Document:

Exhibit 10.3 KV Extension 2-4-05

Exhibit
10.3

February
4, 2005

Kettle
Valley USA LLC 

___________________________

___________________________

Equis II
Corporation

c/o Equis
Financial Group

200 Nyala
Farms Road

Westport,
Connecticut 06880

EFG/Kettle
Development LLC 

c/o Equis
Financial Group

200 Nyala
Farms Road

Westport,
Connecticut 06880

Gentlemen:

Reference
is made to a certain Equity Purchase Agreement (the “Purchase Agreement”) among
Kettle Valley USA LLC (“KVUSA”), Equis II Corporation (“Equis II” and together
with KVUSA, the “Buyers”), AFG Investment Trust C (“Trust C”) and AFG Investment
Trust D (“Trust D” and, together with Trust C, the “Sellers”), and AFG/Kettle
Development LLC (the “Company”).

By
signing below, each of the Sellers and each of the Buyers agrees that Sections
9.1 (b) 9.1 (e) and 9.1 (f) of the Purchase Agreement are amended to extend (i)
the outside Closing Date (ii) the date by which KVUSA can terminate as a result
of a breach by the Sellers or a Material Adverse Event and (iii)
the date by which the condition set forth in 8.2(vii) shall have been satisfied
to March 15, 2005 (instead of February 15, 2005). As so amended, Sections 9.1
(b), 9.1 (e) and 9.1(f) are hereby amended to read as follows: 

“9.1. Termination.
This
Agreement may be terminated and the transaction  contemplated
hereby may be abandoned at any time prior to the Closing, as  follows:

     * *
*

(b)
by
either of the Buyers or either of the Sellers if the Closing shall not have
occurred on or before March 15, 2005 (provided that the right to terminate this
Agreement under this Section
9.1(b)
shall not be available to any party hereto whose failure to perform or comply
with any covenant, condition or obligation under this Agreement has been the
cause of, or resulted in, the failure of the transactions to be consummated on
or before such date);”

     * *
*

(e) by
KVUSA if (i) prior to the Closing Date, or on March 15, 2005, there shall have
been a material Breach of any of the representations, warranties, covenants or
agreements on the part of the Company or the Sellers contained in this Agreement
which cannot be or has not been cured within the earlier of (x) twenty (20) days
after notice thereof to the Sellers or (y) March 15, 2004, or (ii) a Material
Adverse Event shall have occurred and is continuing on the earlier of (x) the
Closing Date or (y) March 15, 2004;

 

* *
*

(f) by
KVUSA if the condition set forth in 8.2(vii) has not been satisfied or waived
prior to March 15, 2005...”

 

Except as
amended hereby, the Purchase Agreement is hereby ratified and confirmed in all
respects and shall remain in full force and effect. 

Please
indicate your consent to this amendment by signing this letter in the space
provided below and returning it to the undersigned. 

Very
truly yours, 

AFG
INVESTMENT TRUST C 

LIQUIDATING
TRUST

AFG
INVESTMENT TRUST D 

LIQUIDATING
TRUST

By:
WILMINGTON TRUST COMPANY,

As
Liquidating Trustee 

By:
_____________________________

Print
Name: ______________________

Title:____________________________

Agreed
to: 

KETTLE
VALLEY USA LLC 

By:______________________________

Print
Name:_______________________

Title:____________________________

EQUIS II
CORPORATION

By:______________________________

Print
Name:_______________________

Title:____________________________

EFG/KETTLE
DEVELOPMENT LLC 

By:______________________________,
as Manager

Print
Name:_______________________

Title:_____________________________Exhibit 10.4 KV Entension 3-14-05

Exhibit
10.4

March 14,
2005

Kettle
Valley USA LLC 

c/o
Lauren Holmes

13900
Hagood Road

Alpharetta,
Ga. 30004

Equis II
Corporation

c/o Equis
Financial Group

200 Nyala
Farms Road

Westport,
Connecticut 06880

EFG/Kettle
Development LLC 

c/o Equis
Financial Group

200 Nyala
Farms Road

Westport,
Connecticut 06880

Gentlemen/Ladies:

Reference
is made to a certain Equity Purchase Agreement, as amended on February 4, 2005
(the “Purchase Agreement”) among Kettle Valley USA LLC (“KVUSA”), Equis II
Corporation (“Equis II” and together with KVUSA, the “Buyers”), AFG Investment
Trust C (“Trust C”) and AFG Investment Trust D (“Trust D” and, together with
Trust C, the “Sellers”), and AFG/Kettle Development LLC (the
“Company”).

By
signing below, each of the Sellers and each of the Buyers agree
that:

(i) Section
8.2 (ix) of the Purchase Agreement, requiring the Sellers to obtain “tail”
insurance in form and substance reasonably satisfactory to KVUSA,as a condition
to Buyer’s obligation to close, is hereby deleted in its entirety;
and

(ii). Section
9.1(h), permitting termination by either Seller in the event that such Seller
“makes a determination that the cost of obtaining the ‘tail’ insurance described
in Section 8.2(ix) is unreasonable”, is hereby deleted in its
entirety.

Further,
by signing below, each of the Sellers and each of the Buyers agrees that Section
Sections 9.1 (b) 9.1 (e) and 9.1 (f) of the Purchase Agreement are amended to
extend (i) the outside Closing Date (ii) the date by which KVUSA can terminate
as a result of a breach by the Sellers or a Material Adverse Event and (iii)
the date by which the condition set forth in 8.2(vii) shall have been satisfied
to May 15, 2005 (instead of March 15, 2005). As so amended, Sections 9.1 (b),
9.1 (e) and 9.1(f) are hereby amended to read as follows: 

“9.1. Termination.
This
Agreement may be terminated and the transaction  contemplated
hereby may be abandoned at any time prior to the Closing, as  follows:

     * *
*

(b)
by
either of the Buyers or either of the Sellers if the Closing shall not have
occurred on or before May 15, 2005 (provided that the right to terminate this
Agreement under this Section
9.1(b)
shall not be available to any party hereto whose failure to perform or comply
with any covenant, condition or obligation under this Agreement has been the
cause of, or resulted in, the failure of the transactions to be consummated on
or before such date);”

     * *
*

(e) by
KVUSA if (i) prior to the Closing Date, or on May 15, 2005, there shall have
been a material Breach of any of the representations, warranties, covenants or
agreements on the part of the Company or the Sellers contained in this Agreement
which cannot be or has not been cured within the earlier of (x) twenty (20) days
after notice thereof to the Sellers or (y) May 15, 2004, or (ii) a Material
Adverse Event shall have occurred and is continuing on the earlier of (x) the
Closing Date or (y) May 15, 2004;

 

* *
*

(f) by
KVUSA if the condition set forth in 8.2(vii) has not been satisfied or waived
prior to May 15, 2005...”

 

Except as
amended hereby, the Purchase Agreement is hereby ratified and confirmed in all
respects and shall remain in full force and effect. 

Please
indicate your consent to this amendment by signing this letter in the space
provided below and returning it to the undersigned. 

Very
truly yours, 

AFG
INVESTMENT TRUST C 

LIQUIDATING
TRUST

AFG
INVESTMENT TRUST D 

LIQUIDATING
TRUST

By:
WILMINGTON TRUST COMPANY,

As
Liquidating Trustee 

By:
_____________________________

Print
Name: ______________________

Title:____________________________

Agreed
to: 

KETTLE
VALLEY USA LLC 

By:______________________________

Print
Name:_______________________

Title:____________________________

EQUIS II
CORPORATION

By:______________________________

Print
Name:_______________________

Title:____________________________

EFG/KETTLE
DEVELOPMENT LLC 

By:______________________________,
as Manager

Print
Name:_______________________

Title:_____________________________IMPAC CMB TRUST SERIES 2005-2

                                     Issuer

                                       and

                             WELLS FARGO BANK, N.A.

                                Indenture Trustee

                             ______________________

                                    INDENTURE

                            Dated as of March 3, 2005

                             ______________________

                        COLLATERALIZED ASSET-BACKED BONDS

                             ______________________

<PAGE>

                                TABLE OF CONTENTS
                                -----------------

<TABLE>
<CAPTION>
SECTION                                                                                                        PAGE
-------                                                                                                        ----
<S>                                                                                                              <C>
ARTICLE I
Definitions.......................................................................................................2
         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...................................5
         Section 2.04         Acceptance of Derivative Contracts by Indenture Trustee.............................6
         Section 2.05         [Reserved]..........................................................................6
         Section 2.06         [Reserved]..........................................................................6

ARTICLE III
Covenants.........................................................................................................7
         Section 3.01         Collection of Payments with respect to the Mortgage Loans...........................7
         Section 3.02         Maintenance of Office or Agency.....................................................7
         Section 3.03         Money for Payments To Be Held in Trust; Paying Agent................................7
         Section 3.04         Existence...........................................................................8
         Section 3.05         Payment of Principal and Interest...................................................9
         Section 3.06         Protection of Trust Estate.........................................................13
         Section 3.07         Opinions as to Trust Estate........................................................13
         Section 3.08         Performance of Obligations.........................................................14
         Section 3.09         Negative Covenants.................................................................14
         Section 3.10         Annual Statement as to Compliance..................................................15
         Section 3.11         [Reserved].........................................................................15
         Section 3.12         Representations and Warranties Concerning the Mortgage Loans.......................15
         Section 3.13         Amendments to Servicing Agreement..................................................16
         Section 3.14         Master Servicer as Agent and Bailee of the Indenture Trustee.......................16
         Section 3.15         Investment Company Act.............................................................16
         Section 3.16         Issuer May Consolidate, etc........................................................16
         Section 3.17         Successor or Transferee............................................................18
         Section 3.18         No Other Business..................................................................18
         Section 3.19         No Borrowing.......................................................................18
         Section 3.20         Guarantees, Loans, Advances and Other Liabilities..................................18
         Section 3.21         Capital Expenditures...............................................................18
         Section 3.22         Determination of Bond Interest Rate................................................18
         Section 3.23         Restricted Payments................................................................19
         Section 3.24         Notice of Events of Default........................................................19
         Section 3.25         Further Instruments and Acts.......................................................19

                                       i
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
         Section 3.26         Statements to Bondholders..........................................................19
         Section 3.27         [Reserved].........................................................................19
         Section 3.28         [Reserved].........................................................................19
         Section 3.29         Certain Representations Regarding the Trust Estate.................................19
         Section 3.30         Guaranty Agreement; Payments Under the Guaranty Agreement..........................21
         Section 3.31         [Reserved].........................................................................21
         Section 3.32         Replacement Derivative Contracts...................................................21
         Section 3.33         [Reserved].........................................................................21
         Section 3.34         Allocation of Realized Losses......................................................21
         Section 3.35         [Reserved].........................................................................22
         Section 3.36         [Reserved].........................................................................22

ARTICLE IV
The Bonds; Satisfaction and Discharge of Indenture...............................................................23
         Section 4.01         The Bonds..........................................................................23
         Section 4.02         Registration of and Limitations on Transfer and Exchange of Bonds; Appointment of
                              Bond Registrar and Certificate Registrar...........................................23
         Section 4.03         Mutilated, Destroyed, Lost or Stolen Bonds.........................................24
         Section 4.04         Persons Deemed Owners..............................................................25
         Section 4.05         Cancellation.......................................................................25
         Section 4.06         Book-Entry Bonds...................................................................25
         Section 4.07         Notices to Depository..............................................................26
         Section 4.08         Definitive Bonds...................................................................26
         Section 4.09         Tax Treatment......................................................................27
         Section 4.10         Satisfaction and Discharge of Indenture............................................27
         Section 4.11         Application of Trust Money.........................................................28
         Section 4.12         Repayment of Monies Held by Paying Agent...........................................28
         Section 4.13         Temporary Bonds....................................................................28
         Section 4.14         Representation Regarding ERISA.....................................................29

ARTICLE V
Default and Remedies.............................................................................................30
         Section 5.01         Events of Default..................................................................30
         Section 5.02         Acceleration of Maturity; Rescission and Annulment.................................30
         Section 5.03         Collection of Indebtedness and Suits for Enforcement by Indenture Trustee..........31
         Section 5.04         Remedies; Priorities...............................................................33
         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
         Section 5.10         Delay or Omission Not a Waiver.....................................................37
         Section 5.11         Control By Bondholders.............................................................37
         Section 5.12         Waiver of Past Defaults............................................................38

                                       ii
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
         Section 5.13         Undertaking for Costs..............................................................38
         Section 5.14         Waiver of Stay or Extension Laws...................................................39
         Section 5.15         Sale of Trust Estate...............................................................39
         Section 5.16         Action on Bonds....................................................................41
         Section 5.17         Performance and Enforcement of Certain Obligations.................................41

ARTICLE VI
The Indenture Trustee............................................................................................42
         Section 6.01         Duties of Indenture Trustee........................................................42
         Section 6.02         Rights of Indenture Trustee........................................................43
         Section 6.03         Individual Rights of Indenture Trustee.............................................44
         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..............................................46
         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...................................48
         Section 6.13         Representations and Warranties.....................................................48
         Section 6.14         Directions to Indenture Trustee....................................................48
         Section 6.15         The Agents.........................................................................48
         Section 6.16         Execution of Derivative Contracts..................................................49

ARTICLE VII
Bondholders' Lists and Reports...................................................................................50
         Section 7.01         Issuer To Furnish Indenture Trustee Names and Addresses of Bondholders.............50
         Section 7.02         Preservation of Information; Communications to Bondholders.........................50
         Section 7.03         Reports of Issuer..................................................................50
         Section 7.04         Reports by Indenture Trustee.......................................................51
         Section 7.05         Statements to Bondholders..........................................................51

ARTICLE VIII
Accounts, Disbursements and Releases.............................................................................54
         Section 8.01         Collection of Money................................................................54
         Section 8.02         Trust Accounts.....................................................................54
         Section 8.03         Officer's Certificate..............................................................54
         Section 8.04         Termination Upon Distribution to Bondholders.......................................55
         Section 8.05         Release of Trust Estate............................................................55
         Section 8.06         Surrender of Bonds Upon Final Payment..............................................55
         Section 8.07         Optional Redemption of the Bonds...................................................55

ARTICLE IX
Supplemental Indentures..........................................................................................57

                                      iii
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
<S>                                                                                                              <C>
         Section 9.01         Supplemental Indentures Without Consent of Bondholders.............................57
         Section 9.02         Supplemental Indentures With Consent of Bondholders................................58
         Section 9.03         Execution of Supplemental Indentures...............................................60
         Section 9.04         Effect of Supplemental Indenture...................................................60
         Section 9.05         Conformity with Trust Indenture Act................................................60
         Section 9.06         Reference in Bonds to Supplemental Indentures......................................60

ARTICLE X
Miscellaneous....................................................................................................61
         Section 10.01        Compliance Certificates and Opinions, etc..........................................61
         Section 10.02        Form of Documents Delivered to Indenture Trustee...................................62
         Section 10.03        Acts of Bondholders................................................................63
         Section 10.04        Notices etc., to Indenture Trustee, Issuer, Seller and Rating
                              Agencies...........................................................................63
         Section 10.05        Notices to Bondholders; Waiver.....................................................64
         Section 10.06        Conflict with Trust Indenture Act..................................................65
         Section 10.07        Effect of Headings.................................................................65
         Section 10.08        Successors and Assigns.............................................................65
         Section 10.09        Separability.......................................................................65
         Section 10.10        Legal Holidays.....................................................................65
         Section 10.11        GOVERNING LAW......................................................................65
         Section 10.12        Counterparts.......................................................................65
         Section 10.13        Recording of Indenture.............................................................65
         Section 10.14        Issuer Obligation..................................................................66
         Section 10.15        No Petition........................................................................66
         Section 10.16        Inspection.........................................................................66
</TABLE>

EXHIBITS

         Exhibit A-1.......--        Form of Class [_]-A-[_] Bonds
         Exhibit A-2.......--        Form of Class [_]-M-[_] Bonds
         Exhibit A-3.......--        Form of 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         --        [Reserved]
         Exhibit G         --        [Reserved]
         Exhibit H         --        [Reserved]
         Exhibit I-1       --        [Reserved]
         Exhibit I-2       --        [Reserved]
         Exhibit J         --        [Reserved]
         Appendix A        --        Definitions

                                       iv
<PAGE>

                  This Indenture, dated as of March 3, 2005, is entered into
between Impac CMB Trust Series 2005-2, a Delaware statutory trust, as Issuer
(the "Issuer"), and Wells Fargo Bank, 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 2005-2 (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
rights under (i) the Mortgage Loan Purchase Agreement as assigned to the Issuer,
with respect to the Mortgage Loans, (ii) the Servicing Agreement and any
Subservicing Agreements, (iii) any title, hazard and primary insurance policies
with respect to the Mortgaged Properties and (iv) the rights with respect to the
Derivative Contracts and the Guaranty Agreement as assigned to the Issuer; and
(e) all present and future claims, demands, causes and choses 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;

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

                  (vi) any agreement, instrument or statute defined or referred
         to herein or in any instrument or certificate delivered in connection
         herewith means such agreement,

                                       2
<PAGE>

         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, Class M 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, A-2 and A-3 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, A-2 and A-3 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 offices at the date of such Bonds.

         The Indenture Trustee shall upon Issuer Request authenticate and
deliver the Class 1-A-1, Class 1-A-2, Class 1-A-IO, Class 1-M-1, Class 1-M-2,
Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B, Class 2-A-1,
Class 2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds for original issue in
an aggregate initial principal amount of $1,317,823,000. The Class 1-A-1 Bonds
shall be issued in an aggregate initial principal amount of $831,600,000, the
Class 1-A-2 Bonds shall be issued in an aggregate initial principal amount of
$92,400,000, the Class 1-M-1 Bonds shall be issued in an aggregate initial
principal amount of $120,000,000, the Class 1-M-2 Bonds shall be issued in an
aggregate initial principal amount of $59,400,000, the Class 1-M-3 Bonds shall
be issued in an aggregate initial principal amount of $28,200,000, the Class
1-M-4 Bonds shall be issued in an aggregate initial principal amount of
$20,400,000, the Class 1-M-5 Bonds shall be issued in an aggregate initial
principal amount of $21,000,000, the Class 1-M-6 Bonds shall be issued in an
aggregate initial principal amount of $12,000,000, the Class 1-B Bonds shall be
issued in an aggregate initial principal amount of $15,000,000, the Class 2-A-1
Bonds shall be issued in an aggregate initial principal amount of $37,462,000,
the Class 2-A-2 Bonds shall be issued in an aggregate initial principal amount
of $39,576,000, the Class 2-M-1 Bonds shall be issued in an aggregate initial
principal amount of $7,553,000, the Class 2-M-2 Bonds shall be issued in an
aggregate initial principal amount of $11,480,000 and the Class 2-B Bonds shall
be issued in an aggregate initial principal amount of $21,752,000.

         The Class 1-A-IO Bonds will not have a Bond Principal Balance and will
not be entitled to payments of principal. The Class 1-A-IO Bonds will accrue
interest on the related Notional Amount. With respect to the Class 1-A-IO Bonds
immediately prior to the related Payment Date, the Notional Amount for the Class
1-A-IO Bonds will be $1,200,000,000 for the April

                                       4
<PAGE>

2005 Payment Date, $1,140,000,000 for the May 2005 Payment Date, $997,500,000
for the June 2005 Payment Date, $798,000,000 for the July 2005 Payment Date,
$598,500,000 for the August 2005 Payment Date, $418,950,000 for the September
2005 Payment Date, $418,950,000 for the October 2005 Payment Date, $418,950,000
for the November 2005 Payment Date and $418,950,000 for the December 2005
Payment Date.

         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 or Notional Amounts 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
Custodian as agent for 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
Mortgage Loan Purchase Agreement with respect to the Mortgage Loans, 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 Mortgage Loans, (or, with respect to any Eligible
Substitute Mortgage Loan, within 5 days after the receipt by the Custodian as
agent for the Indenture Trustee thereof and, with respect to any documents
received beyond 45 days after the Closing Date, promptly thereafter), the
Custodian as agent for 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, the Indenture
Trustee and the Master Servicer an Initial Certification in the form annexed to
the Custodial Agreement as Exhibit One. In conducting such review, the Indenture
Trustee will ascertain whether all required documents described in Section
2.1(b) of the Mortgage Loan Purchase Agreement, with respect to the 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 in subclause (b)(vii) of such section, the Custodian's
obligations shall extend only to documents actually delivered pursuant to such
subclause). In performing any such review, the Custodian 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 Custodian as agent for
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 Custodian as agent for 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. To the extent the

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Custodian as agent for the Indenture Trustee has not received a Mortgage File
with respect to any of the Mortgage Loans by the Closing Date, the Custodian as
agent for the Indenture Trustee shall not require the deposit of cash into the
Payment Account or any other account to cover the amount of that Mortgage Loan
and shall solely treat such Mortgage Loan as if it were in breach of a
representation or warranty; provided that the aggregate Stated Principal Balance
of such Mortgage Loans does not exceed 1% of the Cut-off Date Balance.

         (b) No later than 180 days after the Closing Date, (with respect to the
Mortgage Loans), the Custodian as agent for 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 and the Indenture
Trustee, a Final Certification in the form annexed to the Custodial Agreement as
Exhibit Two. In conducting such review, the Custodian as agent for the Indenture
Trustee will ascertain whether an original of each document described in
subclauses (b)(ii)-(iv) of Section 2.1 of the Mortgage Loan Purchase Agreement
with respect to the 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 Custodian as agent for 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 Custodian as agent for the Indenture Trustee shall promptly notify the
Seller.

         (c) Upon deposit of the Repurchase Price in the Payment Account, the
Custodian as agent for 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 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 Custodian as agent for the Indenture Trustee shall amend
the applicable Mortgage Loan Schedule to reflect such repurchase and shall
promptly notify the Master Servicer, the Indenture Trustee and the Rating
Agencies of such amendment.

         Section 2.04 ACCEPTANCE OF DERIVATIVE CONTRACTS BY INDENTURE TRUSTEE.
The Indenture Trustee acknowledges receipt of the Derivative Contracts 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 in accordance with their terms.

         Section 2.05 [RESERVED].

         Section 2.06 [RESERVED].

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<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 may be 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 Sixth and Marquette, Minneapolis,
Minnesota 55479-0113, Attention: Corporate Trust Services IMH Assets Corp.,
2005-2, 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 statutory 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

                                       8
<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 below, to
the extent provided therein, the Available Funds and the Guaranteed Amount for
such Payment Date.

         (b) On each Payment Date, the Group 1 Available Funds and the
Guaranteed Amount, if any, for such Payment Date shall be distributed in the
following order of priority, in each case to the extent of the Group 1 Available
Funds and the Guaranteed Amount remaining for such Payment Date:

                  first, concurrently, to the Holders of the Class 1-A-1, Class
         1-A-2 and Class 1-A-IO Bonds, the related Accrued Bond Interest for
         such Classes for such Payment Date; and

                  second, sequentially, to the Holders of the Class 1-M-1, Class
         1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B
         Bonds, any Accrued Bond Interest for such Classes for such Payment
         Date.

         (c) On each Payment Date, the Holders of the Group 1 Bonds (other than
the Class 1-A-IO Bonds) shall be entitled to receive payments in respect of
principal equal the related Principal Distribution Amount for that Payment Date,
allocated on a pro rata basis, based on the Bond Principal Balances thereof, in
reduction of the Bond Principal Balances thereof, until the Bond Principal
Balances thereof have been reduced to zero.

         (d) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 1 Loans shall be paid as follows:

                  (i) to the Holders of the Group 1 Bonds (other than the Class
         1-A-IO Bonds), pro rata, in an amount equal to any related
         Overcollateralization Increase Amount, payable to such Holders as part
         of the Principal Distribution Amount as described under Section 3.05(c)
         above;

                  (ii) sequentially, to the Holders of the Class 1-A-1, Class
         1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
         Class 1-M-6 and Class 1-B Bonds in an amount equal to the Allocated
         Realized Loss Amount for such Bonds;

                  (iii) sequentially, to the Class 2-A-1, Class 2-A-2, Class
         2-M-1, Class 2-M-2 and Class 2-B Bonds, any Cross-Collateralized Loss
         Payments as provided in Section 3.05(h);

                  (iv) first, concurrently, to the Holders of the Class 1-A-1
         Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of
         the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
         Class 1-M-6 and Class 1-B Bonds, in that order, any

                                       9
<PAGE>

         Unpaid Interest Shortfall for such Bonds on such Payment Date, to the
         extent not previously reimbursed;

                  (v) first, concurrently, to the Holders of the Class 1-A-1
         Bonds and Class 1-A-2 Bonds and second, sequentially, to the Holders of
         the Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
         Class 1-M-6 and Class 1-B Bonds, in that order, any related Basis Risk
         Shortfall Carry-Forward Amount for such Bonds on such Payment Date, to
         the extent not covered by the Derivative Contracts;

                  (vi) sequentially to the Holders of the Class 2-A-1, Class
         2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds, in each case, in
         respect of the Allocated Realized Loss Amounts;

                  (vii) to the Indenture Trustee for amounts owed the Indenture
         Trustee hereunder remaining unpaid; and

                  (viii) any remaining amounts 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 Group 2 Available Funds for such Payment
Date shall be distributed in each case to the extent of the Group 2 Available
Funds remaining for such Payment Date, sequentially, to the Holders of the Class
2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds, in that order,
the related Accrued Bond Interest for such Classes for such Payment Date.

         (f) On each Payment Date, the Holders of the Group 2 Bonds shall be
entitled to receive payments in respect of principal equal the related Principal
Distribution Amount for that Payment Date, allocated on a pro rata basis, based
on the Bond Principal Balances thereof, in reduction of the Bond Principal
Balances thereof, until the Bond Principal Balances thereof have been reduced to
zero.

         (g) On each Payment Date, any Net Monthly Excess Cashflow in respect of
the Group 2 Loans shall be paid as follows:

                  (i) to the Holders of the Group 2 Bonds, pro rata, in an
         amount equal to any related Overcollateralization Increase Amount,
         payable to such Holders as part of the Principal Distribution Amount as
         described under Section 3.05(f) above;

                  (ii) sequentially, to the Holders of the Class 2-A-1, Class
         2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds in an amount equal
         to the Allocated Realized Loss Amount for such Bonds;

                  (iii) sequentially, to the Holders of the Class 1-A-1, Class
         1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
         Class 1-M-6 and Class 1-B Bonds, any Cross-Collateralized Loss Payments
         as provided in Section 3.05(h) below;

                                       10
<PAGE>

                  (iv) sequentially, to the Holders of the Class 2-A-1, Class
         2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds, in that order, any
         Unpaid Interest Shortfall for such Bonds on such Payment Date, to the
         extent not previously reimbursed;

                  (v) sequentially, to the Holders of the Class 2-A-1, Class
         2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds, in that order, any
         related Basis Risk Shortfall Carry-Forward Amount for such Bonds on
         such Payment Date, to the extent not covered by the Derivative
         Contracts;

                  (vi) sequentially, to the Holders of the Class 1-A-1, Class
         1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5,
         Class 1-M-6 and Class 1-B Bonds, in each case, in respect of the
         Allocated Realized Loss Amounts;

                  (vii) to the Indenture Trustee for amounts owed the Indenture
         Trustee hereunder remaining unpaid; and

                  (viii) 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.

         (h) On each Payment Date, Crossable Excess from each Loan Group may be
available to cover Crossable Losses on Mortgage Loans in the non-related Loan
Group if on such Payment Date one Loan Group has Crossable Excess and one Loan
Group has Crossable Losses. In such instance, payments shall be made from the
Loan Group with Crossable Excess to the Loan Group with Crossable Losses, up to
the amount of such Crossable Losses.

         (i) With respect to the Group 1 Derivative Contracts and on each
Payment Date, the Group 1 Net Derivative Contract Payment Amount with respect to
such Payment Date shall be allocated to the Group 1 Bonds (other than the Class
1-A-IO Bonds) in the following order of priority, in each case to the extent of
amounts available:

                  (i) to the Holders of the Class 1-A-1 Bonds and Class 1-A-2
         Bonds, pro rata, any related Basis Risk Shortfall Carry-Forward Amount
         for such Payment Date;

                  (ii) sequentially, to the Class 1-M-1, Class 1-M-2, Class
         1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B Bonds any
         related Basis Risk Shortfall Carry-Forward Amount for such Payment
         Date;

                  (iii) on or after the Payment Date in April 2006, any
         remaining amounts shall be included in the Net Monthly Excess Cashflow
         for the Group 1 Loans, and shall be used as described under Section
         3.05(d) above; and

                  (iv) provided the Derivative Contracts have not been subject
         to early termination, any remaining amounts to the Holders of the
         Certificates.

         (j) With respect to the Group 2 Derivative Contracts and on each
Payment Date, the Group 2 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:

                                       11
<PAGE>

                  (i) sequentially, to the Holders of the Class 2-A-1, Class
         2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds any related Basis
         Risk Shortfall Carry-Forward Amount for such Payment Date;

                  (ii) on or after the Payment Date in April 2006, any remaining
         amounts shall be included in the Net Monthly Excess Cashflow for the
         Group 2 Loans, and shall be used as described under Section 3.05(g)
         above; and

                  (iii) provided the Derivative Contracts have not been subject
         to early termination, any remaining amounts to the Holders of the
         Certificates.

         (k) 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.

         (l) 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
Certificateholders.

         (m) 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.

         (n) The principal of each Bond (other than the Class 1-A-IO Bonds)
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, A-2 and A-3 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 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

                                       12
<PAGE>

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.

         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

                                       13
<PAGE>

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 2006, 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.

         (d) The Issuer may retain an administrator and may enter into contracts
with other Persons for the performance of the Issuer's obligations hereunder,
and performance of such obligations by such Persons shall be deemed to be
performance of such obligations by the Issuer.

         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;

                                       14
<PAGE>

                  (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 Purchase 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, by March 1 of each year commencing with the calendar
year 2006, 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 the
         previous calendar 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 [RESERVED].

         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 the Mortgage Loan
Purchase Agreement concerning the Seller and the Initial Mortgage Loans 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 Purchase 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.

                                       15
<PAGE>

         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
bailee 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 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, the
         Indenture Trustee and the Derivative Contract Counterparty, the payment
         to the Certificate Paying Agent of all amounts due to the
         Certificateholders, 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;

                                       16
<PAGE>

                  (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, the Derivative
         Contract Counterparty 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 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

                                       17
<PAGE>

         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.

         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.

         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 (other than the Class 1-A-IO
Bonds) for the following Accrual

                                       18
<PAGE>

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 (other than the Class 1-A-IO
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 make available on the
Indenture Trustee's website, www.ctslink.com, to each Bondholder and
Certificateholder the most recent statement prepared by the Master Servicer
pursuant to Section 4.01 of the Servicing Agreement.

         Section 3.27 [RESERVED].

         Section 3.28 [Reserved].

         Section 3.29 CERTAIN REPRESENTATIONS REGARDING THE TRUST ESTATE.

         (a) With respect to that portion of the Collateral described in clauses
(a) through (f) 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, as trustee for the Bondholders, which
         security interest is prior to all other liens, and is enforceable as
         such as against creditors of and purchasers from the Issuer.

                                       19
<PAGE>

                  (ii) The Collateral constitutes "deposit accounts" or
         "instruments," as applicable, 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 clause
(g), 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, as trustee for the Bondholders, 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 "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) 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.

         (c) With respect to any Collateral in which a security interest may be
perfected by filing, 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 such 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 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 all Collateral granted to the Indenture Trustee hereunder
in which a security interest may be perfected by filing. Any financing statement
that is filed in connection with this Section 3.29 shall contain a statement
that a

                                       20
<PAGE>

purchase or security interest in any collateral described therein will violate
the rights of the secured party named in such financing statement.

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

         Section 3.30 GUARANTY AGREEMENT; PAYMENTS UNDER THE GUARANTY AGREEMENT.
On the Closing Date, the Guaranty Agreement shall be assigned to the Indenture
Trustee on behalf of the Trust. The Indenture Trustee shall enforce the Guaranty
Agreement in accordance with its terms. On each Determination Date, the
Indenture Trustee shall calculate the Guaranteed Amount, if any, and shall make
any claim on behalf of the Issuer under the Guaranty Agreement at least two
Business Days prior to the related Payment Date, for payment to the Indenture
Trustee of the amount of any such claim no later than the Business Day prior to
the next Payment Date. Upon receipt of such Guaranteed Amount in accordance with
the terms of the Guaranty Agreement, such payment shall be deposited by the
Indenture Trustee into the Payment Account for distribution to the Class 1-A-IO
Bondholders pursuant to Section 3.05 hereof. On each Payment Date, any payments
received by the Indenture Trustee in respect of the Guaranty Agreement shall be
paid to the Holders of the Class 1-A-IO Bonds.

         Section 3.31 [Reserved].

         Section 3.32 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 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 3.33 [RESERVED].

         Section 3.34 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 Group 1 Loans is less than the aggregate Bond Principal Balances of the
Group 1 Bonds due to Realized Losses on the Group 1 Loans, the Bond Principal
Balances of the of the Class 1-B, Class 1-M-6, Class 1-M-5, Class 1-M-4, Class
1-M-3, Class 1-M-2, Class 1-M-1, Class 1-A-2 and Class 1-A-1 Bonds, in that
order, shall be reduced, until the Bond Principal Balance thereof has been
reduced to zero.

                                       21
<PAGE>

On each Payment Date following the application of all amounts distributable on
such date, to the extent the aggregate Stated Principal Balance of the Group 2
Loans is less than the aggregate Bond Principal Balances of the Group 2 Bonds
due to Realized Losses on the Group 2 Loans, the Bond Principal Balances of the
of the Class 2-B, Class 2-M-2, Class 2-M-1, Class 2-A-2 and Class 2-A-1 Bonds,
in that order, shall be reduced, until the Bond Principal Balance thereof has
been reduced to zero. All Realized Losses allocated to a Class of Bonds will be
allocated in proportion to the Percentage Interests evidenced thereby.

         Section 3.35 [RESERVED].

         Section 3.36 [RESERVED].

                                       22
<PAGE>

                                   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 or Notional Amounts 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.

                                       23
<PAGE>

         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

                                       24
<PAGE>

to the extent of any loss, damage, cost or expense incurred by the Issuer or the
Indenture Trustee in connection therewith.

         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:

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<PAGE>

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

                  (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

                                       26
<PAGE>

relying on, such instructions. Upon the issuance of Definitive Bonds, the
Indenture Trustee shall recognize the Holders of the Definitive Bonds as
Bondholders.

         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,
3.17, 3.19 and 3.20, (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), (vi) the
right of the Derivative Contract Counterparty to receive the related Net
Derivative Fee and (vii) 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

                                       27
<PAGE>

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
firm certifying that the amounts 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, and

                  (B) 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 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 4.13 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 Sixth Street and Marquette Avenue, Minneapolis, Minnesota 55479,
without charge to the Holder. Upon surrender for cancellation of any one or
more

                                       28
<PAGE>

temporary Bonds, the Issuer shall execute and the Indenture Trustee shall
authenticate and make available for delivery, in exchange 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 4.14 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 Plan Assets or (2) (A) the acquisition, holding and transfer 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, any Underwriter, 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 Counterparty, 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 and (B) the Bonds
are rated investment grade or better and such person believes that the Bonds are
properly treated as indebtedness without substantial equity features for
purposes of the Department of Labor regulation 29 C.F.R. ss. 2510.3-101, and
agrees to so treat the Bonds. Alternatively, regardless of the rating of the
Bonds, such person may provide the Indenture Trustee and the Owner Trustee with
an opinion of counsel, which opinion of counsel will not be at the expense of
the Issuer, the Seller, any Underwriter, the Owner Trustee, the Indenture
Trustee, the Master Servicer or any successor servicer which opines that the
acquisition, holding and transfer of such Bond or interest therein is
permissible under applicable law, will not constitute or result in a non-exempt
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Issuer, the Seller, the Depositor, any Underwriter, the Owner
Trustee, the Indenture Trustee, the Master Servicer or any successor servicer to
any obligation in addition to those undertaken in the Indenture.

                                       29
<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 the
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, the Holders of the Bonds representing
not less than a majority of the aggregate Bond Principal Balance of the Bonds
(other than the Class 1-A-IO Bonds) and not less than a majority of the
aggregate Notional Amount of the Class 1-A-IO 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;

                           (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

                           (C)      all amounts owed to the Derivative Contract
                                    Counterparty;

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<PAGE>

                  (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.

         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 directed in writing by the Holders of a majority of
the aggregate Bond Principal Balances of the Bonds, to 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, as directed in writing by the
Holders of a majority of the aggregate Bond Principal Balances of the Bonds,

                                       31
<PAGE>

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 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,

                                       32
<PAGE>

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.

         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, and shall, at the written direction of
the Holders of a majority of the aggregate Bond Principal Balances of the Bonds,
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 of the Bonds and 50% of the aggregate Notional Amount of
the Class 1-A-IO Bonds, (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 such 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
applicable 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 of the Bonds and a
majority of the aggregate Notional Amount of the Class 1-A-IO Bonds. 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

                                       33
<PAGE>

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
         with respect to the Group 1 Loans 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 Derivative Contract Counterparty, any amounts
         owed under the Derivative Contracts, other than any Additional
         Derivative Contract Counterparty Payment;

                  THIRD: to the Group 1 Bondholders for amounts due and unpaid
         on the Bonds (including Unpaid Interest Shortfalls but not including
         any Basis Risk Shortfall Carry-Forward Amounts) with respect to
         interest, first, concurrently, to the Class 1-A-1, Class 1-A-2 and
         Class 1-A-IO Bonds and second, sequentially, to the Class 1-M-1, Class
         1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B
         Bonds according to the amounts due and payable on the Bonds for
         interest;

                  FOURTH: to Group 1 Bondholders for amounts due and unpaid on
         the Bonds (other than the Class 1-A-IO Bonds) with respect to
         principal, and to each Group 1 Bondholder, pro rata, without preference
         or priority of any kind, according to the amounts due and payable on
         such Bonds for principal, until the Bond Principal Balance of each such
         Class is reduced to zero;

                  FIFTH: to the Group 1 Bondholders (other than the Holders of
         the Class 1-A-IO Bonds), first, concurrently, to the Class 1-A-1 Bonds
         and Class 1-A-2 Bonds, and second, sequentially, to the Class 1-M-1,
         Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and
         Class 1-B Bonds the amount of any related Allocated Realized Loss
         Amount not previously paid;

                  SIXTH: to Group 1 the Bondholders for amounts due and unpaid
         on the Bonds with respect to any related Unpaid Interest Shortfalls,
         first, concurrently, to the Class 1-A-1 Bonds and Class 1-A-2 Bonds and
         second, sequentially, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class
         1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B Bonds, according to the
         amounts due and payable on the Bonds with respect thereto, from amounts
         available in the Trust Estate for the Bondholders;

                  SEVENTH: to the Group 1 Bondholders for amounts due and unpaid
         on the Bonds with respect to any related Basis Risk Shortfall
         Carry-Forward Amounts, first, concurrently, to the Class 1-A-1 Bonds
         and Class 1-A-2 Bonds and second, sequentially, Class 1-M-1, Class
         1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B
         Bonds, according to the amounts due and payable on the Bonds with
         respect thereto, from amounts available in the Trust Estate for the
         Bondholders;

                  EIGHTH: to the Derivative Contract Counterparty, any
         Additional Derivative Contract Counterparty Payment; and

                                       34
<PAGE>

                  NINTH: 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.

         (c) If the Indenture Trustee collects any money or property with
respect to the Group 2 Loans 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 Derivative Contract Counterparty, any amounts
         owed under the Derivative Contracts, other than any Additional
         Derivative Contract Counterparty Payment;

                  THIRD: to the Group 2 Bondholders for amounts due and unpaid
         on the Bonds (including Unpaid Interest Shortfalls but not including
         any Basis Risk Shortfall Carry-Forward Amounts) with respect to
         interest, first, concurrently, to the Class 2-A-1 Bonds and Class 2-A-2
         Bonds and second, sequentially, to the Class 2-M-1, Class 2-M-2 and
         Class 2-B Bonds according to the amounts due and payable on the Bonds
         for interest;

                  FOURTH: to Group 2 Bondholders for amounts due and unpaid on
         the Bonds with respect to principal, and to each Group 2 Bondholder,
         pro rata, without preference or priority of any kind, according to the
         amounts due and payable on such Bonds for principal, until the Bond
         Principal Balance of each such Class is reduced to zero;

                  FIFTH: to the Group 2 Bondholders, first, concurrently, to the
         Class 2-A-1 Bonds and Class 2-A-2 Bonds, and second, sequentially, to
         the Class 2-M-1, Class 2-M-2 and Class 2-B Bonds the amount of any
         related Allocated Realized Loss Amount not previously paid;

                  SIXTH: to the Group 2 Bondholders for amounts due and unpaid
         on the Bonds with respect to any related Unpaid Interest Shortfalls,
         first, concurrently, to the Class 2-A-1 Bonds and Class 2-A-2 Bonds and
         second, sequentially, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds,
         according to the amounts due and payable on the Bonds with respect
         thereto, from amounts available in the Trust Estate for the
         Bondholders;

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

                  EIGHTH: to the Derivative Contract Counterparty, any
         Additional Derivative Contract Counterparty Payment; and

                  NINTH: 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.

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<PAGE>

         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 (for which purpose the Class 1-A-IO
         Bonds will be deemed to have an aggregate Bond Principal Balance equal
         to 5% of the aggregate Bond Principal Balance of the other Classes of
         Bonds) have made a written request to the Indenture Trustee to
         institute such 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 and a
         majority of the aggregate Notional Amount of the Class 1-A-IO 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

                                       36
<PAGE>

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 or Notional Amounts 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 interest and, with respect to all of the Bonds other than
the Class 1-A-IO Bonds, of principal, 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 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 CONTROL BY BONDHOLDERS. The Holders of a majority of the
aggregate Bond Principal Balances of the Bonds (other than the Class 1-A-IO
Bonds) and a majority of the aggregate Notional Amount of the Class 1-A-IO Bonds
shall have the right to direct the time, method and place of conducting any
Proceeding for any remedy available to the Indenture Trustee with respect to the
Bonds or exercising any trust or power conferred on the Indenture Trustee;
provided that:

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<PAGE>

                           (i) such direction shall not be in conflict with any
         rule of law or with this Indenture;

                           (ii) any direction to the Indenture Trustee to sell
         or liquidate the Trust Estate shall be by Holders of Bonds representing
         not less than 100% of the Bond Principal Balances of the Bonds (for
         which purpose the Class 1-A-IO Bonds will be deemed to have a Bond
         Principal Balance equal to 5% of the aggregate Bond Principal Balance
         of the other Classes of Bonds); and

                           (iii) the Indenture Trustee may take any other action
         deemed proper by the Indenture Trustee that is not inconsistent with
         such direction of the Holders of Bonds representing a majority of the
         Bond Principal Balances or Notional Amounts of the Bonds.

Notwithstanding the rights of Bondholders set forth in this Section 5.11 the
Indenture Trustee need not take any action that it determines might involve it
in liability.

         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 or Notional Amounts 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 (for which purpose the Class 1-A-IO Bonds will
be deemed to have a Bond Principal Balance equal to 5% of the aggregate Bond
Principal Balance of the other Classes of Bonds) or (c) any suit instituted by
any Bondholder for

                                       38
<PAGE>

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 any such law, and covenants that it shall not
hinder, delay or impede the execution of any power herein granted 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
         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) the Holders
         of Bonds representing at least 100% of the Bond Principal Balances of
         the Bonds (for which purpose the Class 1-A-IO Bonds will be deemed to
         have a Bond Principal Balance equal to 5% of the aggregate Bond
         Principal Balance of the other Classes of 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 (for which purpose the Class 1-A-IO Bonds will
be deemed to have a Bond Principal Balance equal to 5% of the aggregate Bond
Principal Balance of the other Classes of

                                       39
<PAGE>

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 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 as a result of
         such Sale in accordance with Section 5.04(b) hereof 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.

                                       40
<PAGE>

         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 Purchase Agreement and the Servicing Agreement, and to exercise
any and all rights, remedies, powers and privileges lawfully available to the
Issuer under or in connection with the Mortgage Loan Purchase 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 Purchase 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 (for which purpose the Class 1-A-IO Bonds will be deemed
to have a Bond Principal Balance equal to 5% of the aggregate Bond Principal
Balance of the other Classes of 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 Purchase 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 Purchase Agreement and the Servicing Agreement, as the
case may be, and any right of the Issuer to take such action shall not be
suspended.

                                       41
<PAGE>

                                   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

                                       42
<PAGE>

believe that repayment of such funds 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.

         (g) The Indenture Trustee or its Affiliates are permitted to receive
additional compensation that could be deemed to be in the Indenture Trustee's
economic self-interest for (i) serving as investment adviser, administrator,
shareholder servicing agent, custodian or sub-custodian with respect to certain
of the Eligible Investments, (ii) using Affiliates to effect transactions in
certain Eligible Investments and (iii) effecting transactions in certain
Eligible

                                       43
<PAGE>

Investments. Such compensation shall not be considered an amount that
is reimbursable or payable to the Indenture Trustee pursuant to Sections
3.05(d), 3.05(g), 5.04(b), 6.07 or 8.02(c) hereunder or (iii) out of Available
Funds.

         (h) In order to comply with its duties under the Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism Act of 2001 ("U.S.A. Patriot Act"), the Indenture Trustee
shall obtain and verify certain information and documentation from the other
party to this Indenture, including, but not limited to, such party's name,
address, and other identifying information.

         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.

         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 Indenture Trustee shall
receive the Indenture Trustee's Fee in accordance with Section 8.02(c) hereof on
each Payment Date as compensation for its services. On each Payment Date, the
Indenture Trustee shall pay itself from amounts available therefore on deposit
in the Payment Account for such Payment Date all

                                       44
<PAGE>

amounts owing to the Indenture Trustee hereunder (including amounts owing from
the Issuer for indemnification and otherwise) and such amounts shall be paid
solely as provided and in the priority described in Section 3.05(d)(vii),
Section 3.05(g)(vii), Section 5.04(b) and Section 8.02(c) hereof and Appendix A
hereto. 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.

         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.

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         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
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 and no notice to
the Bondholders of the appointment of any co-trustee or separate trustee shall
be required under Section 6.08 hereof.

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<PAGE>

         (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.

         (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.

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<PAGE>

         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 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, A-2 and A-3 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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<PAGE>

         Section 6.16 EXECUTION OF DERIVATIVE CONTRACTS. The Issuer hereby
directs the Indenture Trustee to enter into and execute the Derivative Contracts
and make all representations and warranties contained therein on behalf of the
Trust. The Indenture Trustee hereby acknowledges receipt by it of the Derivative
Contracts. Upon receipt thereof from the counterparty under the Derivative
Contracts, the Indenture Trustee shall deposit into the Payment Account an
amount equal to all amounts actually received under the Derivative Contracts and
not previously deposited into the Payment Account.

                                       49
<PAGE>

                                  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 TIA ss. 312(c).

         Section 7.03 REPORTS OF ISSUER. (a) Subject to Section 4.06 of the
Servicing Agreement (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.

                                       50
<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 January 30 beginning with March 31, 2005, 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 https://www.ctslink.com or deliver at the recipient's option
to each Bondholder and each Certificateholder, the Derivative Contract
Counterparty, 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 Group 1 Available Funds, Group 2 Available Funds and
         Net Monthly Excess Cash Flow, with respect to the Group 1 Loans and
         Group 2 Loans, 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 1-A-1,
         Class 1-A-2, Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4, Class
         1-M-5, Class 1-M-6, Class 1-B, Class 2-A-1, Class 2-A-2, Class 2-M-1,
         Class 2-M-2 and Class 2-B Bonds applied to reduce the Bond Principal
         Balance thereof, and (b) the aggregate amount included therein
         representing Principal Prepayments;

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

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

                  (vi) 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;

                  (vii) the number and the aggregate Stated Principal Balance of
         the Mortgage Loans as of the end of the related Due Period, determined
         in the aggregate and separately for Loan Group 1 and Loan Group 2;

                                       51
<PAGE>

                  (viii) the aggregate Bond Principal Balance of each Class of
         Bonds (other than the Class 1-A-IO 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 Class 1-A-1, Class 1-A-2, Class 1-M-1, Class
         1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6, Class 1-B,
         Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2 and Class 2-B Bonds
         after giving effect to the distribution of principal on such Payment
         Date;

                  (ix) 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, determined in the aggregate
         and separately for Loan Group 1 and Loan Group 2;

                  (x) the Group 1 Net Derivative Contract Payment Amount and
         Group 2 Net Derivative Contract Payment Amount;

                  (xi) the Overcollateralization Increase Amount with respect to
         each Loan Group, Overcollateralization Release Amount,
         Overcollateralization Target Amount and Overcollateralized Amount, if
         any, in each case as the end of the related Payment Date, in each case
         as determined separately for each Loan Group;

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

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

                  (xiv) the number and aggregate Stated Principal Balance of
         Mortgage Loans repurchased pursuant to the Mortgage Loan Purchase
         Agreement for the related Payment Date and cumulatively since the
         Closing Date determined in the aggregate and separately for Loan Group
         1 and Loan Group 2;

                  (xv) the book value of any REO Property;

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

                  (xvii) 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.

         Items (iii) and (iv) 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) and (iv) with respect to the Bonds for such calendar year.

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<PAGE>

         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 Group 1 Net Derivative Contract Payment
Amount and Group 2 Net Derivative Contract Payment Amount furnished to the
Indenture Trustee pursuant to the Derivative Contracts in its preparation of its
Statement to Bondholders.

         The Indenture Trustee will make the monthly statements provided for in
this section (and, at its option, any additional files containing the same
information in an alternative format) available each month to Bondholders, other
parties to this Agreement and any other interested parties via the Indenture
Trustee's website. The Indenture Trustee's website shall initially be located at
www.ctslink.com. Assistance in using the website can be obtained by calling the
Trustee's customer service desk at (301) 815-6600. Parties that are unable to
use the website are entitled to have a paper copy mailed to them via first class
mail by calling the customer service desk and indicating such. With the consent
of the Director, the Indenture Trustee may have the right to change the way the
monthly statements are distributed in order to make such distribution more
convenient and/or more accessible to the above parties and the Indenture Trustee
shall provide timely and adequate notification to all above parties regarding
any such changes. The Indenture Trustee shall be entitled to rely on but shall
not be responsible for the content or accuracy of any information provided by
third parties for purposes of preparing the monthly statement, and may affix
thereto any disclaimer it deems appropriate in its reasonable discretion
(without suggesting liability on the part of any other party hereto).

                                       53
<PAGE>

                                  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 and the Derivative
Contract Counterparty, the Payment Account as provided in Section 3.01 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 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 from
amounts on deposit in the Payment Account the Indenture Trustee's Fee for such
Payment Date then shall pay the Derivative Contract Counterparty the Group 1 Net
Derivative Fee and Group 2 Net Derivative Fee, in each case excluding any
Additional Derivative Contract Counterparty Payment, and then shall pay the
Owner Trustee the Owner Trustee's Fee, 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, 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.
From the Business Day prior to the Payment Date until distributed, such funds
shall be held uninvested and any income, gain or other benefit with respect
thereto shall be for the benefit of the Indenture Trustee.

         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

                                       54
<PAGE>

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 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, except as otherwise
provided in clause (a).

         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 Majority
Certificateholder shall have the option to redeem the Group 1 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 Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the aggregate
Group 1 Cut-off Date Balance and (ii) the Payment Date occurring in March 2015.
The Majority Certificateholder shall have the option to redeem the Group 2 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 Group 2
Loans as of the end of the prior Due Period is less than or equal to 20% of the
aggregate Group 2 Cut-off Date Balance and (ii) the

                                       55
<PAGE>

Payment Date occurring in March 2015. The aggregate redemption price for each
Group of Bonds will be equal to the unpaid Bond Principal Balance of such 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
related Unpaid Interest Shortfall 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) and plus an amount
equal to any amounts owing to the Derivative Contract Counterparty under the
Derivative Contracts.

         (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 for all amounts payable to
it under this Indenture 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.

                                       56
<PAGE>

                                   ARTICLE IX

                             Supplemental Indentures

         Section 9.01 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF BONDHOLDERS.
(a) Without the consent of the Holders of any Bonds and 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

                                       57
<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 may be 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 but
with 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 or Notional
Amounts 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;

                                       58
<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.

         No supplemental indenture adverse to the interests of the Derivative
Contract Counterparty shall be entered into without the Derivative Contract
Counterparty's written consent.

         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.

                                       59
<PAGE>

         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 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.

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<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 Certificate".

                  (6) (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.

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<PAGE>

                  (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 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 or Notional Amounts 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 or Notional Amounts 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 or Notional Amounts 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 or Notional Amounts 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

                                       62
<PAGE>

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.

         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, SELLER 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:

                                       63
<PAGE>

                  (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 to the Issuer addressed to: Impac
         CMB Trust Series 2005-2, 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; or

                  (iii) the Seller by the Indenture Trustee shall be sufficient
         for every purpose hereunder if in writing and mailed, first-class
         postage pre-paid, or personally delivered or telecopied to: Impac
         Mortgage Holdings, Inc., 1401 Dove Street, Newport Beach, California
         92660, Attention: General Counsel.

         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, first-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

                                       64
<PAGE>

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.

         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 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 10.11 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 10.12 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 10.13 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

                                       65
<PAGE>

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 10.14 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 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 10.15 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 10.16 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 2005-2, as
                                            Issuer

                                            Wilmington Trust Company, not in its
                                            individual capacity but solely as
                                            Owner Trustee

                                            By: /s/ Heather L. Williamson
                                                -----------------------------
                                            Name:   Heather L. Williamson
                                            Title:  Financial Services Officer

                                            WELLS FARGO BANK, N.A., as
                                            Indenture Trustee

                                            By: /s/ Sandra Whalen
                                                ---------------------
                                            Name:   Sandra Whalen
                                            Title:  Vice President

<PAGE>

Acknowledged and agreed with respect to Section 2.07 hereof:

IMPAC MORTGAGE HOLDINGS, INC.,
as Seller

By: /s/ Richard J. Johnson
    --------------------------
Name:   Richard J. Johnson
Title:  EVP, CFO

<PAGE>

STATE OF NEW YORK       )
                        ) ss.:
COUNTY OF NEW YORK      )

         On this _____ day of March, 2005, before me personally appeared
______________________ to me known, who being by me duly sworn, did depose and
say, that he is the ____________________ of the Indenture 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>

STATE OF DELAWARE          )
                           ) ss.:
COUNTY OF NEW CASTLE       )

         On this ____ day of March, 2005, before me personally appeared
_______________________ to me known, who being by me duly sworn, did depose and
say, that she is a ____________________________ of the Owner Trustee, one of the
entities 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 CALIFORNIA        )
                           ) ss.:
COUNTY OF ORANGE           )

         On this ____ day of March, 2005, before me personally appeared
_______________________ to me known, who being by me duly sworn, did depose and
say, that he is a ____________________________ of the Seller, one of the
entities 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>

                                   EXHIBIT A-1

                           FORM OF CLASS [_-A-_] 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 2005-2
                        COLLATERALIZED ASSET-BACKED BONDS
                                  CLASS [_-A-_]

<TABLE>
<CAPTION>

<S>                                                                    <C>
AGGREGATE [BOND PRINCIPAL                                              BOND INTEREST
BALANCE] [NOTIONAL AMOUNT]:                                            RATE: [Adjustable Rate] [___%]
$[             ]

INITIAL [BOND PRINCIPAL                                                BOND NO. 1
BALANCE] [NOTIONAL AMOUNT] OF THIS BOND: $[             ]

PERCENTAGE INTEREST: 100%                                              CUSIP NO. [             ]
</TABLE>

         Impac CMB Trust Series 2005-2 (the "Issuer"), a Delaware statutory
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 April 2005
and ending on or before the Payment Date occurring in [_________] (the "Final
Scheduled Payment Date") and to pay] interest on the [Bond Principal
Balance][Notional Amount] 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 2005-2 (the "Bonds"), issued under an
Indenture dated as of March 3, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, 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 "Notional Amount" of this Bond, immediately prior to
the related Payment Date, for the for the April 2005 Payment Date, is
$[________], for the May 2005 Payment Date, $[________], for the June 2005
Payment Date, $[________], for the July 2005 Payment Date, $[________], for the
August 2005 Payment Date, $[________], for the September 2005 Payment Date,
$[________], for the October 2005 Payment Date, $[________], for the November
2005 Payment Date, $[________] and for the December 2005 Payment Date,
$[________].]

                                      A-1-2
<PAGE>

         The [principal of], [and interest on], this Bond [are] [is] 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-_] Bonds as described above, and shall be applied as [between]
interest [and principal] as provided in the Indenture. [In addition, any
payments received by the Indenture Trustee in respect of the Guaranty Agreement
shall be paid to the Holders of this Bond pursuant to Section 3.30 of 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 Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the Payment
Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the sum of the
aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date,
and (ii) the Payment Date occurring in March 2015. The Group 2 Bonds are subject
to redemption in whole, but not in part, by the Majority Certificateholder, on
or after the earlier of (i) the Payment Date on which the aggregate Stated
Principal Balance of the Group 2 Loans as of the end of the prior Due Period is
less than or equal to 20% of the aggregate Stated Principal Balance of the Group
2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in March
2015.

         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 scheduled reductions in the
[principal amount][Notional 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

                                     A-1-3
<PAGE>

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] accrued and unpaid interest [thereon] [on the Notional
Amount] 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 Plan
Assets or (2) (A) the acquisition, holding and transfer 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, 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 and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         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

                                     A-1-4
<PAGE>

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][Notional Amount], 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 with the consent of 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 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][Notional
Amount] 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: March 3, 2005
                                            IMPAC CMB TRUST SERIES 2005-2

                                            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 Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, 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-[_] BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [_-A-_] BONDS [AND
CLASS [_]-M-[_] BONDS] AS DESCRIBED IN THE INDENTURE.

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 2005-2
                        COLLATERALIZED ASSET-BACKED BONDS
                                 CLASS [_]-M-[_]

AGGREGATE BOND PRINCIPAL                         BOND INTEREST
BALANCE:                                         RATE: Adjustable Rate
$[             ]

INITIAL BOND PRINCIPAL                           BOND NO. 1
BALANCE OF THIS BOND: $[             ]

PERCENTAGE INTEREST: 100%                        CUSIP NO. [             ]

         Impac CMB Trust Series 2005-2 (the "Issuer"), a Delaware statutory
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 April 2005 and ending on or before the Payment Date occurring in
[__________] (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 2005-2 (the "Bonds"), issued under an
Indenture dated as of March 3, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, 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-[_] Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-2-2
<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 Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the Payment
Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the sum of the
aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date,
and (ii) the Payment Date occurring in March 2015. The Group 2 Bonds are subject
to redemption in whole, but not in part, by the Majority Certificateholder, on
or after the earlier of (i) the Payment Date on which the aggregate Stated
Principal Balance of the Group 2 Loans as of the end of the prior Due Period is
less than or equal to 20% of the aggregate Stated Principal Balance of the Group
2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in March
2015.

         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 [_]-M-[_] 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-[_] 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.

                                     A-2-3
<PAGE>

         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 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 Plan
Assets or (2) (A) the acquisition, holding and transfer 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, 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 and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         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

                                     A-2-4
<PAGE>

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 with the consent of 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 and Notional Amount 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 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: March 3, 2005
                                            IMPAC CMB TRUST SERIES 2005-2

                                            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 Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, 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 A-3

                           FORM OF CLASS [__]-B BONDS

THIS BOND IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A BONDS AND CLASS M
BONDS AS DESCRIBED IN THE INDENTURE.

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-3-1
<PAGE>

                          IMPAC CMB TRUST SERIES 2005-2
                        COLLATERALIZED ASSET-BACKED BONDS
                                  CLASS [__]-B

AGGREGATE BOND PRINCIPAL                             BOND INTEREST
BALANCE:                                             RATE: [Adjustable Rate]
$[             ]
INITIAL BOND PRINCIPAL                               BOND NO. 1
BALANCE OF THIS BOND: $[             ]
PERCENTAGE INTEREST: 100%                            CUSIP NO. [             ]

         Impac CMB Trust Series 2005-2 (the "Issuer"), a Delaware statutory
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 April 2005 and ending on or before the Payment Date occurring in
[__________] (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 2005-2 (the "Bonds"), issued under an
Indenture dated as of March 3, 2005 (the "Indenture"), between the Issuer and
Wells Fargo Bank, 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
[__]-B Bonds as described above, and shall be applied as between interest and
principal as provided in the Indenture.

                                     A-3-2
<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 Group 1 Bonds are subject to redemption in whole, but not in part,
by the Majority Certificateholder, on or after the earlier of (i) the Payment
Date on which the aggregate Stated Principal Balance of the Group 1 Loans as of
the end of the prior Due Period is less than or equal to 20% of the sum of the
aggregate Stated Principal Balance of the Group 1 Loans as of the Cut-off Date,
and (ii) the Payment Date occurring in March 2015. The Group 2 Bonds are subject
to redemption in whole, but not in part, by the Majority Certificateholder, on
or after the earlier of (i) the Payment Date on which the aggregate Stated
Principal Balance of the Group 2 Loans as of the end of the prior Due Period is
less than or equal to 20% of the aggregate Stated Principal Balance of the Group
2 Loans as of the Cut-off Date and (ii) the Payment Date occurring in March
2015.

         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 4-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.

                                     A-3-3
<PAGE>

         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 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 Plan
Assets or (2) (A) the acquisition, holding and transfer 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, 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 and (B) the Bonds are rated investment grade or better and such person
believes that the Bonds are properly treated as indebtedness without substantial
equity features for purposes of the DOL Regulations, and agrees to so treat the
Bonds. Alternatively, regardless of the rating of the Bonds, such person may
provide the Indenture Trustee and the Owner Trustee with an opinion of counsel,
which opinion of counsel will not be at the expense of the Issuer, the Seller,
any Underwriter, the Owner Trustee, the Indenture Trustee, the Master Servicer
or any successor servicer which opines that the acquisition, holding and
transfer of such Bond or interest therein is permissible under applicable law,
will not constitute or result in a non-exempt prohibited transaction under ERISA
or Section 4975 of the Code and will not subject the Issuer, the Seller, the
Depositor, any Underwriter, the Owner Trustee, the Indenture Trustee, the Master
Servicer or any successor servicer to any obligation in addition to those
undertaken in the Indenture.

         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

                                     A-3-4
<PAGE>

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 with the consent of 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 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-3-5
<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: March 3, 2005
                                            IMPAC CMB TRUST SERIES 2005-2

                                            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 Bonds referred to in the within-mentioned Indenture.

WELLS FARGO BANK, N.A., as Indenture Trustee

By:  _________________________________
         Authorized Signatory

                                     A-3-6
<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-3-7
<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-3-8
<PAGE>

                                    EXHIBIT B

                             MORTGAGE LOAN SCHEDULE

                                (Filed Manually)

                                      B-1
<PAGE>

                                    EXHIBIT C

                          FORM OF INITIAL CERTIFICATION

                                                    _______________, 200_

[Issuer]

[Master Servicer]

Attention:  Impac CMB Trust Series 2005-2

         Re:      Indenture dated as of March 3, 2005, between Impac CMB Trust
                  Series 2005-2 and Wells Fargo Bank, 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 Purchase Agreement,
dated as of March 3, 2005 between Impac Mortgage Holdings, Inc. and Impac
Funding Corporation (the "MLPA"; 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 MLPA 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.

                                                WELLS FARGO BANK, 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 2005-2

         Re:      Indenture, dated as of March 3, 2005, between Impac CMB Trust
                  Series 2005-2 and Wells Fargo Bank, 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 Purchase Agreement, dated as
of March 3, 2005, between Impac Mortgage Holdings, Inc. (formerly known as
Imperial Credit Mortgage Holdings, Inc.) and Impac Funding Corporation (formerly
known as ICI Funding Corporation) (the "MLPA"; 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 MLPA.

                  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.

                                       D-1
<PAGE>

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

                                              WELLS FARGO BANK, N.A.,
                                              as Indenture Trustee

                                              By:______________________________
                                              Name:
                                              Title:

                                      D-2
<PAGE>

                                    EXHIBIT E

                              DERIVATIVE CONTRACTS

                             (Provided Upon Request)

                                       E-1
<PAGE>

                                    EXHIBIT F

                                   [RESERVED]

                                       F-1
<PAGE>

                                    EXHIBIT G

                                   [RESERVED]

                                       G-1
<PAGE>

                                    EXHIBIT H

                                   [RESERVED]

                                      H-1
<PAGE>

                                   EXHIBIT I-1

                                   [RESERVED]

                                       I-1
<PAGE>

                                   EXHIBIT I-2

                                   [RESERVED]

                                      I-2-1
<PAGE>

                                    EXHIBIT J

                                   [RESERVED]

                                       J-1

<PAGE>

                                   APPENDIX A

                                   DEFINITIONS

         ACCRUAL PERIOD: With respect to any Payment Date and each Class of
Bonds (other than the Class 1-A-IO Bonds), the period from the preceding Payment
Date (or in the case of the first Payment Date, from the Closing Date) through
the day preceding such Payment Date. With respect to the Class 1-A-IO Bonds and
any Payment Date, the calendar month preceding the month in which such Payment
Date occurs.

         ACCRUED BOND INTEREST: With respect to any Payment Date and each Class
of Bonds (other than the Class 1-A-IO Bonds), interest accrued during the
related Accrual Period at the then-applicable Bond Interest Rate on the related
Bond Principal Balance thereof immediately prior to such Payment Date, less such
Bonds' Unpaid Interest Shortfall for such Payment Date, plus any Accrued Bond
Interest remaining unpaid from any prior Payment Date with interest thereon at
the related Bond Interest Rate. With respect to any Payment Date and the Class
1-A-IO Bonds, interest accrued during the related Accrual Period at the
then-applicable Bond Interest Rate on the related Notional Amount thereof
immediately prior to such Payment Date. Accrued Bond Interest for each Class of
Bonds (other than the Class 1-A-IO Bonds) shall be calculated on the basis of
the actual number of days in the Accrual Period and a 360-day year. Accrued Bond
Interest for the Class 1-A-IO Bonds shall be calculated on the basis of a
360-day year consisting of twelve 30-day months.

         ADDITIONAL DERIVATIVE CONTRACT COUNTERPARTY PAYMENT: With respect to
any Payment Date, any termination payments payable to the Derivative Contract
Counterparty as a result of a default of the Derivative Contract Counterparty
under the related Derivative Contracts.

         ADJUSTMENT DATE: As to each Mortgage Loan, each date set forth in the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.

         ADVANCE: As to any Mortgage Loan, any advance made by the Master
Servicer pursuant to Section 4.04 of the Servicing Agreement or by a Subservicer
in respect of delinquent Monthly Payments of principal and interest pursuant to
the related Subservicing Agreement.

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

         ALLOCATED REALIZED LOSS AMOUNT: With respect to any Class of Bonds
(other than the Class 1-A-IO Bonds) and any Payment Date, an amount equal to the
sum of any related Realized Loss allocated to reduce the Bond Principal Balance
of that Class of Bonds on that Payment Date and any Allocated Realized Loss
Amount for that Class remaining unpaid from the previous Payment Date, less the
amount of any Subsequent Recoveries added to the Bond Principal Balance of such
Bond.

<PAGE>

         APPRAISED VALUE: The appraised value of a Mortgaged Property based upon
the lesser of (i) the appraisal made at the time of the origination of the
related Mortgage Loan, or (ii) the sale 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 obtained at the time of refinancing.

         ASSIGNMENT OF MORTGAGE: 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, which assignment, notice of transfer or
equivalent instrument may be in the form of one or more blanket assignments
covering Mortgages secured by Mortgaged Properties located in the same county,
if permitted by law.

         AUTHORIZED NEWSPAPER: A newspaper of general circulation in the Borough
of Manhattan, The City of New York, printed in the English language and
customarily published on each Business Day, whether or not published on
Saturdays, Sundays or holidays.

         AUTHORIZED OFFICER: With respect to the Issuer, any officer of the
Owner Trustee who is authorized to act for the Owner Trustee in matters relating
to the Issuer and who is identified on the list of Authorized Officers delivered
by the Owner Trustee to the Indenture Trustee on the Closing Date (as such list
may be modified or supplemented from time to time thereafter).

         AVAILABLE FUNDS: The Group 1 Available Funds or Group 2 Available
Funds, as applicable.

         AVAILABLE FUNDS RATE: On any Payment Date and with respect to the Group
1 Bonds, the per annum rate equal to the product of:

         (i)      (A) the product of:

                           (1) the Group 1 Net WAC Rate; and

                           (2) a fraction equal to

                                    (x) the aggregate Stated Principal Balance
                           of the Group 1 Loans as of the end of the prior Due
                           Period divided by

                                    (y) the aggregate Bond Principal Balance of
                           the Group 1 Bonds immediately prior to such Payment
                           Date, minus

         (B) the product of:

                           (1) the Bond Interest Rate of the Class 1-A-IO Bonds;
                  and

                           (2) a fraction equal to

                                    (x) the applicable Notional Amount divided
                           by

                                       2
<PAGE>

                                    (y) the aggregate Bond Principal Balance of
                           the Group 1 Bonds immediately prior to such Payment
                           Date; and

         (ii)     a fraction equal to (x) 30 divided by (y) the number of days
in the related Accrual Period.

On any Payment Date and for the Group 2 Bonds, the per annum rate equal to the
product of:

         (i)      the product of:

                           (1) the Group 2 Net WAC Rate; and

                           (2) a fraction equal to

                                    (x) the aggregate Stated Principal Balance
                           of the Group 2 Loans as of the end of the prior Due
                           Period divided by

                                    (y) the aggregate Bond Principal Balance of
                           the Group 2 Bonds immediately prior to such Payment
                           Date, and

         (i)      (ii) a fraction equal to (x) 30 divided by (y) the number of
days in the related Accrual Period.

         BANKRUPTCY CODE: The Bankruptcy Code of 1978, as amended.

         BASIC DOCUMENTS: The Trust Agreement, the Certificate of Trust, the
Indenture, the Servicing Agreement, the Mortgage Loan Purchase Agreement, the
Derivative Contracts, the Guaranty Agreement and the other documents and
certificates delivered in connection with any of the above.

         BASIC PRINCIPAL DISTRIBUTION AMOUNT: With respect to any Payment Date
and each Loan Group, the lesser of (a) the excess of (i) the related Available
Funds for such Payment Date over (ii) the aggregate amount of Accrued Bond
Interest for the related Bonds for such Payment Date and (b) the excess of (i)
the related Principal Remittance Amount for such Payment Date over (ii) the
related Overcollateralization Release Amount, if any, for such Payment Date.

         BASIS RISK SHORTFALL: With respect to any Class of Bonds (other than
the Class 1-A-IO Bonds), on each Payment Date where clause (iii) of the
definition of "Bond Interest Rate" is less than clauses (i) or (ii) of the
definition of "Bond Interest Rate," the excess, if any, of (x) the aggregate
Accrued Bond Interest thereon for such Payment Date calculated pursuant to the
lesser of clause (i) or (ii) of the definition of Bond Interest Rate over (y)
interest accrued on the related Mortgage Loans at the related Available Funds
Rate.

         BASIS RISK SHORTFALL CARRY-FORWARD AMOUNT: With respect to each Class
of Bonds (other than the Class 1-A-IO Bonds) and any Payment Date, as determined
separately for each Class of Bonds, an amount equal to the aggregate amount of
Basis Risk Shortfall for such Bonds on such Payment Date, plus any unpaid Basis
Risk Shortfall for such Class of Bonds from prior Payment Dates, plus interest
thereon at the Bond Interest Rate for such Payment

                                       3
<PAGE>

Date, to the extent previously unreimbursed by the related Net Monthly Excess
Cashflow or the related Derivative Contracts.

         BENEFICIAL OWNER: With respect to any Bond, the Person who is the
beneficial owner of such Bond as reflected on the books of the Depository or on
the books of a Person maintaining an account with such Depository (directly as a
Depository Participant or indirectly through a Depository Participant, in
accordance with the rules of such Depository).

         BOND: A Class A, Class M or Class B Bond.

         BOND INTEREST RATE: With respect to each Payment Date and (a) each
Class of Bonds (other than the Class 1-A-IO Bonds), a floating rate equal to the
least of (i) One-Month LIBOR plus the related Bond Margin, (ii) the Maximum Bond
Interest Rate and (iii) the related Available Funds Rate with respect to such
Payment Date and (b) the Class 1-A-IO Bonds, (i) for the April 2005 Payment Date
through the December 2005 Payment Date, 1.00% per annum, and (ii) for each
Payment Date thereafter, 0.00% per annum.

         BOND MARGIN: With respect to the Class 1-A-1 Bonds, on any Payment Date
prior to the Step Up Date, 0.260% per annum, and on any Payment Date on and
after the Step Up Date, 0.520% per annum. With respect to the Class 1-A-2 Bonds,
on any Payment Date prior to the Step Up Date, 0.310% per annum, and on any
Payment Date on and after the Step Up Date, 0.620% per annum. With respect to
the Class 1-M-1 Bonds, on any Payment Date prior to the Step Up Date, 0.430% per
annum, and on any Payment Date on and after the Step Up Date, 0.645% per annum.
With respect to the Class 1-M-2 Bonds, on any Payment Date prior to the Step Up
Date, 0.490% per annum, and on any Payment Date on and after the Step Up Date,
0.735% per annum. With respect to the Class 1-M-3 Bonds, on any Payment Date
prior to the Step Up Date, 0.510% per annum, and on any Payment Date on and
after the Step Up Date, 0.765% per annum. With respect to the Class 1-M-4 Bonds,
on any Payment Date prior to the Step Up Date, 0.670% per annum, and on any
Payment Date on and after the Step Up Date, 1.005% per annum. With respect to
the Class 1-M-5 Bonds, on any Payment Date prior to the Step Up Date, 0.730% per
annum, and on any Payment Date on and after the Step Up Date, 1.095% per annum.
With respect to the Class 1-M-6 Bonds, on any Payment Date prior to the Step Up
Date, 0.780% per annum, and on any Payment Date on and after the Step Up Date,
1.170% per annum. With respect to the Class 1-B Bonds, on any Payment Date prior
to the Step Up Date, 1.300% per annum, and on any Payment Date on and after the
Step Up Date, 1.950% per annum. With respect to the Class 2-A-1 Bonds, on any
Payment Date prior to the Step Up Date, 0.300% per annum, and on any Payment
Date on and after the Step Up Date, 0.600% per annum. With respect to the Class
2-A-2 Bonds, on any Payment Date prior to the Step Up Date, 0.400% per annum,
and on any Payment Date on and after the Step Up Date, 0.800% per annum. With
respect to the Class 2-M-1 Bonds, on any Payment Date prior to the Step Up Date,
0.520% per annum, and on any Payment Date on and after the Step Up Date, 0.780%
per annum. With respect to the Class 2-M-2 Bonds, on any Payment Date prior to
the Step Up Date, 0.750% per annum, and on any Payment Date on and after the
Step Up Date, 1.125% per annum. With respect to the Class 2-B Bonds, on any
Payment Date prior to the Step Up Date, 1.650% per annum, and on any Payment
Date on and after the Step Up Date, 2.475% per annum.

                                       4
<PAGE>

         BOND OWNER: The Beneficial Owner of a Bond.

         BOND PRINCIPAL BALANCE: With respect to any Bond (other than the Class
1-A-IO Bonds) as of any date of determination, the initial Bond Principal
Balance as stated on the face thereof, minus all amounts distributed in respect
of principal with respect to such Bond and, in the case of any Bond, the
aggregate amount of any reductions in the Bond Principal Balance thereof deemed
to have occurred in connection with allocations of Realized Losses on all prior
Payment Dates; provided that, the Bond Principal Balance of any Class of Bonds
with the highest payment priority to which Realized Losses have been allocated
shall be increased by the amount of any Subsequent Recoveries on the related
Mortgage Loans not previously allocated, but not by more than the amount of
Realized Losses previously allocated to reduce the Bond Principal Balance of
that Class.

         BOND REGISTER: The register maintained by the Bond Registrar in which
the Bond Registrar shall provide for the registration of Bonds and of transfers
and exchanges of Bonds.

         BOND REGISTRAR: The Indenture Trustee, in its capacity as Bond
Registrar, or any successor to the Indenture Trustee in such capacity.

         BONDHOLDER OR HOLDER: The Person in whose name a Bond is registered in
the Bond Register, except that, any Bond registered in the name of the
Depositor, the Issuer, the Indenture Trustee, the Seller or the Master Servicer
or any Affiliate of any of them shall be deemed not to be a holder or holders,
nor shall any so owned be considered outstanding, for purposes of giving any
request, demand, authorization, direction, notice, consent or waiver under the
Indenture or the Trust Agreement; provided that, in determining whether the
Indenture Trustee shall be protected in relying upon any such request, demand,
authorization, direction, notice, consent or waiver, only Bonds that a
Responsible Officer of the Indenture Trustee or the Owner Trustee actually knows
to be so owned shall be so disregarded. Owners of Bonds that have been pledged
in good faith may be regarded as Holders if the pledgee establishes to the
satisfaction of the Indenture Trustee or the Owner Trustee the pledgee's right
so to act with respect to such Bonds and that the pledgee is not the Issuer, any
other obligor upon the Bonds or any Affiliate of any of the foregoing Persons.

         BONDS: The Class A Bonds, Class M Bonds and Class B Bonds issued and
outstanding at any time pursuant to the Indenture.

         BOOK-ENTRY BONDS: Beneficial interests in the Bonds, ownership and
transfers of which shall be made through book entries by the Depository as
described in Section 4.06 of the Indenture.

         BUSINESS DAY: Any day other than (i) a Saturday or a Sunday or (ii) a
day on which banking institutions in the City of New York, Delaware, California,
Minnesota and Maryland or in the city in which the corporate trust office of the
Indenture Trustee are located, is required or authorized by law to be closed.

         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 evidenced in a

                                       5
<PAGE>

certificate of a Servicing Officer 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 DISTRIBUTION ACCOUNT: The account or accounts created and
maintained pursuant to Section 3.10(c) of the Trust Agreement. The Certificate
Distribution Account shall be an Eligible Account.

         CERTIFICATE PAYING AGENT: The meaning specified in Section 3.10 of the
Trust Agreement.

         CERTIFICATE PERCENTAGE INTEREST: With respect to each Certificate, the
Certificate Percentage Interest stated on the face thereof.

         CERTIFICATE REGISTER: The register maintained by the Certificate
Registrar in which the Certificate Registrar shall provide for the registration
of Certificates and of transfers and exchanges of Certificates.

         CERTIFICATE REGISTRAR: Initially, the Indenture Trustee, in its
capacity as Certificate Registrar, or any successor to the Indenture Trustee in
such capacity.

         CERTIFICATE OF TRUST: The Certificate of Trust filed for the Trust
pursuant to Section 3810(a) of the Statutory Trust Statute.

         CERTIFICATES OR TRUST CERTIFICATES: The Impac CMB Trust Series 2005-2
Trust Certificates, Series 2005-2, evidencing the beneficial ownership interest
in the Issuer and executed by the Owner Trustee in substantially the form set
forth in Exhibit A to the Trust Agreement.

         CERTIFICATEHOLDER OR HOLDER: The Person in whose name a Certificate is
registered in the Certificate Register. Owners of Certificates that have been
pledged in good faith may be regarded as Holders if the pledgee establishes to
the satisfaction of the Indenture Trustee or the Owner Trustee, as the case may
be, the pledgee's right so to act with respect to such Certificates and that the
pledgee is not the Issuer, any other obligor upon the Certificates or any
Affiliate of any of the foregoing Persons.

         CLASS: Any of the Class A Bonds, Class M Bonds or Class B Bonds.

         CLASS A BONDS: The Class 1-A-1, Class 1-A-2, Class 1-A-IO, Class 2-A-1
and Class 2-A-2 Bonds in the form attached as Exhibit A-1 to the Indenture.

         CLASS B BONDS: The Class B Bonds in the form attached as Exhibit A-3 to
the Indenture.

         CLASS M BONDS: The Class 1-M-1, Class 1-M-2, Class 1-M-3, Class 1-M-4,
Class 1-M-5, Class 1-M-6, Class 2-M-1 and Class 2-M-2 Bonds in the form attached
as Exhibit A-2 to the Indenture.

         CMSA IRP: Commercial Mortgage Securities Association Investor Reporting
Package.

         CLOSING DATE: March 3, 2005.

                                       6
<PAGE>

         CODE: The Internal Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.

         COLLATERAL: The meaning specified in the Granting Clause of the
Indenture.

         COLLECTION ACCOUNT: The account or accounts created and maintained
pursuant to Section 3.06(d) of the Servicing Agreement. The Collection Account
shall be an Eligible Account.

         COMMISSION: The Securities and Exchange Commission.

         COMPENSATING INTEREST: With respect to any Payment Date as determined
separately for each Loan Group, the amount of any Prepayment Interest Shortfalls
resulting from prepayments in full during the preceding calendar month on the
related Mortgage Loans, but only to the extent such Prepayment Interest
Shortfalls do not exceed an amount equal to the lesser of (a) one-twelfth of
0.125% of the aggregate Stated Principal Balance of the related Mortgage Loans
immediately preceding such Payment Date and (b) the sum of the Master Servicing
Fee and Subservicing Fee for such Payment Date for the related Mortgage Loans.

         CORPORATE TRUST OFFICE: With respect to the Indenture Trustee,
Certificate Registrar, Certificate Paying Agent and Paying Agent, the principal
corporate trust office of the Indenture Trustee and Bond Registrar at which at
any particular time its corporate trust business shall be administered, which
office at the date of the execution of this instrument is located at (A) for
bond transfer and surrender purposes, Wells Fargo Bank, N.A. Sixth Street and
Marquette Avenue, Minneapolis, Minnesota 55479, Attention: Corporate Trust
Services IMH 2005-2, and for all other purposes, (B) 9062 Old Annapolis Road,
Columbia, Maryland 21045, Attention: Client Manager, IMH Asset Corp., 2005-2.
With respect to the Owner Trustee, the principal corporate trust office of the
Owner Trustee at which at any particular time its corporate trust business shall
be administered, which office at the date of the execution of the Trust
Agreement is located at Wilmington Trust Company, Rodney Square North, 1100
North Market Street, Wilmington, Delaware 19801, Attention: Impac CMB Trust
Series 2005-2.

         CORRECTED MORTGAGE LOAN: Any Multifamily Loan which is no longer a
Specially Serviced Mortgage Loan as a result of the curing of any event of
default under such Specially Serviced Mortgage Loan through a modification,
restructuring or workout negotiated by the Master Servicer, or a Special
Servicer on the Master Servicer's behalf, and evidenced by a signed writing.

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

         CROSS-COLLATERALIZED LOSS PAYMENTS: For any Payment Date and each Loan
Group, the amount, if any, of Crossable Excess from such Loan Group available to
cover Crossable Losses in the other Loan Groups as provided in Section 3.05 of
the Indenture.

         CROSSABLE EXCESS: With respect to Loan Group 1 and Loan Group 2 and any
Payment Date, an amount equal to the related Net Monthly Excess Cashflow
remaining after payments have been made pursuant to Section 3.05(d)(ii) and
Section 3.05(g)(ii) of the Indenture, respectively.

                                       7
<PAGE>

         CROSSABLE LOSSES: With respect to either Loan Group and any Payment
Date, an amount equal to any Realized Losses suffered by any Mortgage Loan in
such Loan Group, to the extent that such Realized Losses have not been covered
by related Net Monthly Excess Cashflow on such Payment Date, and any previously
unreimbursed Realized Losses suffered by any Mortgage Loans in such Loan Group
to the extent such Realized Losses have not been covered by related and
non-related Net Monthly Excess Cashflow on prior Payment Dates.

         CUSTODIAL AGREEMENT: The custodial agreement dated as of March 3, 2005,
among the Indenture Trustee, the Depositor, the Master Servicer and the
Custodian.

         CUSTODIAN: Deutsche Bank National Trust Company.

         CUT-OFF DATE: March 1, 2005.

         CUT-OFF DATE BALANCE: The aggregate Stated Principal Balance of the
Mortgage Loans as of the Cut-off Date.

         CUT-OFF DATE PRINCIPAL BALANCE: With respect to any Mortgage Loan, the
unpaid principal balance thereof as of the Cut-off Date after applying the
principal portion of Monthly Payments due on or before such date, whether or not
received, and without regard to any payments due after such date.

         DEBT SERVICE COVERAGE RATIO: With respect to any Group 2 Loan at any
given time, the ratio of (i) the Net Cash Flow of the related Mortgaged Property
for a twelve-month period to (ii) the annualized scheduled payments on the Group
2 Loan.

         DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a reduction
in the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.

         DEFAULT: Any occurrence which is or with notice or the lapse of time or
both would become an Event of Default.

         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 BONDS: The meaning specified in Section 4.06 of the
Indenture.

         DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be replaced with
an Eligible Substitute Mortgage Loan.

         DEPOSITOR: IMH Assets Corp., a California corporation, or its successor
in interest.

                                       8
<PAGE>

         DEPOSITORY OR DEPOSITORY AGENCY: The Depository Trust Company or a
successor appointed by the Indenture Trustee. Any successor to the Depository
shall be an organization registered as a "clearing agency" pursuant to Section
17A of the Exchange Act and the regulations of the Securities and Exchange
Commission thereunder.

         DEPOSITORY PARTICIPANT: A Person for whom, from time to time, the
Depository effects book-entry transfers and pledges of securities deposited with
the Depository.

         DERIVATIVE CONTRACTS: The Group 1 Derivative Contracts or Group 2
Derivative Contracts, as applicable.

         DERIVATIVE CONTRACT COUNTERPARTY: Bear Stearns Financial Products Inc.

         DETERMINATION DATE: With respect to any Payment Date, the 15th day of
the related month, or if the 15th day of such month is not a Business Day, the
immediately preceding Business Day.

         DUE DATE: With respect to each Mortgage Loan, the day of the month on
which each scheduled Monthly Payment is due.

         DUE PERIOD: With respect to any Payment Date and the Mortgage Loans,
the period commencing on the second day of the month immediately preceding the
month of such Payment 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 such
Payment Date.

         ELIGIBLE ACCOUNT: An account that is any of the following: (i) a
segregated account maintained with a federal or state chartered depository
institution (A) the short-term obligations of which are rated A-1+ or better by
Standard & Poor's and P-1 by Moody's at the time of any deposit therein or (B)
fully insured to the limits established by the FDIC, PROVIDED that any deposits
not so insured shall, to the extent acceptable to each Rating Agency, as
evidenced in writing, be maintained such that (as evidenced by an Opinion of
Counsel delivered to the Indenture Trustee and each Rating Agency) the Indenture
Trustee has a claim with respect to the funds in such account or a perfected
first security interest against any collateral (which shall be limited to
Eligible Investments) securing such funds that is superior to claims of any
other depositors or creditors of the depository institution with which such
account is maintained, (ii) a segregated trust account or accounts maintained
with a federal or state chartered depository institution or trust company
subject to regulations regarding fiduciary funds on deposit similar to Title 12
of the Code of Federal Regulations Section 9.10(b), which, in either case, has
corporate trust powers, acting in its fiduciary capacity, or (iii) in the case
of the Collection Account or Servicing Account, either (A) a trust account or
accounts maintained at the corporate trust department of the Indenture Trustee
or (B) an account or accounts maintained at the corporate trust department of
the Indenture Trustee or the Subservicer (or an affiliate thereof), as long as
their short term debt obligations are rated P-1 by Moody's and A-1+ by Standard
& Poor's or better and their long term debt obligations are rated A2 by Moody's
and AA- by Standard & Poor's or better, (iv) in the case of the Collection
Account and the Payment Account, a trust account or accounts maintained in the
corporate trust division of the Indenture Trustee, or (v) an account or accounts
of a depository institution acceptable to each Rating Agency as evidenced in

                                       9
<PAGE>

writing by each Rating Agency that use of any such account as the Collection
Account or the Payment Account will not reduce the rating assigned to any of the
Securities by such Rating Agency below investment grade.

         ELIGIBLE INVESTMENTS: One or more of the following:

         (i) direct obligations of, and obligations fully guaranteed by, the
United States of America, the Federal Home Mortgage Corporation, the Federal
National Mortgage Association, the Federal Home Loan Banks or any agency or
instrumentality of the United States of America the obligations of which are
backed by the full faith and credit of the United States of America;

         (ii) (A) demand and time deposits in, certificates of deposit of,
banker's acceptances issued by or federal funds sold by any depository
institution or trust company (including the Indenture Trustee or its agent
acting in their respective commercial capacities) incorporated under the laws of
the United States of America or any State thereof and subject to supervision and
examination by federal and/or state authorities, so long as at the time of such
investment or contractual commitment providing for such investment, such
depository institution or trust company has a short term unsecured debt rating
in the highest available rating category of each of the Rating Agencies and
provided that each such investment has an original maturity of no more than 365
days, and (B) any other demand or time deposit or deposit which is fully insured
by the FDIC;

         (iii) repurchase obligations with a term not to exceed 30 days with
respect to any security described in clause (i) above and entered into with a
depository institution or trust company (acting as a principal) rated "A" or
higher by Standard & Poor's and A2 or higher by Moody's; provided, however, that
collateral transferred pursuant to such repurchase obligation must (A) be valued
weekly at current market price plus accrued interest, (B) pursuant to such
valuation, equal, at all times, 105% of the cash transferred by the Indenture
Trustee in exchange for such collateral and (C) be delivered to the Indenture
Trustee or, if the Indenture Trustee is supplying the collateral, an agent for
the Indenture Trustee, in such a manner as to accomplish perfection of a
security interest in the collateral by possession of certificated securities;

         (iv) securities bearing interest or sold at a discount issued by any
corporation incorporated under the laws of the United States of America or any
State thereof which has a long term unsecured debt rating in the highest
available rating category of each of the Rating Agencies at the time of such
investment;

         (v) commercial paper having an original maturity of less than 365 days
and issued by an institution having a short term unsecured debt rating in the
highest available rating category of each of the Rating Agencies at the time of
such investment;

         (vi) a guaranteed investment contract approved by each of the Rating
Agencies and issued by an insurance company or other corporation having a long
term unsecured debt rating in the highest available rating category of each of
the Rating Agencies at the time of such investment;

                                       10
<PAGE>

         (vii) money market funds having ratings in the highest available long
term rating category of each of the Rating Agencies at the time of such
investment; any such money market funds which provide for demand withdrawals
being conclusively deemed to satisfy any maturity requirement for Eligible
Investments set forth in the Indenture, including money market funds of the
Indenture Trustee or any such funds that are managed or advised by the Indenture
Trustee or any Affiliate thereof; and

         (viii) any investment approved in writing by each of the Rating
Agencies.

         The Indenture Trustee may purchase from or sell to itself or an
affiliate, as principal or agent, the Eligible Investments listed above.

         PROVIDED, HOWEVER, that each such instrument shall be acquired in an
arm's length transaction and no such instrument shall be an Eligible 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; PROVIDED FURTHER, HOWEVER, that
each such instrument acquired shall not be acquired at a price in excess of par.

         ELIGIBLE SUBSTITUTE MORTGAGE LOAN: A Mortgage Loan substituted by the
Seller for a Deleted Mortgage Loan which must, on the date of such substitution,
as confirmed in an Officer's Certificate delivered to the Indenture 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 outstanding principal balance of the Deleted Mortgage Loan (the amount of
any shortfall to be deposited by the Seller in the Collection Account in the
month of substitution); (ii) comply with each non-statistical representation and
warranty set forth in Section 3.1(b) of the Mortgage Loan Purchase Agreement as
of the date of substitution; (iii) have a Mortgage Rate no lower than and not
more than 1% per annum higher than the Mortgage Rate of the Deleted Mortgage
Loan as of the date of substitution; (iv) 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; (v) have a remaining term to stated maturity not greater than (and
not more than one year less than) that of the Deleted Mortgage Loan; (vi) not be
30 days or more delinquent; and (vii) be an adjustable-rate first lien mortgage
loan, if being substituted for a Mortgage Loan secured by a first lien on the
related Mortgaged Property.

         ERISA: The Employee Retirement Income Security Act of 1974, as amended.

         EVENT OF DEFAULT: With respect to the Indenture, any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

                                       11
<PAGE>

         (i) a failure by the Issuer to pay (a) Accrued Bond Interest on any
Class of Bonds or the Principal Distribution Amount with respect to a Payment
Date on such Payment Date or (b) the Unpaid Interest Shortfall with respect to
any Class of Bonds, but only, with respect to clause (b), to the extent funds
are available to make such payment as provided in the Indenture; or

         (ii) the failure by the Issuer on the Final Scheduled Payment Date to
reduce the Bond Principal Balance of any of the Class A Bonds, Class M Bonds or
the Class B Bonds to zero; or

         (iii) there occurs a default in the observance or performance of any
covenant or agreement of the Issuer made in the Indenture, or any representation
or warranty of the Issuer made in the Indenture or in any certificate or other
writing delivered pursuant hereto or in connection herewith proving to have been
incorrect in any material respect as of the time when the same shall have been
made, and such default shall continue or not be cured, or the circumstance or
condition in respect of which such representation or warranty was incorrect
shall not have been eliminated or otherwise cured, for a period of 30 days after
there shall have been given, by registered or certified mail, to the Issuer by
the Indenture Trustee or to the Issuer and the Indenture Trustee by the Holders
of at least 25% of the aggregate Bond Principal Balance of the Outstanding Bonds
(for which purpose the Class 1-A-IO Bonds will be deemed to have a Bond
Principal Balance equal to 5% of the aggregate Bond Principal Balance of the
other Classes of Bonds), a written notice specifying such default or incorrect
representation or warranty and requiring it to be remedied and stating that such
notice is a notice of default hereunder; or

         (iv) there occurs the filing of a decree or order for relief by a court
having jurisdiction in the premises in respect of the Issuer or any substantial
part of the Trust Estate in an involuntary case under any applicable federal or
state bankruptcy, insolvency or other similar law now or hereafter in effect, or
appointing a receiver, liquidator, assignee, custodian, trustee, sequestrator or
similar official of the Issuer or for any substantial part of the Trust Estate,
or ordering the winding-up or liquidation of the Issuer's affairs, and such
decree or order shall remain unstayed and in effect for a period of 60
consecutive days; or

         (v) there occurs the commencement by the Issuer of a voluntary case
under any applicable federal or state bankruptcy, insolvency or other similar
law now or hereafter in effect, or the consent by the Issuer to the entry of an
order for relief in an involuntary case under any such law, or the consent by
the Issuer to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator or similar official of the Issuer or
for any substantial part of the assets of the Trust Estate, or the making by the
Issuer of any general assignment for the benefit of creditors, or the failure by
the Issuer generally to pay its debts as such debts become due, or the taking of
any action by the Issuer in furtherance of any of the foregoing.

         EVENT OF SERVICER TERMINATION: With respect to the Servicing Agreement,
a Servicing Default as defined in Section 6.01 of the Servicing Agreement.

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

                                       12
<PAGE>

         EXPENSE FEE RATE: With respect to each Mortgage Loan, the sum of the
Master Servicing Fee Rate, the applicable Subservicing Fee Rate, the Minimum
Spread Rate, the Indenture Trustee's Fee Rate, the Owner Trustee's Fee Rate, the
PMI Insurer Fee Rate, if such Mortgage Loan is a PMI Mortgage Loan, and the
related Net Derivative Fee Rate.

         EXPENSES: The meaning specified in Section 7.02 of the Trust Agreement.

         FANNIE MAE: Fannie Mae (formerly, the Federal National Mortgage
Association), or any successor thereto.

         FDIC: The Federal Deposit Insurance Corporation or any successor
thereto.

         FINAL CERTIFICATION: The final certification delivered by the Custodian
pursuant to Section 2.03(b) of the Indenture in the form attached thereto as
Exhibit D.

         FINAL SCHEDULED PAYMENT DATE: With respect to each Class of Group 1
Bonds and Group 2 Bonds, the Payment Date in April 2035.

         FITCH RATINGS: Fitch, Inc., or its successor in interest.

         FORECLOSURE PROFIT: With respect to a Liquidated Mortgage Loan, the
amount, if any, by which (i) the aggregate of its Net Liquidation Proceeds
exceeds (ii) the related Stated Principal Balance (plus accrued and unpaid
interest thereon at the applicable Mortgage Rate from the date interest was last
paid through the date of receipt of the final Liquidation Proceeds) of such
Liquidated Mortgage Loan immediately prior to the final recovery of its
Liquidation Proceeds.

         FREDDIE MAC: Freddie Mac (formerly, the Federal Home Loan Mortgage
Corporation), or any successor thereto.

         GRANT: Pledge, bargain, sell, warrant, alienate, remise, release,
convey, assign, transfer, create, and grant a lien upon and a security interest
in and right of set-off against, deposit, set over and confirm pursuant to the
Indenture. A Grant of the Collateral or of any other agreement or instrument
shall include all rights, powers and options (but none of the obligations) of
the granting party thereunder, including the immediate and continuing right to
claim for, collect, receive and give receipt for principal and interest payments
in respect of such collateral or other agreement or instrument and all other
moneys payable thereunder, to give and receive notices and other communications,
to make waivers or other agreements, to exercise all rights and options, to
bring proceedings in the name of the granting party or otherwise, and generally
to do and receive anything that the granting party is or may be entitled to do
or receive thereunder or with respect thereto.

         GROSS MARGIN: With respect to any Mortgage Loan, the percentage set
forth as the "Gross Margin" for such Mortgage Loan on the Mortgage Loan
Schedule, as adjusted from time to time in accordance with the terms of the
Servicing Agreement.

         GROUP 1 AVAILABLE FUNDS: For any Payment Date, an amount equal to the
amount received by the Indenture Trustee and available in the Payment Account on
that Payment Date in respect of the Group 1 Loans. The Group 1 Available Funds
will generally be equal to (a) the

                                       13
<PAGE>

sum of (1) the aggregate amount of scheduled payments on the Group 1 Loans
received or advanced that were due during the related Due Period, (2) any
unscheduled payments and receipts on the Group 1 Loans, including mortgagor
prepayments on such Mortgage Loans, the proceeds of any repurchase of the Group
1 Loans by the Master Servicer or Seller, Insurance Proceeds (including amounts
paid under the PMI Insurer Policy), Subsequent Recoveries and Liquidation
Proceeds, received during the related Prepayment Period, in each case net of
amounts reimbursable therefrom to the Indenture Trustee, the Master Servicer and
any subservicer, (3) any Compensating Interest paid by the Master Servicer in
respect of the Group 1 Loans and (4) any prepayment charges related to the Group
1 Loans, and reduced by (b) the sum of (1) Master Servicing Fees, the
Subservicing Fees, the Owner Trustee's Fee, the Indenture Trustee's Fee, the Net
Derivative Fee, if any, and (2) certain amounts owed to the Master Servicer, the
Depositor, the Indenture Trustee and the Owner Trustee in respect of the Group 1
Loans, as provided in the Agreements.

         GROUP 1 BOND: A Class 1-A-1, Class 1-A-2, Class 1-A-IO, Class 1-M-1,
Class 1-M-2, Class 1-M-3, Class 1-M-4, Class 1-M-5, Class 1-M-6 and Class 1-B
Bond.

         GROUP 1 CUT-OFF DATE BALANCE: The sum of the aggregate Stated Principal
Balance of the Group 1 Loans as of the Cut-off Date.

         GROUP 1 DERIVATIVE CONTRACTS: The Confirmation together with the
associated ISDA Master Agreement with respect to the four derivative contracts
between the Seller and the Derivative Contract Counterparty primarily for the
benefit of the Group 1 Bonds and the Certificates, set forth in Exhibit E of the
Indenture.

         GROUP 1 LOAN: A Mortgage Loan in Loan Group 1.

         GROUP 1 NET DERIVATIVE CONTRACT PAYMENT AMOUNT: With respect to any
Payment Date, the amount equal to the excess, if any, of (a) the aggregate
amount payable on that Payment Date to the Issuer from the Derivative Contract
Counterparty pursuant to the Group 1 Derivative Contracts, over (b) the
aggregate amount payable on that Payment Date to the Derivative Contract
Counterparty under the Group 1 Derivative Contracts, in each case as described
in Section 8.02(c) of the Indenture.

         GROUP 1 NET WAC RATE: The weighted average of the Net Mortgage Rates on
the Group 1 Loans included in the Trust as of the end of the prior Due Period,
weighted on the basis of the Stated Principal Balances thereof as of the end of
the prior Due Period.

         GROUP 1 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any
Payment Date, (i) on or before the Payment Date occurring in September 2005, $0,
and (ii) with respect to any Payment Date thereafter, 0.35%% of the Group 1
Cut-off Date Balance.

         GROUP 2 AVAILABLE FUNDS: For any Payment Date, an amount equal to the
amount received by the Indenture Trustee and available in the Payment Account on
that Payment Date in respect of the Group 2 Loans. The Group 2 Available Funds
will generally be equal to (a) the sum of (1) the aggregate amount of scheduled
payments on the Group 2 Loans received or advanced that were due during the
related Due Period, (2) any unscheduled payments and

                                       14
<PAGE>

receipts on the Group 2 Loans, including mortgagor prepayments on such Mortgage
Loans, the proceeds of any repurchase of the Group 2 Loans by the Master
Servicer or Seller, Subsequent Recoveries, Insurance Proceeds and Liquidation
Proceeds, received during the related Prepayment Period, in each case net of
amounts reimbursable therefrom to the Indenture Trustee, the Master Servicer and
any subservicer and (3) any Compensating Interest paid by the Master Servicer in
respect of the Group 2 Loans, reduced by (b) the sum of (1) Master Servicing
Fees, the Subservicing Fees, the Indenture Trustee's Fee, the Owner Trustee's
Fee, the Net Derivative Fee, if any, and (2) certain amounts owed to the Master
Servicer, the Depositor, the Indenture Trustee and the Owner Trustee in respect
of the Group 2 Loans, as provided in the Agreements.

         GROUP 2 BOND: A Class 2-A-1, Class 2-A-2, Class 2-M-1, Class 2-M-2 and
Class 2-B Bond.

         GROUP 2 CUT-OFF DATE BALANCE: The sum of the aggregate Stated Principal
Balance of the Group 2 Loans as of the Cut-off Date.

         GROUP 2 DERIVATIVE CONTRACTS: The Confirmation together with the
associated ISDA Master Agreement with respect to the two derivative contracts
between the Seller and the Derivative Contract Counterparty primarily for the
benefit of the Group 2 Bonds and the Certificates, set forth in Exhibit E of the
Indenture.

         GROUP 2 LOAN: A Mortgage Loan in Loan Group 2.

         GROUP 2 NET DERIVATIVE CONTRACT PAYMENT AMOUNT: With respect to any
Payment Date, the amount equal to the excess, if any, of (a) the aggregate
amount payable on that Payment Date to the Issuer from the Derivative Contract
Counterparty pursuant to the Group 2 Derivative Contracts, over (b) the
aggregate amount payable on that Payment Date to the Derivative Contract
Counterparty under the Group 2 Derivative Contracts, in each case as described
in Section 8.02(c) of the Indenture.

         GROUP 2 NET WAC RATE: The weighted average of the Net Mortgage Rates on
the Group 2 Loans included in the Trust as of the end of the prior Due Period,
weighted on the basis of the Stated Principal Balances thereof as of the end of
the prior Due Period.

         GROUP 2 OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any
Payment Date prior to the Group 2 Stepdown Date, 4.00% of the Group 2 Cut-off
Date Balance. With respect to any Payment Date on or after the Group 2 Stepdown
Date, the greater of (i) 8.00% of the aggregate Stated Principal Balance of the
Group 2 Loans as of the end of the related Due Period, and (ii) 0.50% of the
Group 2 Cut-off Date Balance; provided however, that on or after the Group 2
Stepdown Date, if a Group 2 Trigger Event is in effect, the Group 2
Overcollateralization Target Amount will be equal to such amount on the previous
Payment Date.

         GROUP 2 STEPDOWN DATE: The later to occur of (x) the Payment Date
occurring in April 2012 and (y) the first Payment Date for which the aggregate
Stated Principal Balance of the Group 2 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

                                       15
<PAGE>

reduction for Realized Losses incurred during the related Prepayment Period) is
less than or equal to 50.00% of the sum of the Group 2 Cut off Date Balance.

         GROUP 2 TRIGGER EVENT: A Trigger Event is in effect with respect to any
Payment Date with respect to the Group 2 Loans if:

         (1) in the case of any Payment Date after the 85th Payment Date, the
three month average of the aggregate principal balance of Group 2 Loans that are
60 or more days delinquent (including for this purpose any such Mortgage Loans
in bankruptcy or foreclosure and Mortgage Loans with respect to which the
related mortgaged property has been acquired by the Trust) as of the close of
business on the last day of the preceding calendar month exceeds 16.00% of the
aggregate Stated Principal Balance of the Group 2 Loans; or

         (2) (a) in the case of any Payment Date after the 85th Payment Date and
on or before the 96th Payment Date, the cumulative amount of Realized Losses
incurred on the Group 2 Loans from the Cut-off Date, through the end of the
calendar month immediately preceding such Payment Date exceeds 5.50% of the
Group 2 Cut-off Date Balance, plus an additional 1/12th of 1.25% of the Group 2
Cut-off Date Balance for each Payment Date after the 85th Payment Date to and
including the 96th Payment Date, (b) in the case of any Payment Date after the
96th Payment Date and on or before the 108th Payment Date, the cumulative amount
of Realized Losses from the Cut-off Date, through the end of the calendar month
immediately preceding such Payment Date exceeds 6.75% of the Group 2 Cut-off
Date Balance, plus an additional 1/12th of 0.75% of the Group 2 Cut-off Date
Balance for each Payment Date after the 96th Payment Date to and including the
108th Payment Date, (c) in the case of any Payment Date after the 108th Payment
Date and on or before the 120th Payment Date, the cumulative amount of Realized
Losses from the Cut-off Date, through the end of the calendar month immediately
preceding such Payment Date exceeds 7.50% of the Group 2 Cut-off Date Balance,
plus an additional 1/12th of 0.75% of the Group 2 Cut-off Date Balance for each
Payment Date after the 108th Payment Date to and including the 120th Payment
Date, and (d) in the case of any Payment Date after the 120th Payment Date, the
cumulative amount of Realized Losses from the Cut-off Date, through the end of
the calendar month immediately preceding such Payment Date exceeds 8.25% of the
Group 2 Cut-off Date Balance.

         For purposes of the foregoing calculations, a mortgage loan is
considered "60 days" and "90 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
and third following month, respectively.

         GUARANTEED AMOUNT: With respect to the Class 1-A-IO Bonds and each
Payment Date, the full payment of Accrued Bond Interest on the Class 1-A-IO
Bonds on each Payment Date to the extent not covered by related Available Funds
on any Payment Date. Such amount shall be unconditionally and irrevocably
guaranteed to the Issuer pursuant to the Guaranty Agreement.

         GUARANTY AGREEMENT: The guaranty agreement dated as of March 3, 2005,
among Impac Holdings, as guarantor, the Issuer and the Indenture Trustee.

         HAZARDOUS MATERIALS: Any dangerous, toxic or hazardous pollutants,
chemicals, wastes, or substances, including, without limitation, those so
identified pursuant to the Comprehensive

                                       16
<PAGE>

Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., or any other environmental laws now existing, and specifically
including, without limitation, asbestos and asbestos-containing materials,
polychlorinated biphenyls, radon gas, petroleum and petroleum products, urea
formaldehyde and any substances classified as being "in inventory", "usable work
in progress" or similar classification which would, if classified unusable, be
included in the foregoing definition.

         IMPAC HOLDINGS: Impac Mortgage Holdings, Inc., a Maryland corporation,
and its successors and assigns.

         INDEMNIFIED PARTY: The meaning specified in Section 7.02 of the Trust
Agreement.

         INDENTURE: The indenture dated as of March 3, 2005, between the Issuer
and the Indenture Trustee, relating to the Impac CMB Trust Series 2005-2 Bonds.

         INDENTURE TRUSTEE: Wells Fargo Bank, N.A., and its successors and
assigns or any successor indenture trustee appointed pursuant to the terms of
the Indenture.

         INDENTURE TRUSTEE'S FEE: With respect to any payment date, 1/12th of
the Indenture Trustee's Fee Rate multiplied by the Stated Principal Balance of
each mortgage loan, plus investment earnings on deposits in the Payment Account.

         INDENTURE TRUSTEE'S FEE RATE: A rate equal to 0.0012% per annum.

         INDEPENDENT: When used with respect to any specified Person, the Person
(i) is in fact independent of the Issuer, any other obligor on the Bonds, the
Seller, the Master Servicer, the Depositor and any Affiliate of any of the
foregoing Persons, (ii) does not have any direct financial interest or any
material indirect financial interest in the Issuer, any such other obligor, the
Seller, the Master Servicer, the Depositor or any Affiliate of any of the
foregoing Persons and (iii) is not connected with the Issuer, any such other
obligor, the Seller, the Master Servicer, the Depositor or any Affiliate of any
of the foregoing Persons as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.

         INDEPENDENT CERTIFICATE: A certificate or opinion to be delivered to
the Indenture Trustee under the circumstances described in, and otherwise
complying with, the applicable requirements of Section 10.01 of the Indenture,
made by an independent appraiser or other expert appointed by an Issuer Request
and approved by the Indenture Trustee in the exercise of reasonable care, and
such opinion or certificate shall state that the signer has read the definition
of "Independent" in this Indenture and that the signer is Independent within the
meaning thereof.

         INDEX: With respect to any Mortgage Loan, the index for the adjustment
of the Mortgage Rate set forth as such on the related Mortgage Note.

         INITIAL CERTIFICATION: The initial certification delivered by the
Custodian pursuant to Section 2.03(a) of the Indenture in the form attached
thereto as Exhibit C.

         INITIAL SUBSERVICERS: Initially, with respect to substantially all of
the Mortgage Loans in Loan Group 1, Countrywide Home Loans Servicing LP. On or
about May 1, 2005, the

                                       17
<PAGE>

subservicing of the Mortgage Loans in Loan Group 1 will be transferred to GMAC
Mortgage Corporation. With respect to all of the Mortgage Loans in Loan Group 2,
Midland Loan Services, Inc.

         INSURANCE PROCEEDS: Proceeds paid by any insurer pursuant to any
insurance policy covering a Mortgage Loan which are required to be remitted to
the Master Servicer, net of any component thereof (i) covering any expenses
incurred by or on behalf of the Master Servicer in connection with obtaining
such proceeds, (ii) that is applied to the restoration or repair of the related
Mortgaged Property or (iii) released to the Mortgagor in accordance with the
Master Servicer's normal servicing procedures.

         INTEREST DETERMINATION DATE: With respect to each Accrual Period (other
than the first Accrual Period), the second LIBOR Business Day preceding the
related Payment Date on which such Accrual Period commences.

         INVESTMENT COMPANY ACT: The Investment Company Act of 1940, as amended,
and any amendments thereto.

         IRS: The Internal Revenue Service.

         ISSUER: Impac CMB Trust Series 2005-2, a Delaware statutory trust, or
its successor in interest.

         ISSUER REQUEST: A written order or request signed in the name of the
Issuer by any one of its Authorized Officers and delivered to the Indenture
Trustee.

         LIBOR BUSINESS DAY: A day on which banks are open for dealing in
foreign currency and exchange in London and New York City.

         LIEN: Any mortgage, deed of trust, pledge, conveyance, hypothecation,
assignment, participation, deposit arrangement, encumbrance, lien (statutory or
other), preference, priority right or interest or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing and the filing of any financing statement under the UCC (other than
any such financing statement filed for informational purposes only) or
comparable law of any jurisdiction to evidence any of the foregoing; PROVIDED,
HOWEVER, that any assignment pursuant to Section 6.02 of the Servicing Agreement
shall not be deemed to constitute a Lien.

         LIFETIME RATE CAP: With respect to each Mortgage Loan with respect to
which the related Mortgage Note provides for a lifetime rate cap, the maximum
Mortgage Rate permitted over the life of such Mortgage Loan under the terms of
such Mortgage Note, as set forth on the Mortgage Loan Schedule and initially as
set forth on Exhibit A to the Servicing Agreement.

         LIQUIDATED MORTGAGE LOAN: With respect to any Payment Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified in the Servicing Agreement,
as of the end of the related Due Period that

                                       18
<PAGE>

substantially all Liquidation Proceeds which it reasonably expects to recover
with respect to the disposition of the related Mortgaged Property or REO
Property have been recovered.

         LIQUIDATION EXPENSES: Out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the Master Servicer, or any Special
Servicer on the Master Servicer's behalf, in connection with the liquidation of
any Mortgage Loan and not recovered under any insurance policy, such expenses
including, without limitation, legal fees and expenses, any unreimbursed amount
expended (including, without limitation, amounts advanced to correct defaults on
any mortgage loan which is senior to such Mortgage Loan, amounts advanced to
keep current or pay off a mortgage loan that is senior to such Mortgage Loan and
Disposition Fees) respecting the related Mortgage Loan and any related and
unreimbursed expenditures for real estate property taxes or for property
restoration, preservation or insurance against casualty loss or damage.

         LIQUIDATION PROCEEDS: Proceeds (including Insurance Proceeds) received
in connection with the liquidation of any Mortgage Loan or related REO Property,
whether through trustee's sale, foreclosure sale or otherwise.

         LOAN GROUP: Either of Loan Group 1 or Loan Group 2.

         LOAN GROUP 1: The Group 1 Loans.

         LOAN GROUP 2: The Group 2 Loans.

         LOAN-TO-VALUE RATIO: With respect to any Mortgage Loan, as of any date
of determination, a fraction expressed as a percentage, the numerator of which
is the then current principal amount of the Mortgage Loan, and the denominator
of which is the Appraised Value of the related Mortgaged Property.

         LOAN YEAR: With respect to any Mortgage Loan, the one-year period
commencing on the day succeeding the origination of such Mortgage Loan and
ending on the anniversary date of such Mortgage Loan, and each annual period
thereafter.

         LOST NOTE AFFIDAVIT: With respect to any Mortgage Loan as to which the
original Mortgage Note has been lost or destroyed and has not been replaced, an
affidavit from the Seller certifying that the original Mortgage Note has been
lost, misplaced or destroyed (together with a copy of the related Mortgage
Note).

         MAJORITY CERTIFICATEHOLDER: A Holder of a 50.01% or greater Certificate
Percentage Interest of the Certificates.

         MASTER SERVICER: Impac Funding Corporation, a California corporation,
and its successors and assigns.

         MASTER SERVICING FEE: With respect to each Mortgage Loan and any
Payment Date, the fee payable monthly to the Master Servicer in respect of
master servicing compensation that accrues at an annual rate equal to the Master
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the related Due Date in the related Due Period.

                                       19
<PAGE>

         MASTER SERVICING FEE RATE: With respect to any Mortgage Loan, 0.03% per
annum.

         MAXIMUM BOND INTEREST RATE: With respect to each class of (1) Group 1
Bonds, 11.00% per annum and (2) Group 2 Bonds, 10.25% per annum.

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

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

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

         MINIMUM MORTGAGE RATE: With respect to each Mortgage Loan, the minimum
Mortgage Rate.

         MOM LOAN: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.

         MONTHLY PAYMENT: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for partial Principal Prepayments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, 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 other instrument creating a
first lien on an estate in fee simple interest in real property securing a
Mortgage Loan.

         MORTGAGE FILE: The file containing the Related Documents pertaining to
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to the Mortgage Loan Purchase Agreement or the
Servicing Agreement.

         MORTGAGE LOANS: The Mortgage Loans that will be transferred and
assigned to the Trust pursuant to Section 2.03(a) of the Indenture, each
Mortgage Loan so held being identified in the Mortgage Loan Schedule. The
Mortgage Loans have been divided into two groups, Loan Group 1 and Loan Group 2.

         MORTGAGE LOAN PURCHASE AGREEMENT: The Mortgage Loan Purchase Agreement,
dated as of the Closing Date, between the Seller, as seller, and the Purchaser,
as purchaser, relating to the sale, transfer and assignment of the Mortgage
Loans.

         MORTGAGE LOAN SCHEDULE: With respect to any date, the schedule of
Mortgage Loans held by the Issuer on such date. The schedule of Mortgage Loans
as of the Cut-off Date is the

                                       20
<PAGE>

schedule set forth in Exhibit B of the Indenture which schedule sets forth as 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) the original Mortgage Rate and current Mortgage Rate;

         (iv) the maturity date;

         (v) the original principal balance;

         (vi) the first Payment Date;

         (vii) the type of Mortgaged Property;

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

         (ix) the Cut-off Date Principal Balance;

         (x) the Index, the Maximum Rate, Minimum Rate, Lifetime Cap and the
Gross Margin, if applicable;

         (xi) the Adjustment Date frequency and Payment Date frequency, if
applicable;

         (xii) the occupancy status;

         (xiii) the purpose of the Mortgage Loan;

         (xiv) the Appraised Value of the Mortgaged Property;

         (xv) the original term to maturity;

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

         (xvii) the Loan-to-Value Ratio;

         (xviii) the Mortgagor credit score;

         (xix) the lien status

         (xx) the documentation program

         (xxi) the subordinate lien amount

         (xxii) the prepay penalty period

         (xxiii) the amortization term

                                       21
<PAGE>

         (xxiv) the Interest Only term

         (xxv) whether such Mortgage Loan is a Group 1 Loan or a Group 2 Loan;

         (xxvi) whether such Mortgage Loan is a PMI Mortgage Loan, and if so,
the related PMI Insurer Fee Rate; and

         (xxvii) whether or not the Mortgage Loan was underwritten pursuant to a
limited documentation program.

         The Mortgage Loan Schedule shall also set forth the total of the
amounts described under (ix) above for all of the Mortgage Loans.

         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 and any date of
determination, the annual rate at which interest accrues on such Mortgage Loan.

         MORTGAGED PROPERTY: The underlying property, including real property
and improvements thereon, securing a Mortgage Loan.

         MORTGAGOR: The obligor or obligors under a Mortgage Note.

         MULTIFAMILY LOAN: Each of the Group 2 Loans transferred and assigned to
the Indenture Trustee pursuant to Section 2.03 of the Indenture, secured by a
fee simple estate in a parcel of land improved by a multifamily property,
together with any personal property, fixtures, leases and other property or
rights pertaining thereto, as indicated in the related Mortgage Loan Schedule.

         NET CASH FLOW: For any given period, the total operating revenues
derived from a multifamily property during such period, minus total operating
expenses incurred in respect of such property and estimated replacement reserves
during such period other than (i) non-cash items such as depreciation and
amortization, (ii) capital expenditures and (iii) debt service on loans
(including the related Mortgage Loan) secured by liens on such property.

         NET COLLECTIONS: With respect to any Corrected Mortgage Loan, an amount
equal to all payments on account of interest and principal on such Mortgage
Loan.

         NET DERIVATIVE FEE: With respect to any Payment Date, the amount equal
to the excess, if any, of (a) the aggregate amount payable on that Payment Date
to the Derivative Contract Counterparty in respect of the Derivative Contracts,
other than any Additional Derivative Contract Counterparty Payment, over (b) the
aggregate amount payable on that Payment Date to the Issuer from the Derivative
Contract Counterparty pursuant to the Derivative Contracts.

         NET DERIVATIVE FEE RATE: With respect to any Payment Date, the
fraction, expressed as a rate per annum, equal to (x) the Net Derivative Fee on
such Payment Date related to Loan Group 1 and Loan Group 2 over (y) the
aggregate Stated Principal Balance of the Mortgage Loans.

                                       22
<PAGE>

         NET LIQUIDATION PROCEEDS: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.

         NET MONTHLY EXCESS CASH FLOW: For any Payment Date and each Loan Group,
the sum of (a) any related Overcollateralization Release Amount, (b) the excess
of (x) the related Available Funds for such Payment Date over (y) the sum for
such Payment Date of (A) the aggregate amount of Accrued Bond Interest for the
related Bonds and (B) the related Principal Remittance Amount and (c) any
amounts payable from the related Derivative Contracts as described in Section
3.05 of the Indenture.

         NET MORTGAGE RATE: On any Mortgage Loan and any Payment Date, the then
applicable Mortgage Rate thereon for the scheduled monthly payment thereon
during the related Due Period, minus the sum of (1) the Master Servicing Fee
Rate, (2) the Subservicing Fee Rate, (3) the Owner Trustee's Fee Rate, (4) the
Net Derivative Fee Rate (if any), (5) the Indenture Trustee's Fee Rate, and (6)
the related PMI Insurer Fee Rate, if such Mortgage Loan is a PMI Mortgage Loan.

         NEW LEASE: Any lease of REO Property entered into on behalf of the
Trust Fund, including any lease renewed or extended on behalf of the Trust Fund
if the Trust Fund has the right to renegotiate the terms of such lease.

         NONRECOVERABLE ADVANCE: Any advance (i) which was previously made or is
proposed to be made by the Master Servicer; and (ii) which, in the good faith
judgment of the Master Servicer, will not or, in the case of a proposed advance,
would not, be ultimately recoverable by the Master Servicer from Liquidation
Proceeds, Insurance Proceeds or future payments on any Mortgage Loan. The
Indenture Trustee may conclusively rely on any determination of
nonrecoverability made by the Master Servicer.

         NOTIONAL AMOUNT: With respect to the Class 1-A-IO Bonds immediately
prior to the related payment date, an amount equal to the amount set for the
below:

                 PAYMENT DATE                         NOTIONAL BALANCES
                 ------------                         -----------------
                  April 2005                           $1,200,000,000
                   May 2005                            $1,140,000,000
                  June 2005                            $  997,500,000
                  July 2005                            $  798,000,000
                 August 2005                           $  598,000,000
                September 2005                         $  418,950,000
                 October 2005                          $  418,950,000
                November 2005                          $  418,950,000
                December 2005                          $  418,950,000

         OFFICER'S CERTIFICATE: With respect to the Master Servicer, a
certificate signed by the President, Managing Director, a Director, a Vice
President or an Assistant Vice President, of the Master Servicer and delivered
to the Indenture Trustee. With respect to the Issuer, a certificate

                                       23
<PAGE>

signed by any Authorized Officer of the Issuer, under the circumstances
described in, and otherwise complying with, the applicable requirements of
Section 10.01 of the Indenture, and delivered to the Indenture Trustee. Unless
otherwise specified, any reference in the Indenture to an Officer's Certificate
shall be to an Officer's Certificate of any Authorized Officer of the Issuer.

         ONE-MONTH LIBOR: With respect to any Accrual Period (other than the
first Accrual Period), the rate determined by the Indenture Trustee on the
related Interest Determination Date on the basis of the London interbank offered
rate for one-month United States dollar deposits, as such rates appear on the
Telerate Screen Page 3750, as of 11:00 a.m. (London time) on such Interest
Determination Date.

         In the event that on any Interest Determination Date, Telerate Screen
3750 fails to indicate the London interbank offered rate for one-month United
States dollar deposits, then One-Month LIBOR for the related Interest Accrual
Period will be established by the Indenture Trustee as follows:

         (i) If on such Interest Determination Date two or more Reference Banks
provide such offered quotations, One-Month LIBOR for the related Accrual Period
shall be the arithmetic mean of such offered quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%).

         (ii) If on such Interest Determination Date fewer than two Reference
Banks provide such offered quotations, One-Month LIBOR for the related Accrual
Period shall be the higher of (i) One-Month LIBOR as determined on the previous
Interest Determination Date and (ii) the Reserve Interest Rate.

         With respect to the first Accrual Period, 2.76500%.

         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 for the related Accrual Period shall (in the absence
of manifest error) be final and binding.

         OPINION OF COUNSEL: A written opinion of counsel acceptable to the
Indenture Trustee in its reasonable discretion which counsel may be in-house
counsel for the Master Servicer if acceptable to the Indenture Trustee and the
Rating Agencies or counsel for the Depositor, as the case may be.

         ORIGINAL VALUE: Except in the case of a refinanced Mortgage Loan, the
lesser of the Appraised Value or sales price of Mortgaged Property at the time a
Mortgage Loan is closed, and for a refinanced Mortgage Loan, the Original Value
is the value of such property at the time application is made for such
refinancings as set forth in an appraisal acceptable to the Master Servicer.

         OUTSTANDING: With respect to the Bonds, as of the date of
determination, all Bonds theretofore executed, authenticated and delivered under
this Indenture except:

                                       24
<PAGE>

         (i) Bonds theretofore canceled by the Bond Registrar or delivered to
the Indenture Trustee for cancellation; and

         (ii) Bonds in exchange for or in lieu of which other Bonds have been
executed, authenticated and delivered pursuant to the Indenture unless proof
satisfactory to the Indenture Trustee is presented that any such Bonds are held
by a holder in due course.

         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,
deleted or substituted for prior to such Due Date pursuant to the Servicing
Agreement.

         OVERCOLLATERALIZATION INCREASE AMOUNT: With respect to any Payment
Date, and each Loan Group, the lesser of (i) the related Net Monthly Excess
Cashflow for such Payment Date and (ii) the excess, if any, of (a) the related
Overcollateralization Target Amount over (b) the related Overcollateralized
Amount on such Payment Date (after taking into account payments to the related
Bonds of the related Basic Principal Distribution Amount on such Payment Date).

         OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any Payment Date
and each Loan Group, the lesser of (x) the related Principal Remittance Amount
for such Payment Date and (y) the excess, if any, of (i) the related
Overcollateralized Amount for such Payment Date (assuming that 100% of the
related Principal Remittance Amount is applied as a principal payment on such
Payment Date) over (ii) the related Overcollateralization Target Amount for such
Payment Date.

         OVERCOLLATERALIZATION TARGET AMOUNT: The Group 1 Overcollateralization
Target Amount or Group 2 Overcollateralization Target Amount, as applicable.

         OVERCOLLATERALIZED AMOUNT: For any Payment Date and each Loan Group,
the amount, if any, by which (i) the aggregate principal balance of the related
Mortgage Loans (after giving effect to scheduled payments of principal due
during the related Due Period, to the extent received or Advanced, unscheduled
collections of principal received during the related Prepayment Period and
Realized Losses on the related Mortgage Loans incurred during the related
Prepayment Period) exceeds (ii) the aggregate Bond Principal Balance of the
related Bonds as of such Payment Date (assuming that 100% of the related
Principal Remittance Amount is applied as a principal payment on the Bonds on
such Payment Date).

         OWNER TRUST ESTATE: The corpus of the Issuer created by the Trust
Agreement which consists of items referred to in Section 3.01 of the Trust
Agreement.

         OWNER TRUSTEE: Wilmington Trust Company and its successors and assigns
or any successor owner trustee appointed pursuant to the terms of the Trust
Agreement.

         OWNER TRUSTEE'S FEE: With respect to any Payment Date the product of
(i) the Owner Trustee's Fee Rate divided by 12 and (ii) the aggregate Stated
Principal Balance of the Mortgage Loans as of the first day of the related Due
Period.

         OWNER TRUSTEE'S FEE RATE: On each Mortgage Loan, a rate equal to
0.0017% per annum.

                                       25
<PAGE>

         PAYING AGENT: Any paying agent or co-paying agent appointed pursuant to
Section 3.03 of the Indenture, which initially shall be the Indenture Trustee.

         PAYMENT ACCOUNT: The account established by the Indenture Trustee
pursuant to Section 3.01 of the Indenture. The Payment Account shall be an
Eligible Account.

         PAYMENT DATE: The 25th day of each month, or if such day is not a
Business Day, then the next Business Day.

         PERCENTAGE INTEREST: With respect to any Bond, the percentage obtained
by dividing the Bond Principal Balance of such Bond by the aggregate Bond
Principal Balances of all Bonds of that Class. With respect to any Certificate,
the percentage as stated on the face thereof.

         PERIODIC RATE CAP: With respect to any Mortgage Loan, the maximum rate,
if any, by which the Mortgage Rate on such Mortgage Loan can adjust on any
Adjustment Date, as stated in the related Mortgage Note or Mortgage.

         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.

         PHASE I ENVIRONMENTAL ASSESSMENT: A "Phase I environmental assessment"
as described in and meeting the criteria of the American Society of Testing
Materials Standard E 1527- 94 or any successor thereto published by the American
Society of Testing Materials.`

         PLAN: Any employee benefit plan or certain other retirement plans and
arrangements, 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 are subject to ERISA or Section 4975 of the Code.

         PLAN ASSETS: Assets of a Plan within the meaning of Department of Labor
regulation 29 C.F.R. ss.
2510.3-101.

         PMI INSURER:  Radian Guaranty, Inc., or its successors or assigns.

         PMI INSURER FEE RATE: With respect to any Mortgage Loan covered by the
PMI Insurer Policy, the rate per annum at which the premium with respect to such
policy accrues as indicated in the Mortgage Loan Schedule.

         PMI INSURER POLICY: A lender-paid primary mortgage insurance policy
issued by Radian in accordance with a March 29, 2002 letter between the Seller
and Radian.

         PMI INSURER POLICY FEE: With respect to each PMI Mortgage Loan and any
Payment Date, the product of (i) the PMI Insurer Fee Rate divided by 12 and (ii)
the Stated Principal Balance of such Mortgage Loan as of the first day of the
related Due Period.

         PMI MORTGAGE LOANS: The Mortgage Loans included in the Trust Fund
covered by the PMI Insurer Policy, as indicated on the Mortgage Loan Schedule.

                                       26
<PAGE>

         POOL BALANCE: With respect to any date of determination, the aggregate
of the Stated Principal Balances of all Mortgage Loans as of such date.

         PREPAYMENT ASSUMPTION: A Prepayment Assumption of 100% assumes, (i)
with respect to the Group 1 Loans (other than the fixed-rate first lien loans),
30% CPR and with respect to the fixed-rate first lien loans, 10% CPR building to
25% CPR in the 12th month and remaining constant at 25% CPR thereafter, and (ii)
with respect to the Group 2 Loans, a prepayment vector which assumes no
prepayments in the first 12 months after the origination date of such mortgage
loan, 10% CPR in the second 12 month period, 15% CPR in the third 12 month
period, 25% CPR in the fourth 12 month period and 30% CPR thereafter, adjusted
for any seasoning.

         PREPAYMENT INTEREST SHORTFALL: As to any Payment 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 interest accrued during the related
Prepayment Period at the Net Mortgage Rate on the Stated Principal Balance of
such Mortgage Loan over the sum of the amount of interest (less interest at the
related Expense Fee Rate) paid by the Mortgagor for such Prepayment Period to
the date of such Principal Prepayment in Full and any Advances made by the
Master Servicer pursuant to Section 4.04 of the Servicing Agreement or (b) a
partial Principal Prepayment during the related Prepayment Period, an amount
equal to the interest at the Mortgage Rate (less the Subservicing Fee Rate)
during the related Prepayment Period on the amount of such partial Principal
Prepayment.

         PREPAYMENT PERIOD: With respect any Payment Date, the calendar month
immediately preceding the month in which such payment occurs.

         PRIMARY INSURANCE POLICY: Each primary policy of mortgage guaranty
insurance issued by a Qualified Insurer or any replacement policy therefor,
including the PMI Insurer Policies.

         PRINCIPAL DISTRIBUTION AMOUNT: For any Payment Date and each Loan
Group, the sum of (a) the related Basic Principal Distribution Amount and (b)
the related Overcollateralization Increase Amount (to the extent available from
Net Monthly Excess Cashflow in the case of Loan Group 1 and Loan Group 2
pursuant to clause (i) of Section 3.05(d) and Section 3.05(g).

         PRINCIPAL PREPAYMENT: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.

         PRINCIPAL PREPAYMENT IN FULL: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.

         PRINCIPAL REMITTANCE AMOUNT: For any Payment Date and each Loan Group,
the sum of

         (1) the principal portion of all scheduled monthly payments on the
related mortgage loans due on the related Due Date, to the extent received or
advanced;

                                       27
<PAGE>

         (2) the principal portion of all proceeds of the repurchase of a
related mortgage loan (or, in the case of a substitution, certain amounts
representing a principal adjustment) as required by the Servicing Agreement
during the preceding calendar month; and

         (3) the principal portion of all other unscheduled collections received
during the preceding calendar month in respect of the related mortgage loans,
including full and partial prepayments, the proceeds of any repurchase of such
mortgage loans by the Master Servicer or Seller, Liquidation Proceeds,
Subsequent Recoveries and Insurance Proceeds (including amounts, if any, paid
under the PMI Insurer Policy), in each case to the extent applied as recoveries
of principal.

         PROCEEDING: Any suit in equity, action at law or other judicial or
administrative proceeding.

         PROSPECTUS: The Prospectus Supplement, dated March 2, 2005, together
with the attached Prospectus, dated September 28, 2004.

         PURCHASE PRICE: With respect to the Mortgage Loans, the meaning
specified in Section 2.2(a) of the Mortgage Loan Purchase Agreement.

         PURCHASER: IMH Assets Corp., a California corporation, and its
successors and assigns.

         QUALIFIED INSURER: A mortgage guaranty insurance company duly qualified
as such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as an insurer
by the Master Servicer and as a Fannie Mae-approved mortgage insurer.

         RATING AGENCY: Any nationally recognized statistical rating
organization, or its successor, that rated the Bonds at the request of the
Depositor at the time of the initial issuance of the Bonds. Initially, Standard
& Poor's or Moody's. If such organization or a successor is no longer in
existence, "Rating Agency" with respect to the Class A Bonds shall be such
nationally recognized statistical rating organization, or other comparable
Person, designated by the Depositor, notice of which designation shall be given
to the Indenture Trustee and Master Servicer. References herein to the highest
short term unsecured rating category of a Rating Agency shall mean A-1 or better
in the case of Standard & Poor's and P-1 or better in the case of Moody's and in
the case of any other Rating Agency shall mean such equivalent ratings.
References herein to the highest long-term rating category of a Rating Agency
shall mean "AAA" in the case of Standard & Poor's and "Aaa" in the case of
Moody's and in the case of any other Rating Agency, such equivalent rating.

         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 (or
REO Property) 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 Bondholders

                                       28
<PAGE>

up to the last day of the month in which the Cash Liquidation (or REO
Disposition) occurred on the Stated Principal Balance of such Mortgage Loan (or
REO Property) 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 Subservicer with respect to related Advances or expenses as to which the
Master Servicer or any Subservicer is entitled to reimbursement thereunder but
which have not been 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. With respect to each Mortgage Loan which has become the
object of a Debt Service Reduction, the amount of such Debt Service Reduction.

         RECORD DATE: With respect to any Book-Entry Bonds (other than the Class
1-A-IO Bonds) and any Payment Date, the close of business on the Business Day
immediately preceding such Payment Date. With respect to any Bonds that are not
Book-Entry Bonds and the Class 1-A-IO Bonds, the close of business on the last
Business Day of the calendar month preceding such Payment Date.

         REFERENCE BANKS: Any leading banks engaged in transactions in
Eurodollar deposits in the international Eurocurrency market (i) with an
established place of business in London, (ii) whose quotations appear on the
Telerate Screen Page 3750 on the Interest Determination Date in question, (iii)
which have been designated as such by the Indenture Trustee after consultation
with the Master Servicer, and (iv) which are not Affiliates of the Depositor or
the Seller.

         REGISTERED HOLDER: The Person in whose name a Bond is registered in the
Bond Register on the applicable Record Date.

         RELATED DOCUMENTS: With respect to each Mortgage Loan, the documents
specified in Section 2.1(b) of the Mortgage Loan Purchase Agreement (with
respect to the Initial Mortgage Loans) and any documents required to be added to
such documents pursuant to the Mortgage Loan Purchase Agreement, the Trust
Agreement, Indenture or the Servicing Agreement.

         RELIEF ACT: The Servicemembers Civil Relief Act.

         RELIEF ACT SHORTFALL: As to any Payment Date and any Mortgage Loan
(other than a Mortgage Loan relating to an REO Property), any shortfalls
relating to the Relief Act or similar legislation or regulations.

         REMITTANCE REPORT: The report prepared by the Master Servicer pursuant
to Section 4.01 of the Servicing Agreement.

         REO ACQUISITION: The acquisition by the Master Servicer on behalf of
the Indenture Trustee for the benefit of the Bondholders of any REO Property
pursuant to Section 3.13 of the Servicing Agreement.

                                       29
<PAGE>

         REO DISPOSITION: As to any REO Property, a determination by the Master
Servicer that it has received substantially all Insurance Proceeds, Liquidation
Proceeds, REO 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 Net 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 for such
period as such balance is reduced pursuant to Section 3.13 of the Servicing
Agreement by any income from the REO Property treated as a recovery of
principal.

         REO PROCEEDS: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property) which proceeds are required to be deposited into the
Collection Account only upon the related REO Disposition.

         REO PROPERTY: A Mortgaged Property that is acquired by the Issuer by
foreclosure or by deed in lieu of foreclosure.

         REPURCHASE EVENT: With respect to any Mortgage Loan, either (i) a
discovery that, as of the Closing Date the related Mortgage was not a valid
first lien or second lien (as applicable) on the related Mortgaged Property,
subject to no other liens except (A) the lien of real property taxes and
assessments not yet due and payable, (B) covenants, conditions, and
restrictions, rights of way, easements and other matters of public record as of
the date of recording of such Mortgage and such other permissible title
exceptions as are permitted and (C) other matters to which like properties are
commonly subject which do not materially adversely affect the value, use,
enjoyment or marketability of the related Mortgaged Property or (ii) with
respect to any Mortgage Loan as to which the Seller delivers an affidavit
certifying that the original Mortgage Note has been lost or destroyed, a
subsequent default on such Mortgage Loan if the enforcement thereof or of the
related Mortgage is materially and adversely affected by the absence of such
original Mortgage Note.

         REPURCHASE PRICE: With respect to any Mortgage Loan required to be
repurchased on any date pursuant to the Mortgage Loan Purchase Agreement or
purchased by the Master Servicer pursuant to the Servicing Agreement, an amount
equal to the sum, without duplication, of (i) 100% of the Stated Principal
Balance thereof (without reduction for any amounts charged off) and (ii) unpaid
accrued interest at the Mortgage Rate on the outstanding principal balance
thereof from the Due Date to which interest was last paid by the Mortgagor to
the first day of the month following the month of purchase plus (iii) the amount
of unreimbursed Advances or unreimbursed Servicing Advances made with respect to
such Mortgage Loan plus (iv) any other amounts owed to the Master Servicer or
any Subservicer pursuant to Section 3.07 of the Servicing Agreement and not
included in clause (iii) of this definition plus (v) any costs and damages
incurred by the Trust in connection with any violation by such Mortgage Loan of
any predatory-lending law.

         RESERVE INTEREST RATE: With respect to any Interest Determination Date,
the rate per annum that the Indenture Trustee determines to be either (i) the
arithmetic mean (rounded

                                       30
<PAGE>

upwards if necessary to the nearest whole multiple of 0.0625%) of the one-month
United States dollar lending rates which New York City banks selected by the
Indenture Trustee are quoting on the relevant Interest Determination Date to the
principal London offices of leading banks in the London interbank market or (ii)
in the event that the Indenture Trustee can determine no such arithmetic mean,
the lowest one-month United States dollar lending rate which New York City banks
selected by the Indenture Trustee are quoting on such Interest Determination
Date to leading European banks.

         RESPONSIBLE OFFICER: With respect to the Indenture Trustee, any officer
of the Indenture Trustee with direct responsibility for the administration of
the Indenture 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.

         SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder.

         SECURITY: Any of the Certificates or Bonds.

         SECURITYHOLDER or HOLDER: Any Bondholder or a Certificateholder.

         SECURITY INSTRUMENT: A written instrument creating a valid first lien
or second lien on a Mortgaged Property securing a Mortgage Note, which may be
any applicable form of mortgage, deed of trust, deed to secure debt or security
deed, including any riders or addenda thereto.

         SELLER: Impac Mortgage Holdings, Inc., a Maryland corporation, and its
successors and assigns.

         SERVICING ACCOUNT: The separate trust account created and maintained by
the Master Servicer or each Subservicer with respect to the Mortgage Loans or
REO Property, which shall be an Eligible Account, for collection of taxes,
assessments, insurance premiums and comparable items as described in Section
3.08 of the Servicing Agreement.

         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
Subservicer of its servicing obligations, including, without duplication, 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 and any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered on the MERS System, (iii) the
management and liquidation of any REO Property and (iv) compliance with the
obligations under Sections 3.10, 3.11, 3.13 of the Servicing Agreement.

         SERVICING AGREEMENT: The Servicing Agreement dated as of March 3, 2005,
among the Master Servicer, the Issuer and the Indenture Trustee.

         SERVICING CERTIFICATE: A certificate completed and executed by a
Servicing Officer on behalf of the Master Servicer in accordance with Section
4.01 of the Servicing Agreement.

                                       31
<PAGE>

         SERVICING DEFAULT: The meaning assigned in Section 6.01 of the
Servicing Agreement.

         SERVICING FEE: The sum of the Master Servicing Fee and the Subservicing
Fee.

         SERVICING FEE RATE: The sum of the Master Servicing Fee Rate and the
related Subservicing Fee Rate.

         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 Indenture Trustee by the Master Servicer, as such list may be amended from
time to time.

         SPECIAL SERVICER: Any special servicer that may be appointed by the
Master Servicer which consent shall not be unreasonably withheld, for the
purposes of servicing the Specially Serviced Mortgage Loans.

         SPECIALLY SERVICED MORTGAGE LOAN: Subject to Section 3.23 of the
Servicing Agreement, any Group 2 Loan with respect to which:

         (a) the related Mortgagor is 60 or more days delinquent (without giving
effect to any grace period permitted by the related Mortgage Note) in the
payment of a Monthly Payment or other obligation (regardless of whether, in
respect thereof, Advances have been reimbursed);

         (b) such Mortgagor has expressed to the Master Servicer an inability to
pay or a hardship in paying such Group 2 Loan in accordance with its terms;

         (c) the Master Servicer has received notice that such Mortgagor has
become the subject of any bankruptcy, insolvency or similar proceeding, admitted
in writing the inability to pay its debts as they come due or made an assignment
for the benefit of creditors;

         (d) the Master Servicer has received notice of a foreclosure or
threatened foreclosure of any lien on the related Mortgaged Property;

         (e) a default, of which the Master Servicer has notice (other than a
failure by such Mortgagor to pay principal or interest) and which in the sole
judgment of the Master Servicer, materially and adversely affects the interests
of the Bondholders, has occurred and remained unremedied for the applicable
grace period specified in such Group 2 Loan (or, if no grace period is
specified, 60 days); provided, however, that a default requiring a Servicing
Advance shall be deemed to materially and adversely affect the interests of the
Bondholders for purposes of this definition; or

         (f) the Master Servicer proposes to commence foreclosure or other
workout arrangements.

         A Group 2 Loan will cease to be a Specially Serviced Mortgage Loan:

                                       32
<PAGE>

         (a) with respect to the circumstances described in clause (a) above,
when the related Mortgagor has brought such Group 2 Loan current and thereafter
made three consecutive full and timely Monthly Payments;

         (b) with respect to the circumstances described in clauses (b) and (d)
above, when such circumstances cease to exist in the good faith and reasonable
judgment of the Master Servicer, or any Special Servicer on its behalf, and with
respect to the circumstances described in clauses (c) and (f),when such
circumstances cease to exist; or

         (c) with respect to the circumstances described in clause (e) above,
when such default is cured;

provided, however, in each case that at the time no circumstance identified in
clauses (a) through (f) above exists that would cause the Group 4 Loan to
continue to be characterized as a Specially Serviced Mortgage Loan.

         STANDARD & POOR'S: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc., or its successor in interest.

         STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or related
REO Property as of any date of determination, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut-off Date, after application of all
scheduled Monthly 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 Payment Date which were received or with respect to
which an Advance was made, (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 3.13 of the Servicing Agreement with
respect to such Mortgage Loan or REO Property, which were distributed pursuant
to Section 3.05 of the Indenture on any previous Payment Date, and (c) the
principal portion of any Realized Loss with respect thereto allocated pursuant
to Section 3.33 of the Indenture for any previous Payment Date.

         STATUTORY TRUST STATUTE: Chapter 38 of Title 12 of the Delaware Code,
12 DEL. Code ss.ss.3801 ET SEQ., as the same may be amended from time to time.

         STEP-UP DATE: With respect to the (1) Group 1 Bonds, the first Payment
Date following the earlier of (i) the first Payment Date for which the aggregate
Stated Principal Balance of the Group 1 Loans as of the end of the related Due
Period has been reduced to 20% or less of the sum of the Group 1 Cut-off Date
Balance and (ii) the Payment Date occurring in March 2015 and (2) Group 2 Bonds,
the first Payment Date following the earlier of (i) the first Payment Date for
which the aggregate Stated Principal Balance of the Group 2 Loans as of the end
of the related Due Period has been reduced to 20% or less of the Group 2 Cut-off
Date Balance and (ii) the Payment Date occurring in March 2015.

         SUBSEQUENT RECOVERIES: Additional recoveries, net of reimbursable
expenses, with respect to Mortgage Loans that have been previously liquidated
and that resulted in a Realized Loss.

                                       33
<PAGE>

         SUBSERVICER: Any Person with whom the Master Servicer has entered into
a Subservicing Agreement as a Subservicer, including the Initial Subservicers.

         SUBSERVICING ACCOUNT: An Eligible Account established or maintained by
a Subservicer as provided for in Section 3.06(e) of the Servicing Agreement.

         SUBSERVICING AGREEMENT: The written contract between the Master
Servicer and any Subservicer relating to servicing and administration of certain
Mortgage Loans as provided in Section 3.02 of the Servicing Agreement.

         SUBSERVICING FEE: With respect to each Mortgage Loan and any Payment
Date, the fee payable monthly to the related subservicer in respect of servicing
compensation that accrues at an annual rate equal to the Subservicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the
related Due Date in the related Due Period.

         SUBSERVICING FEE RATE: On each adjustable rate Group 1 Loan, a rate
equal to 0.375% per annum. On each fixed rate Group 1 Loan, a rate equal to
0.25% per annum. On each Group 2 Loan, a rate equal to 0.1330% per annum, with
such rate increasing to 0.75% per annum for any multifamily loan that becomes a
Specially Serviced Multifamily Loan.

         SUBSTITUTION ADJUSTMENT AMOUNT: With respect to any Eligible Substitute
Mortgage Loan, the amount as defined in Section 2.03 of the Servicing Agreement.

         TELERATE SCREEN PAGE 3750: 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).

         TREASURY REGULATIONS: Regulations, including proposed or temporary
Regulations, promulgated under the Code. References herein to specific
provisions of proposed or temporary regulations shall include analogous
provisions of final Treasury Regulations or other successor Treasury
Regulations.

         TRUST: The Impac CMB Trust Series 2005-2 to be created pursuant to the
Trust Agreement.

         TRUST AGREEMENT: The Amended and Restated Trust Agreement dated as of
March 3, 2005, among the Owner Trustee, the Depositor and Wells Fargo Bank,
N.A., as Certificate Registrar and Certificate Paying Agent, relating to the
Trust.

         TRUST ESTATE: The meaning specified in the Granting Clause of the
Indenture.

         TRUST INDENTURE ACT OR TIA: The Trust Indenture Act of 1939, as amended
from time to time, as in effect on any relevant date.

         UCC: The Uniform Commercial Code, as amended from time to time, as in
effect in any specified jurisdiction.

                                       34
<PAGE>

         UNDERWRITERS: Bear, Stearns & Co. Inc., Countrywide Securities
Corporation and Merrill Lynch, Pierce, Fenner & Smith Incorporated.

         UNINSURED CAUSE: Any cause of damage to property subject to a Mortgage
that the complete restoration of such property is not fully reimbursable by the
hazard insurance policies.

         UNPAID INTEREST SHORTFALL: For each class of Bonds (other than the
Class 1-A-IO Bonds) and any Payment Date, such Bonds' pro rata share, based on
the amount of Accrued Bond Interest otherwise payable on such Bond on such
Payment Date, of (a) any Prepayment Interest Shortfalls on the related Mortgage
Loans, to the extent not covered by related Compensating Interest, and (b) any
Relief Act Shortfalls on the related Mortgage Loans, plus interest on the amount
of previously allocated Unpaid Interest Shortfall on such class of Bonds which
remains unreimbursed, at the Bond Interest Rate for such Class for the related
Accrual Period.

         WORKOUT FEE: An amount equal to the product of 1.50% and the amount of
Net Collections received by the Master Servicer or any Special Servicer with
respect to each Corrected Mortgage Loan.

                                       35

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