, owning and selling and managing the Mortgage
Loans and the issuance of the Bonds and Certificates in the manner contemplated
by this Indenture and the Basic Documents and all activities incidental thereto.

     Section 3.19 NO BORROWING. The Issuer shall not issue, incur, assume,
guarantee or otherwise become liable, directly or indirectly, for any
indebtedness except for the Bonds under this Indenture.

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     Section 3.20 GUARANTEES, LOANS, ADVANCES AND OTHER LIABILITIES. Except as
contemplated by this Indenture or the Basic Documents, the Issuer shall not make
any loan or advance or credit to, or guarantee (directly or indirectly or by an
instrument having the effect of assuring another's payment or performance on any
obligation or capability of so doing or otherwise), endorse or otherwise become
contingently liable, directly or indirectly, in connection with the obligations,
stocks or dividends of, or own, purchase, repurchase or acquire (or agree
contingently to do so) any stock, obligations, assets or securities of, or any
other interest in, or make any capital contribution to, any other Person.

     Section 3.21 CAPITAL EXPENDITURES. The Issuer shall not make any
expenditure (by long-term or operating lease or otherwise) for capital assets
(either realty or personalty).

     Section 3.22 DETERMINATION OF BOND INTEREST RATE. On each Interest
Determination Date the Indenture Trustee shall determine One-Month LIBOR and the
related Bond Interest Rate for each Class of Bonds for the following Accrual
Period and shall inform the Issuer, the Master Servicer, and the Depositor at
their respective facsimile numbers given to the Indenture Trustee in writing
thereof. The establishment of One-Month LIBOR on each Interest Determination
Date by the Indenture Trustee and the Indenture Trustee's calculation of the
rate of interest applicable to each Class of Bonds for the related Accrual
Period shall (in the absence of manifest error) be final and binding.

     Section 3.23 RESTRICTED PAYMENTS. The Issuer shall not, directly or
indirectly, (i) pay any dividend or make any distribution (by reduction of
capital or otherwise), whether in cash, property, securities or a combination
thereof, to the Owner Trustee or any owner of a beneficial interest in the
Issuer or otherwise with respect to any ownership or equity interest or security
in or of the Issuer, (ii) redeem, purchase, retire or otherwise acquire for
value any such ownership or equity interest or security or (iii) set aside or
otherwise segregate any amounts for any such purpose; PROVIDED, HOWEVER, that
the Issuer may make, or cause to be made, (x) distributions and payments to the
Owner Trustee, the Indenture Trustee, Bondholders and the Certificateholders as
contemplated by, and to the extent funds are available for such purpose under
this Indenture and the Trust Agreement and (y) payments to the Master Servicer
and the Subservicers pursuant to the terms of the Servicing Agreement. The
Issuer will not, directly or indirectly, make payments to or distributions from
the Collection Account except in accordance with this Indenture and the Basic
Documents.

     Section 3.24 NOTICE OF EVENTS OF DEFAULT. The Issuer shall give the
Indenture Trustee and the Rating Agencies prompt written notice of each Event of
Default hereunder and under the Trust Agreement.

     Section 3.25 FURTHER INSTRUMENTS AND ACTS. Upon request of the Indenture
Trustee, the Issuer will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

     Section 3.26 STATEMENTS TO BONDHOLDERS. On each Payment Date, the Indenture
Trustee and the Certificate Registrar shall prepare and make available on the
Indenture Trustee's website, http://www-apps.gis.deutsche-bank .com/invr (or
deliver at the recipient's option), to each

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Bondholder and Certificateholder the most recent statement prepared by the
Master Servicer pursuant to Section 4.01 of the Servicing Agreement.

     Section 3.27 GRANT OF THE SUBSEQUENT MORTGAGE LOANS. In consideration of
the delivery on each Subsequent Transfer Date to or upon the order of the Issuer
of all or a portion of the amount on deposit in the Pre-Funding Account, the
Depositor shall, to the extent of the availability thereof, on such Subsequent
Transfer Date during the Funding Period Grant to the Indenture Trustee all of
its rights, title and interest in the Subsequent Mortgage Loans and
simultaneously with the Grant of the Subsequent Mortgage Loans the Depositor
will cause the Mortgage File to be delivered to the Indenture Trustee..

     Section 3.28 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.

     (a) With respect to that portion of the Collateral described in clauses (a)
through (d) of the definition of Trust Estate, the Issuer represents to the
Indenture Trustee that:

          (i) This Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral in favor of the Indenture
Trustee, which security interest is prior to all other liens, and is enforceable
as such as against creditors of and purchasers from the Issuer.

          (ii) The Collateral constitutes "deposit accounts" within the meaning
of the applicable UCC.

          (iii) The Issuer owns and has good and marketable title to the
Collateral free and clear of any lien, claim or encumbrance of any Person.

          (iv) The Issuer has taken all steps necessary to cause the Indenture
Trustee to become the account holder of the Collateral.

          (v) Other than the security interest granted to the Indenture Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted
a security interest in, or otherwise conveyed any of the Collateral.

          (vi) The Collateral is not in the name of any Person other than the
Issuer or the Indenture Trustee. The Issuer has not consented to the bank
maintaining the Collateral to comply with instructions of any Person other than
the Indenture Trustee.

     (b) With respect to that portion of the Collateral described in clauses (e)
and (f), the Issuer represents to the Indenture Trustee that:

          (i) This Indenture creates a valid and continuing security interest
(as defined in the applicable UCC) in the Collateral in favor of the Indenture
Trustee, which security interest is prior to all other liens, and is enforceable
as such as against creditors of and purchasers from the Issuer.

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          (ii) The Collateral constitutes "general intangibles" within the
meaning of the applicable UCC.

          (iii) The Issuer owns and has good and marketable title to the
Collateral free and clear of any lien, claim or encumbrance of any Person.

          (iv) The Issuer has caused or will have caused, within ten days, the
filing of all appropriate financing statements in the proper filing office in
the appropriate jurisdictions under applicable law in order to perfect the
security interest in the Collateral granted to the Indenture Trustee hereunder.

          (v) Other than the security interest granted to the Indenture Trustee
pursuant to this Indenture, the Issuer has not pledged, assigned, sold, granted
a security interest in, or otherwise conveyed any of the Collateral. The Issuer
has not authorized the filing of and is not aware of any financing statements
against the Issuer that include a description of collateral covering the
Collateral other than any financing statement relating to the security interest
granted to the Indenture Trustee hereunder or that has been terminated. The
Issuer is not aware of any judgment or tax lien filings against the Issuer.

     (d) The foregoing representations may not be waived and shall survive the
issuance of the Bonds.

     Section 3.29 REPLACEMENT DERIVATIVE CONTRACTS. In the event of a default by
a Derivative Contract Counterparty with respect to the related Derivative
Contracts (a "Derivative Contract Default'), the Issuer, at its expense, may,
but shall not be required to, substitute a new 1231 derivative contract for the
existing Derivative Contracts or any other form of similar coverage for basis
risk shortfalls; PROVIDED, HOWEVER, that the timing and mechanism for receiving
payments under such new derivative contracts shall be reasonably acceptable to
the Indenture Trustee. It shall be a condition to substitution of any new
derivative contracts that there be delivered to the Indenture Trustee an Opinion
of Counsel to the effect that such substitution would not (a) result in a
"substantial modification" of the Bonds under Treasury Regulation section
1.1001-3, or adversely affect the status of the Bonds as indebtedness for
federal income tax purposes, or (b) if 100% of the Certificates are not owned by
IMH Assets Corp., cause the Trust to be subject to an entity level tax for
federal income tax purposes.

     Section 3.30 ALLOCATION OF REALIZED LOSSES. (a) Prior to each Payment Date,
the Master Servicer shall determine the total amount of Realized Losses that
occurred during the related Prepayment Period. The amount of each Realized Loss
shall be evidenced by an Officer's Certificate delivered to the Indenture
Trustee with the related Remittance Report.

     (b) On each Payment Date following the application of all amounts
distributable on such date, to the extent the aggregate Stated Principal Balance
of the Mortgage Loans is less than the aggregate Bond Principal Balances of the
Bonds due to Realized Losses on the Mortgage Loans, FIRST, the Bond Principal
Balances of the Class B Bonds shall be reduced, until the Bond Principal
Balances thereof have been reduced to zero, SECOND, the Bond Principal Balances
of the Class M-2 Bonds shall be reduced, until the Bond Principal Balances
thereof have been reduced to zero, THIRD,

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the Bond Principal Balances of the Class M-1 Bonds shall be reduced, until the
Bond Principal Balances thereof have been reduced to zero and FOURTH, the Bond
Principal Balances of the Class A-2 Bonds shall be reduced, until the Bond
Principal Balances thereof have been reduced to zero. All Realized Losses
allocated to a Class of Bonds will be allocated in proportion to the Percentage
Interests evidenced thereby.

                                       24

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                                   ARTICLE IV

               The Bonds; Satisfaction and Discharge of Indenture

     Section 4.01 THE BONDS. Each Class of Bonds shall be registered in the name
of a nominee designated by the Depository. Beneficial Owners will hold interests
in the Bonds through the book- entry facilities of the Depository in minimum
initial Bond Principal Balances of $25,000 and integral multiples of $1 in
excess thereof.

     The Indenture Trustee may for all purposes (including the making of
payments due on the Bonds) deal with the Depository as the authorized
representative of the Beneficial Owners with respect to the Bonds for the
purposes of exercising the rights of Holders of the Bonds hereunder. Except as
provided in the next succeeding paragraph of this Section 4.01, the rights of
Beneficial Owners with respect to the Bonds shall be limited to those
established by law and agreements between such Beneficial Owners and the
Depository and Depository Participants. Except as provided in Section 4.08
hereof, Beneficial Owners shall not be entitled to definitive certificates for
the Bonds as to which they are the Beneficial Owners. Requests and directions
from, and votes of, the Depository as Holder of the Bonds shall not be deemed
inconsistent if they are made with respect to different Beneficial Owners. The
Indenture Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Bondholders and give notice to the
Depository of such record date. Without the consent of the Issuer and the
Indenture Trustee, no Bond may be transferred by the Depository except to a
successor Depository that agrees to hold such Bond for the account of the
Beneficial Owners.

     In the event the Depository Trust Company resigns or is removed as
Depository, the Indenture Trustee with the approval of the Issuer may appoint a
successor Depository. If no successor Depository has been appointed within 30
days of the effective date of the Depository's resignation or removal, each
Beneficial Owner shall be entitled to certificates representing the Bonds it
beneficially owns in the manner prescribed in Section 4.08.

     The Bonds shall, on original issue, be executed on behalf of the Issuer by
the Owner Trustee, not in its individual capacity but solely as Owner Trustee,
authenticated by the Indenture Trustee and delivered by the Indenture Trustee to
or upon the order of the Issuer.

     Section 4.02 REGISTRATION OF AND LIMITATIONS ON TRANSFER AND EXCHANGE OF
BONDS; APPOINTMENT OF BOND REGISTRAR AND CERTIFICATE REGISTRAR. The Issuer shall
cause to be kept at the Corporate Trust Office a Bond Register in which, subject
to such reasonable regulations as it may prescribe, the Bond Registrar shall
provide for the registration of Bonds and of transfers and exchanges of Bonds as
herein provided.

     Subject to the restrictions and limitations set forth below, upon surrender
for registration of transfer of any Bond at the Corporate Trust Office, the
Issuer shall execute and the Bond Registrar shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Bonds in
authorized initial Bond Principal Balances evidencing the same Class and
aggregate Percentage Interests.

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     Subject to the foregoing, at the option of the Bondholders, Bonds may be
exchanged for other Bonds of like tenor and in authorized initial Bond Principal
Balances evidencing the same Class and aggregate Percentage Interests upon
surrender of the Bonds to be exchanged at the Corporate Trust Office of the Bond
Registrar. Whenever any Bonds are so surrendered for exchange, the Issuer shall
execute and the Indenture Trustee shall authenticate and deliver the Bonds which
the Bondholder making the exchange is entitled to receive. Each Bond presented
or surrendered for registration of transfer or exchange shall (if so required by
the Bond Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Bond Registrar
duly executed by the Holder thereof or his attorney duly authorized in writing
with such signature guaranteed by a commercial bank or trust company located or
having a correspondent located in the city of New York. Bonds delivered upon any
such transfer or exchange will evidence the same obligations, and will be
entitled to the same rights and privileges, as the Bonds surrendered.

     No service charge shall be made for any registration of transfer or
exchange of Bonds, but the Bond Registrar shall require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any registration of transfer or exchange of Bonds.

     The Issuer hereby appoints the Indenture Trustee as (i) Certificate
Registrar to keep at its Corporate Trust Office a Certificate Register pursuant
to Section 3.09 of the Trust Agreement in which, subject to such reasonable
regulations as it may prescribe, the Certificate Registrar shall provide for the
registration of Certificates and of transfers and exchanges thereof pursuant to
Section 3.05 of the Trust Agreement and (ii) Bond Registrar under this
Indenture. The Indenture Trustee hereby accepts such appointments.

     Section 4.03 MUTILATED, DESTROYED, LOST OR STOLEN BONDS. If (i) any
mutilated Bond is surrendered to the Indenture Trustee, or the Indenture Trustee
receives evidence to its satisfaction of the destruction, loss or theft of any
Bond, and (ii) there is delivered to the Indenture Trustee such security or
indemnity as may be required by it to hold the Issuer and the Indenture Trustee
harmless, then, in the absence of notice to the Issuer, the Bond Registrar or
the Indenture Trustee that such Bond has been acquired by a bona fide purchaser,
and provided that the requirements of Section 8- 405 of the UCC are met, the
Issuer shall execute, and upon its request the Indenture Trustee shall
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Bond, a replacement Bond; PROVIDED, HOWEVER, that if
any such destroyed, lost or stolen Bond, but not a mutilated Bond, shall have
become or within seven days shall be due and payable, instead of issuing a
replacement Bond, the Issuer may pay such destroyed, lost or stolen Bond when so
due or payable without surrender thereof. If, after the delivery of such
replacement Bond or payment of a destroyed, lost or stolen Bond pursuant to the
proviso to the preceding sentence, a bona fide purchaser of the original Bond in
lieu of which such replacement Bond was issued presents for payment such
original Bond, the Issuer and the Indenture Trustee shall be entitled to recover
such replacement Bond (or such payment) from the Person to whom it was delivered
or any Person taking such replacement Bond from such Person to whom such
replacement Bond was delivered or any assignee of such Person, except a bona
fide purchaser, and shall be entitled to recover upon the security or indemnity
provided therefor to the extent of any loss, damage, cost or expense incurred by
the Issuer or the Indenture Trustee in connection therewith.

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     Upon the issuance of any replacement Bond under this Section 4.03, the
Issuer may require the payment by the Holder of such Bond of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other reasonable expenses (including the fees and expenses of
the Indenture Trustee) connected therewith.

     Every replacement Bond issued pursuant to this Section 4.03 in replacement
of any mutilated, destroyed, lost or stolen Bond shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Bond shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Bonds duly issued hereunder.

     The provisions of this Section 4.03 are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Bonds.

     Section 4.04 PERSONS DEEMED OWNERS. Prior to due presentment for
registration of transfer of any Bond, the Issuer, the Indenture Trustee, the
Paying Agent and any agent of the Issuer or the Indenture Trustee may treat the
Person in whose name any Bond is registered (as of the day of determination) as
the owner of such Bond for the purpose of receiving payments of principal of and
interest, if any, on such Bond and for all other purposes whatsoever, whether or
not such Bond be overdue, and neither the Issuer, the Indenture Trustee, the
Paying Agent nor any agent of the Issuer or the Indenture Trustee shall be
affected by notice to the contrary.

     Section 4.05 CANCELLATION. All Bonds surrendered for payment, registration
of transfer, exchange or redemption shall, if surrendered to any Person other
than the Indenture Trustee, be delivered to the Indenture Trustee and shall be
promptly cancelled by the Indenture Trustee. The Issuer may at any time deliver
to the Indenture Trustee for cancellation any Bonds previously authenticated and
delivered hereunder which the Issuer may have acquired in any manner whatsoever,
and all Bonds so delivered shall be promptly cancelled by the Indenture Trustee.
No Bonds shall be authenticated in lieu of or in exchange for any Bonds
cancelled as provided in this Section 4.05, except as expressly permitted by
this Indenture. All cancelled Bonds may be held or disposed of by the Indenture
Trustee in accordance with its standard retention or disposal policy as in
effect at the time unless the Issuer shall direct by an Issuer Request that they
be destroyed or returned to it; PROVIDED, HOWEVER, that such Issuer Request is
timely and the Bonds have not been previously disposed of by the Indenture
Trustee.

     Section 4.06 BOOK-ENTRY BONDS. The Bonds, upon original issuance, will be
issued in the form of typewritten Bonds representing the Book-Entry Bonds, to be
delivered to The Depository Trust Company, the initial Depository, by, or on
behalf of, the Issuer. The Bonds shall initially be registered on the Bond
Register in the name of Cede & Co., the nominee of the initial Depository, and
no Beneficial Owner will receive a Definitive Bond representing such Beneficial
Owner's interest in such Bond, except as provided in Section 4.08. With respect
to such Bonds, unless and until definitive, fully registered Bonds (the
"Definitive Bonds") have been issued to Beneficial Owners pursuant to Section
4.08:

               (i) the provisions of this Section 4.06 shall be in full force
     and effect;

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<PAGE>

               (ii) the Bond Registrar, the Paying Agent and the Indenture
     Trustee shall be entitled to deal with the Depository for all purposes of
     this Indenture (including the payment of principal of and interest on the
     Bonds and the giving of instructions or directions hereunder) as the sole
     holder of the Bonds, and shall have no obligation to the Beneficial Owners
     of the Bonds;

               (iii) to the extent that the provisions of this Section 4.06
     conflict with any other provisions of this Indenture, the provisions of
     this Section 4.06 shall control;

               (iv) the rights of Beneficial Owners shall be exercised only
     through the Depository and shall be limited to those established by law and
     agreements between such Owners of Bonds and the Depository and/or the
     Depository Participants. Unless and until Definitive Bonds are issued
     pursuant to Section 4.08, the initial Depository will make book- entry
     transfers among the Depository Participants and receive and transmit
     payments of principal of and interest on the Bonds to such Depository
     Participants; and

               (v) whenever this Indenture requires or permits actions to be
     taken based upon instructions or directions of Holders of Bonds evidencing
     a specified percentage of the Bond Principal Balances of the Bonds, the
     Depository shall be deemed to represent such percentage with respect to the
     Bonds only to the extent that it has received instructions to such effect
     from Beneficial Owners and/or Depository Participants owning or
     representing, respectively, such required percentage of the beneficial
     interest in the Bonds and has delivered such instructions to the Indenture
     Trustee.

     Section 4.07 NOTICES TO DEPOSITORY. Whenever a notice or other
communication to the Bond Holders is required under this Indenture, unless and
until Definitive Bonds shall have been issued to Beneficial Owners pursuant to
Section 4.08, the Indenture Trustee shall give all such notices and
communications specified herein to be given to Holders of the Bonds to the
Depository, and shall have no obligation to the Beneficial Owners.

     Section 4.08 DEFINITIVE BONDS. If (i) the Indenture Trustee determines that
the Depository is no longer willing or able to properly discharge its
responsibilities with respect to the Bonds and the Indenture Trustee is unable
to locate a qualified successor, (ii) the Indenture Trustee elects to terminate
the book-entry system through the Depository or (iii) after the occurrence of an
Event of Default, Beneficial Owners of Bonds representing beneficial interests
aggregating at least a majority of the Bond Principal Balances of the Bonds
advise the Depository in writing that the continuation of a book-entry system
through the Depository is no longer in the best interests of the Beneficial
Owners, then the Depository shall notify all Beneficial Owners and the Indenture
Trustee of the occurrence of any such event and of the availability of
Definitive Bonds to Beneficial Owners requesting the same. Upon surrender to the
Indenture Trustee of the typewritten Bonds representing the Book-Entry Bonds by
the Depository, accompanied by registration instructions, the Issuer shall
execute and the Indenture Trustee shall authenticate the Definitive Bonds in
accordance with the instructions of the Depository. None of the Issuer, the Bond
Registrar or the Indenture Trustee shall be liable for 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 Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Bonds as
Bondholders.

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<PAGE>

     Section 4.09 TAX TREATMENT. The Issuer has entered into this Indenture, and
the Bonds will be issued, with the intention that, for federal, state and local
income, single business and franchise tax purposes, the Bonds will qualify as
indebtedness. The Issuer and the Indenture Trustee (in accordance with Section
6.06 hereof), by entering into this Indenture, and each Bondholder, by its
acceptance of its Bond (and each Beneficial Owner by its acceptance of an
interest in the applicable Book-Entry Bond), agree to treat the Bonds for
federal, state and local income, single business and franchise tax purposes as
indebtedness.

     Section 4.10 SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
cease to be of further effect with respect to the Bonds except as to (i) rights
of registration of transfer and exchange, (ii) substitution of mutilated,
destroyed, lost or stolen Bonds, (iii) rights of Bondholders to receive payments
of principal thereof and interest thereon, (iv) Sections 3.03, 3.04, 3.06, 3.09,
3.16, 3.18 and 3.19, (v) the rights, obligations and immunities of the Indenture
Trustee hereunder (including the rights of the Indenture Trustee under Section
6.07 and the obligations of the Indenture Trustee under Section 4.11) and (vi)
the rights of Bondholders as beneficiaries hereof with respect to the property
so deposited with the Indenture Trustee payable to all or any of them, and the
Indenture Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
with respect to the Bonds and shall release and deliver the Collateral to or
upon the order of the Issuer, when

          (A) either

          (1) all Bonds theretofore authenticated and delivered (other than (i)
     Bonds that have been destroyed, lost or stolen and that have been replaced
     or paid as provided in Section 4.03 hereof and (ii) Bonds for whose payment
     money has theretofore been deposited in trust or segregated and held in
     trust by the Issuer and thereafter repaid to the Issuer or discharged from
     such trust, as provided in Section 3.03) have been delivered to the
     Indenture Trustee for cancellation; or

          (2) all Bonds not theretofore delivered to the Indenture Trustee for
     cancellation

               a.   have become due and payable,

               b.   will become due and payable at the Final Scheduled Payment
                    Date within one year, or

               c.   have been called for early redemption and the Trust has been
                    terminated pursuant to Section 8.07 hereof,

and the Issuer, in the case of a. or b. above, has irrevocably deposited or
caused to be irrevocably deposited with the Indenture Trustee cash or direct
obligations of or obligations guaranteed by the United States of America (which
will mature prior to the date such amounts are payable), in trust for such
purpose, in an amount sufficient to pay and discharge the entire indebtedness on
such Bonds then outstanding not theretofore delivered to the Indenture Trustee
for cancellation when due on the Final Scheduled Payment Date or other final
Payment Date and has delivered to the Indenture Trustee a verification report
from a nationally recognized accounting fore certifying that the amounts

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<PAGE>

deposited with the Indenture Trustee are sufficient to pay and discharge the
entire indebtedness of such Bonds, or, in the case of c. above, the Issuer shall
have complied with all requirements of Section 8.07 hereof,

          (B) the Issuer has paid or caused to be paid all other sums payable
     hereunder; and

          (C) the Issuer has delivered to the Indenture Trustee an Officer's
     Certificate and an Opinion of Counsel, each meeting the applicable
     requirements of Section 10.01 hereof, each stating that all conditions
     precedent herein provided for relating to the satisfaction and discharge of
     this Indenture have been complied with and, if the Opinion of Counsel
     relates to a deposit made in connection with Section 4.10(A)(2)b. above,
     such opinion shall further be to the effect that such deposit will
     constitute an "in-substance defeasance" within the meaning of Revenue
     Ruling 85-42, 1985-1 C.B. 36, and in accordance therewith, the Issuer will
     be the owner of the assets deposited in trust for federal income tax
     purposes.

     Section 4.11 APPLICATION OF TRUST MONEY. All monies deposited with the
Indenture Trustee pursuant to Section 4.10 hereof shall be held in trust and
applied by it, in accordance with the provisions of the Bonds and this
Indenture, to the payment, either directly or through any Paying Agent or the
Issuer, Certificate Paying Agent as designee of the Issuer, as the Indenture
Trustee may determine, to the Holders of Securities, of all sums due and to
become due thereon for principal and interest or otherwise; but such monies need
not be segregated from other funds except to the extent required herein or
required by law.

     Section 4.12 [RESERVED].

     Section 4.13 REPAYMENT OF MONIES HELD BY PAYING AGENT. In connection with
the satisfaction and discharge of this Indenture with respect to the Bonds, all
monies then held by any Person other than the Indenture Trustee under the
provisions of this Indenture with respect to such Bonds shall, upon demand of
the Issuer, be paid to the Indenture Trustee to be held and applied according to
Section 3.05 and thereupon such Person shall be released from all further
liability with respect to such monies.

     Section 4.14 TEMPORARY BONDS. Pending the preparation of any Definitive
Bonds, the Issuer may execute and upon its written direction, the Indenture
Trustee may authenticate and make available for delivery, temporary Bonds that
are printed, lithographed, typewritten, photocopied or otherwise produced, in
any denomination, substantially of the tenor of the Definitive Bonds in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Bonds may
determine, as evidenced by their execution of such Bonds.

     If temporary Bonds are issued, the Issuer will cause Definitive Bonds to be
prepared without unreasonable delay. After the preparation of the Definitive
Bonds, the temporary Bonds shall be exchangeable for Definitive Bonds upon
surrender of the temporary Bonds at the office of the Indenture Trustee located
at 123 Washington Street, New York, New York 10006, without charge to the
Holder. Upon surrender for cancellation of any one or more temporary Bonds, the
Issuer shall execute and the Indenture Trustee shall authenticate and make
available for delivery, in exchange

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<PAGE>

therefor, Definitive Bonds of authorized denominations and of like tenor, class
and aggregate principal amount. Until so exchanged, such temporary Bonds shall
in all respects be entitled to the same benefits under this Indenture as
Definitive Bonds.

     Section 4.15 REPRESENTATION REGARDING ERISA. By acquiring a Bond or
interest therein, each Holder of such Bond or Beneficial Owner of any such
interest will be deemed to represent that either (1) it is not acquiring the
Bond with the assets of a Plan or (2) the acquisition and holding of such Bond
will not give rise to a nonexempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code as a result of the Issuer, the Seller, the
Depositor, the Underwriters, the Owner Trustee, the Indenture Trustee, the
Master Servicer, any Subservicer, any other servicer, any administrator, any
provider of credit support, including the Derivative Contract Counterparties,
any owner of the Certificates, or any of their Affiliates being a "Party in
Interest" (within the meaning of ERISA) or Disqualified Person (within the
meaning of the Code) with respect to such Holder or Beneficial Owner that is a
Plan.

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<PAGE>

                                    ARTICLE V

                              Default and Remedies

     Section 5.01 EVENTS OF DEFAULT. The Issuer shall deliver to the Indenture
Trustee, within five days after learning of the occurrence of an Event of
Default, written notice in the form of an Officer's Certificate of any event
which with the giving of notice and the lapse of time would become an Event of
Default under clause (iii) or (iv) of the definition of "Event of Default", its
status and what action the Issuer is taking or proposes to take with respect
thereto. The Indenture Trustee shall not be deemed to have knowledge of any
Event of Default unless a Responsible Officer has actual knowledge thereof or
unless written notice of such Event of Default is received by a Responsible
Officer and such notice references the Bonds, the Trust Estate or this
Indenture.

     Section 5.02 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default should occur and be continuing, then and in every such case the
Indenture Trustee at the written direction of the Holders of Bonds representing
not less than a majority of the aggregate Bond Principal Balance of the Bonds
may declare the Bonds to be immediately due and payable, by a notice in writing
to the Issuer (and to the Indenture Trustee if such notice is given by
Bondholders), and upon any such declaration the unpaid Bond Principal Balance of
the Bonds, together with accrued and unpaid interest thereon through the date of
acceleration, shall become immediately due and payable.

     At any time after such declaration of acceleration of maturity with respect
to an Event of Default has been made and before a judgment or decree for payment
of the money due has been obtained by the Indenture Trustee as hereinafter in
this Article V provided, Holders of Bonds representing not less than a majority
of the aggregate Bond Principal Balance of the Bonds, by written notice to the
Issuer and the Indenture Trustee, may waive the related Event of Default and
rescind and annul such declaration and its consequences if

               (i) the Issuer has paid or deposited with the Indenture Trustee a
     sum sufficient to pay:

               (A) all payments of principal of and interest on the Bonds and
          all other amounts that would then be due hereunder or upon the Bonds
          if the Event of Default giving rise to such acceleration had not
          occurred; and

               (B) all sums paid or advanced by the Indenture Trustee hereunder
          and the reasonable compensation, expenses, disbursements and advances
          of the Indenture Trustee and its agents and counsel; and

               (ii) all Events of Default, other than the nonpayment of the
     principal of the Bonds that has become due solely by such acceleration,
     have been cured or waived as provided in Section 5.12.

     No such rescission shall affect any subsequent default or impair any right
     consequent thereto.

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<PAGE>

     Section 5.03 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
INDENTURE TRUSTEE.

     (a) The Issuer covenants that if (i) default is made in the payment of any
interest on any Bond when the same becomes due and payable, and such default
continues for a period of five days, or (ii) default is made in the payment of
the principal of or any installment of the principal of any Bond when the same
becomes due and payable, the Issuer shall, upon demand of the Indenture Trustee,
at the direction of the Holders of a majority of the aggregate Bond Principal
Balances of the Bonds, pay to the Indenture Trustee, for the benefit of the
Holders of Bonds, the whole amount then due and payable on the Bonds for
principal and interest, with interest at the applicable Bond Interest Rate upon
the overdue principal, and in addition thereto such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Indenture
Trustee and its agents and counsel.

     (b) In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Indenture Trustee, in its own name and as trustee of an express
trust, subject to the provisions of Section 10.16 hereof may institute a
Proceeding for the collection of the sums so due and unpaid, and may prosecute
such Proceeding to judgment or final decree, and may enforce the same against
the Issuer or other obligor upon the Bonds and collect in the manner provided by
law out of the property of the Issuer or other obligor the Bonds, wherever
situated, the monies adjudged or decreed to be payable.

     (c) If an Event of Default occurs and is continuing, the Indenture Trustee,
subject to the provisions of Section 10.16 hereof may, as more particularly
provided in Section 5.04 hereof, in its discretion, proceed to protect and
enforce its rights and the rights of the Bondholders by such appropriate
Proceedings as the Indenture Trustee shall protect and enforce any such rights,
whether for the specific enforcement of any covenant or agreement in this
Indenture or in aid of the exercise of any power granted herein, or to enforce
any other proper remedy or legal or equitable right vested in the Indenture
Trustee by this Indenture or by law.

     (d) In case there shall be pending, relative to the Issuer or any other
obligor upon the Bonds or any Person having or claiming an ownership interest in
the Trust Estate, Proceedings under Title 11 of the United States Code or any
other applicable federal or state bankruptcy, insolvency or other similar law,
or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or Person,
or in case of any other comparable judicial Proceedings relative to the Issuer
or other obligor upon the Bonds, or to the creditors or property of the Issuer
or such other obligor, the Indenture Trustee, irrespective of whether the
principal of any Bonds shall then be due and payable as therein expressed or by
declaration or otherwise and irrespective of whether the Indenture Trustee shall
have made any demand pursuant to the provisions of this Section, shall be
entitled and empowered, by intervention in such Proceedings or otherwise:

               (i) to file and prove a claim or claims for the whole amount of
     principal and interest owing and unpaid in respect of the Bonds and to file
     such other papers or documents as may be necessary or advisable in order to
     have the claims of the Indenture Trustee (including any claim for
     reasonable compensation to the Indenture Trustee and each predecessor
     Indenture Trustee, and their respective agents, attorneys and counsel, and
     for

                                       33

<PAGE>

     reimbursement of all expenses and liabilities incurred, and all advances
     made, by the Indenture Trustee and each predecessor Indenture Trustee,
     except as a result of negligence or bad faith) and of the Bondholders
     allowed in such Proceedings;

               (ii) unless prohibited by applicable law and regulations, to vote
     on behalf of the Holders of Bonds in any election of a trustee, a standby
     trustee or Person performing similar functions in any such Proceedings;

               (iii) to collect and receive any monies or other property payable
     or deliverable on any such claims and to distribute all amounts received
     with respect to the claims of the Bondholders and of the Indenture Trustee
     on their behalf, and

               (iv) to file such proofs of claim and other papers or documents
     as may be necessary or advisable in order to have the claims of the
     Indenture Trustee or the Holders of Bonds allowed in any judicial
     proceedings relative to the Issuer, its creditors and its property;

and any trustee, receiver, liquidator, custodian or other similar official in
any such Proceeding is hereby authorized by each of such Bondholders to make
payments to the Indenture Trustee, and, in the event that the Indenture Trustee
shall consent to the making of payments directly to such Bondholders, to pay to
the Indenture Trustee such amounts as shall be sufficient to cover reasonable
compensation to the Indenture Trustee, each predecessor Indenture Trustee and
their respective agents, attorneys and counsel, and all other expenses and
liabilities incurred, and all advances made, by the Indenture Trustee and each
predecessor Indenture Trustee.

     (e) Nothing herein contained shall be deemed to authorize the Indenture
Trustee to authorize or consent to or vote for or accept or adopt on behalf of
any Bondholder any plan of reorganization, arrangement, adjustment or
composition affecting the Bonds or the rights of any Holder thereof or to
authorize the Indenture Trustee to vote in respect of the claim of any
Bondholder in any such proceeding except, as aforesaid, to vote for the election
of a trustee in bankruptcy or similar Person.

     (f) All rights of action and of asserting claims under this Indenture, or
under any of the Bonds, may be enforced by the Indenture Trustee without the
possession of any of the Bonds or the production thereof in any trial or other
Proceedings relative thereto, and any such action or proceedings instituted by
the Indenture Trustee shall be brought in its own name as trustee of an express
trust, and any recovery of judgment, subject to the payment of the expenses,
disbursements and compensation of the Indenture Trustee, each predecessor
Indenture Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Bonds, subject to Section 5.05 hereof.

     (g) In any Proceedings brought by the Indenture Trustee (and also any
Proceedings involving the interpretation of any provision of this Indenture to
which the Indenture Trustee shall be a party), the Indenture Trustee shall be
held to represent all the Holders of the Bonds, and it shall not be necessary to
make any Bondholder a party to any such Proceedings.

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<PAGE>

     Section 5.04 REMEDIES; PRIORITIES. (a) If an Event of Default shall have
occurred and be continuing and if an acceleration has been declared and not
rescinded pursuant to Section 5.02 hereof, the Indenture Trustee subject to the
provisions of Section 10.16 hereof may do one or more of the following (subject
to Section 5.05 hereof):

               (i) institute Proceedings in its own name and as trustee of an
     express trust for the collection of all amounts then payable on the Bonds
     or under this Indenture with respect thereto, whether by declaration or
     otherwise, enforce any judgment obtained, and collect from the Issuer and
     any other obligor upon such Bonds monies adjudged due;

               (ii) institute Proceedings from time to time for the complete or
     partial foreclosure of this Indenture with respect to the Trust Estate;

               (iii) exercise any remedies of a secured party under the UCC and
     take any other appropriate action to protect and enforce the rights and
     remedies of the Indenture Trustee and the Holders of the Bonds; and

               (iv) sell the Trust Estate or any portion thereof or rights or
     interest therein, at one or more public or private sales called and
     conducted in any manner permitted by law;

PROVIDED, HOWEVER, that the Indenture Trustee may not sell or otherwise
liquidate the Trust Estate following an Event of Default, unless (A) the
Indenture Trustee obtains the consent of the Holders of 100% of the aggregate
Bond Principal Balance, (B) the proceeds of such sale or liquidation
distributable to the Holders of the Bonds are sufficient to discharge in full
all amounts then due and unpaid upon the Bonds for principal and interest or (C)
the Indenture Trustee determines that the Mortgage Loans will not continue to
provide sufficient funds for the payment of principal of and interest on the
Bonds as they would have become due if the Bonds had not been declared due and
payable, and the Indenture Trustee obtains the consent of the Holders of a
majority of the aggregate Bond Principal Balance. In determining such
sufficiency or insufficiency with respect to clause (B) and (C), the Indenture
Trustee may, but need not, obtain and rely upon an opinion (obtained at the
expense of the Trust) of an Independent investment banking or accounting firm of
national reputation as to the feasibility of such proposed action and as to the
sufficiency of the Trust Estate for such purpose. Notwithstanding the foregoing,
so long as an Event of Servicer Termination has not occurred, any Sale of the
Trust Estate shall be made subject to the continued servicing of the Mortgage
Loans by the Master Servicer as provided in the Servicing Agreement.

     (b) If the Indenture Trustee collects any money or property pursuant to
this Article V, it shall pay out the money or property in the following order:

          FIRST: to the Indenture Trustee for amounts due under Section 6.07
     hereof;

       SECOND: to the Bondholders for amounts due and unpaid on the Bonds
     with respect to interest, first, to the Class A-1 Bondholders, second, to
     the Class A-2 Bondholders, third, to the Class M-1 Bondholders, fourth, to
     the Class M-2 Bondholders and fifth, to the Class B Bondholders, according
     to the amounts due and payable on the Bonds for interest

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     (including any Unpaid Interest Shortfalls but not including any Basis Risk
     Shortfall Carry- Forward Amount);

          THIRD: to Bondholders for amounts due and unpaid on the Bonds with
     respect to principal, and to each Bondholder ratably, without preference or
     priority of any kind, according to the amounts due and payable on the Bonds
     for principal, until the Bond Principal Balance of each Class is reduced to
     zero;

          FOURTH: to the Bondholders for amounts due and unpaid on the Bonds
     with respect to any related Basis Risk Shortfall Carry-Forward Amounts,
     first, to the Class A-1 Bondholders, second, to the Class A-2 Bondholders,
     third, to the Class M-1 Bondholders, fourth, to the Class M-2 Bondholders
     and fifth, to the Class B Bondholders, according to the amounts due and
     payable on the Bonds with respect thereto, from amounts available in the
     Trust Estate for the Bondholders; and

          FIFTH: to the payment of the remainder, if any to the Certificate
     Paying Agent on behalf of the Issuer or to any other person legally
     entitled thereto.

     The Indenture Trustee may fix a record date and payment date for any
payment to Bondholders pursuant to this Section 5.04. At least 15 days before
such record date, the Indenture Trustee shall mail to each Bondholder a notice
that states the record date, the payment date and the amount to be paid.

     Section 5.05 OPTIONAL PRESERVATION OF THE TRUST ESTATE. If the Bonds have
been declared to be due and payable under Section 5.02 following an Event of
Default and such declaration and its consequences have not been rescinded and
annulled, the Indenture Trustee may elect to take and maintain possession of the
Trust Estate. It is the desire of the parties hereto and the Bondholders that
there be at all times sufficient funds for the payment of principal of and
interest on the Bonds and other obligations of the Issuer, and the Indenture
Trustee shall take such desire into account when determining whether or not to
take and maintain possession of the Trust Estate. In determining whether to take
and maintain possession of the Trust Estate, the Indenture Trustee may, but need
not, obtain and rely upon an opinion of an Independent investment banking or
accounting firm of national reputation as to the feasibility of such proposed
action and as to the sufficiency of the Trust Estate for such purpose.

     Section 5.06 LIMITATION OF SUITS. No Holder of any Bond shall have any
right to institute any Proceeding, judicial or otherwise, with respect to this
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy hereunder, unless and subject to the provisions of Section 10.16 hereof

               (i) such Holder has previously given written notice to the
     Indenture Trustee of a continuing Event of Default;

               (ii) the Holders of not less than 25% of the aggregate Bond
     Principal Balances of the Bonds have made a written request to the
     Indenture Trustee to institute such

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<PAGE>

     Proceeding in respect of such Event of Default in its own name as Indenture
     Trustee hereunder;

               (iii) such Holder or Holders have offered to the Indenture
     Trustee reasonable indemnity against the costs, expenses and liabilities to
     be incurred in complying with such request;

               (iv) the Indenture Trustee for 60 days after its receipt of such
     notice of request and offer of indemnity has failed to institute such
     Proceedings; and

               (v) no direction inconsistent with such written request has been
     given to the Indenture Trustee during such 60-day period by the Holders of
     a majority of the Bond Principal Balances of the Bonds.

It is understood and intended that no one or more Holders of Bonds shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Bonds or to obtain or to seek to obtain priority or preference over
any other Holders or to enforce any right under this Indenture, except in the
manner herein provided.

     Subject to the last paragraph of Section 5.11 herein, in the event the
Indenture Trustee shall receive conflicting or inconsistent requests and
indemnity from two or more groups of Holders of Bonds, each representing less
than a majority of the Bond Principal Balances of the Bonds, the Indenture
Trustee in its sole discretion may determine what action, if any, shall be
taken, notwithstanding any other provisions of this Indenture.

     Section 5.07 UNCONDITIONAL RIGHTS OF BONDHOLDERS TO RECEIVE PRINCIPAL AND
INTEREST. Notwithstanding any other provisions in this Indenture, the Holder of
any Bond shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest, if any, on such Bond on or after the
respective due dates thereof expressed in such Bond or in this Indenture and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.

     Section 5.08 RESTORATION OF RIGHTS AND REMEDIES. If the Indenture Trustee
or any Bondholder has instituted any Proceeding to enforce any right or remedy
under this Indenture and such Proceeding has been discontinued or abandoned for
any reason or has been determined adversely to the Indenture Trustee or to such
Bondholder, then and in every such case the Issuer, the Indenture Trustee and
the Bondholders shall, subject to any determination in such Proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Indenture Trustee and the Bondholders
shall continue as though no such Proceeding had been instituted.

     Section 5.09 RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Indenture Trustee or to the Bondholders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or

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in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.

     Section 5.10 DELAY OR OMISSION NOT A WAIVER. No delay or omission of the
Indenture Trustee or any Holder of any Bond to exercise any right or remedy
accruing upon any Event of Default shall impair any such right or remedy or
constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article V or by law to the Indenture
Trustee or to the Bondholders may be exercised from time to time, and as often
as may be deemed expedient, by the Indenture Trustee or by the Bondholders, as
the case may be.

     Section 5.11 [RESERVED]

     Section 5.12 WAIVER OF PAST DEFAULTS. Prior to the declaration of the
acceleration of the maturity of the Bonds as provided in Section 5.02 hereof,
the Holders of Bonds representing not less than a majority of the aggregate Bond
Principal Balance of the Bonds may waive any past Event of Default and its
consequences except an Event of Default (a) with respect to payment of principal
of or interest on any of the Bonds or (b) in respect of a covenant or provision
hereof which cannot be modified or amended without the consent of the Holder of
each Bond. In the case of any such waiver, the Issuer, the Indenture Trustee and
the Holders of the Bonds shall be restored to their former positions and rights
hereunder, respectively, but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereto.

     Upon any such waiver, any Event of Default arising therefrom shall be
deemed to have been cured and not to have occurred, for every purpose of this
Indenture; but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereto.

     Section 5.13 UNDERTAKING FOR COSTS. All parties to this Indenture agree,
and each Holder of any Bond and each Beneficial Owner of any interest therein by
such Holder's or Beneficial Owner's acceptance thereof shall be deemed to have
agreed, that any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Indenture, or in any suit against
the Indenture Trustee for any action taken, suffered or omitted by it as
Indenture Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.13 shall not apply to (a) any suit instituted by
the Indenture Trustee, (b) any suit instituted by any Bondholder, or group of
Bondholders, in each case holding in the aggregate more than 10% of the Bond
Principal Balances of the Bonds or (c) any suit instituted by any Bondholder for
the enforcement of the payment of principal of or interest on any Bond on or
after the respective due dates expressed in such Bond and in this Indenture.

     Section 5.14 WAIVER OF STAY OR EXTENSION LAWS. The Issuer covenants (to the
extent that it may lawfully do so) that it will not at any time insist upon, or
plead or in any manner whatsoever, claim or take the benefit or advantage of,
any stay or extension law wherever enacted, now or at any time hereafter in
force, that may affect the covenants or the performance of this Indenture; and
the Issuer (to the extent that it may lawfully do so) hereby expressly waives
all benefit or advantage of

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<PAGE>

any such law, and covenants that it shall not hinder, delay or impede the
execution of any power herein grunted to the Indenture Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.

     Section 5.15 SALE OF TRUST ESTATE. (a) The power to effect any sale or
other disposition (a "Sale") of any portion of the Trust Estate pursuant to
Section 5.04 hereof is expressly subject to the provisions of Section 5.05
hereof and this Section 5.15. The power to effect any such Sale shall not be
exhausted by any one or more Sales as to any portion of the Trust Estate
remaining unsold, but shall continue unimpaired until the entire Trust Estate
shall have been sold or all amounts payable on the Bonds and under this
Indenture shall have been paid. The Indenture Trustee may from time to time
postpone any public Sale by public announcement made at the time and place of
such Sale. The Indenture Trustee hereby expressly waives its right to any amount
fixed by law as compensation for any Sale.

     (b) The Indenture Trustee shall not in any private Sale sell the Trust
Estate, or any portion thereof, unless

          (1) the Holders of all Bonds consent to or direct the Indenture
     Trustee to make, such Sale, or

          (2) the proceeds of such Sale would be not less than the entire amount
     which would be payable to the Bondholders under the Bonds, in full payment
     thereof in accordance with Section 5.02 hereof, on the Payment Date next
     succeeding the date of such Sale, or

          (3) the Indenture Trustee determines that the conditions for retention
     of the Trust Estate set forth in Section 5.05 hereof cannot be satisfied
     (in making any such determination, the Indenture Trustee may rely upon an
     opinion of an Independent investment banking firm obtained and delivered as
     provided in Section 5.05 hereof), and the Holders of Bonds representing at
     least 100% of the Bond Principal Balances of the Bonds consent to such
     Sale.

The purchase by the Indenture Trustee of all or any portion of the Trust Estate
at a private Sale shall not be deemed a Sale or other disposition thereof for
purposes of this Section 5.15(b).

     (c) Unless the Holders representing at least 66-2/3% of the Bond Principal
Balances of the Bonds have otherwise consented or directed the Indenture
Trustee, at any public Sale of all or any portion of the Trust Estate at which a
minimum bid equal to or greater than the amount described in paragraph (2) of
subsection (b) of this Section 5.15 has not been established by the Indenture
Trustee and no Person bids an amount equal to or greater than such amount, the
Indenture Trustee, as trustee for the benefit of the Holders of the Bonds, shall
bid an amount at least $1.00 more than the highest other bid.

     (d) In connection with a Sale of all or any portion of the Trust Estate,

          (1) any Holder or Holders of Bonds may bid for and purchase the
     property offered for sale, and upon compliance with the terms of sale may
     hold, retain and possess and dispose of such property, without further
     accountability, and may, in paying the purchase

                                       39

<PAGE>

     money therefor, deliver any Bonds or claims for interest thereon in lieu of
     cash up to the amount which shall, upon distribution of the net proceeds of
     such sale, be payable thereon, and such Bonds, in case the amounts so
     payable thereon shall be less than the amount due thereon, shall be
     returned to the Holders thereof after being appropriately stamped to show
     such partial payment;

          (2) the Indenture Trustee may bid for and acquire the property offered
     for Sale in connection with any Sale thereof, and, subject to any
     requirements of, and to the extent permitted by, applicable law in
     connection therewith, may purchase all or any portion of the Trust Estate
     in a private sale, and, in lieu of paying cash therefor, may make
     settlement for the purchase price by crediting the gross Sale price against
     the sum of (A) the amount which would be distributable to the Holders of
     the Bonds and Holders of Certificates on the Payment Date next succeeding
     the date of such Sale and (B) the expenses of the Sale and of any
     Proceedings in connection therewith which are reimbursable to it, without
     being required to produce the Bonds in order to complete any such Sale or
     in order for the net Sale price to be credited against such Bonds, and any
     property so acquired by the Indenture Trustee shall be held and dealt with
     by it in accordance with the provisions of this Indenture;

          (3) the Indenture Trustee shall execute and deliver an appropriate
     instrument of conveyance, prepared by the Issuer and satisfactory to the
     Indenture Trustee, transferring its interest in any portion of the Trust
     Estate in connection with a Sale thereof;

          (4) the Indenture Trustee is hereby irrevocably appointed the agent
     and attorney-in-fact of the Issuer to transfer and convey its interest in
     any portion of the Trust Estate in connection with a Sale thereof, and to
     take all action necessary to effect such Sale; and

          (5) no purchaser or transferee at such a Sale shall be bound to
     ascertain the Indenture Trustee's authority, inquire into the satisfaction
     of any conditions precedent or see to the application of any monies.

     Section 5.16 ACTION ON BONDS. The Indenture Trustee's right to seek and
recover judgment on the Bonds or under this Indenture shall not be affected by
the seeking, obtaining or application of any other relief under or with respect
to this Indenture. Neither the lien of this Indenture nor any rights or remedies
of the Indenture Trustee or the Bondholders shall be impaired by the recovery of
any judgment by the Indenture Trustee against the Issuer or by the levy of any
execution under such judgment upon any portion of the Trust Estate or upon any
of the assets of the Issuer. Any money or property collected by the Indenture
Trustee shall be applied in accordance with Section 5.04(b) hereof.

     Section 5.17 PERFORMANCE AND ENFORCEMENT OF CERTAIN OBLIGATIONS. (a)
Promptly following a request from the Indenture Trustee to do so, the Issuer in
its capacity as holder of the Mortgage Loans, shall take all such lawful action
as the Indenture Trustee may request to cause the Issuer to compel or secure the
performance and observance by the Seller and the Master Servicer, as applicable,
of each of their obligations to the Issuer under or in connection with the
Mortgage Loan Sale and Contribution Agreement, the Subsequent Mortgage Loan Sale
and Contribution Agreement and the Servicing Agreement, and to exercise any and
all rights, remedies, powers and privileges

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<PAGE>

lawfully available to the Issuer under or in connection with the Mortgage Loan
Sale and Contribution Agreement, the Subsequent Mortgage Loan Sale and
Contribution Agreement and the Servicing Agreement to the extent and in the
manner directed by the Indenture Trustee, as pledgee of the Mortgage Loans,
including the transmission of notices of default on the part of the Seller or
the Master Servicer thereunder and the institution of legal or administrative
actions or proceedings to compel or secure performance by the Seller or the
Master Servicer of each of their obligations under the Mortgage Loan Sale and
Contribution Agreement, the Subsequent Mortgage Loan Sale and Contribution
Agreement and the Servicing Agreement.

     (b) The Indenture Trustee, as pledgee of the Mortgage Loans, may, and at
the direction (which direction shall be in writing or by telephone (confirmed in
writing promptly thereafter)) of the Holders of 66-2/3% of the Bond Principal
Balances of the Bonds, shall exercise all rights, remedies, powers, privileges
and claims of the Issuer against the Seller or the Master Servicer under or in
connection with the Mortgage Loan Sale and Contribution Agreement, the
Subsequent Mortgage Loan Sale and Contribution Agreement and the Servicing
Agreement, including the right or power to take any action to compel or secure
performance or observance by the Seller or the Master Servicer, as the case may
be, of each of their obligations to the Issuer thereunder and to give any
consent, request, notice, direction, approval, extension or waiver under the
Mortgage Loan Sale and Contribution Agreement, the Subsequent Mortgage Loan Sale
and Contribution Agreement and the Servicing Agreement, as the case may be, and
any right of the Issuer to take such action shall not be suspended.

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                                   ARTICLE VI

                              The Indenture Trustee

     Section 6.01 DUTIES OF INDENTURE TRUSTEE. (a) If an Event of Default has
occurred and is continuing, the Indenture Trustee shall exercise the rights and
powers vested in it by this Indenture and use the same degree of care and skill
in their exercise as a prudent person would exercise or use under the
circumstances in the conduct of such person's own affairs.

     (b) Except during the continuance of an Event of Default:

               (i) the Indenture Trustee undertakes to perform such duties and
     only such duties as are specifically set forth in this Indenture and no
     implied covenants or obligations shall be read into this Indenture against
     the Indenture Trustee; and

               (ii) in the absence of bad faith on its part, the Indenture
     Trustee may conclusively rely, as to the truth of the statements and the
     correctness of the opinions expressed therein, upon certificates or
     opinions furnished to the Indenture Trustee and conforming to the
     requirements of this Indenture; however, the Indenture Trustee shall
     examine the certificates and opinions to determine whether or not they
     conform to the requirements of this Indenture.

     (c) The Indenture Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own willful
misconduct, except that:

               (i) this paragraph does not limit the effect of paragraph (b) of
     this Section 6.01;

               (ii) the Indenture Trustee shall not be liable for any error of
     judgment made in good faith by a Responsible Officer unless it is proved
     that the Indenture Trustee was negligent in ascertaining the pertinent
     facts; and

               (iii) the Indenture Trustee shall not be liable with respect to
     any action it takes or omits to take in good faith in accordance with a
     direction received by it from Bondholders or from the Issuer, which they
     are entitled to give under the Basic Documents.

     (d) The Indenture Trustee shall not be liable for interest on any money
received by it except as the Indenture Trustee may agree in writing with the
Issuer.

     (e) Money held in trust by the Indenture Trustee need not be segregated
from other trust funds except to the extent required by law or the terms of this
Indenture or the Trust Agreement.

     (f) No provision of this Indenture shall require the Indenture Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that

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<PAGE>

repayment of such finds or adequate indemnity against such risk or liability is
not reasonably assured to it.

     (g) Every provision of this Indenture relating to the conduct or affecting
the liability of or affording protection to the Indenture Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

     (h) The Indenture Trustee shall act in accordance with Sections 6.03 and
6.04 of the Servicing Agreement and shall act as successor to the Master
Servicer or appoint a successor Master Servicer in accordance with Section 6.02
of the Servicing Agreement.

     Section 6.02 RIGHTS OF INDENTURE TRUSTEE. (a) The Indenture Trustee may
rely on any document believed by it to be genuine and to have been signed or
presented by the proper person. The Indenture Trustee need not investigate any
fact or matter stated in the document.

     (b) Before the Indenture Trustee acts or refrains from acting, it may
require an Officer's Certificate or an Opinion of Counsel. The Indenture Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on an Officer's Certificate or Opinion of Counsel.

     (c) The Indenture Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys or a custodian or nominee.

     (d) The Indenture Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers; PROVIDED, HOWEVER, that the Indenture Trustee's conduct does
not constitute willful misconduct, negligence or bad faith.

     (e) The Indenture Trustee may consult with counsel, and the advice or
opinion of Counsel with respect to legal matters relating to this Indenture and
the Bonds shall be full and complete authorization and protection from liability
in respect to any action taken, omitted or suffered by it hereunder in good
faith and in accordance with the advice or opinion of such counsel.

     (f) For the limited purpose of effecting any action to be undertaken by the
Indenture Trustee, but not specifically as a duty of the Indenture Trustee in
the Indenture, the Indenture Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents, attorneys, custodians or nominees 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.

     Section 6.03 INDIVIDUAL RIGHTS OF INDENTURE TRUSTEE. The Indenture Trustee
in its individual or any other capacity may become the owner or pledgee of Bonds
and may otherwise deal with the Issuer or its Affiliates with the same rights it
would have if it were not Indenture Trustee, subject to the requirements of the
Trust Indenture Act. Any Bond Registrar, co-registrar or co-paying agent may do
the same with like rights. However, the Indenture Trustee must comply with
Sections 6.11 and 6.12 hereof.

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<PAGE>

     Section 6.04 INDENTURE TRUSTEE'S DISCLAIMER. The Indenture Trustee shall
not be responsible for and makes no representation as to the validity or
adequacy of this Indenture or the Bonds, it shall not be accountable for the
Issuer's use of the proceeds from the Bonds, and it shall not be responsible for
any statement of the Issuer in the Indenture or in any document issued in
connection with the sale of the Bonds or in the Bonds other than the Indenture
Trustee's certificate of authentication.

     Section 6.05 NOTICE OF EVENT OF DEFAULT. Subject to Section 5.01, the
Indenture Trustee shall promptly mail to each Bondholder notice of the Event of
Default after it is known to a Responsible Officer of the Indenture Trustee,
unless such Event of Default shall have been waived or cured. Except in the case
of an Event of Default in payment of principal of or interest on any Bond, the
Indenture Trustee may withhold the notice if and so long as a committee of its
Responsible Officers in good faith determines that withholding the notice is in
the interests of Bondholders.

     Section 6.06 REPORTS BY INDENTURE TRUSTEE TO HOLDERS AND TAX
ADMINISTRATION. The Indenture Trustee shall deliver to each Bondholder such
information as may be required to enable such holder to prepare its federal and
state income tax returns.

     The Indenture Trustee shall prepare and file (or cause to be prepared and
filed), on behalf of the Owner Trustee, all tax returns (if any) and information
reports, tax elections and such annual or other reports of the Issuer as are
necessary for preparation of tax returns and information reports as provided in
Section 5.03 of the Trust Agreement, including without limitation Form 1099. All
tax returns and information reports shall be signed by the Owner Trustee as
provided in Section 5.03 of the Trust Agreement.

     Section 6.07 COMPENSATION AND INDEMNITY. The Issuer shall pay to the
Indenture Trustee on each Payment Date reasonable compensation for its services.
The amount of the Indenture Trustee Fee shall be paid by the Master Servicer to
the Indenture Trustee on each Payment Date pursuant to Section 3.07(a)(x) of the
Servicing Agreement and all amounts owing to the Indenture Trustee hereunder
(including amounts owing from the Issuer for indemnification and otherwise) in
excess of such amount shall be paid solely as provided in Section 3.05(d)(ix)
and Section 5.04(b) hereof. The Indenture Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Issuer
shall reimburse the Indenture Trustee for all reasonable out-of-pocket expenses
incurred or made by it, including costs of collection, in addition to
compensation for its services. Such expenses shall include reasonable
compensation and expenses, disbursements and advances of the Indenture Trustee's
agents, counsel, accountants and experts. The Issuer shall indemnify the
Indenture Trustee against any and all loss, liability or expense (including
attorneys' fees) incurred by it in connection with the administration of this
Trust and the performance of its duties hereunder. The Indenture Trustee shall
notify the Issuer promptly of any claim for which it may seek indemnity. Failure
by the Indenture Trustee to so notify the Issuer shall not relieve the Issuer of
its obligations hereunder. The Issuer shall defend any such claim, and the
Indenture Trustee may have separate counsel and the Issuer shall pay the fees
and expenses of such counsel. The Issuer is not obligated to reimburse any
expense or indemnify against any loss, liability or expense incurred by the
Indenture Trustee through the Indenture Trustee's own willful misconduct,
negligence or bad faith.

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<PAGE>

     The Issuer's payment obligations to the Indenture Trustee pursuant to this
Section 6.07 shall survive the discharge of this Indenture and the termination
or resignation of the Indenture Trustee. When the Indenture Trustee incurs
expenses after the occurrence of an Event of Default with respect to the Issuer,
the expenses are intended to constitute expenses of administration under Title
11 of the United States Code or any other applicable federal or state
bankruptcy, insolvency or similar law.

     Section 6.08 REPLACEMENT OF INDENTURE TRUSTEE. No resignation or removal of
the Indenture Trustee and no appointment of a successor Indenture Trustee shall
become effective until the acceptance of appointment by the successor Indenture
Trustee pursuant to this Section 6.08. The Indenture Trustee may resign at any
time by so notifying the Issuer. The Holders of a majority of Bond Principal
Balances of the Bonds may remove the Indenture Trustee by so notifying the
Indenture Trustee and may appoint a successor Indenture Trustee. The Issuer
shall remove the Indenture Trustee if:

               (i) the Indenture Trustee fails to comply with Section 6.11
     hereof;

               (ii) the Indenture Trustee is adjudged a bankrupt or insolvent;

               (iii) a receiver or other public officer takes charge of the
     Indenture Trustee or its property; or

               (iv) the Indenture Trustee otherwise becomes incapable of acting.

     If the Indenture Trustee resigns or is removed or if a vacancy exists in
the office of the Indenture Trustee for any reason (the Indenture Trustee in
such event being referred to herein as the retiring Indenture Trustee), the
Issuer shall promptly appoint a successor Indenture Trustee.

     A successor Indenture Trustee shall deliver a written acceptance of its
appointment to the retiring Indenture Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Indenture Trustee shall become effective,
and the successor Indenture Trustee shall have all the rights, powers and duties
of the Indenture Trustee under this Indenture. The successor Indenture Trustee
shall mail a notice of its succession to Bondholders. The retiring Indenture
Trustee shall promptly transfer all property held by it as Indenture Trustee to
the successor Indenture Trustee.

     If a successor Indenture Trustee does not take office within 60 days after
the retiring Indenture Trustee resigns or is removed, the retiring Indenture
Trustee, the Issuer or the Holders of a majority of Bond Principal Balances of
the Bonds may petition any court of competent jurisdiction for the appointment
of a successor Indenture Trustee.

     Notwithstanding the replacement of the Indenture Trustee pursuant to this
Section, the Issuer's obligations under Section 6.07 shall continue for the
benefit of the retiring Indenture Trustee.

     Section 6.09 SUCCESSOR INDENTURE TRUSTEE BY MERGER. If the Indenture
Trustee consolidates with, merges or converts into, or transfers all or
substantially all of its corporate trust business or assets to, another
corporation or banking association, the resulting, surviving or transferee

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corporation, without any further act, shall be the successor Indenture Trustee;
provided, that such corporation or banking association shall be otherwise
qualified and eligible under Section 6.11 hereof. The Indenture Trustee shall
provide the Rating Agencies with prior written notice of any such transaction.

     If at the time such successor or successors by merger, conversion or
consolidation to the Indenture Trustee shall succeed to the trusts created by
this Indenture and any of the Bonds shall have been authenticated but not
delivered, any such successor to the Indenture Trustee may adopt the certificate
of authentication of any predecessor trustee and deliver such Bonds so
authenticated; and if at that time any of the Bonds shall not have been
authenticated, any successor to the Indenture Trustee may authenticate such
Bonds either in the name of any predecessor hereunder or in the name of the
successor to the Indenture Trustee; and in all such cases such certificates
shall have the full force which it is in the Bonds or in this Indenture provided
that the certificate of the Indenture Trustee shall have.

     Section 6.10 APPOINTMENT OF CO-INDENTURE TRUSTEE OR SEPARATE INDENTURE
TRUSTEE. (a) Notwithstanding any other provisions of this Indenture, at any
time, for the purpose of meeting any legal requirement of any jurisdiction in
which any part of the Trust Estate may at the time be located, the Indenture
Trustee shall have the power and may execute and deliver all instruments to
appoint one or more Persons to act as a co-trustee or co-trustees, or separate
trustee or separate trustees, of all or any part of the Trust Estate, and to
vest in such Person or Persons, in such capacity and for the benefit of the
Bondholders, such title to the Trust Estate, or any part hereof, and, subject to
the other provisions of this Section, such powers, duties, obligations, rights
and trusts as the Indenture Trustee may consider necessary or desirable. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 6.11 hereof.

     (b) Every separate trustee and co-trustee shall, to the extent permitted by
law, be appointed and act subject to the following provisions and conditions:

               (i) all rights, powers, duties and obligations conferred or
     imposed upon the Indenture Trustee shall be conferred or imposed upon and
     exercised or performed by the Indenture Trustee and such separate trustee
     or co-trustee jointly (it being understood that such separate trustee or
     co-trustee is not authorized to act separately without the Indenture
     Trustee joining in such act), except to the extent that under any law of
     any jurisdiction in which any particular act or acts are to be performed
     the Indenture 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 Estate or any portion thereof
     in any such jurisdiction) shall be exercised and performed singly by such
     separate trustee or co-trustee, but solely at the direction of the
     Indenture Trustee;

               (ii) no trustee hereunder shall be personally liable by reason of
     any act or omission of any other trustee hereunder; and

               (iii) the Indenture Trustee may at any time accept the
     resignation of or remove any separate trustee or co-trustee.

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     (c) Any notice, request or other writing given to the Indenture 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 Indenture and
the conditions of this Article VI. 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
Indenture Trustee or separately, as may be provided therein, subject to all the
provisions of this Indenture, specifically including every provision of this
Indenture relating to the conduct of, affecting the liability of, or affording
protection to, the Indenture Trustee. Every such instrument shall be filed with
the Indenture Trustee.

     (d) Any separate trustee or co-trustee may at any time constitute the
Indenture 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 Indenture 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 Indenture Trustee, to the extent permitted by law, without the
appointment of a new or successor trustee.

     Section 6.11 ELIGIBILITY; DISQUALIFICATION. The Indenture Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Indenture Trustee
shall have a combined capital and surplus of at least $50,000,000 as set forth
in its most recent published annual report of condition and it or its parent
shall have a long-term debt rating of Baa3 or better by Moody's and BBB or
better by Standard & Poor's. The Indenture Trustee shall comply with TIA ss.
310(b), including the optional provision permitted by the second sentence of TIA
ss. 310(b)(9); PROVIDED, HOWEVER, that there shall be excluded from the
operation of TIA ss. 310(b)(1) any indenture or indentures under which other
securities of the Issuer are outstanding if the requirements for such exclusion
set forth in TIA ss. 310(b)(1) are met.

     Section 6.12 PREFERENTIAL COLLECTION OF CLAIMS AGAINST ISSUER. The
Indenture Trustee shall comply with TIA ss. 311(a), excluding any creditor
relationship listed in TIA ss. 311(b). An Indenture Trustee who has resigned or
been removed shall be subject to TIA ss. 311(a) to the extent indicated.

     Section 6.13 REPRESENTATIONS AND WARRANTIES. The Indenture Trustee hereby
represents that:

               (i) The Indenture Trustee is duly organized and validly existing
     as an association in good standing under the laws of the United States with
     power and authority to own its properties and to conduct its business as
     such properties are currently owned and such business is presently
     conducted;

               (ii) The Indenture Trustee has the power and authority to execute
     and deliver this Indenture and to carry out its terms; and the execution,
     delivery and performance of this Indenture have been duly authorized by the
     Indenture Trustee by all necessary corporate action;

               (iii) The consummation of the transactions contemplated by this
     Indenture and the fulfillment of the terms hereof do not conflict with,
     result in any breach of any of the terms and provisions of, or constitute
     (with or without notice or lapse of time) a default

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     under, the articles of incorporation or bylaws of the Indenture Trustee or
     any agreement or other instrument to which the Indenture Trustee is a party
     or by which it is bound; and

               (iv) To the Indenture Trustee's knowledge, there are no
     proceedings or investigations pending or threatened before any court,
     regulatory body, administrative agency or other governmental
     instrumentality having jurisdiction over the Indenture Trustee or its
     properties: (A) asserting the invalidity of this Indenture (B) seeking to
     prevent the consummation of any of the transactions contemplated by this
     Indenture or (C) seeking any determination or ruling that might materially
     and adversely affect the performance by the Indenture Trustee of its
     obligations under, or the validity or enforceability of, this Indenture.

     Section 6.14 DIRECTIONS TO INDENTURE TRUSTEE. The Indenture Trustee is
hereby directed:

     (a) to accept the pledge of the Mortgage Loans and hold the assets of the
Trust Estate in trust for the Bondholders;

     (b) to authenticate and deliver the Bonds substantially in the form
prescribed by Exhibits A-1 and A-2 to this Indenture in accordance with the
terms of this Indenture; and

     (c) to take all other actions as shall be required to be taken by the terms
of this Indenture.

     Section 6.15 THE AGENTS. The provisions of this Indenture relating to the
limitations of the Indenture Trustee's liability and to its indemnity, rights
and protections shall inure also to the Paying Agent and Bond Registrar.

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                                   ARTICLE VII

                         Bondholders' Lists and Reports

     Section 7.01 ISSUER TO FURNISH INDENTURE TRUSTEE NAMES AND ADDRESSES OF
BONDHOLDERS. The Issuer will furnish or cause to be furnished to the Indenture
Trustee (a) not more than five days after each Record Date, a list, in such form
as the Indenture Trustee may reasonably require, of the names and addresses of
the Holders of Bonds as of such Record Date, (b) at such other times as the
Indenture Trustee may request in writing, within 30 days after receipt by the
Issuer of any such request, a list of similar form and content as of a date not
more than 10 days prior to the time such list is furnished; PROVIDED, HOWEVER,
that so long as the Indenture Trustee is the Bond Registrar, no such list shall
be required to be furnished to the Indenture Trustee.

     Section 7.02 PRESERVATION OF INFORMATION; COMMUNICATIONS TO BONDHOLDERS.
(a) The Indenture Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of the Holders of Bonds contained in the
most recent list furnished to the Indenture Trustee as provided in Section 7.01
hereof and the names and addresses of Holders of Bonds received by the Indenture
Trustee in its capacity as Bond Registrar. The Indenture Trustee may destroy any
list furnished to it as provided in such Section 7.01 upon receipt of a new list
so furnished.

     (b) Bondholders may communicate pursuant to TIA ss. 312(b) with other
Bondholders with respect to their rights under this Indenture or under the
Bonds.

     (c) The Issuer, the Indenture Trustee and the Bond Registrar shall have the
protection of TIAss.312(c).

     Section 7.03 REPORTS OF ISSUER. (a) (i) The Indenture Trustee shall file
with the Commission on behalf of the Issuer, with a copy to the Issuer within 15
days before the Issuer is required to file the same with the Commission, the
annual reports and the information, documents and other reports (or such
portions of any of the foregoing as the Commission may from time to time by
rules and regulations prescribe) that the Issuer may be required to file with
the Commission pursuant to Section 13 or 15(d) of the Exchange Act;

               (ii) The Indenture Trustee shall file with the Commission, on
     behalf of the Issuer, in accordance with rules and regulations prescribed
     from time to time by the Commission such additional information, documents
     and reports with respect to compliance by the Issuer with the conditions
     and covenants of this Indenture as may be required from time to time by
     such rules and regulations; and

               (iii) The Indenture Trustee shall supply (and the Indenture
     Trustee shall transmit by mail to all Bondholders described in TIA ss.
     313(c)) such summaries of any information, documents and reports required
     to be filed by the Issuer pursuant to clauses (i) and (ii) of this Section
     7.03(a) and by rules and regulations prescribed from time to time by the
     Commission.

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<PAGE>

     (b) Unless the Issuer otherwise determines, the fiscal year of the Issuer
shall end on December 31 of each year.

     Section 7.04 REPORTS BY INDENTURE TRUSTEE. If required by TIA ss. 313(a),
within 60 days after each October 30 beginning with October 30, 2002, the
Indenture Trustee shall mail to each Bondholder as required by TIA ss. 313(c) a
brief report dated as of such date that complies with TIA ss. 313(a). The
Indenture Trustee also shall comply with TIA ss. 313(b).

     A copy of each report at the time of its mailing to Bondholders shall be
filed by the Indenture Trustee with the Commission via EDGAR and each stock
exchange, if any, on which the Bonds are listed. The Issuer shall notify the
Indenture Trustee if and when the Bonds are listed on any stock exchange.

     Section 7.05 STATEMENTS TO BONDHOLDERS. (a) With respect to each Payment
Date, the Indenture Trustee shall make available via the Indenture Trustee's
website http://www- apps.gis.deutsche-bank.com/invr or deliver at the
recipient's option to each Bondholder and each Certificateholder, the Depositor,
the Owner Trustee, the Certificate Paying Agent and each Rating Agency, a
statement setting forth the following information as to the Bonds, to the extent
applicable:

               (i) the aggregate amount of collections with respect to the
     Mortgage Loans;

               (ii) the Available Funds and Net Monthly Excess Cash Flow payable
     to each Class of Bondholders for such Payment Date, the Basis Risk
     Shortfall Carry-Forward Amount on each Class of Bonds for such Payment Date
     and the aggregate Unpaid Interest Shortfall on each Class of Bonds for such
     Payment Date;

               (iii) (a) the amount of such distribution to each Class of Bonds
     applied to reduce the Bond Principal Balance thereof, and (b) the aggregate
     amount included therein representing Principal Prepayments;

               (iv) [reserved];

               (v) (v) the amount of such distribution to Holders of each Class
     of Bonds allocable to interest;

               (vi) the amount of such distribution to the Certificates;

               (vii) if the distribution to the Holders of any Class of Bonds is
     less than the full amount that would be distributable to such Holders if
     there were sufficient funds available therefor, the amount of the
     shortfall;

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

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<PAGE>

               (ix) the aggregate Bond Principal Balance of each Class of Bonds,
     after giving effect to the amounts distributed on such Payment Date,
     separately identifying any reduction thereof due to Realized Losses other
     than pursuant to an actual distribution of principal and the aggregate Bond
     Principal Balance of all of the Bonds after giving effect to the
     distribution of principal on such Payment Date;

               (x) the number and aggregate Stated Principal Balances of
     Mortgage Loans (a) as to which the Monthly Payment is delinquent for 31-60
     days, 61-90 days, 91 or more days, respectively, (b) in foreclosure and (c)
     that have become REO Property, in each case as of the end of the preceding
     calendar month;

               (xi) the Net Derivative Contract Payment Amount;

               (xii) the Overcollateralization Deficiency Amount,
     Overcollateralization Release Amount, Overcollateralization Target Amount
     and Overcollateialized Amount, if any, in each case as the end of the
     related Payment Date;

               (xiii) the amount of any Advances and Compensating Interest
     payments;

               (xiv) the aggregate Realized Losses with respect to the related
     Payment Date and cumulative Realized Losses since the Closing Date;

               (xv) the number and aggregate Stated Principal Balance of
     Mortgage Loans repurchased pursuant to the Mortgage Loan Sale and
     Contribution Agreement or the Subsequent Mortgage Loan Sale and
     Contribution Agreement, as applicable, for the related Payment Date and
     cumulatively since the Closing Date;

               (xvi) the Sixty Day Rolling Delinquency Percentage, Ninety Day
     Rolling Delinquency Percentage and Cumulative Losses for such Payment Date;

               (xvii) the book value of any REO Property;

               (xviii) the amount of any Prepayment Interest Shortfalls or
     Relief Act Shortfalls for such Payment Date;

               (xix) the aggregate Stated Principal Balance of Mortgage Loans
     purchased pursuant to Section 3.18 of the Servicing Agreement for the
     related Payment Date and cumulatively since the Closing Date;

               (xx) the amount withdrawn from the Pre-Funding Account and used
     to make payments to Bondholders on that Payment Date, the amount remaining
     on deposit following such Payment Date, and the amount withdrawn from the
     Pre-Funding Account used to buy Subsequent Mortgage Loans prior to such
     Payment Date; and

               (xxi) the Net Derivative Fee for such Payment Date.

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     Items (iii) and (v) above shall be presented on the basis of a Bond having
a $1,000 denomination. In addition, by January 31 of each calendar year
following any year during which the Bonds are outstanding, the Indenture Trustee
shall furnish a report to each Bondholder of record if so requested in writing
at any time during each calendar year as to the aggregate of amounts reported
pursuant to (iii), (iv) and (xii) with respect to the Bonds for such calendar
year.

     The Indenture Trustee may conclusively rely upon the Remittance Report
provided by the Master Servicer pursuant to Section 4.01 of the Servicing
Agreement and on the amount of the Net Derivative Contract Payment Amount
furnished to the Indenture Trustee pursuant to the Derivative Contracts in its
preparation of its Statement to Bondholders.

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                                  ARTICLE VIII

                      Accounts, Disbursements and Releases

     Section 8.01 COLLECTION OF MONEY. Except as otherwise expressly provided
herein, the Indenture Trustee may demand payment or delivery of, and shall
receive and collect, directly and without intervention or assistance of any
fiscal agent or other intermediary, all money and other property payable to or
receivable by the Indenture Trustee pursuant to this Indenture. The Indenture
Trustee shall apply all such money received by it as provided in this Indenture.
Except as otherwise expressly provided in this Indenture, if any default occurs
in the making of any payment or performance under any agreement or instrument
that is part of the Trust Estate, the Indenture Trustee may take such action as
may be appropriate to enforce such payment or performance, including the
institution and prosecution of appropriate Proceedings. Any such action shall be
without prejudice to any right to claim a Default or Event of Default under this
Indenture and any right to proceed thereafter as provided in Article V.

     Section 8.02 TRUST ACCOUNTS. (a) On or prior to the Closing Date, the
Issuer shall cause the Indenture Trustee to establish and maintain, in the name
of the Indenture Trustee, for the benefit of the Bondholders, the Payment
Account as provided in Section 3.01 hereof and the Pre-Funding Account as
provided in Section 3.11 hereof.

     (b) All monies deposited from time to time in the Payment Account and all
deposits therein pursuant to this Indenture (other than deposits of any gain or
income on investments thereof) are for the benefit of the Bondholders. Any loss
on any investment made by the Indenture Trustee with funds in the Payment
Account and Pre-Funding Account shall be reimbursed immediately to the Trust
Estate by the Master Servicer. All investments made with monies in the Payment
Account and the Certificate Distribution Account including all income or other
gain from such investments shall be for the benefit of and the risk of the
Master Servicer.

     (c) On each Payment Date, the Indenture Trustee shall pay itself the
Indenture Trustee Fee for such Payment Date and shall pay the Derivative
Contract Counterparties any amounts owed under the Derivative Contracts, and
then the Indenture Trustee shall distribute all remaining amounts on deposit in
the Payment Account to the Bondholders in respect of the Bonds and to such other
persons in the order of priority set forth in Section 3.05 hereof (except as
otherwise provided in Section 5.04(b) hereof).

     (d) The Indenture Trustee shall invest any funds in the Payment Account and
the Pre- Funding Account, but only in Eligible Investments, as directed by the
Master Servicer, maturing no later than the Business Day preceding each Payment
Date and such Eligible Investments shall not be sold or disposed of prior to
their maturity.

     Section 8.03 OFFICER'S CERTIFICATE. The Indenture Trustee shall receive at
least seven Business Days' notice when requested by the Issuer to take any
action pursuant to Section 8.05(a) hereof, accompanied by copies of any
instruments to be executed, and the Indenture Trustee shall also require, as a
condition to such action, an Officer's Certificate, in form and substance
satisfactory to the Indenture Trustee, stating the legal effect of any such
action, outlining the steps required to

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<PAGE>

complete the same, and concluding that all conditions precedent to the taking of
such action have been complied with.

     Section 8.04 TERMINATION UPON DISTRIBUTION TO BONDHOLDERS. This Indenture
and the respective obligations and responsibilities of the Issuer and the
Indenture Trustee created hereby shall terminate upon the distribution to
Bondholders, the Certificate Paying Agent on behalf of the Certificateholders
and the Indenture Trustee of all amounts required to be distributed pursuant to
Article III; PROVIDED, HOWEVER, that in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the survivor of the
descendants of Joseph P. Kennedy, the late ambassador of the United States to
the Court of St. James, living on the date hereof.

     Section 8.05 RELEASE OF TRUST ESTATE. (a) Subject to the payment of its
fees and expenses, the Indenture Trustee may, and when required by the
provisions of this Indenture shall, execute instruments to release property from
the lien of this Indenture, or convey the Indenture Trustee's interest in the
same, in a manner and under circumstances that are not inconsistent with the
provisions of this Indenture, including for the purposes of any repurchase by
the Master Servicer of a Mortgage Loan pursuant to Section 3.18 of the Servicing
Agreement. No party relying upon an instrument executed by the Indenture Trustee
as provided in Article VIII hereunder shall be bound to ascertain the Indenture
Trustee's authority, inquire into the satisfaction of any conditions precedent,
or see to the application of any monies.

     (b) The Indenture Trustee shall, at such time as (i) there are no Bonds
Outstanding and (ii) all sums due to the Indenture Trustee pursuant to this
Indenture have been paid, release any remaining portion of the Trust Estate that
secured the Bonds from the lien of this Indenture.

     (c) The Indenture Trustee shall release property from the lien of this
Indenture pursuant to this Section 8.05 only upon receipt of a request from the
Issuer accompanied by an Officers' Certificate and an Opinion of Counsel stating
that all applicable requirements have been satisfied,.

     Section 8.06 SURRENDER OF BONDS UPON FINAL PAYMENT. By acceptance of any
Bond, the Holder thereof agrees to surrender such Bond to the Indenture Trustee
promptly, prior to such Bondholder's receipt of the final payment thereon.

     Section 8.07 OPTIONAL REDEMPTION OF THE BONDS. (a) The Holder of the
Certificates shall have the option to redeem the Bonds in whole, but not in
part, on any Payment Date on or after the earlier of (i) the Payment Date on
which the aggregate Stated Principal Balance of the Mortgage Loans is less than
or equal to 20% of the aggregate Stated Principal Balance of the Mortgage Loans
as of Cut-off Date and (ii) the Payment Date in November 2011. The aggregate
redemption price for the Bonds will be equal to the unpaid Bond Principal
Balance of the Bonds as of the Payment Date on which the proposed redemption
will take place in accordance with the foregoing, together with accrued and
unpaid interest thereon at the applicable Bond Interest Rate through such
Payment Date (including any Unpaid Interest Shortfalls and Basis Risk Shortfall
Carry-Forward Amount), plus an amount sufficient to pay in full all amounts
owing to the Indenture Trustee under this Indenture (which amounts shall be
specified in writing upon request of the Issuer by the Indenture Trustee).

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<PAGE>

     (b) In order to exercise the foregoing option, the Issuer shall provide
written notice of its exercise of such option to the Indenture Trustee, the
Owner Trustee and the Master Servicer at least 15 days prior to its exercise.
Following receipt of the notice, the Indenture Trustee shall provide notice to
the Bondholders of the final payment on the Bonds. In addition, the Issuer
shall, not less than one Business Day prior to the proposed Payment Date on
which such redemption is to be made, deposit the aggregate redemption price
specified in (a) above with the Indenture Trustee, who shall deposit the
aggregate redemption price into the Payment Account and shall, on the Payment
Date after receipt of the funds, apply such funds to make final payments of
principal and interest on the Bonds in accordance with Section 3.05(b) and (c)
hereof and payment in full to the Indenture Trustee, and this Indenture shall be
discharged subject to the provisions of Section 4.10 hereof. If for any reason
the amount deposited by the Issuer is not sufficient to make such redemption or
such redemption cannot be completed for any reason, the amount so deposited by
the Issuer with the Indenture Trustee shall be immediately returned to the
Issuer in full and shall not be used for any other purpose or be deemed to be
part of the Trust Estate.

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                                   ARTICLE IX

                             Supplemental Indentures

     Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS. (a)
Without the consent of the Holders of any Bonds but with prior notice to the
Rating Agencies, the Issuer and the Indenture Trustee, when authorized by an
Issuer Request, at any time and from time to time, may enter into one or more
indentures supplemental hereto (which shall conform to the provisions of the TIA
as in force at the date of the execution thereof), in form satisfactory to the
Indenture Trustee, for any of the following purposes:

               (i) to correct or amplify the description of any property at any
     time subject to the lien of this Indenture, or better to assure, convey and
     confirm unto the Indenture Trustee any property subject or required to be
     subjected to the lien of this Indenture, or to subject to the lien of this
     Indenture additional property;

               (ii) to evidence the succession, in compliance with the
     applicable provisions hereof, of another person to the Issuer, and the
     assumption by any such successor of the covenants of the Issuer herein and
     in the Bonds contained;

               (iii) to add to the covenants of the Issuer, for the benefit of
     the Holders of the Bonds, or to surrender any right or power herein
     conferred upon the Issuer;

               (iv) to convey, transfer, assign, mortgage or pledge any property
     to or with the Indenture Trustee;

               (v) to cure any ambiguity, to correct or supplement any provision
     herein or in any supplemental indenture that may be inconsistent with any
     other provision herein or in any supplemental indenture;

               (vi) to make any other provisions with respect to matters or
     questions arising under this indenture or in any supplemental indenture;
     provided, that such action shall not materially and adversely affect the
     interests of the Holders of the Bonds;

               (vii) to evidence and provide for the acceptance of the
     appointment hereunder by a successor trustee with respect to the Bonds and
     to add to or change any of the provisions of this Indenture as shall be
     necessary to facilitate the administration of the trusts hereunder by more
     than one trustee, pursuant to the requirements of Article VI hereof; or

               (viii) to modify, eliminate or add to the provisions of this
     Indenture to such extent as shall be necessary to effect the qualification
     of this Indenture under the TIA or under any similar federal statute
     hereafter enacted and to add to this Indenture such other provisions as may
     be expressly required by the TIA;

PROVIDED, HOWEVER, that no such indenture supplements shall be entered into
unless the Indenture Trustee shall have received an Opinion of Counsel as to the
enforceability of any such indenture

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<PAGE>

supplement and to the effect that (i) such indenture supplement is permitted
hereunder and (ii) entering into such indenture supplement will not result in a
"substantial modification" of the Bonds under Treasury Regulation Section
1.1001-3 or adversely affect the status of the Bonds as indebtedness for federal
income tax purposes.

     The Indenture Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that maybe therein contained.

     (b) The Issuer and the Indenture Trustee, when authorized by an Issuer
Request, may, also without the consent of any of the Holders of the Bonds and
prior notice to the Rating Agencies, enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to, or changing in
any manner or eliminating any of the provisions of, this Indenture or of
modifying in any manner the rights of the Holders of the Bonds under this
Indenture; PROVIDED, HOWEVER, that such action as evidenced by an Opinion of
Counsel, (i) is permitted by this Indenture, and shall not (ii) adversely affect
in any material respect the interests of any Bondholder or (iii) if 100% of the
Certificates are not owned by IMH Assets Corp., cause the Issuer to be subject
to an entity level tax for federal income tax purposes.

     Section 9.02 SUPPLEMENTAL INDENTURES WITH CONSENT OF BONDHOLDERS. The
Issuer and the Indenture Trustee, when authorized by an Issuer Request, also
may, with prior notice to the Rating Agencies and, with the consent of the
Holders of not less than a majority of the Bond Principal Balance of each Class
of Bonds affected thereby, by Act (as defined in Section 10.03 hereof) of such
Holders delivered to the Issuer and the Indenture Trustee, enter into an
indenture or indentures supplemental hereto for the purpose of adding any
provisions to, or changing in any manner or eliminating any of the provisions
of, this Indenture or of modifying in any manner the rights of the Holders of
the Bonds under this Indenture; PROVIDED, HOWEVER, that no such supplemental
indenture shall, without the consent of the Holder of each Bond affected
thereby:

               (i) change the date of payment of any installment of principal of
     or interest on any Bond, or reduce the principal amount thereof or the
     interest rate thereon, change the provisions of this Indenture relating to
     the application of collections on, or the proceeds of the sale of, the
     Trust Estate to payment of principal of or interest on the Bonds, or change
     any place of payment where, or the coin or currency in which, any Bond or
     the interest thereon is payable, or impair the right to institute suit for
     the enforcement of the provisions of this Indenture requiring the
     application of funds available therefor, as provided in Article V, to the
     payment of any such amount due on the Bonds on or after the respective due
     dates thereof,

               (ii) reduce the percentage of the Bond Principal Balances of the
     Bonds, the consent of the Holders of which is required for any such
     supplemental indenture, or the consent of the Holders of which is required
     for any waiver of compliance with certain provisions of this Indenture or
     certain defaults hereunder and their consequences provided for in this
     Indenture;

                                       57

<PAGE>

               (iii) modify or alter the provisions of the proviso to the
     definition of the term "Outstanding" or modify or alter the exception in
     the definition of the term "Holder";

               (iv) reduce the percentage of the Bond Principal Balances of the
     Bonds required to direct the Indenture Trustee to direct the Issuer to sell
     or liquidate the Trust Estate pursuant to Section 5.04 hereof;

               (v) modify any provision of this Section 9.02 except to increase
     any percentage specified herein or to provide that certain additional
     provisions of this Indenture or the Basic Documents cannot be modified or
     waived without the consent of the Holder of each Bond affected thereby;

               (vi) modify any of the provisions of this Indenture in such
     manner as to affect the calculation of the amount of any payment of
     interest or principal due on any Bond on any Payment Date (including the
     calculation of any of the individual components of such calculation); or

               (vii) permit the creation of any lien ranking prior to or on a
     parity with the lien of this Indenture with respect to any part of the
     Trust Estate or, except as otherwise permitted or contemplated herein,
     terminate the lien of this Indenture on any property at any time subject
     hereto or deprive the Holder of any Bond of the security provided by the
     lien of this Indenture; and provided, further, that such action shall not,
     as evidenced by an Opinion of Counsel, cause the Issuer (if 100% of the
     Certificates are not owned by IMH Assets Corp.) to be subject to an entity
     level tax.

     Any such action shall not adversely affect in any material respect the
interest of any Holder (other than a Holder who shall consent to such
supplemental indenture) as evidenced by an Opinion of Counsel (provided by the
Person requesting such supplemental indenture) delivered to the Indenture
Trustee.

     It shall not be necessary for any Act of Bondholders under this Section
9.02 to approve the particular form of any proposed supplemental indenture, but
it shall be sufficient if such Act shall approve the substance thereof.

     Promptly after the execution by the Issuer and the Indenture Trustee of any
supplemental indenture pursuant to this Section 9.02, the Indenture Trustee
shall mail to the Holders of the Bonds to which such amendment or supplemental
indenture relates a notice setting forth in general terms the substance of such
supplemental indenture. Any failure of the Indenture Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

     Section 9.03 EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
permitting the additional trusts created by, any supplemental indenture
permitted by this Article IX or the modification thereby of the trusts created
by this Indenture, the Indenture Trustee shall be entitled to receive, and
subject to Sections 6.01 and 6.02 hereof, shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or

                                       58

<PAGE>

permitted by this Indenture. The Indenture Trustee may, but shall not be
obligated to, enter into any such supplemental indenture that affects the
Indenture Trustee's own rights, duties, liabilities or immunities under this
Indenture or otherwise.

     Section 9.04 EFFECT OF SUPPLEMENTAL INDENTURE. Upon the execution of any
supplemental indenture pursuant to the provisions hereof, this Indenture shall
be and shall be deemed to be modified and amended in accordance therewith with
respect to the Bonds affected thereby, and the respective rights, limitations of
rights, obligations, duties, liabilities and immunities under this Indenture of
the Indenture Trustee, the Issuer and the Holders of the Bonds shall thereafter
be determined, exercised and enforced hereunder subject in all respects to such
modifications and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the terms and
conditions of this Indenture for any and all purposes.

     Section 9.05 CONFORMITY WITH TRUST INDENTURE ACT. Every amendment of this
Indenture and every supplemental indenture executed pursuant to this Article IX
shall conform to the requirements of the Trust Indenture Act as then in effect
so long as this Indenture shall then be qualified under the Trust Indenture Act.

     Section 9.06 REFERENCE IN BONDS TO SUPPLEMENTAL INDENTURES. Bonds
authenticated and delivered after the execution of any supplemental indenture
pursuant to this Article IX may, and if required by the Indenture Trustee shall,
bear a notation in form approved by the Indenture Trustee as to any matter
provided for in such supplemental indenture. If the Issuer or the Indenture
Trustee shall so determine, new Bonds so modified as to conform, in the opinion
of the Indenture Trustee and the Issuer, to any such supplemental indenture may
be prepared and executed by the Issuer and authenticated and delivered by the
Indenture Trustee in exchange for Outstanding Bonds.

                                       59

<PAGE>

                                    ARTICLE X

                                  Miscellaneous

     Section 10.01 COMPLIANCE CERTIFICATES AND OPINIONS. etc. (a) Upon any
application or request by the Issuer to the Indenture Trustee to take any action
under any provision of this Indenture, the Issuer shall furnish to the Indenture
Trustee (i) an Officer's Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and (ii) an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that, in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture,
no additional certificate or opinion need be furnished.

     Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:

          (1) a statement that each signatory of such certificate or opinion has
     read or has caused to be read such covenant or condition and the
     definitions herein relating thereto;

          (2) a brief statement as to the nature and scope of the examination or
     investigation upon which the statements or opinions contained in such
     certificate or opinion are based;

          (3) a statement that, in the opinion of each such signatory, such
     signatory has made such examination or investigation as is necessary to
     enable such signatory to express an informed opinion as to whether or not
     such covenant or condition has been complied with;

          (4) a statement as to whether, in the opinion of each such signatory,
     such condition or covenant has been complied with; and

          (5) if the signatory of such certificate or opinion is required to be
     Independent, the statement required by the definition of the term
     "Independent".

     (b) (i) Prior to the deposit of any Collateral or other property or
securities with the Indenture Trustee that is to be made the basis for the
release of any property or securities subject to the lien of this Indenture, the
Issuer shall, in addition to any obligation imposed in Section 10.01 (a) or
elsewhere in this Indenture, furnish to the Indenture Trustee an Officer's
Certificate certifying or stating the opinion of each person signing such
certificate as to the fair value (within 90 days prior to such deposit) to the
Issuer of the Collateral or other property or securities to be so deposited and
a report from a nationally recognized accounting firm verifying such value.

               (ii) Whenever the Issuer is required to furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (i) above, the Issuer
     shall also deliver to the Indenture Trustee an Independent Certificate from
     a nationally recognized accounting firm as to the same matters, if the fair
     value of the securities to be so deposited and of all other such securities
     made the

                                       60

<PAGE>

     basis of any such withdrawal or release since the commencement of the then
     current fiscal year of the Issuer, as set forth in the certificates
     delivered pursuant to clause (i) above and this clause (ii), is 10% or more
     of the Bond Principal Balances of the Bonds, but such a certificate need
     not be furnished with respect to any securities so deposited, if the fair
     value thereof as set forth in the related Officer's Certificate is less
     than $25,000 or less than one percent of the Bond Principal Balances of the
     Bonds.

               (iii) Whenever any property or securities are to be released from
     the lien of this Indenture, the Issuer shall also furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of each
     person signing such certificate as to the fair value (within 90 days prior
     to such release) of the property or securities proposed to be released and
     stating that in the opinion of such person the proposed release will not
     impair the security under this Indenture in contravention of the provisions
     hereof.

               (iv) Whenever the Issuer is required to furnish to the Indenture
     Trustee an Officer's Certificate certifying or stating the opinion of any
     signer thereof as to the matters described in clause (iii) above, the
     Issuer shall also furnish to the Indenture Trustee an Independent
     Certificate as to the same matters if the fair value of the property or
     securities and of all other property or securities released from the lien
     of this Indenture since the commencement of the then-current calendar year,
     as set forth in the certificates required by clause (iii) above and this
     clause (iv), equals 10% or more of the Bond Principal Balances of the
     Bonds, but such certificate need not be furnished in the case of any
     release of property or securities if the fair value thereof as set forth in
     the related Officer's Certificate is less than $25,000 or less than one
     percent of the then Bond Principal Balances of the Bonds.

     Section 10.02 FORM OF DOCUMENTS DELIVERED TO INDENTURE TRUSTEE. In any case
where several matters are required to be certified by, or covered by an opinion
of, any specified Person, it is not necessary that all such matters be certified
by, or covered by the opinion of, only one such Person, or that they be so
certified or covered by only one document, but one such Person may certify or
give an opinion with respect to some matters and one or more other such Persons
as to other matters, and any such Person may certify or give an opinion as to
such matters in one or several documents.

     Any certificate or opinion of an Authorized Officer of the Issuer may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate of an Authorized Officer or Opinion of Counsel
may be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Seller or the
Issuer, stating that the information with respect to such factual matters is in
the possession of the Seller or the Issuer, unless such counsel knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to such matters are erroneous.

     Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.

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<PAGE>

     Whenever in this Indenture, in connection with any application or
certificate or report to the Indenture Trustee, it is provided that the Issuer
shall deliver any document as a condition of the granting of such application,
or as evidence of the Issuer's compliance with any term hereof, it is intended
that the truth and accuracy, at the time of the granting of such application or
at the effective date of such certificate or report (as the case may be), of the
facts and opinions stated in such document shall in such case be conditions
precedent to the right of the Issuer to have such application granted or to the
sufficiency of such certificate or report. The foregoing shall not, however, be
construed to affect the Indenture Trustee's right to rely upon the truth and
accuracy of any statement or opinion contained in any such document as provided
in Article VI.

     Section 10.03 ACTS OF BONDHOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Bondholders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Bondholders in person
or by agents duly appointed in writing; and except as herein otherwise expressly
provided, such action shall become effective when such instrument or instruments
are delivered to the Indenture Trustee, and, where it is hereby expressly
required, to the Issuer. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as the "Act" of
the Bondholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 6.01
hereof) conclusive in favor of the Indenture Trustee and the Issuer, if made in
the manner provided in this Section 10.03 hereof.

     (b) The fact and date of the execution by any person of any such instrument
or writing may be proved in any manner that the Indenture Trustee deems
sufficient.

     (c) The ownership of Bonds shall be proved by the Bond Registrar.

     (d) Any request, demand, authorization, direction, notice, consent, waiver
or other action by the Holder of any Bonds shall bind the Holder of every Bond
issued upon the registration thereof or in exchange therefor or in lieu thereof,
in respect of anything done, omitted or suffered to be done by the Indenture
Trustee or the Issuer in reliance thereon, whether or not notation of such
action is made upon such Bond.

     Section 10.04 NOTICES ETC., TO INDENTURE TRUSTEE ISSUER AND RATING
AGENCIES. Any request, demand, authorization, direction, notice, consent, waiver
or Act of Bondholders or other documents provided or permitted by this Indenture
shall be in writing and if such request, demand, authorization, direction,
notice, consent, waiver or act of Bondholders is to be made upon, given or
furnished to or filed with:

               (i) the Indenture Trustee by any Bondholder or by the Issuer
     shall be sufficient for every purpose hereunder if made, given, furnished
     or filed in writing to or with the Indenture Trustee at the Corporate Trust
     Office. The Indenture Trustee shall promptly transmit any notice received
     by it from the Bondholders to the Issuer, or

               (ii) the Issuer by the Indenture Trustee or by any Bondholder
     shall be sufficient for every purpose hereunder if in writing and mailed
     first-class, postage prepaid

                                       62

<PAGE>

     to the Issuer addressed to: Impac CMB Trust Series 2001-3, in care of
     Wilmington Trust Company, Rodney Square North, 1100 North Market Street,
     Wilmington, Delaware 19990- 0001, Attention: Corporate Trust
     Administration, or at any other address previously furnished in writing to
     the Indenture Trustee by the Issuer. The Issuer shall promptly transmit any
     notice received by it from the Bondholders to the Indenture Trustee.

     Notices required to be given to the Rating Agencies by the Issuer, the
Indenture Trustee or the Owner Trustee shall be in writing, mailed first-class
postage pre-paid, to (i) in the case of Moody's, at the following address:
Moody's Investors Service, Inc., Residential Mortgage Monitoring Department, 99
Church Street, New York, New York 10007 and (ii) in the case of Standard &
Poor's, at the following address: Standard & Poor's, 55 Water Street, 41st
Floor, New York, New York 10041, Attention of Asset Backed Surveillance
Department; or as to each of the foregoing, at such other address as shall be
designated by written notice to the other parties.

     Section 10.05 NOTICES TO BONDHOLDERS; WAIVER. Where this Indenture provides
for notice to Bondholders of any event, such notice shall be sufficiently given
(unless otherwise herein expressly provided) if in writing and mailed,
fast-class, postage prepaid to each Bondholder affected by such event, at such
Person's address as it appears on the Bond Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice. In any case where notice to Bondholders is given by mail, neither the
failure to mail such notice nor any defect in any notice so mailed to any
particular Bondholder shall affect the sufficiency of such notice with respect
to other Bondholders, and any notice that is mailed in the manner herein
provided shall conclusively be presumed to have been duly given regardless of
whether such notice is in fact actually received.

     Where this Indenture provides for notice in any manner, such notice may be
waived in writing by any Person entitled to receive such notice, either before
or after the event, and such waiver shall be the equivalent of such notice.
Waivers of notice by Bondholders shall be filed with the Indenture Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such a waiver.

     In case, by reason of the suspension of regular mail service as a result of
a strike, work stoppage or similar activity, it shall be impractical to mail
notice of any event to Bondholders when such notice is required to be given
pursuant to any provision of this Indenture, then any manner of giving such
notice as shall be satisfactory to the Indenture Trustee shall be deemed to be a
sufficient giving of such notice.

     Where this Indenture provides for notice to the Rating Agencies, failure to
give such notice shall not affect any other rights or obligations created
hereunder, and shall not under any circumstance constitute an Event of Default.

     Section 10.06 CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with another provision hereof that is required to
be included in this Indenture by any of the provisions of the Trust Indenture
Act, such required provision shall control.

                                       63

<PAGE>

     The provisions of TIA ss.ss. 310 through 317 that impose duties on any
Person (including the provisions automatically deemed included herein unless
expressly excluded by this Indenture) are a part of and govern this Indenture,
whether or not physically contained herein.

     Section 10.07 EFFECT OF HEADINGS. The Article and Section headings herein
are for convenience only and shall not affect the construction hereof.

     Section 10.08 SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture and the Bonds by the Issuer shall bind its successors and assigns,
whether so expressed or not. All agreements of the Indenture Trustee in this
Indenture shall bind its successors, co-trustees and agents.

     Section 10.09 SEPARABILITY. In case any provision in this Indenture or in
the Bonds shall be invalid, illegal or unenforceable, the validity, legality,
and enforceability of the remaining provisions shall not in any way be affected
or impaired thereby.

     Section 10.10 [RESERVED].

     Section 10.11 LEGAL HOLIDAYS. In any case where the date on which any
payment is due shall not be a Business Day, then (notwithstanding any other
provision of the Bonds or this Indenture) payment need not be made on such date,
but may be made on the next succeeding Business Day with the same force and
effect as if made on the date on which nominally due, and no interest shall
accrue for the period from and after any such nominal date.

     Section 10.12 GOVERNING LAW. THIS INDENTURE SHALL BE CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICT OF LAW PROVISIONS, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE
PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

     Section 10.13 COUNTERPARTS. This Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

     Section 10.14 RECORDING OF INDENTURE. If this Indenture is subject to
recording in any appropriate public recording offices, such recording is to be
effected by the Issuer and at its expense accompanied by an Opinion of Counsel
at its expense (which may be counsel to the Indenture Trustee or any other
counsel reasonably acceptable to the Indenture Trustee) to the effect that such
recording is necessary either for the protection of the Bondholders or any other
Person secured hereunder or for the enforcement of any right or remedy granted
to the Indenture Trustee under this Indenture.

     Section 10.15 ISSUER OBLIGATION. No recourse may be taken, directly or
indirectly, with respect to the obligations of the Issuer, the Owner Trustee or
the Indenture Trustee on the Bonds or under this Indenture or any certificate or
other writing delivered in connection herewith or therewith, against (i) the
Indenture Trustee or the Owner Trustee in its individual capacity, (ii) any
owner of

                                       64

<PAGE>

a beneficial interest in the Issuer or (iii) any partner, owner, beneficiary,
agent, officer, director, employee or agent of the Indenture Trustee or the
Owner Trustee in its individual capacity, any holder of a beneficial interest in
the Issuer, the Owner Trustee or the Indenture Trustee or of any successor or
assign of the Indenture Trustee or the Owner Trustee in its individual capacity,
except as any such Person may have expressly agreed (it being understood that
the Indenture Trustee and the Owner Trustee have no such obligations in their
individual capacity) and except that any such partner, owner or beneficiary
shall be fully liable, to the extent provided by applicable law, for any unpaid
consideration for stock, unpaid capital contribution or failure to pay any
installment or call owing to such entity. For all purposes of this Indenture, in
the performance of any duties or obligations of the Issuer hereunder, the Owner
Trustee shall be subject to, and entitled to the benefits of, the terms and
provisions of Article VI, VII and VIII of the Trust Agreement.

     Section 10.16 NO PETITION. The Indenture Trustee, by entering into this
Indenture, and each Bondholder, by accepting a Bond, hereby covenant and agree
that they will not at any time prior to one year from the date of termination
hereof, institute against the Depositor or the Issuer, or join in any
institution against the Depositor or the Issuer of, any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings, or other
proceedings under any United States federal or state bankruptcy or similar law
in connection with any obligations relating to the Bonds, this Indenture or any
of the Basic Documents.

     Section 10.17 INSPECTION. The Issuer agrees that, at its expense, on
reasonable prior notice, it shall permit any representative of the Indenture
Trustee, during the Issuer's normal business hours, to examine all the books of
account, records, reports and other papers of the Issuer, to make copies and
extracts therefrom, to cause such books to be audited by Independent certified
public accountants, and to discuss the Issuer's affairs, finances and accounts
with the Issuer's officers, employees, and Independent certified public
accountants, all at such reasonable times and as often as may be reasonably
requested. The Indenture Trustee shall cause its representatives to hold in
confidence all such information except to the extent disclosure may be required
by law (and all reasonable applications for confidential treatment are
unavailing) and except to the extent that the Indenture Trustee may reasonably
determine that such disclosure is consistent with its obligations hereunder.

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<PAGE>

         IN WITNESS WHEREOF, the Issuer and the Indenture 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 CMB TRUST SERIES 2001-3,
                                        as Issuer
                                        Wilmington Trust Company, not in its
                                        individual capacity but solely as Owner
                                        Trustee

                                        By: ____________________________________
                                            Name: James P. Lawler
                                            Title: Vice President

                                        BANKERS TRUST COMPANY OF
                                        CALIFORNIA, N.A., as Indenture Trustee

                                        By: ____________________________________
                                            Name: James F. Noriega
                                            Title: Associate

<PAGE>

STATE OF              )
                      ) ss.:
COUNTY OF             )

     On this 30th day of October 2001, before me personally appeared James F.
Noriega to me known, who being by me duly sworn, did depose and say, that he is
the Associate of the Indenture Trustee, one of the corporations described in and
which executed the above instrument; and that she signed her name thereto by
like order.

                                        Notary Public

                                        ____________________________
                                        NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

STATE OF DELAWARE           )
                            ) ss.:
COUNTY OF NEW CASTLE        )

     On this 30th day of October, 2001, before me personally appeared James P.
Lawler to me known, who being by me duly sworn, did depose and say, that he
resides at Wilmington Trust Company and is the Vice President of the Owner
Trustee, one of the corporations described in and which executed the above
instrument; and that he signed his name thereto by like order.

                                            Notary Public

                                            ____________________________________
                                            NOTARY PUBLIC

[NOTARIAL SEAL]

<PAGE>

                                   EXHIBIT A-1

                         FORM OF CLASS [A-1][A-2] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-1-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2001-3
                        COLLATERALIZED ASSET-BACKED BONDS
                                CLASS [A-1][A-2]

AGGREGATE BOND PRINCIPAL                              BOND INTEREST
BALANCE:                                              RATE: ______%
$_____________________

INITIAL BOND PRINCIPAL                                BOND NO. ___
BALANCE OF THIS BOND: $___________________

PERCENTAGE INTEREST: _______%                         CUSIP NO. ______________

     Impac CMB Trust Series 2001-3 (the "Issuer"), a Delaware business trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of _____________________________ ($____________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in November 2001 and ending on or before the Payment Date occurring
in October 2031 (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

     This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2001-3 (the "Bonds"), issued under an Indenture dated
as of October 30, 2001 (the "Indenture"), between the Issuer and Bankers Trust
Company of California, N.A., as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

     Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

     The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[A-1][A-2] Bonds as described above, and shall be applied as between interest
and principal as provided in the Indenture.

                                      A-1-2

<PAGE>

     All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

     The Bonds are subject to redemption in whole, but not in part, by the
Holder of the Certificates on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 20% of the aggregate Stated Principal Balance of
the Mortgage Loans as of Cut-off Date and (ii) the Payment Date in November
2011.

     The Issuer shall not be liable upon the indebtedness evidenced by the Bonds
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class A Bonds, and each
Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class A Bonds pursuant to the Indenture and
the rights conveyed to the Issuer under the Indenture.

     Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

     Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

     If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the effect provided in the Indenture. If any
such acceleration of maturity occurs [prior to the payment of the entire unpaid
Bond Principal Balance of the Bonds], the amount payable to the Holder of this
Bond will be equal to the sum of the unpaid Bond Principal Balance of the Bonds,
together with

                                      A-1-3

<PAGE>

accrued and unpaid interest thereon as described in the Indenture. The Indenture
provides that, notwithstanding the acceleration of the maturity of the Bonds,
under certain circumstances specified therein, all amounts collected as proceeds
of the Trust Estate securing the Bonds or otherwise shall continue to be applied
to payments of principal of and interest on the Bonds as if they had not been
declared due and payable.

     The failure to pay any Unpaid Interest Shortfall at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

     The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with the assets
of a Plan or (2) the acquisition and holding of a Bond will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters,
the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer,
any other servicer, any administrator, any provider of credit support, including
the Derivative Contract Counterparties, any owner of the Certificates, or any of
their Affiliates being a "Party in Interest" (within the meaning of ERISA) or
Disqualified Person (within the meaning of the Code) with respect to such Holder
or Beneficial Owner that is a Plan.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond may be registered on the Bond Register of the
Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

     Prior to the due presentment for registration of transfer of this Bond, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences. Any such waiver by the Holder,
at the time of the giving thereof, of this Bond (or any one or more Predecessor
Bonds) shall bind the Holder of every Bond issued upon the registration of
transfer hereof or in exchange hereof or in lieu hereof, whether or not notation
of such consent or waiver is made upon such Bond. The Indenture also permits the
Issuer and the Indenture Trustee to amend or

                                      A-1-4

<PAGE>

waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds issued thereunder.

     Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

     Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

     AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-1-5

<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated: October 30, 2001

                                     IMPAC CMB TRUST SERIES 2001-3

                                     BY: WILMINGTON TRUST COMPANY,
                                         not in its individual capacity but
                                         solely in its capacity as Owner Trustee

                                     By: ____________________________________
                                         Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [A-1][A-2] Bonds referred to in the within-mentioned
Indenture.

BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Indenture Trustee

By: ____________________________________
         Authorized Signatory

                                      A-1-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

         TEN COM      --      as tenants in common

         TEN ENT      --      as tenants by the entireties

         JT TEN       --      as joint tenants with right of survivorship
                              and not as tenants in common

UNIF GIFT MIN ACT     --      __________ Custodian

                              ______________________________
                                   (Cust)      (Minor)

                              under Uniform Gifts to Minor Act

                              __________________________
                                                         (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-1-7

<PAGE>

                                   ASSIGNMENT
                                   ----------

     FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto

     PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE:

         _______________________________________________________________

         _______________________________________________________________

         _______________________________________________________________
  (Please print or typewrite name and address, including zip code, of assignee)

_______________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:____________________            _________________________________________

Signature Guaranteed by    __________________________________________

     NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-1-8

<PAGE>

                                   EXHIBIT A-2

                           FORM OF CLASS [M][B] BONDS

UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE INDENTURE TRUSTEE OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

THE HOLDER OF THIS BOND OR BENEFICIAL OWNER OF ANY INTEREST HEREIN WILL BE
DEEMED TO REPRESENT TO ONE OF THE REPRESENTATIONS CONTAINED IN SECTION 4.15 OF
THE INDENTURE.

THIS BOND IS A NON-RECOURSE OBLIGATION OF THE ISSUER, AND IS LIMITED IN RIGHT OF
PAYMENT TO AMOUNTS AVAILABLE FROM THE TRUST ESTATE AS PROVIDED IN THE INDENTURE
REFERRED TO BELOW. THE ISSUER IS NOT OTHERWISE PERSONALLY LIABLE FOR PAYMENTS ON
THIS BOND.

PRINCIPAL OF THIS BOND IS PAYABLE OVER TIME AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS BOND AT ANY TIME MAY BE LESS THAN THE AMOUNT
SHOWN ON THE FACE HEREOF.

                                      A-2-1

<PAGE>

                          IMPAC CMB TRUST SERIES 2001-3
                        COLLATERALIZED ASSET-BACKED BONDS
                               CLASS [M-1][M-2][B]

AGGREGATE BOND PRINCIPAL                              BOND INTEREST
BALANCE:                                              RATE: ______%
$______________

INITIAL BOND PRINCIPAL                                BOND NO. ___
BALANCE OF THIS BOND:
$______________

PERCENTAGE INTEREST: _______%                         CUSIP NO. ______________

     Impac CMB Trust Series 2001-3 (the "Issuer"), a Delaware business trust,
for value received, hereby promises to pay to Cede & Co. or registered assigns,
the principal sum of ______________________________ ($___________) in monthly
installments on the twenty-fifth day of each month or, if such day is not a
Business Day, the next succeeding Business Day (each a "Payment Date"),
commencing in November 2001 and ending on or before the Payment Date occurring
in October 2031 (the "Final Scheduled Payment Date") and to pay interest on the
Bond Principal Balance of this Bond (this "Bond") outstanding from time to time
as provided below.

     This Bond is one of a duly authorized issue of the Issuer's Collateralized
Asset-Backed Bonds, Series 2001-3 (the "Bonds"), issued under an Indenture dated
as of October 30, 2001 (the "Indenture"), between the Issuer and Bankers Trust
Company of California, N.A., as indenture trustee (the "Indenture Trustee",
which term includes any successor Indenture Trustee under the Indenture), to
which Indenture and all indentures supplemental thereto reference is hereby made
for a statement of the respective rights thereunder of the Issuer, the Indenture
Trustee, and the Holders of the Bonds and the terms upon which the Bonds are to
be authenticated and delivered. All terms used in this Bond which are defined in
the Indenture shall have the meanings assigned to them in the Indenture.

     Payments of principal and interest on this Bond will be made on each
Payment Date to the Bondholder of record as of the related Record Date. The
"Bond Principal Balance" of a Bond as of any date of determination is equal to
the initial Bond Principal Balance thereof, reduced by the aggregate of all
amounts previously paid with respect to such Bond on account of principal and
the aggregate amount of cumulative Realized Losses allocated to such Bond on all
prior Payment Dates.

     The principal of, and interest on, this Bond are due and payable as
described in the Indenture, in such coin or currency of the United States of
America as at the time of payment is legal tender for payment of public and
private debts. All payments made by the Issuer with respect to this Bond shall
be equal to this Bond's pro rata share of the aggregate payments on all Class
[M-1][M-2][B] Bonds

                                      A-2-2

<PAGE>

as described above, and shall be applied as between interest and principal as
provided in the Indenture.

     All principal and interest accrued on the Bonds, if not previously paid,
will become finally due and payable at the Final Scheduled Payment Date.

     The Bonds are subject to redemption in whole, but not in part, by the
Holder of the Certificates on any Payment Date on or after the earlier of (i)
the Payment Date on which the aggregate Stated Principal Balance of the Mortgage
Loans is less than or equal to 20% of the aggregate Stated Principal Balance of
the Mortgage Loans as of Cut-off Date and (ii) the Payment Date in November
2011.

     The Issuer shall not be liable upon the indebtedness evidenced by the Bonds
except to the extent of amounts available from the Trust Estate which
constitutes security for the payment of the Bonds. The assets included in the
Trust Estate will be the sole source of payments on the Class B Bonds, and each
Holder hereof, by its acceptance of this Bond, agrees that (i) such Bond will be
limited in right of payment to amounts available from the Trust Estate as
provided in the Indenture and (ii) such Holder shall have no recourse to the
Issuer, the Owner Trustee, the Indenture Trustee, IMH Assets Corp., Impac
Mortgage Holdings, Inc., the Master Servicer or any of their respective
affiliates, or to the assets of any of the foregoing entities, except the assets
of the Issuer pledged to secure the Class [M-1][M-2][B] Bonds pursuant to the
Indenture and the rights conveyed to the Issuer under the Indenture.

     Any payment of principal or interest payable on this Bond which is
punctually paid on the applicable Payment Date shall be paid to the Person in
whose name such Bond is registered at the close of business on the Record Date
for such Payment Date by check mailed to such person's address as it appears in
the Bond Register on such Record Date, except for the final installment of
principal and interest payable with respect to such Bond, which shall be payable
as provided below. Notwithstanding the foregoing, upon written request with
appropriate instructions by the Holder of this Bond delivered to the Indenture
Trustee at least five Business Days prior to the Record Date, any payment of
principal or interest, other than the final installment of principal or
interest, shall be made by wire transfer to an account in the United States
designated by such Holder. All reductions in the principal amount of a Bond (or
one or more Predecessor Bonds) effected by payments of principal made on any
Payment Date shall be binding upon all Holders of this Bond and of any bond
issued upon the registration of transfer thereof or in exchange therefor or in
lieu thereof, whether or not such payment is noted on such Bond. The final
payment of this Bond shall be payable upon presentation and surrender thereof on
or after the Payment Date thereof at the Corporate Trust Office or the office or
agency of the Issuer maintained by it for such purpose pursuant to Section 3.02
of the Indenture.

     Subject to the foregoing provisions, each Bond delivered under the
Indenture, upon registration of transfer of or in exchange for or in lieu of any
other Bond shall carry the right to unpaid principal and interest that were
carried by such other Bond.

     If an Event of Default as defined in the Indenture shall occur and be
continuing with respect to the Bonds, the Bonds may become or be declared due
and payable in the manner and with the

                                      A-2-3

<PAGE>

effect provided in the Indenture. If any such acceleration of maturity occurs
prior to the payment of the entire unpaid Bond Principal Balance of the Bonds,
the amount payable to the Holder of this Bond will be equal to the sum of the
unpaid Bond Principal Balance of the Bonds, together with accrued and unpaid
interest thereon as described in the Indenture. The Indenture provides that,
notwithstanding the acceleration of the maturity of the Bonds, under certain
circumstances specified therein, all amounts collected as proceeds of the Trust
Estate securing the Bonds or otherwise shall continue to be applied to payments
of principal of and interest on the Bonds as if they had not been declared due
and payable.

     The failure to pay any Unpaid Interest Shortfall at any time when funds are
not available to make such payment as provided in the Indenture shall not
constitute an Event of Default under the Indenture.

     The Holder of this Bond or Beneficial Owner of any interest herein is
deemed to represent that either (1) it is not acquiring the Bond with the assets
of a Plan; or (2) the acquisition and holding of a Bond will not give rise to a
nonexempt prohibited transaction under Section 406 of ERISA or Section 4975 of
the Code as a result of the Issuer, the Seller, the Depositor, the Underwriters,
the Owner Trustee, the Indenture Trustee, the Master Servicer, any Subservicer,
any other servicer, any administrator, any provider of credit support, including
the Derivative Contract Counterparties, any owner of the Certificates, or any of
their Affiliates being a "Party in Interest" (within the meaning of ERISA) or
Disqualified Person (within the meaning of the Code) with respect to such Holder
or Beneficial Owner that is a Plan.

     As provided in the Indenture and subject to certain limitations therein set
forth, the transfer of this Bond may be registered on the Bond Register of the
Issuer. Upon surrender for registration of transfer of, or presentation of a
written instrument of transfer for, this Bond at the office or agency designated
by the Issuer pursuant to the Indenture, accompanied by proper instruments of
assignment in form satisfactory to the Indenture Trustee, one or more new Bonds
of any authorized denominations and of a like aggregate initial Bond Principal
Balance, will be issued to the designated transferee or transferees.

     Prior to the due presentment for registration of transfer of this Bond, the
Issuer, the Indenture Trustee and any agent of the Issuer or the Indenture
Trustee may treat the Person in whose name this Bond is registered as the owner
of such Bond (i) on the applicable Record Date for the purpose of making
payments and interest of such Bond, and (ii) on any other date for all other
purposes whatsoever, as the owner hereof, whether or not this Bond be overdue,
and neither the Issuer, the Indenture Trustee nor any such agent of the Issuer
or the Indenture Trustee shall be affected by notice to the contrary.

     The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Bonds under the Indenture at any
time by the Issuer and the Holders of a majority of all Bonds at the time
outstanding. The Indenture also contains provisions permitting the Holders of
Bonds representing specified percentages of the aggregate Bond Principal Balance
of the Bonds on behalf of the Holders of all the Bonds, to waive any past
Default under the Indenture and its consequences.

                                      A-2-4

<PAGE>

Any such waiver by the Holder, at the time of the giving thereof, of this Bond
(or any one or more Predecessor Bonds) shall bind the Holder of every Bond
issued upon the registration of transfer hereof or in exchange hereof or in lieu
hereof, whether or not notation of such consent or waiver is made upon such
Bond. The Indenture also permits the Issuer and the Indenture Trustee to amend
or waive certain terms and conditions set forth in the Indenture without the
consent of the Holders of the Bonds issued thereunder.

     Initially, the Bonds will be registered in the name of Cede & Co. as
nominee of DTC, acting in its capacity as the Depository for the Bonds. The
Bonds will be delivered by the clearing agency in denominations as provided in
the Indenture and subject to certain limitations therein set forth. The Bonds
are exchangeable for a like aggregate initial Bond Principal Balance of Bonds of
different authorized denominations, as requested by the Holder surrendering
same.

     Unless the Certificate of Authentication hereon has been executed by the
Indenture Trustee by manual signature, this Bond shall not be entitled to any
benefit under the Indenture, or be valid or obligatory for any purpose.

     AS PROVIDED IN THE INDENTURE, THIS BOND AND THE INDENTURE CREATING THIS
BOND SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF THE
STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED THEREIN.

                                      A-2-5

<PAGE>

     IN WITNESS WHEREOF, the Issuer has caused this instrument to be duly
executed by Wilmington Trust Company, not in its individual capacity but solely
as Owner Trustee.

Dated:  October 30, 2001

                                       IMPAC CMB TRUST SERIES 2001-3

                                       BY:  WILMINGTON TRUST COMPANY, not in
                                            its individual capacity but solely
                                            in its capacity as Owner Trustee

                                       By:  ____________________________________
                                            Authorized Signatory

                INDENTURE TRUSTEE'S CERTIFICATE OF AUTHENTICATION

This is one of the Class [M-1][M-2][B] Bonds referred to in the within-mentioned
Indenture.

BANKERS TRUST COMPANY OF CALIFORNIA, N.A., as Indenture Trustee

By:__________________________________________
            Authorized Signatory

                                      A-2-6

<PAGE>

                                  ABBREVIATIONS
                                  -------------

     The following abbreviations, when used in the inscription on the face of
the Bond, shall be construed as though they were written out in full according
to applicable laws or regulations:

         TEN COM     -- as tenants in common
         TEN ENT     -- as tenants by the entireties
         JT TEN      -- as joint tenants with right of survivorship and not as
                        tenants in common
UNIF GIFT MIN ACT    -- __________ Custodian

                        ____________________________
                             (Cust)             (Minor)

                        under Uniform Gifts to Minor Act
                        ____________________________
                                                 (State)

     Additional abbreviations may also be used though not in the above list.

                                      A-2-7

<PAGE>

                                   ASSIGNMENT

  FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto

          PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF
                                                     ASSIGNEE:

     ______________________________________________________________________

     ______________________________________________________________________

     ______________________________________________________________________
  (Please print or typewrite name and address, including zip code, of assignee)

_______________________________________________________________________________
the within Bond and all rights thereunder, and hereby irrevocably constitutes
and appoints ________________________ attorney to transfer said Bond on the
books kept for registration thereof, with full power of substitution in the
premises.

Dated:_____________________              _______________________________________

Signature Guaranteed by ________________________________________________________

     NOTICE: The signature(s) to this assignment must correspond with the name
as it appears upon the face of the within Bond in every particular, without
alteration or enlargement or any change whatsoever. Signature(s) must be
guaranteed by a commercial bank or by a member firm of the New York Stock
Exchange or another national securities exchange. Notarized or witnessed
signatures are not acceptable.

                                      A-2-8

<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                             (provided upon request)

                                       B-1

<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                                        _________________, 2000

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2001-3

                    Re:  Indenture dated as of October 30, 2001, between Impac
                         CMB Trust Series 2001-3 And Bankers Trust Company of
                         California, N.A.
                         ------------------------------------------------------

Ladies and Gentlemen:

          In accordance with Section 2.03(a) of the above-captioned Indenture,
and Section 2.1(b)(i)-(v) of the Mortgage Loan Sale and Contribution Agreement,
dated as of October 30, 2001 between Impac Mortgage Holdings, Inc. (formerly
known as Imperial Credit Mortgage Holdings, Inc.) and Impac Funding Corporation
(formerly known as ICI Funding Corporation) (the "MLSCA"; and together with the
Indenture, the "Agreements"), the undersigned, as Indenture 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 exception report
attached 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 been 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) and (v) of the definition or description of "Mortgage
Loan Schedule" is correct.

          The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the above-referenced Agreements. The Indenture Trustee makes no
representation that any documents specified in clause (v) of Section 2.1 (b) of
the MLSCA should be included in any Mortgage File. The Indenture 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 Indenture Trustee.

                                       C-1

<PAGE>

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.

                                               BANKERS TRUST COMPANY OF
                                                    CALIFORNIA, N.A.,
                                               as Indenture Trustee

                                               By:____________________________
                                                   Name:
                                                   Title:

                                       C-2

<PAGE>

                                    EXHIBIT D

                           FORM OF FINAL CERTIFICATION

                                                        ______________, 200__

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2001-3

          Re:  Indenture, dated as of October 30, 2001, between Impac CMB Trust
               Series 2001-3 and Bankers Trust Company of California, N.A.
               ----------------------------------------------------------------

Ladies and Gentlemen:

          In accordance with Section 2.03(b) of the above-captioned Indenture,
and Section 2.1(b) of the Mortgage Loan Sale and Contribution Agreement, dated
as of October 30, 2001, between Impac Mortgage Holdings, Inc. (formerly known as
Imperial Credit Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly
known as ICI Funding Corporation) (the "MLSCA"; and together with the Indenture,
the "Agreements"), the undersigned, as Indenture 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 exception report attached hereto) it
has received the documents set forth in Section 2.1 (b) of the MLSCA.

          The Indenture Trustee has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Agreements. The Indenture Trustee makes no representation that
any documents specified in clause (v) of Section 2.1 (b) should be included in
any Mortgage File. The Indenture 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 indenture Trustee.

          Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Indenture.

                                                 BANKERS TRUST COMPANY OF
                                                 CALIFORNIA, N.A.,
                                                 as Indenture Trustee

                                       D-1

<PAGE>

                                                  By:___________________________
                                                      Name:
                                                      Title:

                                       D-2

<PAGE>

                                    EXHIBIT E

                              DERIVATIVE CONTRACTS

                                       E-1

<PAGE>

                                    EXHIBIT F

                        SPECIAL CERTIFICATE CAP CONTRACT

                                       F-1

<PAGE>

                                    EXHIBIT G

                                 ADDITION NOTICE

                                                          November ___, 2001
Bankers Trust Company of California, N.A.
1761 East St. Andrew Place
Santa Ana, California 92705-4934

     RE:  Indenture, dated as of October 30, 2001, between Impac CMB Trust
          Series 2001-3, a Delaware business trust, as Issuer (the "Issuer"),
          and Bankers Trust Company of California, N.A., a national banking
          association, as Indenture Trustee (the "Indenture Trustee"), relating
          to IMH Assets Corp., Collateralized Asset-Backed Bonds, Series 2001-3
          Subsequent Transfer
          ---------------------------------------------------------------------

Ladies and Gentlemen:

          Pursuant to Section 2.05 of the Indenture, Issuer has designated
Subsequent Mortgage Loans to be transfered to the Indenture Trustee on November
___, 2001, with an approximate aggregate principal balance of
[$_________________]. Capitalized terms not otherwise defined herein have the
meaning set forth in the Indenture.

          Please acknowledge your receipt of this notice by countersigning the
enclosed copy in the space indicated below and returning it to the attention of
the undersigned.

                                             Very truly yours,

                                             IMPAC CMB TRUST SERIES 2001-3, as
                                             Issuer
                                             Wilmington Trust Company, not
                                             in its individual capacity but
                                             solely as Owner Trustee

                                             By:____________________________
                                                 Name: James P. Lawler
                                                 Title: Vice President

                                       G-1

<PAGE>

ACKNOWLEDGED AND AGREED:

BANKERS TRUST COMPANY OF CALIFORNIA, N.A.

By:_______________________________________
   Name:
   Title:

                                       G-2

<PAGE>

                                    EXHIBIT H

                         SUBSEQUENT TRANSFER INSTRUMENT
                             (Provided Upon Request)

                                       H-1

<PAGE>

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