Document:

AKZO NOBEL

BY TELEFAX: +1 510 845-7914
AND BY COURIER
Ronald S. Barkin
President
BioTime, Inc.
935 Pardee Street
Berkeley, CA 94710

                                    February 13, 2001

Re:      Exclusive License Agreement entered into as of February 13, 2001
         between BioTime, Inc. and Horus B.V.

Dear Mr. Barkin:

We hereby  certify  that  Horus  B.V.  of  Boxtel,  the  Netherlands,  is at the
effective  date  of the  above  referenced  Exclusive  License  Agreement  ("the
Agreement") part of the Akzo Nobel group of companies.

In  consideration of the Agreement  between  BioTime,  Inc. and Horus B.V., Akzo
Nobel N.V., as the ultimate  corporate  parent of Horus B.V., by its  authorized
signature  below  hereby  guarantees  to  BioTime,  Inc.  all of the payment and
performance  obligations  by Horus B.V. (and any of its  successors  and assigns
within the Akzo Nobel group of companies)  under the  Agreement  when and as the
performance or payment of such obligations  becomes due, in the event Horus B.V.
is unable or fails to perform.

This guaranty applies to the Agreement as in effect on the date of this guaranty
and as the Agreement may be amended,  modified, or supplemented in the future by
BioTime,  Inc.,  and Horus  B.V.  Akzo Nobel N.V.  agrees  that any  supplement,
modification, amendment, extension, renewal, acceleration or other change of one
or more terms of the  Agreement  and the  obligations  of Horus B.V. or BioTime,
Inc.  under the  Agreement  shall not affect the  enforceability  or  continuing
effectiveness of this guaranty even if executed or implemented by BioTime,  Inc.
and Horus B.V. without notice to or the consent or approval of Akzo Nobel N.V.

This guaranty may not be revoked,  amended,  terminated, or assigned without the
written  consent of BioTime,  Inc., so long as Horus B.V. (or its  successors or
assignee companies) is a company within the Akzo Nobel group of companies.

<PAGE>

In the  event  that at any  time  Horus  B.V.  (or its  successors  or  assignee
companies)  ceases  being a member of the Akzo Nobel  group of  companies,  this
guaranty will lapse in respect of obligations  accrued under the Agreement after
the date of such event, provided that Akzo Nobel N.V. at the request of BioTime,
Inc., will spend all reasonable  efforts to have a similar guaranty given by the
new ultimate parent company (if any) of Horus B.V. (or its successor or assignee
company).

BioTime,  Inc. may deliver any notices under this guaranty to Akzo Nobel N.V. at
the following address by personal  delivery,  by facsimile  confirmed by postage
prepaid  first-class mail, by over-night or next day business air courier, or by
postage prepaid certified mail to the following address:

         Akzo Nobel N.V.
         PO Box 9300
         6800 SB Arnhem, the Netherlands
         Attention:  General Counsel

Notices shall be effective upon receipt if personally  delivered or delivered by
facsimile or air courier,  or on the third  business day  following  the date of
mailing.

Akzo  Nobel  N.V.  may  change its  address  listed  above by written  notice to
BioTime,  Inc.,  at the  following  address or at such other address as BioTime,
Inc. may provide to Akzo Nobel N.V. in writing:

         Bio Time, Inc.
         935 Pardee Street
         Berkeley, CA 94710
         Attention:  President

AKZO NOBEL N.V.

   By: /s/F.  Frohlich                           By:   /s/L.  Lohrens
      -----------------------------                  --------------------------

 Name: F.  Frohlich                            Name:   L.  Lohrens
      -----------------------------                  --------------------------

Title: CF0                                    Title:   Director Control Pharma
      -----------------------------                  --------------------------EXHIBIT

<PAGE>

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

                           IMPAC SECURED ASSETS CORP.,
                                    Company,

                            IMPAC FUNDING CORPORATION
                                Master Servicer,

                                       and

                    BANKERS TRUST COMPANY OF CALIFORNIA, N.A.
                                     Trustee

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

                         POOLING AND SERVICING AGREEMENT

                           Dated as of January 1, 2001

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

                       Mortgage Pass-Through Certificates

                                  Series 2001-1

<PAGE>

<TABLE>
<CAPTION>
                                                 TABLE OF CONTENTS
                                                 -----------------
                                                                                                               Page
<S>                                                                                                            <C>
ARTICLE I

         DEFINITIONS..............................................................................................6
         1.01.  Defined Terms.....................................................................................6
         Accrual Period...........................................................................................6
         Advance  ................................................................................................6
         Advisor's Fee............................................................................................6
         Advisor's Fee Rate.......................................................................................6
         Aggregate Stated Principal Balance.......................................................................6
         Agreement................................................................................................6
         Allocated Realized Loss Amount...........................................................................6
         Anniversary..............................................................................................6
         Assignment...............................................................................................6
         Available Distribution Amount............................................................................6
         Balloon Loan.............................................................................................7
         Balloon Payment..........................................................................................7
         Bankruptcy Code..........................................................................................7
         Basic Principal Distribution Amount......................................................................7
         Book-Entry Certificate...................................................................................7
         Business Day.............................................................................................7
         Buydown Funds............................................................................................7
         Buydown Mortgage Loan....................................................................................7
         Cash Liquidation.........................................................................................8
         Certificate..............................................................................................8
         Certificate Account......................................................................................8
         Certificate Account Deposit Date.........................................................................8
         Certificateholder" or "Holder............................................................................8
         Certificate Owner........................................................................................8
         Certificate Principal Balance............................................................................8
         Certificate Register.....................................................................................9
         Class    ................................................................................................9
         Class A Certificate......................................................................................9
         Class A-1 Certificate....................................................................................9
         Class A-1 Net WAC Rate...................................................................................9
         Class A-2 Certificate....................................................................................9
         Class A-2 Net WAC Rate...................................................................................9
         Class A-IO Cap Rate......................................................................................9
         Class A-IO Certificate...................................................................................9
         Class A Principal Distribution Amount...................................................................10
         Class B Certificate.....................................................................................10
         Class B Principal Distribution Amount...................................................................10
         Class C Certificate.....................................................................................10

                                        i

<PAGE>

         Class M-1 Certificate...................................................................................11
         Class M-1 Principal Distribution Amount.................................................................11
         Class M-2 Certificate...................................................................................11
         Class M-2 Principal Distribution Amount.................................................................11
         Class P Certificate.....................................................................................12
         Class R Certificate.....................................................................................12
         Class R-1 Interest......................................................................................12
         Class R-2 Interest......................................................................................12
         Class R-3 Interest......................................................................................12
         Closing Date............................................................................................12
         Code     ...............................................................................................12
         Collateral Value........................................................................................12
         Commission..............................................................................................12
         Company  ...............................................................................................12
         Compensating Interest...................................................................................12
         Consulting Agreement....................................................................................12
         Corporate Trust Office..................................................................................12
         Corresponding Certificate...............................................................................13
         Current Specified Overcollateralization Percentage......................................................13
         Curtailment.............................................................................................13
         Custodial Account.......................................................................................13
         Cut-off Date............................................................................................13
         Defaulted Mortgage Loan.................................................................................13
         Deficient Valuation.....................................................................................13
         Definitive Certificate..................................................................................13
         Deleted Mortgage Loan...................................................................................13
         Depository..............................................................................................13
         Depository Participant..................................................................................14
         Determination Date......................................................................................14
         Disqualified Organization...............................................................................14
         Distribution Date.......................................................................................14
         Due Date ...............................................................................................14
         Due Period..............................................................................................14
         Eligible Account........................................................................................14
         Event of Default........................................................................................15
         Excess Overcollateralized Amount........................................................................15
         Excess Proceeds.........................................................................................15
         Extra Principal Distribution Amount.....................................................................15
         Fannie Mae..............................................................................................15
         FDIC     ...............................................................................................15
         Fitch    ...............................................................................................15
         Freddie Mac.............................................................................................15
         Funding Date............................................................................................15
         GEMICO   ...............................................................................................16
         GEMICO Fee..............................................................................................16
         GEMICO Insured Loans....................................................................................16

                                       ii

<PAGE>

         GEMICO Policy...........................................................................................16
         GEMICO Rate.............................................................................................16
         GMAC     ...............................................................................................16
         Group 1 Loan............................................................................................16
         Group 2 Loan............................................................................................16
         Group 1 Marker Rate.....................................................................................16
         Group 1 Net Wac Rate....................................................................................17
         Group 2 Marker Rate.....................................................................................17
         Group 2 Net Wac Rate....................................................................................17
         Initial Certificate Principal Balance...................................................................17
         Initial Notional Amount.................................................................................18
         Insurance Policy........................................................................................18
         Insurance Proceeds......................................................................................18
         Interest Remittance Amount..............................................................................18
         Late Collections........................................................................................18
         Liquidated Mortgage Loan................................................................................18
         Liquidation Proceeds....................................................................................18
         Loan-to-Value Ratio.....................................................................................18
         Loss Mitigation Advisor.................................................................................19
         Loss Mitigation Advisory Agreement......................................................................19
         Lost Note Affidavit.....................................................................................19
         Majority Class C Certificateholder......................................................................19
         Master Servicer.........................................................................................19
         Master Servicer Prepayment Charge Payment Amount........................................................19
         Maximum Uncertificated Accrued Interest Deferral Amount.................................................19
         Mezzanine Certificate...................................................................................20
         Mezzanine Net WAC Rate..................................................................................20
         Monthly Interest Distributable Amount...................................................................20
         Monthly Payment.........................................................................................21
         Moody's  ...............................................................................................21
         Mortgage ...............................................................................................21
         Mortgage File...........................................................................................21
         Mortgage Loan...........................................................................................21
         Mortgage Loan Purchase Agreement........................................................................21
         Mortgage Loan Schedule..................................................................................21
         Mortgage Note...........................................................................................23
         Mortgage Rate...........................................................................................23
         Mortgaged Property......................................................................................23
         Mortgagor...............................................................................................23
         Net Liquidation Proceeds................................................................................23
         Net Monthly Excess Cashflow.............................................................................23
         Net Mortgage Rate.......................................................................................23
         Net Prepayment Interest Shortfall.......................................................................23
         Net WAC Rate............................................................................................23
         Nonrecoverable Advance..................................................................................24
         Non-United States Person................................................................................24

                                       iii

<PAGE>

         Notional Amount.........................................................................................24
         Officers' Certificate...................................................................................24
         Opinion of Counsel......................................................................................24
         Optional Termination Date...............................................................................25
         OTS      ...............................................................................................25
         Outstanding Mortgage Loan...............................................................................25
         Overcollateralization Deficiency Amount.................................................................25
         Overcollateralization Release Amount....................................................................25
         Overcollateralization Target Amount.....................................................................25
         Overcollateralized Amount...............................................................................25
         Ownership Interest......................................................................................25
         Pass-Through Rate.......................................................................................25
         Percentage Interest.....................................................................................28
         Permitted Investment....................................................................................28
         Permitted Transferee....................................................................................29
         Person   ...............................................................................................29
         Prepayment Assumption...................................................................................29
         Prepayment Charge.......................................................................................29
         Prepayment Interest Shortfall...........................................................................29
         Prepayment Period.......................................................................................29
         Primary Hazard Insurance Policy.........................................................................30
         Primary Insurance Policy................................................................................30
         Principal Distribution Amount...........................................................................30
         Principal Prepayment....................................................................................30
         Principal Prepayment in Full............................................................................30
         Principal Remittance Amount.............................................................................30
         Prospectus Supplement...................................................................................30
         Purchase Price..........................................................................................30
         Qualified Insurer.......................................................................................31
         Qualified Substitute Mortgage Loan......................................................................31
         Radian   ...............................................................................................31
         Radian Insured Loans....................................................................................31
         Radian Lender-Paid PMI Policy...........................................................................31
         Radian PMI Policy Rate..................................................................................31
         Rating Agency...........................................................................................31
         Realized Loss...........................................................................................32
         Record Date.............................................................................................32
         Regular Certificate.....................................................................................32
         Relief Act..............................................................................................32
         Relief Act Interest Shortfall...........................................................................32
         REMIC    ...............................................................................................32
         REMIC 1  ...............................................................................................32
         REMIC 1 Regular Interest LT1A...........................................................................33
         REMIC 1 Regular Interest LT1B...........................................................................33
         REMIC 1 Regular Interest LT1C...........................................................................33
         REMIC 1 Regular Interest LT1D...........................................................................33

                                       iv

<PAGE>

         REMIC 1 Regular Interest LT1P...........................................................................33
         REMIC 1 Regular Interests...............................................................................34
         REMIC 2  ...............................................................................................34
         REMIC 2 Group 1 Interest Loss Allocation Amount.........................................................34
         REMIC 2 Group 2 Interest Loss Allocation Amount.........................................................34
         REMIC 2 Overcollateralization Target Amount.............................................................34
         REMIC 2 Overcollateralized Amount.......................................................................34
         REMIC 2 Group 1 Principal Loss Allocation Amount........................................................34
         REMIC 2 Group 2 Principal Loss Allocation Amount........................................................35
         REMIC 2 Regular Interest LT2A...........................................................................35
         REMIC 2 Regular Interest LT2A-IOA.......................................................................35
         REMIC 2 Regular Interest LT2A-IOB.......................................................................35
         REMIC 2 Regular Interest LT2A-IOC.......................................................................35
         REMIC 2 Regular Interest LT2A-IOD.......................................................................35
         REMIC 2 Regular Interest LT2A-IOE.......................................................................35
         REMIC 2 Regular Interest LT2B...........................................................................35
         REMIC 2 Regular Interest LT2C...........................................................................36
         REMIC 2 Regular Interest LT2D...........................................................................36
         REMIC 2 Regular Interest LT2E...........................................................................36
         REMIC 2 Regular Interest LT2F...........................................................................36
         REMIC 2 Regular Interest LT2G...........................................................................36
         REMIC 2 Regular Interest LT2H...........................................................................36
         REMIC 2 Regular Interest LT2I...........................................................................37
         REMIC 2 Regular Interest LT2J...........................................................................37
         REMIC 2 Regular Interest LT2K...........................................................................37
         REMIC 2 Regular Interest LT2L...........................................................................37
         REMIC 2 Regular Interest LT2P...........................................................................37
         REMIC 2 Regular Interests...............................................................................37
         REMIC 3  ...............................................................................................38
         REMIC Provisions........................................................................................38
         REMIC Regular Interest..................................................................................38
         Remittance Report.......................................................................................38
         REO Acquisition.........................................................................................38
         REO Disposition.........................................................................................38
         REO Imputed Interest....................................................................................38
         REO Proceeds............................................................................................38
         REO Property............................................................................................38
         Request for Release.....................................................................................38
         Residual Interest.......................................................................................39
         Responsible Officer.....................................................................................39
         Seller   ...............................................................................................39
         Servicing Account.......................................................................................39
         Servicing Advances......................................................................................39
         Servicing Fees..........................................................................................39
         Servicing Fee Rate......................................................................................39
         Servicing Guide.........................................................................................39

                                        v

<PAGE>

         Servicing Officer.......................................................................................39
         Single Certificate......................................................................................40
         Special Deposit.........................................................................................40
         Standard & Poor's.......................................................................................40
         Startup Day.............................................................................................40
         Stated Principal Balance................................................................................40
         Stepdown Date...........................................................................................40
         Sub-Servicer............................................................................................40
         Sub-Servicer Remittance Date............................................................................40
         Sub-Servicing Account...................................................................................40
         Sub-Servicing Agreement.................................................................................41
         Substitution Adjustment.................................................................................41
         Tax Returns.............................................................................................41
         Transfer ...............................................................................................41
         Transferor..............................................................................................41
         Trigger Event...........................................................................................41
         Trust Fund..............................................................................................42
         Trustee  ...............................................................................................42
         Trustee's Fee...........................................................................................42
         Trustee Fee Rate........................................................................................42
         Uncertificated Accrued Interest.........................................................................42
         Uncertificated Notional Amount..........................................................................42
         Uncertificated Principal Balance........................................................................42
         Uncertificated Pass-Through Rate........................................................................43
         Uncertificated REMIC 1 Pass-Through Rate................................................................43
         Uncertificated REMIC 2 Pass-Through Rate................................................................43
         Uninsured Cause.........................................................................................44
         United States Person....................................................................................44
         Unpaid Interest Shortfall Amount........................................................................44
         Voting Rights...........................................................................................44
         Wendover ...............................................................................................45
         1.02     Allocation of Certain Interest Shortfalls......................................................45

ARTICLE II

         CONVEYANCE OF MORTGAGE LOANS;
         ORIGINAL ISSUANCE OF CERTIFICATES.......................................................................47
         2.01.    Conveyance of Mortgage Loans...................................................................47
         2.02.    Acceptance of the Trust Fund by the Trustee....................................................50
         2.03.    Representations, Warranties and Covenants of the Master Servicer and the
                  Company........................................................................................51
         2.04.    Representations and Warranties of the Seller...................................................54
         2.05.    Issuance of Certificates; Conveyance of  REMIC Regular Interests and
                  Acceptance of REMIC 2 by the Trustee...........................................................55

                                       vi

<PAGE>

ARTICLE III

         ADMINISTRATION AND SERVICING
         OF THE TRUST FUND.......................................................................................57
         3.01.    Master Servicer to Act as Master Servicer......................................................57
         3.02.    Sub-Servicing Agreements Between Master Servicer and Sub-Servicers.............................58
         3.03.    Successor Sub-Servicers........................................................................60
         3.04.    Liability of the Master Servicer...............................................................60
         3.05.    No Contractual Relationship Between Sub-Servicers and Trustee or
                  Certificateholders.............................................................................60
         3.06.    Assumption or Termination of Sub-Servicing Agreements by Trustee...............................61
         3.07.    Collection of Certain Mortgage Loan Payments...................................................61
         3.08.    Sub-Servicing Accounts.........................................................................62
         3.09.    Collection of Taxes, Assessments and Similar Items; Servicing Accounts.........................63
         3.10.    Custodial Account..............................................................................63
         3.11.    Permitted Withdrawals From the Custodial Account...............................................64
         3.12.    Permitted Investments..........................................................................65
         3.13.    Maintenance of Primary Hazard Insurance. ......................................................66
         3.14.    Enforcement of Due-on-Sale Clauses; Assumption Agreements......................................68
         3.15.    Realization Upon Defaulted Mortgage Loans......................................................70
         3.16.    Trustee to Cooperate; Release of Mortgage Files................................................71
         3.17.    Servicing Compensation.........................................................................72
         3.18.    Maintenance of Certain Servicing Policies......................................................72
         3.19.    Annual Statement as to Compliance..............................................................73
         3.20.    Annual Independent Public Accountants' Servicing Statement.....................................73
         3.21.    Access to Certain Documentation................................................................74
         3.22.    Title, Conservation and Disposition of REO Property............................................74
         3.23.    Additional Obligations of the Master Servicer..................................................76
         3.24     Optional Purchase of Defaulted Mortgage Loans..................................................76
         3.25.    Additional Obligations of the Company..........................................................77
         3.26.    Periodic Filings with the Securities and Exchange Commission; Additional
                  Information....................................................................................77
         3.27.    Administration of Buydown Funds................................................................78

ARTICLE IV

         PAYMENTS TO CERTIFICATEHOLDERS..........................................................................79
         4.01.    Distributions..................................................................................79
         4.02.    Statements to Certificateholders...............................................................84
         4.03.    Remittance Reports; Advances by the Master Servicer............................................86
         4.04.    Distributions on the REMIC Regular Interests...................................................88
         4.05.    Allocation of Realized Losses..................................................................91
         4.06.    Information Reports to Be Filed by the Master Servicer.........................................92
         4.07.    Compliance with Withholding Requirements.......................................................93

                                       vii

<PAGE>

ARTICLE V

         THE CERTIFICATES........................................................................................94
         5.01.    The Certificates...............................................................................94
         5.02.    Registration of Transfer and Exchange of Certificates..........................................96
         5.03.    Mutilated, Destroyed, Lost or Stolen Certificates.............................................100
         5.04.    Persons Deemed Owners.........................................................................100
         5.05.    Rule 144A Information.........................................................................100

ARTICLE VI

         THE COMPANY AND THE MASTER SERVICER....................................................................102
         6.01.    Liability of the Company and the Master Servicer..............................................102
         6.02.    Merger, Consolidation or Conversion of the Company or the Master Servicer
                   .............................................................................................102
         6.03.    Limitation on Liability of the Company, the Master Servicer and Others........................102
         6.04.    Limitation on Resignation of the Master Servicer..............................................103
         6.05.    Sale and Assignment of Master Servicing.......................................................104

ARTICLE VII

         DEFAULT................................................................................................105
         7.01.    Events of Default.............................................................................105
         7.02.    Trustee to Act; Appointment of Successor......................................................107
         7.03.    Notification to Certificateholders............................................................107
         7.04.    Waiver of Events of Default...................................................................108
         7.05.    List of Certificateholders....................................................................108

ARTICLE VIII

         CONCERNING THE TRUSTEE.................................................................................109
         8.01.    Duties of Trustee.............................................................................109
         8.02.    Certain Matters Affecting the Trustee.........................................................110
         8.03.    Trustee Not Liable for Certificates or Mortgage Loans.........................................111
         8.04.    Trustee May Own Certificates..................................................................112
         8.05.    Trustee's Fees................................................................................112
         8.06.    Eligibility Requirements for Trustee..........................................................112
         8.07.    Resignation and Removal of the Trustee........................................................113
         8.08.    Successor Trustee.............................................................................114
         8.09.    Merger or Consolidation of Trustee............................................................114
         8.10.    Appointment of Co-Trustee or Separate Trustee.................................................114

ARTICLE IX

         TERMINATION............................................................................................116

                                      viii

<PAGE>

         9.01.    Termination Upon Repurchase or Liquidation of All Mortgage Loans or upon
                  Purchase of Certificates......................................................................116
         9.02.    Termination of REMIC 2 and REMIC 3............................................................118
         9.03.    Additional Termination Requirements...........................................................118

ARTICLE X

         REMIC PROVISIONS.......................................................................................119
         10.01.   REMIC Administration..........................................................................119
         10.02.   Prohibited Transactions and Activities........................................................121
         10.03.   Master Servicer and Trustee Indemnification...................................................122

ARTICLE XI

         MISCELLANEOUS PROVISIONS...............................................................................123
         11.01.   Amendment.....................................................................................123
         11.02.   Recordation of Agreement; Counterparts........................................................124
         11.03.   Limitation on Rights of Certificateholders....................................................124
         11.04.   Governing Law.................................................................................125
         11.05.   Notices.......................................................................................125
         11.06.   Severability of Provisions....................................................................126
         11.07.   Successors and Assigns........................................................................126
         11.08.   Article and Section Headings..................................................................126
         11.09.   Notice to Rating Agencies.....................................................................126

         Signatures
         Acknowledgments

         Exhibit A-1       Form of Class A-1 Certificate
         Exhibit A-2       Form of Class A-2 Certificate
         Exhibit A-3       Form of Class A-IO Certificate
         Exhibit A-4       Form of Class M-1 Certificate
         Exhibit A-5       Form of Class M-2 Certificate
         Exhibit A-6       Form of Class B Certificate
         Exhibit A-7       Form of Class P Certificate
         Exhibit A-8       Form of Class C Certificate
         Exhibit A-9       Form of Class R Certificate
         Exhibit C         Form of Trustee Initial Certification
         Exhibit D         Form of Trustee Final Certification
         Exhibit E         Form of Remittance Report
         Exhibit F-1       Request for Release
         Exhibit F-2       Request for Release for Mortgage Loans Paid in Full
         Exhibit G-1       Form of Investor Representation Letter
         Exhibit G-2       Form of Transferor Representation Letter
         Exhibit G-3       Form of Rule 144A Investment Representation
         Exhibit G-4       Transferor Certificate for Transfers of Residual Certificates

                                       ix

<PAGE>

         Exhibit G-5       Transfer Affidavit and Agreement for Transfers of Residual Certificates
         Exhibit G-6       Form of Investor Representation Letter for Insurance Companies
         Exhibit H         Mortgage Loan Schedule
         Exhibit I         Seller Representations and Warranties
         Exhibit J         Form of Notice Under Section 3.25
         Exhibit K         Impac Funding Corporation Servicing Guide
         Exhibit L         Consulting Agreement between Trustee and Loss Mitigation Advisor
         Exhibit M         Loss Mitigation Advisory Agreement
         Exhibit N         GEMICO Policy
</TABLE>

                                        x

<PAGE>

                  This Pooling and Servicing Agreement, dated and effective as
of January 1, 2001, among Impac Secured Assets Corp., as company (the
"Company"), Impac Funding Corporation, as master servicer (the "Master
Servicer"), and Bankers Trust Company of California, N.A., as trustee (the
"Trustee").

                             PRELIMINARY STATEMENT:

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

                                     REMIC 1
                                     -------

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

<TABLE>
<CAPTION>
    Designation          Uncertificated REMIC 1          Initial Uncertificated             Assumed Final
                            Pass-Through Rate               Principal Balance             Maturity Date (1)
------------------- --------------------------------- ----------------------------        -----------------
<S>                 <C>                               <C>                                 <C>
       LT1A                    Variable(2)                 $      178,200,367               February 2031
       LT1B                    Variable(2)                 $        1,290,865               February 2031
       LT1C                    Variable(2)                 $          509,139               February 2031
       LT1D                    Variable(2)                 $       20,000,000               February 2031
       LT1P                    Variable(2)                 $              100               February 2031
</TABLE>

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

<PAGE>

                                     REMIC 2
                                     -------

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

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

<TABLE>
<CAPTION>
                         Uncertificated REMIC 2         Initial Uncertificated                 Assumed Final
    Designation             Pass-Through Rate              Principal Balance                 Maturity Date (1)
    -----------     -------------------------------- -----------------------------           -----------------
<S>                 <C>                              <C>                                     <C>
       LT2A                   Variable(2)                   $     140,560,790.40                 February 2031
       LT2B                   Variable(2)                   $       1,362,490.00                 February 2031
       LT2C                   Variable(2)                   $          32,310.50                 February 2031
       LT2D                   Variable(2)                   $          25,130.39                 February 2031
       LT2E                   Variable(2)                   $          14,360.22                 February 2031
       LT2F                   Variable(2)                   $       1,434,297.16                 February 2031
       LT2G                   Variable(2)                   $      55,439,573.14                 February 2031
       LT2H                   Variable(2)                   $         537,510.00                 February 2031
       LT2I                   Variable(2)                   $          12,689.50                 February 2031
       LT2J                   Variable(2)                   $           9,869.61                 February 2031
       LT2K                   Variable(2)                   $           5,639.78                 February 2031
       LT2L                   Variable(2)                   $         565,711.26                 February 2031
     LT2A-IOA                 Variable(3)                          N/A(8)                        February 2031
     LT2A-IOB                 Variable(4)                          N/A(8)                        February 2031
     LT2A-IOC                 Variable(5)                          N/A(8)                        February 2031
     LT2A-IOD                 Variable(6)                          N/A(8)                        February 2031
     LT2A-IOE                 Variable(7)                          N/A(8)                        February 2031
       LT2P                   Variable(2)                   $              100.00                February 2031
</TABLE>

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

(2)      Calculated in accordance with the definition of "Uncertificated REMIC 2
         Pass-Through Rate" herein.

(3)      The lesser of (a) 5.50% per annum for the first 30 Distribution Dates
         and 0.00% per annum thereafter and (b) the Class A-IO Cap Rate less
         2.50% per annum for the first 6 Distribution Dates, and less 2% per
         annum for the second 6 Distribution Dates.

(4)      1.00% per annum for the first 24 Distribution Dates and 0.00% per annum
         thereafter.

(5)      0.50% per annum for the first 18 Distribution Dates and 0.00% per annum
         thereafter.

                                        2

<PAGE>

(6)      0.50% per annum for the first 12 Distribution Dates and 0.00% per annum
         thereafter.

(7)      0.50% per annum for the first 6 Distribution Dates and 0.00% per annum
         thereafter.

(8)      REMIC 2 Regular Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB,
         REMIC 2 Regular Interest LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD
         and REMIC 2 Regular Interest LT2A-IOE will not have Uncertificated
         Principal Balances, but will accrue interest on their respective
         Uncertificated Notional Amounts outstanding from time to time which in
         each case shall equal the Uncertificated Principal Balance of REMIC 1
         Regular Interest LT1D.

                                        3

<PAGE>

                                     REMIC 3
                                     -------

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

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

<TABLE>
<CAPTION>
                                         Initial
                                  Certificate Principal              Pass-Through                 Assumed Final
      Class Designation                  Balance                         Rate                    Maturity Date(1)
      -----------------                  -------                         ----                    ----------------
<S>                               <C>                                <C>                         <C>
Class A-1                            $136,249,000.00                  Variable(2)                 February 2031
Class A-2                            $ 53,751,000.00                  Variable(2)                 February 2031
Class M-1                            $  4,500,000.00                  Variable(2)                 February 2031
Class M-2                            $  3,500,000.00                  Variable(2)                 February 2031
Class B                              $  2,000,000.00                  Variable(2)                 February 2031
Class C                              $      (3)                       Variable(2)                 February 2031
Class A-IO                              N/A (4)                       Variable(2)                 February 2031
Class P                                      $100.00                    N/A(5)                    February 2031
</TABLE>

-------------------
(1)      Solely for purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
         regulations, the Distribution Date in the month following the maturity
         date for the Mortgage Loan with the latest maturity date has been
         designated as the "latest possible maturity date" for each Class of
         Certificates that represents one or more of the "regular interests" in
         REMIC 3.

(2)      Calculated in accordance with the definition of "Pass-Through Rate"
         herein.

(3)      The Class C Certificates will accrue interest at their variable
         Pass-Through Rate on the Notional Amount of the Class C Certificates
         outstanding from time to time which shall equal the aggregate of the
         Uncertificated Principal Balances of the REMIC 2 Regular Interests. The
         Class C Certificates will not accrue interest on their Certificate
         Principal Balance.

(4)      The Class A-IO Certificates do not have a Certificate Principal Balance
         and are not entitled to distributions of principal. The Class A-IO
         Certificates accrue interest on a Notional Amount calculated in
         accordance with the definition of "Notional Amount" herein.

(5)      The Class P Certificates do not accrue interest.

         Using the Structuring Assumptions (as defined in the Prospectus
Supplement) and assuming prepayments at 0% of the Prepayment Assumption, the
final scheduled Distribution Date on each Class of Certificates would be as
follows: (i) for the Certificates (other than the Class A-IO Certificates), the
Distribution Date in February 2031; and (ii) for the Class A-IO Certificates,
the Distribution Date in July 2003.

                                        4

<PAGE>

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

                                        5

<PAGE>

                                    ARTICLE I

                                   DEFINITIONS

          SECTION 1.01. Defined Terms.

          Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the meanings specified in this
Article. Unless otherwise specified, all calculations in respect of interest on
the Class A Certificates, the Mezzanine Certificates, the Class C Certificates,
the REMIC 1 Regular Interests, the REMIC 2 Regular Interests and the REMIC 3
Regular Interests shall be made on the basis a 360-day year consisting of twelve
30-day months. The Class P Certificates and the Class R Certificates do not
accrue interest.

          "Accrual Period": With respect to each Class of Regular Certificates
(other than the Class P Certificates) and each Distribution Date, the calendar
month prior to the month of such Distribution Date.

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

          "Advisor's Fee": An amount equal to the Advisor's Fee Rate multiplied
by the Stated Principal Balance of each Mortgage Loan.

          "Advisor's Fee Rate": 0.01% per annum.

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

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

          "Allocated Realized Loss Amount": With respect to any Distribution
Date and any Class of Mezzanine Certificates, the sum of (i) any Realized Losses
allocated to such Class of Certificates on any Distribution Date and (ii) the
amount of any Allocated Realized Loss Amount for such Class of Certificates
remaining unpaid from the previous Distribution Date.

          "Anniversary": Each anniversary of January 1, 2001.

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

          "Available Distribution Amount": With respect to any Distribution
Date, an amount equal to (a) the sum of (i) the balance on deposit in the
Custodial Account as of the close of business

                                        6

<PAGE>

on the related Determination Date and (ii) the aggregate amount of any Advances
made and all amounts required to be paid by the Master Servicer pursuant to
Sections 3.13 and 3.23 by deposits into the Certificate Account on the
immediately preceding Certificate Account Deposit Date, reduced by (b) the sum,
as of the close of business on the related Determination Date, of (i) Monthly
Payments collected but due during a Due Period subsequent to the Due Period
ending on the first day of the month of the related Distribution Date, (ii) all
interest or other income earned on deposits in the Custodial Account or the
Certificate Account, (iii) any other amounts reimbursable or payable to the
Trustee, Master Servicer or any Sub-Servicer pursuant to Section 3.11, (iv) the
Servicing Fees, the fees of the Trustee and the Advisor's Fee payable on such
Distribution Date, (v) any amounts in respect of the premium payable to Radian
under the Radian Lender-Paid PMI Policies or payable to GEMICO under the GEMICO
Policy, (vi) Insurance Proceeds, Liquidation Proceeds, Principal Prepayments,
REO Proceeds and the proceeds of Mortgage Loan purchases made pursuant to
Section 2.02, 2.04, 3.14, 3.22 or 3.24, in each case received or made in the
month of such Distribution Date and (vii) amounts on deposit in the Custodial
Account representing any Prepayment Charges or Master Servicer Prepayment Charge
Payment Amounts.

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

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

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

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

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

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

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

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

                                        7

<PAGE>

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

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

          "Certificate Account": The trust account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled "Bankers Trust
Company of California, N.A., in trust for registered holders of Impac Secured
Assets Corp., Mortgage Pass-Through Certificates, Series 2001- 1, and which
account or accounts must each be an Eligible Account.

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

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

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

          "Certificate Principal Balance": With respect to any Class of Regular
Certificates (other than the Class A-IO Certificates and Class C Certificates)
immediately prior to any Distribution Date, the Initial Certificate Principal
Balance thereof reduced by the sum of all amounts actually distributed in
respect of principal of such Class and, in the case of a Mezzanine Certificate,
Realized Losses allocated thereto on all prior Distribution Dates. With respect
to the Class C Certificates as of any date of determination, an amount equal to
the excess, if any, of (A) the then aggregate Uncertificated Principal Balances
of the REMIC 2 Regular Interests over (B) the then

                                        8

<PAGE>

aggregate Certificate Principal Balances of the Class A Certificates, the
Mezzanine Certificates and the Class P Certificates then outstanding. The Class
A-IO Certificates will not have a Certificate Principal Balance.

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

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

          "Class A Certificate": Any one of the Class A-1 Certificates, Class
A-2 Certificates or Class A-IO Certificates.

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

          "Class A-1 Net WAC Rate": (A) For the February 2001 Distribution Date
through the July 2003 Distribution Date, a per annum rate equal to the Net WAC
Rate, and (B) for each Distribution Date thereafter, the weighted average of the
Net Mortgage Rates of the Group 1 Loans as of the first day of the month
preceding the month in which such Distribution Date occurs.

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

          "Class A-2 Net WAC Rate": (A) For the February 2001 Distribution Date
through the July 2003 Distribution Date, a per annum rate equal to the Net WAC
Rate, and (B) for each Distribution Date thereafter, the weighted average of the
Net Mortgage Rates of the Group 2 Loans as of the first day of the month
preceding the month in which such Distribution Date occurs.

          "Class A-IO Cap Rate": With respect to the Class A-IO Certificates and
any Distribution Date, a per annum rate equal to the weighted average of the Net
Mortgage Rates of the Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.

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

                                        9

<PAGE>

          "Class A Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class A Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and (b) the aggregate Stated Principal Balance of the Mortgage Loans as
of the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) multiplied by the sum of (A) approximately
10.00% and (B) the Current Specified Overcollateralization Percentage.

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

          "Class B Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class B Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and (b) the sum of (1) the Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (3) the
Certificate Principal Balance of the Class M-2 Certificates (after taking into
account the payment of the Class M-2 Principal Distribution Amount on such
Distribution Date), and (4) the aggregate Stated Principal Balance of the
Mortgage Loans as of the last day of the related Due Period (after giving effect
to scheduled payments of principal due during the related Due Period, to the
extent received or advanced, and unscheduled collections of principal received
during the related Prepayment Period, and after reduction for Realized Losses
incurred during the related Prepayment Period) multiplied by the Current
Specified Overcollateralization Percentage.

          "Class C Certificate": Any one of the Class C Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-7, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a Regular Interest in REMIC 3.

                                       10

<PAGE>

          "Class M-1 Certificate": Any one of the Class M-1 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-4, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a Regular Interest in REMIC 3.

          "Class M-1 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class M-1 Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) and (b) the sum of (1) the Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date) and (2) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period) multiplied by the sum of (A) approximately 5.50% and (B) the Current
Specified Overcollateralization Percentage.

          "Class M-2 Certificate": Any one of the Class M-2 Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-5, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a Regular Interest in REMIC 3.

          "Class M-2 Principal Distribution Amount": For any applicable
Distribution Date, an amount equal to the excess (if any) of (x) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the difference between (a) the aggregate Stated
Principal Balance of the Mortgage Loans as of the last day of the related Due
Period (after giving effect to scheduled payments of principal due during the
related Due Period, to the extent received or advanced, and unscheduled
collections of principal received during the related Prepayment Period, and
after reduction for Realized Losses incurred during the related Prepayment
Period), and (b) the sum of (1) the Certificate Principal Balance of the Class A
Certificates (after taking into account the payment of the Class A Principal
Distribution Amount on such Distribution Date), (2) the Certificate Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), and (3)
the aggregate Stated Principal Balance of the Mortgage Loans as of the last day
of the related Due Period (after giving effect to scheduled payments of
principal due during the related Due Period, to the extent received or advanced,
and unscheduled collections of principal received during the related Prepayment
Period, and after reduction for Realized Losses incurred during the related
Prepayment Period) multiplied by the sum of (A) approximately 2.00% and (B) the
Current Specified Overcollateralization Percentage.

                                       11

<PAGE>

          "Class P Certificate": Any one of the Class P Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-8, executed by the Trustee and authenticated and delivered by the
Trustee, representing the right to distributions as set forth herein and therein
and evidencing a Regular Interest in REMIC 3.

          "Class R Certificate": Any one of the Class R Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit A-9, executed by the Trustee and authenticated and delivered by the
Trustee, evidencing the ownership of the Class R-1 Interest, Class R-2 Interest
and the Class R-3 Interest.

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

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

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

          "Closing Date": January 30, 2001.

          "Code": The Internal Revenue Code of 1986.

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

          "Commission": The Securities and Exchange Commission.

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

          "Compensating Interest": With respect to any Distribution Date, an
amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments during the related Prepayment Period, but not more than the
Servicing Fees for the immediately preceding Due Period.

          "Consulting Agreement": The Consulting Agreement, dated as of January
30, 2001, between the Trustee and the Loss Mitigation Advisor, substantially in
form attached hereto as Exhibit L.

          "Corporate Trust Office": The principal corporate trust office of the
Trustee at which at any particular time its corporate trust business related to
this Agreement shall be administered, which office at the date of the execution
of this Agreement is located at 1761 East St. Andrew Place,

                                       12

<PAGE>

Santa Ana, California 92705, Attention: Corporate Trust, Impac Secured Assets
Corp. Series 2001-1 [IM01S1].

          "Corresponding Certificate": With respect to (i) REMIC 2 Regular
Interest LT2B, (ii) REMIC 2 Regular Interest LT2C and REMIC 2 Regular Interest
2T2I, (iii) REMIC 2 Regular Interest LT2D and REMIC 2 Regular Interest LT2J,
(iv) REMIC 2 Regular Interest LT2E and REMIC 2 Regular Interest LT2K and (v)
REMIC 2 Regular Interest LT2P, the (i) Class A-1 Certificates, (ii) Class A-2
Certificates, (iii) Class M-1 Certificates, (iv) Class M-2 Certificates, (v)
Class B Certificates and (vi) Class P Certificates, respectively.

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

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

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

          "Cut-off Date": January 1, 2001.

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

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

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

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

          "Depository" The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing

                                       13

<PAGE>

corporation" as defined in Section 8-102(5) of the Uniform Commercial Code of
the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.

          "Depository Participant": A broker, dealer, bank or other financial
institutions or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.

          "Determination Date": The 15th day (or if such 15th day is not a
Business Day, the Business Day immediately preceding such 15th day) of the month
of the related Distribution Date.

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

          "Distribution Date": The 25th day of any month, or if such 25th day is
not a Business Day, the Business Day immediately following such 25th day,
commencing in February 2001.

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

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

          "Eligible Account": Any of (i) a segregated account maintained with a
federal or state chartered depository institution (A) the short-term obligations
of which are rated A-1+ or better by Standard & Poor's and P-1 by Moody's (and
F-1 by Fitch if rated by Fitch) at the time of any deposit therein or (B)
insured by the FDIC (to the limits established by such Corporation), the

                                       14

<PAGE>

uninsured deposits in which account are otherwise secured such that, as
evidenced by an Opinion of Counsel (obtained by the Person requesting that the
account be held pursuant to this clause (ii)) delivered to the Trustee prior to
the establishment of such account, the Certificateholders will have a claim with
respect to the funds in such account and a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments, each of which shall mature not later than the Business Day
immediately preceding the Distribution Date next following the date of
investment in such collateral or the Distribution Date if such Permitted
Investment is an obligation of the institution that maintains the Certificate
Account or Custodial Account) securing such funds that is superior to claims of
any other depositors or general creditors of the depository institution with
which such account is maintained, (ii) a segregated trust account or accounts
maintained with a federal or state chartered depository institution or trust
company with trust powers acting in its fiduciary capacity or (iii) a segregated
account or accounts of a depository institution acceptable to the Rating
Agencies (as evidenced in writing by the Rating Agencies that use of any such
account as the Custodial Account or the Certificate Account will not have an
adverse effect on the then- current ratings assigned to the Classes of the
Certificates then rated by the Rating Agencies). Eligible Accounts may bear
interest.

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

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

          "Excess Proceeds": As defined in Section 3.22.

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

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

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

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

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

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

                                       15

<PAGE>

          "GEMICO": General Electric Mortgage Insurance Corporation, or its
successors or assigns.

          "GEMICO Fee": An amount equal to the GEMICO Rate multiplied by the
Stated Principal Balance of each GEMICO Insured Loan.

          "GEMICO Insured Loans": The Mortgage Loans included in the Trust Fund
covered by the GEMICO Policy, as indicated on the Mortgage Loan Schedule.

          "GEMICO Policy": A supplemental mortgage portfolio insurance policy
issued by GEMICO on January 30, 2001, and all endorsements and schedules that
are incorporated in the policy, substantially in the form attached hereto as
Exhibit N.

          "GEMICO Rate": With respect to any GEMICO Insured Loan, the rate per
annum at which the related premium on the GEMICO Policy accrues.

          "GMAC": GMAC Mortgage Corporation.

          "Group 1 Loan": Any Mortgage Loan identified as a Group 1 Loan on the
Mortgage Loan Schedule.

          "Group 2 Loan": Any Mortgage Loan identified as a Group 2 Loan on the
Mortgage Loan Schedule.

          "Group 1 Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular
Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest LT2D,
REMIC 2 Regular Interest LT2E and REMIC 2 Regular Interest LT2F, with the rate
on REMIC 2 Regular Interest LT2B subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 6.95% per annum and (y) the Group 1 Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 7.45% per annum and (y) the Group 1 Net WAC Rate for the purpose of this
calculation, with the rate on REMIC 2 Regular Interest LT2C subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.46% per annum and (y) the Group 1
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 7.96% per annum and (y) the Group 1 Net WAC
Rate for the purpose of this calculation; with the rate on REMIC 2 Regular
Interest LT2D subject to a cap equal to (A) in the case of any Distribution Date
up to and including the Optional Termination Date, the lesser of (x) 7.75% per
annum and (y) the Group 1 Net WAC Rate and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) 8.25% per annum and
(y) the Group 1 Net WAC Rate for the purpose of this calculation, with the rate
on REMIC 2 Regular Interest LT2E subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 8.00% per

                                       16

<PAGE>

annum and (y) the Group 1 Net WAC Rate and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) 8.50% per annum and
(y) the Group 1 Net WAC Rate for the purpose of this calculation and with the
rate on REMIC 2 Regular Interest LT2F subject to a cap of zero for the purpose
of this calculation.

          "Group 1 Net Wac Rate": With respect to each Distribution Date through
and including the Distribution Date in July 2003, the Net Wac Cap Rate and for
each Distribution Date thereafter, the weighted average of the Net Mortgage
Rates of the Group 1 Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.

          "Group 2 Marker Rate": With respect to the Class C Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC 2 Pass-Through Rates for REMIC 2 Regular
Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest LT2J,
REMIC 2 Regular Interest LT2K and REMIC 2 Regular Interest LT2L; with the rate
on REMIC 2 Regular Interest LT2H subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 7.75% per annum and (y) the Group 2 Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 8.25% per annum and (y) the Group 2 Net WAC Rate for the purpose of this
calculation, with the rate on REMIC 2 Regular Interest LT2I subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 7.46% per annum and (y) the Group 2
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 7.96% per annum and (y) the Group 2 Net WAC
Rate for the purpose of this calculation, with the rate on REMIC 2 Regular
Interest LT2J subject to a cap equal to (A) in the case of any Distribution Date
up to and including the Optional Termination Date, the lesser of (x) 7.75% per
annum and (y) the Group 2 Net WAC Rate and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) 8.25% per annum and
(y) the Group 2 Net WAC Rate for the purpose of this calculation, with the rate
on REMIC 2 Regular Interest LT2K subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 8.00% per annum and (y) the Group 2 Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 8.50% per annum and (y) the Group 2 Net WAC Rate for the purpose of this
calculation and with the rate on REMIC 2 Regular Interest LT2L subject to a cap
of zero for the purpose of this calculation.

          "Group 2 Net Wac Rate": With respect to each Distribution Date through
and including the Distribution Date in July 2003, the Net Wac Cap Rate and for
each Distribution Date thereafter, the weighted average of the Net Mortgage
Rates of the Group 2 Mortgage Loans, weighted on the basis of the Stated
Principal Balances thereof as of the close of business on the first day of the
calendar month preceding the month in which such Distribution Date occurs.

          "Initial Certificate Principal Balance": With respect to each Class of
Regular Certificates (other than the Class A-IO Certificates), the Initial
Certificate Principal Balance of such

                                       17

<PAGE>

Class of Certificates as set forth in the Preliminary Statement hereto, or with
respect to any single Certificate, the Initial Certificate Principal Balance as
stated on the face thereof.

          "Initial Notional Amount": With respect to the Class A-IO
Certificates, $20,000,000.00 or with respect to any single Certificate, the
Initial Notional Amount as stated on the face thereof. With respect to the Class
C Certificate, the aggregate of the initial Uncertificated Principal Balance of
the REMIC 2 Regular Interests, or with respect to any single Certificate, the
Initial Notional Amount as stated on the face thereof.

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

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

          "Interest Remittance Amount": With respect to any Distribution Date,
that portion of the Available Distribution Amount for such Distribution Date
allocable to interest.

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

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

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

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

                                       18

<PAGE>

          "Loss Mitigation Advisor": The Murrayhill Company, or its successors
or assigns.

          "Loss Mitigation Advisory Agreement": The Loss Mitigation Advisory
Agreement, among GMAC, the Trustee and the Loss Mitigation Advisor,
substantially in the form attached hereto as Exhibit M.

          "Lost Note Affidavit": With respect to any Mortgage Note, an original
lost note affidavit from the Seller stating that the original Mortgage Note was
lost, misplaced or destroyed, together with a copy of the related Mortgage Note.

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

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

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

          "Maximum Uncertificated Accrued Interest Deferral Amount": With
respect to any Distribution Date, the excess of (a) accrued interest at the
Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest
LT2F for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2F and accrued interest at the
Uncertificated REMIC 2 Pass-Through Rate applicable to REMIC 2 Regular Interest
LT2L for such Distribution Date on a balance equal to the Uncertificated
Principal Balance of REMIC 2 Regular Interest LT2L minus the REMIC 2
Overcollateralized Amount, in each case for such Distribution Date, over (b)
Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2B, with the rate
on REMIC 2 Regular Interest LT2B subject to a cap equal to (A) in the case of
any Distribution Date up to and including the Optional Termination Date, the
lesser of (x) 6.95% per annum and (y) the Group 1 Net WAC Rate and (B) in the
case of any Distribution Date after the Optional Termination Date, the lesser of
(x) 7.45% per annum and (y) the Group 1 Net WAC Rate for the purpose of this
calculation, Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2C,
with the rate on REMIC 2 Regular Interest LT2C subject to a cap equal to (A) in
the case of any Distribution Date up to and including the Optional Termination
Date, the lesser of (x) 7.46% per annum and (y) the Group 1 Net WAC Rate and (B)
in the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 7.96% per annum and (y) the Group 1 Net WAC Rate for the purpose
of this calculation, Uncertificated Accrued Interest on REMIC 2 Regular Interest
LT2D, with the rate on REMIC 2 Regular Interest LT2D subject to a cap equal to
(A) in the case of any Distribution Date up to and including the Optional
Termination Date, the lesser of (x) 7.75% per annum and (y) the Group 1 Net WAC
Rate and (B) in the case of any Distribution Date after the Optional Termination
Date, the lesser of (x) 8.25% per annum and (y) the Group 1 Net WAC Rate

                                       19

<PAGE>

for the purpose of this calculation, and Uncertificated Accrued Interest on
REMIC 2 Regular Interest LT2E, with the rate on REMIC 2 Regular Interest LT2E
subject to a cap equal to (A) in the case of any Distribution Date up to and
including the Optional Termination Date, the lesser of (x) 8.00% per annum and
(y) the Group 1 Net WAC Rate and (B) in the case of any Distribution Date after
the Optional Termination Date, the lesser of (x) 8.50% per annum and (y) the
Group 1 Net WAC Rate for the purpose of this calculation, Uncertificated Accrued
Interest on REMIC 2 Regular Interest LT2H, with the rate on REMIC 2 Regular
Interest LT2H subject to a cap equal to (A) in the case of any Distribution Date
up to and including the Optional Termination Date, the lesser of (x) 7.75% per
annum and (y) the Group 2 Net WAC Rate and (B) in the case of any Distribution
Date after the Optional Termination Date, the lesser of (x) 8.25% per annum and
(y) the Group 2 Net WAC Rate for the purpose of this calculation, Uncertificated
Accrued Interest on REMIC 2 Regular Interest LT2I, with the rate on REMIC 2
Regular Interest LT2I subject to a cap equal to (A) in the case of any
Distribution Date up to and including the Optional Termination Date, the lesser
of (x) 7.46% per annum and (y) the Group 2 Net WAC Rate and (B) in the case of
any Distribution Date after the Optional Termination Date, the lesser of (x)
7.96% per annum and (y) the Group 2 Net WAC Rate for the purpose of this
calculation, Uncertificated Accrued Interest on REMIC 2 Regular Interest LT2J,
with the rate on REMIC 2 Regular Interest LT2J subject to a cap equal to (A) in
the case of any Distribution Date up to and including the Optional Termination
Date, the lesser of (x) 7.75% per annum and (y) the Group 2 Net WAC Rate and (B)
in the case of any Distribution Date after the Optional Termination Date, the
lesser of (x) 8.25% per annum and (y) the Group 2 Net WAC Rate for the purpose
of this calculation, and Uncertificated Accrued Interest on REMIC 2 Regular
Interest LT2K, with the rate on REMIC 2 Regular Interest LT2K subject to a cap
equal to (A) in the case of any Distribution Date up to and including the
Optional Termination Date, the lesser of (x) 8.00% per annum and (y) the Group 2
Net WAC Rate and (B) in the case of any Distribution Date after the Optional
Termination Date, the lesser of (x) 8.50% per annum and (y) the Group 2 Net WAC
Rate for the purpose of this calculation.

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

          "Mezzanine Net WAC Rate": (A) For the February 2001 Distribution Date
through the July 2003 Distribution Date, a per annum rate equal to the Net WAC
Rate and (B) for each Distribution Date thereafter, the lesser of (1) the
weighted average of the Net Mortgage Rates of the Group 1 Loans as of the first
day of the month preceding the month in which such Distribution Date occurs and
(2) the weighted average of the Net Mortgage Rates of the Group 2 Loans as of
the first day of the month preceding the month in which such Distribution Date
occurs.

          "Monthly Interest Distributable Amount": With respect to the Class A
Certificates, Mezzanine Certificates and Class C Certificates and any
Distribution Date, the amount of interest accrued during the related Accrual
Period at the related Pass-Through Rate on the Certificate Principal Balance (or
Notional Amount in the case of the Class A-IO Certificates and Class C
Certificates) of such Class immediately prior to such Distribution Date, in each
case, reduced by any Net Prepayment Interest Shortfalls and Relief Act Interest
Shortfalls (allocated to such Certificate as set forth in Section 1.02).

                                       20

<PAGE>

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

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

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

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

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

          "Mortgage Loan Purchase Agreement": The Mortgage Loan Purchase
Agreement dated as of January 1, 2001, among Impac Funding Corporation, as
seller, Impac Mortgage Holdings, Inc., as guarantor, and the Company as
purchaser, and all amendments thereof and supplements thereto.

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

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

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

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

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

                                       21

<PAGE>

          (v)    the first payment date;

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

          (vii)  the type of Mortgaged Property;

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

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

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

          (xi)   the occupancy status;

          (xii)  the purpose of the Mortgage Loan;

          (xiii) the Collateral Value of the Mortgaged Property;

          (xiv)  the original term to maturity;

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

          (xvi)  the Servicing Fee Rate;

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

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

          (xix)  whether such Mortgage Loan is a GEMICO Insured Loan;

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

          (xxi)  the documentation type;

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

          (xxiii) whether the Mortgage Loan is a Group 1 Loan or a Group 2 Loan.

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

                                       22

<PAGE>

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

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

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

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

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

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

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

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

          "Net WAC Rate": With respect to each class of the Class A Certificates
(other than the Class A-IO Certificates) and each Class of the Mezzanine
Certificates and any Distribution Date, a per annum rate (but not less than
zero) equal to the weighted average of (x) the Uncertificated REMIC 1
Pass-Through Rate with respect to REMIC 1 Regular Interest LT1A, REMIC 1 Regular
Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular Interest LT1P
for such Distribution Date and (y) the excess, if any, of (i) the Uncertificated
REMIC 1 Pass-Through Rate with respect to REMIC 1 Regular Interest LT1D for such
Distribution Date over (ii) (A) in the case of the Distribution Dates beginning
in February 2001 and ending in July 2001, the lesser of (1) 8.00% per annum and
(2) the Class A-IO Cap Rate, (B) in the case of the Distribution Dates beginning
in August 2001 and ending in January 2002, the lesser of (1) 7.50% per annum and
(2)

                                       23

<PAGE>

the Class A-IO Cap Rate, (C) in the case of the Distribution Dates beginning in
February 2002 and ending in July 2002, 7.00% per annum, (D) in the case of the
Distribution Dates beginning in August 2002 and ending in January 2003, 6.50%
per annum, (E) in the case of the Distribution Dates beginning in February 2003
and ending in August 2003, 5.50% per annum, and (F) in the case of any
Distribution Date thereafter, 0.00% per annum, weighted, in the case of clause
(x), on the basis of the aggregate Uncertificated Principal Balance of REMIC 1
Regular Interest LT1A, REMIC 1 Regular Interest LT1B, REMIC 1 Regular Interest
LT1C and REMIC 1 Regular Interest LT1P, and in the case of clause (y), on the
basis of the Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D,
respectively.

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

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

          "Notional Amount": With respect to the Class A-IO Certificates,
immediately prior to any Distribution Date, an amount equal to the
Uncertificated Principal Balance of REMIC 1 Regular Interest LT1D. With respect
to the Class C Certificates, immediately prior to any Distribution Date, the
aggregate of the Uncertificated Principal Balances of the REMIC 2 Regular
Interests.

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

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

                                       24

<PAGE>

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

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

          "Outstanding Mortgage Loan": As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased prior
to such Due Date pursuant to Sections 2.02, 2.04, 3.14 or 3.24.

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

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

          "Overcollateralization Target Amount": With respect to any
Distribution Date, $1,000,000.

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

          "Ownership Interest": As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.

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

   (i)    the Class A-1 Certificates, (A) in the case of any Distribution Date
          up to and including the Optional Termination Date, the lesser of (x)
          6.95% per annum and (y) the Class A-1 Net WAC Rate and (B) in the case
          of any Distribution Date after the Optional Termination Date, the
          lesser of (x) 7.45% per annum and (y) the Class A-1 Net WAC Rate;

   (ii)   the Class A-2 Certificates, (A) in the case of any Distribution Date
          up to and including the Optional Termination Date, the lesser of (x)
          7.75% per annum and (y)

                                       25

<PAGE>

          the Class A-2 Net WAC Rate and (B) in the case of any Distribution
          Date after the Optional Termination Date, the lesser of (x) 8.25% per
          annum and (y) the Class A-2 Net WAC Rate;

   (iii)  the Class A-IO Certificates, 100% of the interest on REMIC 2 Regular
          Interests LT2A-IOA, LT2A-IOB, LT2A-IOC, LT2A-IOD and LT2A-IOE;

   (iv)   the Class M-1 Certificates, (A) in the case of any Distribution Date
          up to and including the Optional Termination Date, the lesser of (x)
          7.46% per annum and (y) the Net WAC Rate and (B) in the case of any
          Distribution Date after the Optional Termination Date, the lesser of
          (x) 7.96% per annum and (y) the Mezzanine Net WAC Rate;

   (v)    the Class M-2 Certificates, (A) in the case of any Distribution Date
          up to and including the Optional Termination Date, the lesser of (x)
          7.75% per annum and (y) the Mezzanine Net WAC Rate and (B) in the case
          of any Distribution Date after the Optional Termination Date, the
          lesser of (x) 8.25% per annum and (y) the Mezzanine Net WAC Rate;

   (vi)   the Class B Certificates, (A) in the case of any Distribution Date up
          to and including the Optional Termination Date, the lesser of (x)
          8.00% per annum and (y) the Mezzanine Net WAC Rate and (B) in the case
          of any Distribution Date after the Optional Termination Date, the
          lesser of (x) 8.50% per annum and (y) the Mezzanine Net WAC Rate; and

   (vii)  the Class C Certificates, a per annum rate equal to the percentage
          equivalent of a fraction, the numerator of which is (x) the sum of the
          amounts calculated pursuant to clauses (A) through (M) below, and the
          denominator of which is (y) the aggregate of the Uncertificated
          Principal Balances of REMIC 2 Regular Interest REMIC 2 Regular
          Interest LT2A, REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest
          LT2C, REMIC 2 Regular Interest LT2D, REMIC 2 Regular Interest LT2E,
          REMIC 2 Regular Interest LT2F, REMIC 2 Regular Interest LT2G, REMIC 2
          Regular Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular
          Interest LT2J, REMIC 2 Regular Interest LT2K, REMIC 2 Regular Interest
          LT2L and REMIC 2 Regular Interest LT2P. For purposes of calculating
          the Pass-Through Rate for the Class C Certificates, the numerator is
          equal to the sum of the following components:

          (A) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2A minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2A;

          (B) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2B minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2B;

                                       26

<PAGE>

          (C) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2C minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C;

          (D) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2D minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2D;

          (E) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2E minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2E;

          (F) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2F minus the Group 1 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2F; and

          (G) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2G minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2G;

          (H) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2H minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2H;

          (I) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2I minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2I;

          (J) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2J minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2J;

          (K) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2K minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2K;

          (L) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2 Regular
Interest LT2L minus the Group 2 Marker Rate, applied to an amount equal to the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2L; and

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

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

                                       27

<PAGE>

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

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

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

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

          (iii) federal funds, certificates of deposit, demand deposits, time
     deposits and bankers' acceptances (which shall each have an original
     maturity of not more than 90 days and, in the case of bankers' acceptances,
     shall in no event have an original maturity of more than 365 days or a
     remaining maturity of more than 30 days) denominated in United States
     dollars of any U.S. depository institution or trust company incorporated
     under the laws of the United States or any state thereof or of any domestic
     branch of a foreign depository institution or trust company; provided that
     the debt obligations of such depository institution or trust company (or,
     if the only Rating Agency is Standard & Poor's, in the case of the
     principal depository institution in a depository institution holding
     company, debt obligations of the depository institution holding company) at
     the date of acquisition thereof have been rated by each Rating Agency in
     its highest short-term rating available; and provided further that, if the
     only Rating Agency is Standard & Poor's and if the depository or trust
     company is a principal subsidiary of a bank holding company and the debt
     obligations of such subsidiary are not separately rated, the applicable
     rating shall be that of the bank holding company; and, provided further
     that, if the original maturity of such short-term obligations of a domestic
     branch of a foreign depository institution or trust company shall exceed 30
     days, the short-term rating of such institution shall be A-1+ in the case
     of Standard & Poor's if Standard & Poor's is the Rating Agency;

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

                                       28

<PAGE>

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

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

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

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

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

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

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

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

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

                                       29

<PAGE>

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

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

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

          "Principal Prepayment": Any payment of principal made by the Mortgagor
on a Mortgage Loan which is received in advance of its scheduled Due Date and
which is not accompanied by an amount of interest representing scheduled
interest due on any date or dates in any month or months subsequent to the month
of prepayment.

          "Principal Prepayment in Full": Any Principal Prepayment made by a
Mortgagor of the entire unpaid principal balance of the Mortgage Loan.

          "Principal Remittance Amount": With respect to any Distribution Date,
the sum of (i) each scheduled payment of principal collected or advanced on the
Mortgage Loans by the Master Servicer that were due during the related Due
Period, (ii) the principal portion of all partial and full Principal Prepayments
of the Mortgage Loans applied by the Master Servicer during the related
Prepayment Period, (iii) the principal portion of all related Net Liquidation
Proceeds, REO Proceeds and Insurance Proceeds received during the related
Prepayment Period, (iv) the principal portion of proceeds of Mortgage Loan
purchases made pursuant to Section 2.02, 2.04, 3.14, 3.22 or 3.24, in each case
received or made during the related Prepayment Period, (v) the principal portion
of any related Substitution Adjustments deposited in the Custodial Account
during the related Prepayment Period and (vi) on the Distribution Date on which
the Trust Fund is to be terminated pursuant to Section 9.01, the principal
portion of the termination price received from the Majority Class C
Certificateholders in connection with a termination of the Trust Fund to occur
on such Distribution Date.

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

          "Purchase Price": With respect to any Mortgage Loan (or REO Property)
required to be purchased pursuant to Section 2.02, 2.04 or 3.14 or that the
Master Servicer is entitled to repurchase pursuant to Section 3.24, an amount
equal to the sum of (i) 100% of the Stated Principal Balance thereof, (ii)
unpaid accrued interest (or REO Imputed Interest) at the applicable Net Mortgage
Rate on the Stated Principal Balance thereof outstanding during each Due Period
that such interest was not paid or advanced, from the date through which
interest was last paid by the Mortgagor or advanced and distributed to
Certificateholders together with unpaid Servicing Fees, Trustee's Fees and, if
such Mortgage Loan is a Radian Insured Loan, fees due Radian at the Radian

                                       30

<PAGE>

PMI Policy Rate, from the date through which interest was last paid by the
Mortgagor, in each case to the first day of the month in which such Purchase
Price is to be distributed, plus (iii) the aggregate of all Advances and
Servicing Advances made in respect thereof that were not previously reimbursed.

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

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

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

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

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

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

          "Rating Agency": Standard & Poor's, Fitch or Moody's and each of their
successors. If such agencies and their successors are no longer in existence,
"Rating Agency" shall be such nationally recognized statistical rating agency,
or other comparable Person, designated by the Company, notice of which
designation shall be given to the Trustee and Master Servicer. References

                                       31

<PAGE>

herein to the two highest long term debt rating of a Rating Agency shall mean
"AA" or better in the case of Standard & Poor's, "AA" or better in the case of
Fitch and "Aa2" or better in the case of Moody's and references herein to the
highest short-term debt rating of a Rating Agency shall mean "A-1+" in the case
of Standard & Poor's, F-1 in the case of Fitch and "P-1" in the case of Moody's,
and in the case of any other Rating Agency such references shall mean such
rating categories without regard to any plus or minus.

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

          "Record Date": With respect to each Class of Certificates and each
Distribution Date, the last Business Day of the month immediately preceding the
month of the related Distribution Date.

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

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

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

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

          "REMIC 1": The segregated pool of assets, with respect to which a
REMIC election is to be made, conveyed in trust to the Trustee, for the benefit
of the Holders of the REMIC 1 Regular Interests and the Holders of the Class R
Certificates (as holders of the Class R-1 Interest), consisting of: (i) each
Mortgage Loan (exclusive of payments of principal and interest due on or

                                       32

<PAGE>

before the Cut-off Date, if any, received by the Master Servicer which shall not
constitute an asset of the Trust Fund) as from time to time are subject to this
Agreement and all payments under and proceeds of such Mortgage Loans (exclusive
of any prepayment fees and late payment charges received on the Mortgage Loans),
together with all documents included in the related Mortgage File, subject to
Section 2.01; (ii) such funds or assets as from time to time are deposited in
the Custodial Account or the Certificate Account and belonging to the Trust
Fund; (iii) any REO Property; (iv) the Primary Hazard Insurance Policies, if
any, the Primary Insurance Policies, if any, and all other Insurance Policies
with respect to the Mortgage Loans; (v) [reserved]; and (vi) the Company's
interest in respect of the representations and warranties made by the Seller in
the Mortgage Loan Purchase Agreement as assigned to the Trustee pursuant to
Section 2.04 hereof.

          "REMIC 1 Regular Interest LT1A": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1A shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 1 Regular Interest LT1B": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1B shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 1 Regular Interest LT1C": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1C shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 1 Regular Interest LT1D": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1D shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 1 Regular Interest LT1P": One of the separate non-certificated
beneficial ownership interests in REMIC 1 issued hereunder and designated as a
Regular Interest in REMIC 1. REMIC 1 Regular Interest LT1P shall accrue interest
at the related Uncertificated REMIC 1 Pass- Through Rate in effect from time to
time, and shall be entitled to any Prepayment Charges relating to the Mortgage
Loans collected by the Master Servicer and to a distribution of principal,
subject to

                                       33

<PAGE>

the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

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

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

          "REMIC 2 Group 1 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group 1 Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2A minus the Group 1 Marker Rate, divided by (b) 12.

          "REMIC 2 Group 2 Interest Loss Allocation Amount": With respect to any
Distribution Date, an amount equal to (a) the product of (i) the aggregate
Principal Balance of the Group 2 Loans and related REO Properties then
outstanding and (ii) the Uncertificated REMIC 2 Pass-Through Rate for REMIC 2
Regular Interest LT2G minus the Group 2 Marker Rate, divided by (b) 12.

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

          "REMIC 2 Overcollateralized Amount": With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC 2 Regular Interests minus (ii) the aggregate of the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest
LT2C, REMIC 2 Regular Interest LT2D, REMIC 2 Regular Interest LT2E, REMIC 2
Regular Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest
LT2J, and REMIC 2 Regular Interest LT2K in each case as of such date of
determination.

          "REMIC 2 Group 1 Principal Loss Allocation Amount": With respect to
any Distribution Date and the Group 1 Loans, an amount equal to (a) the product
of (i) the aggregate Principal Balance of the Group 1 Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest
LT2D and REMIC 2 Regular Interest LT2E, and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest LT2D, REMIC 2
Regular Interest LT2E and REMIC 2 Regular Interest LT2F.

                                       34

<PAGE>

          "REMIC 2 Group 2 Principal Loss Allocation Amount": With respect to
any Distribution Date and the Group 2 Loans, an amount equal to (a) the product
of (i) the aggregate Principal Balance of the Group 2 Loans and related REO
Properties then outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the aggregate of the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest
LT2J and REMIC 2 Regular Interest LT2K, and the denominator of which is the
aggregate of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest LT2J, REMIC 2
Regular Interest LT2K and REMIC 2 Regular Interest LT2L.

          "REMIC 2 Regular Interest LT2A": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2A-IOA": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A-IOA
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.

          "REMIC 2 Regular Interest LT2A-IOB": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A-IOB
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.

          "REMIC 2 Regular Interest LT2A-IOC": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A-IOC
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.

          "REMIC 2 Regular Interest LT2A-IOD": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A-IOD
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.

          "REMIC 2 Regular Interest LT2A-IOE": One of the separate
non-certificated beneficial ownership interests in REMIC 2 issued hereunder and
designated as a "regular interest" in REMIC 2. REMIC 2 Regular Interest LT2A-IOE
shall accrue interest at the related Uncertificated REMIC 2 Pass-Through Rate on
its Uncertificated Notional Amount outstanding from time to time.

          "REMIC 2 Regular Interest LT2B": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC

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<PAGE>

2. REMIC 2 Regular Interest LT2B shall accrue interest at the related
Uncertificated REMIC 2 Pass- Through Rate in effect from time to time, and shall
be entitled to distributions of principal, subject to the terms and conditions
hereof, in an aggregate amount equal to its initial Uncertificated Principal
Balance as set forth in the Preliminary Statement hereto.

          "REMIC 2 Regular Interest LT2C": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2C shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2D": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2D shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2E": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2E shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2F": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2F shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2G": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2G shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2H": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2H shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject

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<PAGE>

to the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2I": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2I shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2J": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2J shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2K": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2K shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2L": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2L shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.

          "REMIC 2 Regular Interest LT2P": One of the separate non-certificated
beneficial ownership interests in REMIC 2 issued hereunder and designated as a
"regular interest" in REMIC 2. REMIC 2 Regular Interest LT2P shall accrue
interest at the related Uncertificated REMIC 2 Pass- Through Rate in effect from
time to time, and shall be entitled to any amounts distributed to REMIC 1
Regular Interest LT1P.

          "REMIC 2 Regular Interests": REMIC 2 Regular Interest LT2A, REMIC 2
Regular Interest LT2A-IOA, REMIC 2 Regular Interest A-IOB, REMIC 2 Regular
Interest A-IOC, REMIC 2 Regular Interest A-IOD, REMIC 2 Regular Interest A-IOE,
REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular
Interest LT2D, REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest LT2F,
REMIC 2 Regular Interest LT2G, REMIC 2 Regular Interest LT2H, REMIC 2 Regular
Interest LT2I, REMIC 2 Regular Interest LT2J, REMIC 2 Regular Interest LT2K,
REMIC 2 Regular Interest LT2L and REMIC 2 Regular Interest LT2P.

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<PAGE>

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

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

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

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

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

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

          "REO Imputed Interest": As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate that would have been
applicable to the related Mortgage Loan had it been outstanding) on the unpaid
principal balance of the Mortgage Loan as of the date of acquisition thereof (as
such balance is reduced pursuant to Section 3.15 by any income from the REO
Property treated as a recovery of principal).

          "REO Proceeds": Proceeds, net of directly related expenses, received
in respect of any REO Property (including, without limitation, proceeds from the
rental of the related Mortgaged Property and of any REO Disposition), which
proceeds are required to be deposited into the Custodial Account as and when
received.

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

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

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<PAGE>

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

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

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

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

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

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

          "Servicing Fee Rate": With respect to each Mortgage Loan, the per
annum rate of 0.28%.

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

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

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<PAGE>

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

          "Special Deposit": As defined in Section 2.01(a).

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

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

          "Stated Principal Balance": With respect to any Mortgage Loan or
related REO Property at any given time, (i) the principal balance of the
Mortgage Loan outstanding as of the Cut- off Date, after application of
principal payments due on or before such date, whether or not received, minus
(ii) the sum of (a) the principal portion of the Monthly Payments due with
respect to such Mortgage Loan or REO Property during each Due Period ending
prior to the most recent Distribution Date which were received or with respect
to which an Advance was made, and (b) all Principal Prepayments with respect to
such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds to the extent applied by the Master Servicer as
recoveries of principal in accordance with Section 3.15 with respect to such
Mortgage Loan or REO Property, which were distributed pursuant to Section 4.01
on any previous Distribution Date, and (c) any Realized Loss with respect
thereto allocated pursuant to Section 4.05 for any previous Distribution Date.

          "Stepdown Date": The earlier to occur of (i) the Distribution Date on
which the aggregate Certificate Principal Balance of the Class A Certificates
has been reduced to zero and (ii) the later to occur of (x) the Distribution
Date occurring in February 2004 and (y) the first Distribution Date for which
the aggregate Certificate Principal Balance of the Mezzanine Certificates
divided by the aggregate Stated Principal Balance of the Mortgage Loans as of
the last day of the related Due Period (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period, and after reduction for Realized Losses incurred
during the related Prepayment Period) is greater than or equal to 10.00%.

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

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

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

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<PAGE>

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

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

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

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

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

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

     (i)  the aggregate Stated Principal Balance of Mortgage Loans that are 60
          or more days delinquent as of the close of business on the last day of
          the preceding calendar month exceeds 2.25% (in the case of the 36th
          Distribution Date through the 60th Distribution Date) or 3.25% (in the
          case of any Distribution Date thereafter) of the aggregate Stated
          Principal Balance of the Mortgage Loans as of such Distribution Date
          (prior to giving effect to scheduled payments of principal due during
          the related Due Period, to the extent received or advanced, and
          unscheduled collections of principal received during the related
          Prepayment Period); or

     (ii) in the case of any Distribution Date after the 36th Distribution Date,
          the cumulative amount of Realized Losses incurred on the Mortgage
          Loans from the Cut-off Date through the end of the calendar month
          immediately preceding such Distribution Date exceeds 10.00% of the sum
          of (x) the aggregate Certificate Principal Balance of the Mezzanine
          Certificates (or, if the Certificate Principal Balances of the Class A
          Certificates have been reduced to zero, the aggregate Certificate
          Principal Balance of the Mezzanine Certificates other than the Class
          of Mezzanine Certificates with the highest payment priority) after
          giving effect to distributions that would be made on such Distribution
          Date if no Trigger Event were in effect and (y) the Overcollateralized
          Amount.

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<PAGE>

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

          "Trust Fund": REMIC 1, REMIC 2 and REMIC 3.

          "Trustee": Bankers Trust Company of California, N.A., or its successor
in interest, or any successor trustee appointed as herein provided.

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

          "Trustee Fee Rate": 0.005% per annum.

          "Uncertificated Accrued Interest": With respect to each REMIC Regular
Interest on each Distribution Date, an amount equal to one month's interest at
the related Uncertificated Pass- Through Rate on the Uncertificated Principal
Balance or Uncertificated Notional Amount, as applicable, of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by any
Net Prepayment Interest Shortfalls and Relief Act Interest Shortfalls (allocated
to such REMIC Regular Interests as set forth in Section 1.02).

          "Uncertificated Notional Amount": With respect to each of REMIC 2
Regular Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB, REMIC 2 Regular
Interest LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD and REMIC 2 Regular
Interest LT2A-IOE and any date of determination, the Uncertificated Principal
Balance of REMIC 1 Regular Interest LT1D for such Distribution Date.

          "Uncertificated Principal Balance": With respect to each REMIC 1
Regular Interest and REMIC 2 Regular Interest (other than REMIC 2 Regular
Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB, REMIC 2 Regular Interest
LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD and REMIC 2 Regular Interest
LT2A-IOE), the principal amount of such REMIC Regular Interest outstanding as of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each REMIC 1 Regular Interest, REMIC 2 Regular Interest (other than
REMIC 2 Regular Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB, REMIC 2
Regular Interest LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD and REMIC 2 Regular
Interest LT2A-IOE) shall equal the amount set forth in the Preliminary Statement
hereto as its initial Uncertificated Principal Balance. On each Distribution
Date, the Uncertificated Principal Balance of each REMIC Regular Interest shall
be reduced by all distributions of principal made on such REMIC Regular Interest
on such Distribution Date pursuant to Section 4.04 and, if and to the extent
necessary and appropriate, shall be further reduced on such Distribution Date by
Realized Losses as provided in Section 4.05. The Uncertificated Principal
Balance of each of REMIC 2 Regular Interest LT2F and REMIC 2 Regular Interest
LT2L shall be increased by interest deferrals as provided in Section 4.04. The
Uncertificated Principal Balance of each REMIC Regular Interest shall never be
less than zero. REMIC 2 Regular

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<PAGE>

Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB, REMIC 2 Regular Interest
LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD and REMIC 2 Regular Interest
LT2A-IOE will not have an Uncertificated Principal Balance.

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

          "Uncertificated REMIC 1 Pass-Through Rate": With respect to any
Distribution Date and REMIC 1 Regular Interest LT1A, REMIC 1 Regular Interest
LT1D and REMIC 1 Regular Interest LT1P, a per annum rate equal to the average of
the Net Mortgage Rates of the Mortgage Loans, weighted on the basis of the
Stated Principal Balances thereof as of the close of business on the last day of
the calendar month preceding the month in which such Distribution Date occurs.
With respect to any Distribution Date and REMIC 1 Regular Interest LT1B, a per
annum rate equal to the average of the Net Mortgage Rates of the Group 1
Mortgage Loans, weighted on the basis of the Stated Principal Balances thereof
as of the close of business on the last day of the calendar month preceding the
month in which such Distribution Date occurs. With respect to any Distribution
Date and REMIC 1 Regular Interest LT1C, a per annum rate equal to the average of
the Net Mortgage Rates of the Group 2 Mortgage Loans, weighted on the basis of
the Stated Principal Balances thereof as of the close of business on the last
day of the calendar month preceding the month in which such Distribution Date
occurs.

          "Uncertificated REMIC 2 Pass-Through Rate":

          (a) With respect to REMIC 2 Regular Interest LT2A, REMIC 2 Regular
Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest LT2D,
REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest LT2F, REMIC 2 Regular
Interest LT2G, REMIC 2 Regular Interest LT2H, REMIC 2 Regular Interest LT2I,
REMIC 2 Regular Interest LT2J, REMIC 2 Regular Interest LT2K, REMIC 2 Regular
Interest LT2L and REMIC 2 Regular Interest LT2P and any Distribution Date prior
to and including the Distribution Date in July 2003, a per annum rate equal to
the Net WAC Rate. With respect to REMIC 2 Regular Interest LT2A, REMIC 2 Regular
Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest LT2D,
REMIC 2 Regular Interest LT2E, REMIC 2 Regular Interest LT2F, and REMIC 2
Regular Interest LT2P and any Distribution Date after the Distribution Date in
July 2003, a per annum rate equal to the weighted average of the Group 1
Mortgage Loans. With respect to REMIC 2 Regular Interest LT2G, REMIC 2 Regular
Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest LT2J,
REMIC 2 Regular Interest LT2K and REMIC 2 Regular Interest LT2L and any
Distribution Date after the Distribution Date in July 2003, a per annum rate
equal to the weighted average of the Group 2 Mortgage Loans.

          (b) With respect to REMIC 2 Regular Interest LT2A-IOA and the first 30
Distribution Dates, the lesser of (a) 5.50% and (b) the Class A-IO Cap Rate less
2.50% per annum for the Distribution Dates beginning in February 2001 and ending
in August 2001 and less 2.00% per annum for the Distribution Dates beginning in
July 2001 and ending in December 2001. With respect to REMIC 2 Regular Interest
LT2A-IOB and the first 24 Distribution Dates, 1.00% per annum and

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<PAGE>

0.00% per annum thereafter. With respect to REMIC 2 Regular Interest LT2A-IOC
and the first 18 Distribution Dates, 0.50% per annum and 0.00% per annum
thereafter. With respect to REMIC 2 Regular Interest LT2A-IOD and the first 12
Distribution Dates, 0.50% per annum and 0.00% per annum thereafter. With respect
to REMIC 2 Regular Interest LT2A-IOE and the first 6 Distribution Dates, 0.50%
per annum and 0.00% per annum thereafter.

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

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

          "Unpaid Interest Shortfall Amount": With respect to the Class A
Certificates and Mezzanine Certificates and (i) the first Distribution Date,
zero, and (ii) any Distribution Date after the first Distribution Date, the
amount, if any, by which (a) the sum of (1) the Monthly Interest Distributable
Amount for such Class for the immediately preceding Distribution Date and (2)
the outstanding Unpaid Interest Shortfall Amount, if any, for such Class for
such preceding Distribution Date exceeds (b) the aggregate amount distributed on
such Class in respect of interest pursuant to clause (a) of this definition on
such preceding Distribution Date, plus interest on the amount of interest due
but not paid on the Certificates of such Class on such preceding Distribution
Date, to the extent permitted by law, at the Pass-Through Rate for such Class
for the related Accrual Period.

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

                                       44

<PAGE>

will be allocated to the Holders of the Class P Certificates and (iv) 1% of all
Voting Rights will be allocated to the Holders of the Class R Certificates. The
Voting Rights allocated to any Class of Certificates shall be allocated among
all Holders of the Certificates of such Class in proportion to the outstanding
Percentage Interests in such Class represented thereby.

          "Wendover": Wendover Funding, Inc.

     SECTION 1.02 Allocation of Certain Interest Shortfalls.

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

     For purposes of calculating the amount of Uncertificated Accrued Interest
for the Uncertificated REMIC 1 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated first: with respect to any Group 1 Loan, to
REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, 99% and 1%,
respectively, and with respect to any Group 2 Loan, to REMIC 1 Regular Interest
LT1A and REMIC 1 Regular Interest LT1C, 99% and 1%, respectively, and then to
REMIC 1 Regular Interest LT1D, in each case to the extent of one month's
interest at the then applicable respective Uncertificated REMIC 1 Pass- Through
Rate on the respective Uncertificated Principal Balance of each such
Uncertificated REMIC 1 Regular Interest.

     For purposes of calculating the amount of Uncertificated Accrued Interest
for the Uncertificated REMIC 2 Regular Interests for any Distribution Date, the
aggregate amount of any Net Prepayment Interest Shortfalls and any Relief Act
Interest Shortfalls incurred in respect of the Mortgage Loans for any
Distribution Date shall be allocated (i) with respect to the Group 1 Loans,
first, to Uncertificated Accrued Interest payable to REMIC 2 Regular Interest
LT2A and REMIC 2 Regular Interest LT2F up to an aggregate amount equal to the
REMIC 2 Group 1 Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter among REMIC 2 Regular Interest LT2A-IOA, REMIC 2 Regular Interest
LT2A-IOB, REMIC 2 Regular Interest LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD,
REMIC 2 Regular Interest LT2A-IOE, REMIC 2 Regular Interest LT2A, REMIC 2
Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular Interest
LT2D, REMIC 2 Regular Interest LT2E and REMIC 2 Regular Interest LT2F, PRO RATA

                                       45

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based on, and to the extent of, one month's interest at the then applicable
respective Uncertificated REMIC 2 Pass-Through Rate on the respective
Uncertificated Principal Balance of each such Uncertificated REMIC 2 Regular
Interest, and (ii) with respect to the Group 2 Loans, first, to Uncertificated
Accrued Interest payable to REMIC 2 Regular Interest LT2G and REMIC 2 Regular
Interest LT2L up to an aggregate amount equal to the REMIC 2 Group 2 Interest
Loss Allocation Amount, 98% and 2%, respectively, and thereafter among REMIC 2
Regular Interest LT2A-IOA, REMIC 2 Regular Interest LT2A-IOB, REMIC 2 Regular
Interest LT2A-IOC, REMIC 2 Regular Interest LT2A-IOD, REMIC 2 Regular Interest
LT2A-IOE, REMIC 2 Regular Interest LT2G, REMIC 2 Regular Interest LT2H, REMIC 2
Regular Interest LT2I, REMIC 2 Regular Interest LT2J, REMIC 2 Regular Interest
LT2K and REMIC 2 Regular Interest LT2L, PRO RATA based on, and to the extent of,
one month's interest at the then applicable respective Uncertificated REMIC 2
Pass- Through Rate on the respective Uncertificated Principal Balance of each
such Uncertificated REMIC 2 Regular Interest.

                                       46

<PAGE>

                                   ARTICLE II

                          CONVEYANCE OF MORTGAGE LOANS;
                        ORIGINAL ISSUANCE OF CERTIFICATES

          SECTION 2.01. Conveyance of Mortgage Loans.

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

          The Master Servicer hereby acknowledges the receipt by it of cash in
an amount equal to $11,053.50 (the "Special Deposit"), representing interest at
the Mortgage Rate, for the calendar month of January 2001, for those Mortgage
Loans which do not have Monthly Payments due on February 1, 2000. The Master
Servicer shall hold such amount in the Custodial Account and shall include such
amount in the Available Distribution Amount for the Distribution Date in March
2000.

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

          (i) the original Mortgage Note endorsed without recourse, "Bankers
     Trust Company of California, N.A., as trustee under the Pooling and
     Servicing Agreement relating to Impac Secured Assets Corp., Mortgage
     Pass-Through Certificates, Series 2001-1" with all intervening endorsements
     showing an unbroken chain of endorsements from the originator to the Person
     endorsing it to the Trustee or, with respect to any Mortgage Loan as to
     which the original Mortgage Note has been permanently lost or destroyed and
     has not been replaced, a Lost Note Affidavit;

          (ii) the original recorded Mortgage or, if the original Mortgage has
     not been returned from the public recording office, a copy of the Mortgage
     certified by the Seller or the public recording office in which such
     Mortgage has been recorded to be a true and complete copy of the original
     Mortgage submitted for recording;

          (iii) a duly executed original Assignment of the Mortgage, without
     recourse, in recordable form to "Bankers Trust Company of California, N.A.,
     as trustee," or to "Bankers Trust Company of California, N.A., as trustee
     for holders of Impac Secured Assets Corp., Mortgage Pass-Through
     Certificates, Series 2001-1";

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<PAGE>

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

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

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

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

          (viii) the original or a copy of the private mortgage insurance policy
     or original certificate of private mortgage insurance for each Mortgage
     Loan so identified on the Mortgage Loan Schedule (other than a Radian
     Lender-Paid PMI Policy).

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

          Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains the original
Mortgage after it has been recorded,

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<PAGE>

the Seller shall be deemed to have satisfied its obligations hereunder upon
delivery to the Trustee of a copy of such Mortgage certified by the public
recording office to be a true and complete copy of the recorded original
thereof.

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

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

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

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

          It is intended that the conveyance of the Mortgage Loans by the
Company to the Trustee as provided in this Section be, and be construed as, a
sale of the Mortgage Loans and the REMIC 1 Regular Interests as provided for in
this Section 2.01 by the Company to the Trustee for the benefit of the
Certificateholders. It is, further, not intended that such conveyance be deemed
a pledge of the Mortgage Loans and the REMIC 1 Regular Interests by the Company
to the Trustee to secure a debt or other obligation of the Company. However, in
the event that the Mortgage Loans and the REMIC 1 Regular Interests are held to
be property of the Company, or if for any reason this Agreement is held or
deemed to create a security interest in the Mortgage Loans and the REMIC 1
Regular Interests, then it is intended that, (a) this Agreement shall also be
deemed to be a security agreement within the meaning of Articles 8 and 9 of the
New York Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction; (b) the conveyance provided for in this Section shall
be deemed to be (1) a grant by the Company to the Trustee of a security interest
in all of the Company's right (including the power to convey title thereto),
title and interest, whether now owned or hereafter acquired, in and to (A) the
Mortgage Loans, including the Mortgage Notes, the Mortgages, any related
Insurance Policies and all other documents in the related Mortgage Files, (B)
all amounts payable to the holders of the Mortgage Loans in accordance with the
terms thereof, (C) the REMIC 1 Regular Interests and (D) all proceeds of the
conversion, voluntary or involuntary, of the foregoing into cash, instruments,
securities or other property, including without limitation all amounts from time
to time held or invested in the Certificate Account or the Custodial Account,
whether in the form of cash, instruments, securities or other property and (2)
an assignment by the

                                       49

<PAGE>

Company to the Trustee of any security interest in any and all of the Seller's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to the property described in the
foregoing clauses (1)(A) through (D); (c) the possession by the Trustee or any
other agent of the Trustee of Mortgage Notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" or possession by a purchaser or a
person designated by such secured party, for purposes of perfecting the security
interest pursuant to the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction (including, without
limitation, Sections 9-115, 9-305, 8-102, 8-301, 8-501 and 8-503 thereof); and
(d) notifications to persons holding such property, and acknowledgments,
receipts or confirmations from persons holding such property, shall be deemed
notifications to, or acknowledgments, receipts or confirmations from, financial
intermediaries, bailees or agents (as applicable) of the Trustee for the purpose
of perfecting such security interest under applicable law. The Company and the
Trustee shall, to the extent consistent with this Agreement, take such actions
as may be necessary to ensure that, if this Agreement were deemed to create a
security interest in the Mortgage Loans and the REMIC 1 Regular Interests, such
security interest would be deemed to be a perfected security interest of first
priority under applicable law and will be maintained as such throughout the term
of the Agreement.

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

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

          The Trustee agrees, for the benefit of the Certificateholders, to
review or cause to be reviewed on its behalf, each Mortgage File on or before
the Closing Date to ascertain that all documents required to be delivered to it
are in its possession, and the Trustee agrees to execute and deliver, or cause
to be executed and delivered, to the Company and the Master Servicer on the
Closing Date, an Initial Certification in the form annexed hereto as Exhibit C
to the effect that, as to each Mortgage Loan listed in the Mortgage Loan
Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan
specifically identified in such certification as not covered by such
certification), (i) all documents required to be delivered to it pursuant to
this Agreement with respect to such Mortgage Loan are in its possession, (ii)
such documents have been reviewed by it and appear regular on their face and
relate to such Mortgage Loan and (iii) based on its examination and only as to
the foregoing documents, the information set forth in items (i), (ii), (iii) and
(iv) of the definition of the "Mortgage Loan Schedule" accurately reflects
information set forth in the Mortgage File. Neither the Trustee nor the Master
Servicer shall be under any duty to determine whether any Mortgage File should
include any of the documents specified in clause (vi) or (vii) of Section 2.01.
Neither the Trustee nor the Master Servicer shall be under any duty or
obligation to inspect, review

                                       50

<PAGE>

or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable or appropriate for the
represented purpose or that they have actually been recorded, or they are in
recordable form or that they are other than what they purport to be on their
face.

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

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

          SECTION 2.03. Representations, Warranties and Covenants of the Master
                        Servicer and the Company.

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

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

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<PAGE>

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

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

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

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

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

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

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

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<PAGE>

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

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

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

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

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

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

                                       53

<PAGE>

          SECTION 2.04. Representations and Warranties of the Seller.

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

                                       54

<PAGE>

date of substitution, and the Company shall be deemed to have made with respect
to any Qualified Substitute Mortgage Loan or Loans, as of the date of
substitution, the representations and warranties set forth in Exhibit I hereof
(other than representations (xiv), (xvi), (xxix) and (xxxiii) through (xli)).

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

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

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

     (a) The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery to it of the Mortgage Files, subject to the provisions of Sections
2.01 and 2.02, together with the assignment to it of all other assets included
in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with
such assignment and delivery and in exchange therefor, the Trustee, pursuant to
the written request of the Company executed by an officer of the Company, has
executed, authenticated and delivered to or upon the order of the Company, the
Certificates in authorized denominations. The interests evidenced by the
Certificates, constitute the entire beneficial ownership interest in the Trust
Fund.

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

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

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

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

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                                   ARTICLE III

                          ADMINISTRATION AND SERVICING
                                OF THE TRUST FUND

          SECTION 3.01. Master Servicer to Act as Master Servicer.

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

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

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<PAGE>

related thereto, and the Mortgaged Properties. The Master Servicer may exercise
this power in its own name or in the name of a Sub-Servicer.

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

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

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

          The relationship of the Master Servicer (and of any successor to the
Master Servicer under this Agreement) to the Trustee under this Agreement is
intended by the parties to be that of an independent contractor and not that of
a joint venturer, partner or agent.

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

          (a) The Master Servicer may enter into Sub-Servicing Agreements with
Sub- Servicers for the servicing and administration of the Mortgage Loans and
for the performance of any and all other activities of the Master Servicer
hereunder; provided, however, that such agreements would not result in a
withdrawal or a downgrading by Standard & Poor's of its rating on any Class of
Certificates. Each Sub-Servicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans comparable to the Mortgage
Loans, and in either case shall be authorized to transact business in the state
or states in which the related Mortgaged Properties it is to service are
situated, if and to the extent required by applicable law to enable the
Sub-Servicer to perform its obligations hereunder and under the Sub-Servicing
Agreement, and in either case shall be a Freddie Mac or Fannie Mae

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approved mortgage servicer. Any Sub-Servicing Agreement entered into by the
Master Servicer shall include the provision that such Agreement may be
immediately terminated (x) with cause and without any termination fee by any
Master Servicer hereunder or (y) without cause in which case the Master Servicer
shall be responsible for any termination fee or penalty resulting therefrom. In
addition, each Sub-Servicing Agreement shall provide for servicing of the
Mortgage Loans consistent with the terms of this Agreement. With the consent of
the Trustee, the Master Servicer and the Sub-Servicers may enter into
Sub-Servicing Agreements and make amendments to the Sub- Servicing Agreements or
enter into different forms of Sub-Servicing Agreements providing for, among
other things, the delegation by the Master Servicer to a Sub-Servicer of
additional duties regarding the administration of the Mortgage Loans; provided,
however, that any such amendments or different forms shall be consistent with
and not violate the provisions of this Agreement, and that no such amendment or
different form shall be made or entered into which could be reasonably expected
to be materially adverse to the interests of the Certificateholders, without the
consent of the Holders of Certificates entitled to at least 51% of the Voting
Rights. The parties hereto acknowledge that the initial Sub-Servicer shall be
Wendover.

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

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

          (c) The Master Servicer represents that it has entered into a contract
regarding the sale of sub-servicing rights with respect to the Mortgage Loans
with GMAC and shall transfer the subservicing of such Mortgage Loans from
Wendover to GMAC on or about February 1, 2001. The Trustee hereby consents to
such transfer. In connection with the subservicing of the Mortgage Loans by
GMAC, the Master Servicer hereby consents to the Trustee's entering into the
Consulting Agreement, attached hereto as Exhibit L. The Trustee shall forward to
the Rating Agencies, the Depositor and the Holders of the Class C Certificates
copies of any reports provided to the Trustee by the Loss Mitigation Advisor and
the Trustee shall forward copies of any such reports to the Holders of all other
Classes of Certificates upon written request by such Holders. In addition, the
Master Servicer further consents to each of the Trustee's and GMAC's entering
into the Loss Mitigation Advisory Agreement, attached hereto as Exhibit M. In
the event that GMAC shall be

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<PAGE>

terminated as Sub-Servicer, the Master Servicer shall cause any successor
Sub-Servicer to enter into a Loss Mitigation Advisory Agreement with the Loss
Mitigation Advisor.

          SECTION 3.03. Successor Sub-Servicers.

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

          SECTION 3.04. Liability of the Master Servicer.

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

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

          Any Sub-Servicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Sub-Servicer
in its capacity as such and not as an originator shall be deemed to be between
the Sub-Servicer and the Master Servicer alone, and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Sub-Servicer
except as set forth in Section 3.06. The Master Servicer (or Sub-Servicer) shall
be liable for the payment of any franchise taxes which may be assessed by the
California Franchise Tax Board in connection with the activities of the Trust
under this Agreement.

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

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

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

          SECTION 3.07. Collection of Certain Mortgage Loan Payments.

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

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

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<PAGE>

a Mortgagor for a scheduled liquidation of delinquencies. In the event the
Master Servicer shall consent to the deferment of the due dates for payments due
on a Mortgage Note, the Master Servicer shall nonetheless make an Advance or
shall cause the related Sub-Servicer to make an advance to the same extent as if
such installment were due, owing and delinquent and had not been deferred
through liquidation of the Mortgaged Property; provided, however, that the
obligation of the Master Servicer or related Sub-Servicer to make an Advance
shall apply only to the extent that the Master Servicer believes, in good faith,
that such advances are not Nonrecoverable Advances.

          (c) Within five Business Days after the Master Servicer has determined
that all amounts which it expects to recover from or on account of a Mortgage
Loan have been recovered and that no further Liquidation Proceeds will be
received in connection therewith, the Master Servicer shall provide to the
Trustee a certificate of a Servicing Officer that such Mortgage Loan became a
Liquidated Mortgage Loan in a Cash Liquidation or REO Disposition as of the date
of such determination.

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

          SECTION 3.08. Sub-Servicing Accounts.

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

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Investments) and unreimbursed expenses and advances to which it is then entitled
pursuant to the related Sub-Servicing Agreement, to the extent not previously
paid to or retained by it. In addition, on each Sub-Servicer Remittance Date the
Sub-Servicer will be required to remit to the Master Servicer any amounts
required to be advanced pursuant to the related Sub-Servicing Agreement. The
Sub-Servicer will also be required to remit to the Master Servicer, within one
Business Day of receipt, the proceeds of any Principal Prepayment made by the
Mortgagor and any Insurance Proceeds or Liquidation Proceeds.

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

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

          SECTION 3.10. Custodial Account.

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

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

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

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          (iii) all Insurance Proceeds, other than proceeds that represent
     reimbursement of costs and expenses incurred by the Master Servicer or any
     Sub-Servicer in connection with presenting claims under the related
     Insurance Policies, Liquidation Proceeds and REO Proceeds;

          (iv) all proceeds of any Mortgage Loan or REO Property repurchased or
     purchased in accordance with Sections 2.02, 2.04 , 3.14, 3.24 or 9.01; and
     all amounts required to be deposited in connection with the substitution of
     a Qualified Substitute Mortgage Loan pursuant to Section 2.04; and

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

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

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

          SECTION 3.11. Permitted Withdrawals From the Custodial Account.

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

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

               (ii) to pay to itself, the Company, the Seller or any other
     appropriate person, as the case may be, with respect to each Mortgage Loan
     that has previously been purchased or repurchased pursuant to Sections
     2.02, 2.04, 3.14, 3.24 or 9.01 all amounts received thereon and not yet
     distributed as of the date of purchase or repurchase;

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

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

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

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

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

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

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

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

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

          SECTION 3.12. Permitted Investments.

          Any institution maintaining the Custodial Account shall at the
direction of the Master Servicer invest the funds in such account in Permitted
Investments, each of which shall mature not later than (i) the Business Day
immediately preceding the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if a Person other than the Trustee
is the obligor thereon, and (ii) no later than the date on which such funds are
required to be withdrawn from such account pursuant to this Agreement, if the
Trustee is the obligor thereon and shall not be sold or disposed of prior to its
maturity. All income and gain realized from any such investment as well as any
interest earned on deposits in the Custodial Account shall be for the benefit of
the Master Servicer. The Master Servicer shall deposit in the Custodial Account
an amount equal to the amount

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of any loss incurred in respect of any such investment immediately upon
realization of such loss without right of reimbursement.

          SECTION 3.13. Maintenance of Primary Hazard Insurance.

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

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

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     The Master Servicer shall cooperate with Radian and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any Radian Insured Loan.

     The Master Servicer shall cooperate with GEMICO and shall use its best
efforts to furnish all reasonable aid, evidence and information in the
possession of the Master Servicer or to which the Master Servicer has access
with respect to any GEMICO Insured Loan.

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

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

     With respect to the Radian PMI Insured Loans covered by a Radian
Lender-Paid PMI Policy, the Master Servicer will confirm with Radian, and Radian
will certify to the Trustee, on or before January 15, 2001, that the Mortgage
Loans indicated on the Mortgage Loan Schedule as being covered by Radian
Lender-Paid PMI Policy are so covered. The Trustee will confirm that each of the
GEMICO Insured Loans is listed as covered under the GEMICO Policy.

     No earthquake or other additional insurance is to be required of any
Mortgagor or maintained on property acquired with respect to a security
instrument other than pursuant to such applicable laws and regulations as shall
at any time be in force and shall require such additional insurance. When, at
the time of origination of the Mortgage Loan or at any subsequent time, the
Mortgaged Property is located in a federally designated special flood hazard
area, the Master Servicer shall cause with respect to the Mortgage Loans and
each REO Property flood insurance (to the extent available and in accordance
with mortgage servicing industry practice) to be maintained. Such flood
insurance

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shall cover the Mortgaged Property, including all items taken into account in
arriving at the Collateral Value on which the Mortgage Loan was based, and shall
be in an amount equal to the lesser of (i) the Stated Principal Balance of the
related Mortgage Loan and (ii) the minimum amount required under the terms of
coverage to compensate for any damage or loss on a replacement cost basis, but
not more than the maximum amount of such insurance available for the related
Mortgaged Property under either the regular or emergency programs of the
National Flood Insurance Program (assuming that the area in which such Mortgaged
Property is located is participating in such program). Unless applicable state
law requires a higher deductible, the deductible on such flood insurance may not
exceed $1,000 or 1% of the applicable amount of coverage, whichever is less.

          In the event that the Master Servicer shall obtain and maintain a
blanket fire insurance policy with extended coverage insuring against hazard
losses on all of the Mortgage Loans, it shall conclusively be deemed to have
satisfied its obligations as set forth in the first two sentences of this
Section 3.13, it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first two sentences of this Section 3.13 and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account from its own funds the amount not otherwise payable under
the blanket policy because of such deductible clause. Any such deposit by the
Master Servicer shall be made on the Certificate Account Deposit Date next
preceding the Distribution Date which occurs in the month following the month in
which payments under any such policy would have been deposited in the Custodial
Account. Any such deposit shall not be deemed Servicing Advances and the Master
Servicer shall not be entitled to reimbursement therefor. In connection with its
activities as administrator and servicer of the Mortgage Loans, the Master
Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.

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

          The Master Servicer will, to the extent it has knowledge of any
conveyance or prospective conveyance by any Mortgagor of the Mortgaged Property
(whether by absolute conveyance or by contract of sale, and whether or not the
Mortgagor remains or is to remain liable under the Mortgage Note or the
Mortgage), exercise or cause to be exercised its rights to accelerate the
maturity of such Mortgage Loan under any "due-on-sale" clause applicable
thereto; provided, however, that the Master Servicer shall not exercise any such
rights if it reasonably believes that it is prohibited by law from doing so. The
Master Servicer or the related Sub-Servicer may repurchase a Mortgage Loan at
the Purchase Price when the Master Servicer requires acceleration of the
Mortgage Loan, but only if the Master Servicer is satisfied, as evidenced by an
Officer's Certificate delivered to the Trustee, that either (i) such Mortgage
Loan is in default or default is reasonably foreseeable or (ii) if such Mortgage
Loan is not in default or default is not reasonably foreseeable, such repurchase
will have no adverse tax consequences for the Trust Fund or any
Certificateholder. If the Master Servicer is unable to enforce such
"due-on-sale" clause (as provided in the second preceding sentence) or if no
"due-on-sale" clause is applicable, the Master Servicer or the Sub- Servicer is
authorized to enter into an assumption and modification agreement with the
Person to

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whom such property has been conveyed or is proposed to be conveyed, pursuant to
which such Person becomes liable under the Mortgage Note and, to the extent
permitted by applicable state law, the Mortgagor remains liable thereon;
provided, however, that the Master Servicer shall not enter into any assumption
and modification agreement if the coverage provided under the Primary Insurance
Policy, if any, would be impaired by doing so. The Master Servicer shall notify
the Trustee, whenever possible, before the completion of such assumption
agreement, and shall forward to the Trustee the original copy of such assumption
agreement, which copy shall be added by the Trustee to the related Mortgage File
and which shall, for all purposes, be considered a part of such Mortgage File to
the same extent as all other documents and instruments constituting a part
thereof. In connection with any such assumption agreement, the interest rate on
the related Mortgage Loan shall not be changed and no other material alterations
in the Mortgage Loan shall be made unless such material alteration would not
cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC for
federal income tax purposes, as evidenced by an Opinion of Counsel. The Master
Servicer is also authorized to enter into a substitution of liability agreement
with such Person, pursuant to which the original Mortgagor is released from
liability and such Person is substituted as the Mortgagor and becomes liable
under the Mortgage Note. Any fee collected by or on behalf of the Master
Servicer for entering into an assumption or substitution of liability agreement
will be retained by or on behalf of the Master Servicer as additional servicing
compensation. In connection with any such assumption, no material term of the
Mortgage Note (including but not limited to the Mortgage Rate, the amount of the
Monthly Payment and any other term affecting the amount or timing of payment on
the Mortgage Loan) may be changed. The Master Servicer shall not enter into any
substitution or assumption if such substitution or assumption shall (i) both
constitute a "significant modification" effecting an exchange or reissuance of
such Mortgage Loan under the Code (or Treasury regulations promulgated
thereunder) and cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a
REMIC under the REMIC Provisions or (ii) cause the imposition of any tax on
"prohibited transactions" or "contributions" after the Startup Day under the
REMIC Provisions. The Master Servicer shall notify the Trustee that any such
substitution or assumption agreement has been completed by forwarding to the
Trustee the original copy of such substitution or assumption agreement, which
copy shall be added to the related Mortgage File and shall, for all purposes, be
considered a part of such Mortgage File to the same extent as all other
documents and instruments constituting a part thereof. A portion equal to up to
2% of the Collateral Value of the related Mortgage Loan, of any fee or
additional interest collected by the related Sub-Servicer for consenting in any
such conveyance or entering into any such assumption agreement may be retained
by the related Sub-Servicer as additional servicing compensation.

          Notwithstanding the foregoing paragraph or any other provision of this
Agreement, the Master Servicer shall not be deemed to be in default, breach or
any other violation of its obligations hereunder by reason of any assumption of
a Mortgage Loan by operation of law or any assumption that the Master Servicer
may be restricted by law from preventing, for any reason whatsoever. For
purposes of this Section 3.14, the term "assumption" is deemed to also include a
sale of a Mortgaged Property that is not accompanied by an assumption or
substitution of liability agreement.

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          SECTION 3.15. Realization Upon Defaulted Mortgage Loans.

          The Master Servicer shall exercise reasonable efforts, consistent with
the procedures that the Master Servicer would use in servicing loans for its own
account, to foreclose upon or otherwise comparably convert (which may include an
REO Acquisition) the ownership of properties securing such of the Mortgage Loans
as come into and continue in default and as to which no satisfactory
arrangements can be made for collection of delinquent payments pursuant to
Section 3.07, and which are not released from the Trust Fund pursuant to any
other provision hereof. The Master Servicer shall use reasonable efforts to
realize proceeds from such defaulted Mortgage Loans in such manner (including
short sales) as will maximize the receipt of principal and interest by
Certificateholders, taking into account, among other things, the timing of
foreclosure proceedings. The foregoing is subject to the provisions that, in any
case in which Mortgaged Property shall have suffered damage from an Uninsured
Cause, the Master Servicer shall not be required to expend its own funds toward
the restoration of such property unless it shall determine in its sole
discretion (i) that such restoration will increase the net proceeds of
liquidation of the related Mortgage Loan to Certificateholders after
reimbursement to itself for such expenses, and (ii) that such expenses will be
recoverable by the Master Servicer through Insurance Proceeds or Liquidation
Proceeds from the related Mortgaged Property, as contemplated in Section 3.11.
The Master Servicer shall be responsible for all other costs and expenses
incurred by it in any such proceedings; provided, however, that it shall be
entitled to reimbursement thereof from the related property, as contemplated in
Section 3.11.

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

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

          Upon the payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full shall be escrowed in a
manner customary for such purposes, the Master Servicer will immediately notify
the Trustee by a certification (which certification shall include a statement to
the effect that all amounts received or to be received in connection with such
payment which are required to be deposited in the Custodial Account pursuant to
Section 3.10 have been or will be so deposited) of a Servicing Officer and shall
request delivery to it of the Mortgage File in the form of the Request for
Release attached hereto as Exhibit F-2. Upon receipt of such certification and
request, the Trustee shall promptly release the related Mortgage File to the
Master Servicer. Subject to the receipt by the Master Servicer of the proceeds
of such payment in full and the payment of all related fees and expenses, the
Master Servicer shall arrange for the release to the Mortgagor of the original
canceled Mortgage Note. All other documents in the Mortgage File shall be
retained by the Master Servicer to the extent required by applicable law. The
Master Servicer shall provide for preparation of the appropriate instrument of
satisfaction covering any Mortgage Loan which pays in full and the Trustee shall
cooperate in the execution and return of such instrument to provide for its
delivery or recording as may be required. No expenses incurred in connection
with any instrument of satisfaction or deed of reconveyance shall be chargeable
to the Custodial Account or the Certificate Account.

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

          Upon written request of a Servicing Officer, the Trustee shall execute
and deliver to the Master Servicer any court pleadings, requests for trustee's
sale or other documents prepared by the Master Servicer that are necessary to
the foreclosure or trustee's sale in respect of a Mortgaged

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Property or to any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note or Mortgage or to obtain a deficiency judgment, or to
enforce any other remedies or rights provided by the Mortgage Note or Mortgage
or otherwise available at law or in equity. Each such request that such
pleadings or documents be executed by the Trustee shall include a certification
signed by a Servicing Officer as to the reason such documents or pleadings are
required and that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure or trustee's sale.

          SECTION 3.17. Servicing Compensation.

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

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

          SECTION 3.18. Maintenance of Certain Servicing Policies.

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

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          SECTION 3.19. Annual Statement as to Compliance.

          Within 120 days after December 31 of each year, commencing December
2001, the Master Servicer at its own expense shall deliver to the Trustee, with
a copy to the Rating Agencies, a certificate signed by a Servicing Officer
stating, as to the signers thereof, that (i) a review of the activities of the
Master Servicer during the preceding calendar year and of performance under this
Agreement has been made under such officers' supervision, (ii) to the best of
such officers' knowledge, based on such review, the Master Servicer has
fulfilled all its obligations under this Agreement for such year, or, if there
has been a default in the fulfillment of any such obligation, specifying each
such default known to such officer and the nature and status thereof including
the steps being taken by the Master Servicer to remedy such default; (iii) a
review of the activities of each Sub-Servicer during the Sub-Servicer's most
recently ended fiscal year on or prior to such December 31 and its performance
under its Sub-Servicing Agreement has been made under such officer's
supervision; and (iv) to the best of the Servicing Officer's knowledge, based on
his review and the certification of an officer of the Sub-Servicer (unless the
Servicing Officer has reason to believe that reliance on such certification is
not justified), either each Sub-Servicer has performed and fulfilled its duties,
responsibilities and obligations under this Agreement and its Sub-Servicing
Agreement in all material respects throughout the year, or, if there has been a
default in performance or fulfillment of any such duties, responsibilities or
obligations, specifying the nature and status of each such default known to the
Servicing Officer. Copies of such statements shall be provided by the Master
Servicer to the Certificateholders upon request or by the Trustee at the expense
of the Master Servicer should the Master Servicer fail to provide such copies.

          SECTION 3.20. Annual Independent Public Accountants' Servicing
                        Statement.

          (a) Within 120 days after December 31 of each year, commencing
December 2001, the Master Servicer, at its expense, shall cause a firm of
independent public accountants who are members of the American Institute of
Certified Public Accountants to furnish a statement to the Master Servicer,
which will be provided to the Trustee and the Rating Agencies, to the effect
that, in connection with the firm's examination of the Master Servicer's
financial statements as of the end of such calendar year, nothing came to their
attention that indicated that the Master Servicer was not in compliance with the
provisions of this Agreement except for (i) such exceptions as such firm
believes to be immaterial and (ii) such other exceptions as are set forth in
such statement.

          (b) Within 120 days after December 31 of each year, commencing
December 2001, the Master Servicer, at its expense, shall or shall cause each
Sub-Servicer to cause a nationally recognized firm of independent certified
public accountants to furnish to the Master Servicer or such Sub-Servicer a
report stating that (i) it has obtained a letter of representation regarding
certain matters from the management of the Master Servicer or such Sub-Servicer
which includes an assertion that the Master Servicer or such Sub-Servicer has
complied with certain minimum mortgage loan servicing standards (to the extent
applicable to commercial and multifamily mortgage loans) identified in the
Uniform Single Attestation Program for Mortgage Bankers established by the
Mortgage Bankers Association of America with respect to the servicing of first
and second lien

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conventional single family mortgage loans during the most recently completed
calendar year and (ii) on the basis of an examination conducted by such firm in
accordance with standards established by the American Institute of Certified
Public Accountants, such representation is fairly stated in all material
respects, subject to such exceptions and other qualifications that may be
appropriate. Immediately upon receipt of such report, the Master Servicer shall
or shall cause each Sub-Servicer to furnish a copy of such report to the Trustee
and the Rating Agencies.

          SECTION 3.21. Access to Certain Documentation.

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

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

          This Section shall apply only to REO Properties acquired for the
account of REMIC 1 and shall not apply to any REO Property relating to a
Mortgage Loan which was purchased or repurchased from REMIC 1 pursuant to
Sections 2.02, 2.04, 3.14 or 3.24. In the event that title to any such REO
Property is acquired, the deed or certificate of sale shall be issued to the
Trustee, or to its nominee, on behalf of the Certificateholders. The Master
Servicer, on behalf of REMIC 1, shall either sell any REO Property before the
close of the third taxable year following the taxable year in which REMIC 1
acquires ownership of such REO Property for purposes of Section 860G(a)(8) of
the Code or, at the expense of REMIC 1, request, more than 60 days before the
day on which the three-year grace period would otherwise expire an extension of
the three-year grace period, unless the Master Servicer has delivered to the
Trustee an Opinion of Counsel (which shall not be at the expense of the
Trustee), addressed to the Trustee and the Master Servicer, to the effect that
the holding by REMIC 1 of such REO Property subsequent to the close of the third
taxable year following the taxable year in which REMIC 1 acquires ownership of
such REO Property will not result in the imposition on REMIC 1 of taxes on
"prohibited transactions" thereof, as defined in Section 860F of the Code, or
cause any of REMIC 1, REMIC 2 or REMIC 3 to fail to qualify as a REMIC under the
REMIC Provisions or comparable provisions of the laws of the State of California
at any time that any Certificates are outstanding. The Master Servicer shall
manage, conserve,

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protect and operate each REO Property for the Certificateholders solely for the
purpose of its prompt disposition and sale in a manner which does not cause such
REO Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) or result in the receipt by any of REMIC 1, REMIC 2 or REMIC
3 of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code or any "net income from foreclosure property" which is
subject to taxation under the REMIC Provisions. Pursuant to its efforts to sell
such REO Property, the Master Servicer shall either itself or through an agent
selected by the Master Servicer protect and conserve such REO Property in the
same manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Certificateholders, rent the same, or any part thereof, as the
Master Servicer deems to be in the best interest of the Certificateholders for
the period prior to the sale of such REO Property.

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

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

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

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

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

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

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

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

          SECTION 3.23. Additional Obligations of the Master Servicer.

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

          SECTION 3.24 Optional Purchase of Defaulted Mortgage Loans.

     The Master Servicer or any affiliate of the Master Servicer, in its sole
discretion, shall have the right to elect (by written notice sent to the Master
Servicer, and the Trustee), but shall not be obligated, to purchase for its own
account from the Trust Fund any Mortgage Loan which is 90 days or more
delinquent in the manner and at the price specified in Section 2.04. The
purchase price for any Mortgage Loan purchased hereunder shall be deposited in
the Certificate Account and the Trustee, upon receipt of such deposit, shall
release or cause to be released to the purchaser of such

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Mortgage Loan the related Mortgage File and shall execute and deliver such
instruments of transfer or assignment prepared by the purchaser of such Mortgage
Loan, in each case without recourse, as shall be necessary to vest in the
purchaser of such Mortgage Loan any Mortgage Loan released pursuant hereto and
the purchaser of such Mortgage Loan shall succeed to all the Trustee's right,
title and interest in and to such Mortgage Loan and all security and documents
related thereto. Such assignment shall be an assignment outright and not for
security. The purchaser of such Mortgage Loan shall thereupon own such Mortgage
Loan, and all security and documents, free of any further obligation to the
Trustee or the Certificateholders with respect thereto. Notwithstanding the
foregoing, the Trustee, whether acting as Trustee or in the capacity of
successor Master Servicer, shall have no obligation to repurchase any Mortgage
Loan.

          SECTION 3.25. Additional Obligations of the Company.

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

          SECTION 3.26. Periodic Filings with the Securities and Exchange
                        Commission; Additional Information.

          The Trustee shall prepare or cause to be prepared for filing with the
Commission any and all reports, statements and information respecting the Trust
Fund and/or the Certificates required to be filed with the Commission pursuant
to the Securities Exchange Act of 1934, as amended, and shall solicit any and
all proxies of the Certificateholders whenever such proxies are required to be
solicited, pursuant to the Securities Exchange Act of 1934, as amended. The
Company shall promptly file, and exercise its reasonable best efforts to obtain
a favorable response to, no-action requests with, or other appropriate exemptive
relief from, the Commission seeking the usual and customary exemption from such
reporting requirements granted to issuers of securities similar to the
Certificates. Fees and expenses incurred by the Trustee in connection with this
Section shall not be reimbursable from the Trust Fund.

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

          SECTION 3.27. Administration of Buydown Funds.

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

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

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                                   ARTICLE IV

                         PAYMENTS TO CERTIFICATEHOLDERS

          SECTION 4.01. Distributions.

          (a) The Trustee shall establish and maintain a Certificate Account, in
which the Master Servicer shall cause to be deposited on behalf of the Trustee
on or before 5:00 P.M. New York time on each Certificate Account Deposit Date by
wire transfer of immediately available funds an amount equal to the sum of (i)
any Advance for the immediately succeeding Distribution Date, (ii) any amount
required to be deposited in the Certificate Account pursuant to Sections 3.11,
3.13, 3.22 or 3.23, (iii) all other amounts constituting the Available
Distribution Amount for the immediately succeeding Distribution Date and (iv)
any amounts on deposit in the Custodial Account representing Prepayment Charges
collected by the Master Servicer (and any Master Servicer Prepayment Charge
Payment Amounts paid by, or collected on behalf of the Trust Fund by, the Master
Servicer or any Sub-Servicer), other than any such Prepayment Charges or Master
Servicer Prepayment Charge Payment Amounts relating to Principal Prepayments
that occurred after the end of the related Prepayment Period.

          On each Distribution Date, prior to making any other distributions
referred to in Section 4.01, the Trustee shall withdraw from the Certificate
Account and pay (i) itself the Trustee's Fee for such Distribution Date, (ii)
GEMICO the GEMICO Fee for such Distribution Date and (iii) the Loss Mitigation
Advisor the Advisor's Fee for such Distribution Date. The Trustee shall pay the
GEMICO Fee and the Advisor's Fee in accordance with the instructions attached
hereto in Exhibit N and Exhibit L, respectively.

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

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

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

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

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

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

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

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

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

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

          (b) On each Distribution Date (x) prior to the Stepdown Date or (y) on
which a Trigger Event is in effect, the Trustee shall withdraw from the
Certificate Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:

          (i) to the holders of the Class A-1 Certificates and Class A-2
     Certificates, on a pro rata basis, based on the Principal Remittance Amount
     for such Distribution Date from the Group 1 Loans and Group 2 Loans,
     respectively, until the Certificate Principal Balances thereof have been
     reduced to zero;

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

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

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

          (c) On each Distribution Date (x) on or after the Stepdown Date and
(y) on which a Trigger Event is not in effect, the Trustee shall withdraw from
the Certificate Account an amount equal to the Principal Distribution Amount and
distribute to the Certificateholders the following amounts, in the following
order of priority, in each case to the extent of the Principal Distribution
Amount remaining for such Distribution Date:

          (i) from the Class A Principal Distribution Amount, to the holders of
     the Class A-1 Certificates and Class A-2 Certificates, on a pro rata basis,
     based on the Principal Remittance Amount for such Distribution Date from
     the Group 1 Loans and Group 2 Loans, respectively, until the Certificate
     Principal Balances thereof have been reduced to zero;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          (e) Notwithstanding paragraphs (b) and (c) above, (i) (A) if on any
Distribution Date, the Certificate Principal Balance of the Class A-1
Certificates has been reduced to zero, the Class A Principal Distribution Amount
will be allocated to the Class A-2 Certificates and (B) if on any Distribution
Date, the Certificate Principal Balance of the Class A-2 Certificates has been
reduced to zero, the Class A Principal Distribution Amount will be allocated to
the Class A-1 Certificates and (ii) (A) if on any Distribution Date the portion
of the Principal Distribution Amount allocated to the Class A-1 Certificates
pursuant to clause (i) of paragraph (c) above is insufficient to pay to the
Class A-1 Certificates its pro rata potion of the Class A Principal Distribution
Amount, any Net Monthly Excess Cash Flow not included in the Principal
Distribution Amount for such Distribution Date will be allocated to such class
of Class A Certificates in an amount equal to the lesser of the deficiency and
such amount of Net Monthly Excess Cash Flow, (B) if on any Distribution Date the
portion of the Principal Distribution Amount allocated to the Class A-2
Certificates pursuant to clause (i) of paragraph (c) above is insufficient to
pay to the Class A-2 Certificates its pro rata potion of the Class A Principal
Distribution Amount, the principal to which they are entitled under clause (i)
of the preceding paragraph, any Net Monthly Excess Cash Flow not included in the
Principal Distribution Amount for such Distribution Date will be allocated to
such class of Class A Certificates in an amount equal to the lesser of the
deficiency and such amount of such Net Monthly Excess Cash Flow and (C) if both
clauses (A) and (B) are in effect, any such

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amount of Net Monthly Excess Cash Flow will be allocated to pay the deficiencies
in clauses (A) and (B) on a pro rata basis based on the Certificates Principal
Balances of the Class A Certificates.

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

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

          (h) The Trustee may invest or cause the institution maintaining the
Certificate Account to invest the funds in the Certificate Account in Permitted
Investments designated in the name of the Trustee for the benefit of the
Certificateholders, which shall mature not later than the Business Day next
preceding the Distribution Date next following the date of such investment
(except that (i) any investment in the institution with which the Certificate
Account is maintained may mature on such Distribution Date and (ii) any other
investment may mature on such Distribution Date if the Trustee shall advance
funds on such Distribution Date to the Certificate Account in the amount payable
on such investment on such Distribution Date, pending receipt thereof to the
extent necessary to make distributions on the Certificates) and shall not be
sold or disposed of prior to maturity. All income and gain realized from any
such investment shall be for the benefit of the Trustee and shall be subject to
its withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments shall be deposited in the Certificate Account by
the Trustee out of its own funds immediately as realized without any right of
reimbursement.

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

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

          SECTION 4.02. Statements to Certificateholders.

          (a) On each Distribution Date, based, as applicable, on information
provided to it by the Master Servicer, the Trustee shall prepare and make
available on the Trustee's website, http://www-apps.gis.deutsche-bank.com/invr
(or deliver at the recipient's option), to each Holder of the Regular
Certificates, the Master Servicer and the Rating Agencies, a statement as to the
distributions made on such Distribution Date:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

          Within a reasonable period of time after the end of each calendar
year, the Trustee shall prepare and forward, to each Person who at any time
during the calendar year was a Holder of a Certificate, a statement containing
the information set forth in subclauses (i) and (ii) above, aggregated for such
calendar year or applicable portion thereof during which such person was a
Certificateholder. Such obligation of the Trustee shall be deemed to have been
satisfied to the extent that substantially comparable information shall be
provided by the Trustee pursuant to any requirements of the Code and regulations
thereunder as from time to time are in force.

          On each Distribution Date the Trustee shall prepare and make available
on the Trustee's website, http://www-apps.gis.deutsche-bank.com/invr (or deliver
at the recipient's option), to each Holder of a Class R Certificate a copy of
the reports forwarded to the other Certificateholders on such Distribution Date.

          Within a reasonable period of time after the end of each calendar
year, the Trustee shall prepare and forward, to each Person who at any time
during the calendar year was a Holder of a Class R Certificate a statement
containing the information provided pursuant to the previous paragraph
aggregated for such calendar year or applicable portion thereof during which
such Person was a Certificateholder. Such obligation of the Trustee shall be
deemed to have been satisfied to the extent that substantially comparable
information shall be provided by the Trustee pursuant to any requirements of the
Code as from time to time are in force.

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

          (a) On the Business Day following each Determination Date, the Master
Servicer shall deliver to the Trustee a report, prepared as of the close of
business on the Determination Date (the "Remittance Report"), in the form of an
electromagnetic tape or disk. The Remittance Report and any written information
supplemental thereto shall include such information with respect to the Mortgage
Loans that is required by the Trustee for purposes of making the calculations
and preparing

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the statement described in Sections 4.01 and 4.02, as set forth in written
specifications or guidelines issued by the Trustee from time to time. The
Trustee shall have no obligation to recompute, recalculate or verify any
information provided to it by the Master Servicer.

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

          (c) In the event that the Master Servicer determines as of any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date in the amount determined by the Master
Servicer pursuant to paragraph (b) above, it shall give notice to the Trustee

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

          SECTION 4.04. Distributions on the REMIC Regular Interests.

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

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

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

                    (A) to the Holders of REMIC 1 Regular Interest LT1P, on the
          Distribution Date immediately following the expiration of the latest
          Prepayment Charge as identified on the Prepayment Charge Schedule or
          any Distribution Date thereafter until $100 has been distributed
          pursuant to this clause (A);

                    (B) with respect to the Group 1 Loans, to the Holders of
          REMIC 1 Regular Interest LT1A and REMIC 1 Regular Interest LT1B, 99%
          and 1%, respectively, until the Uncertificated Principal Balance of
          those REMIC 1 Regular Interests are reduced to zero;

                    (C) with respect to the Group 2 Loans, to the Holders of
          REMIC Regular Interest LT1A and REMIC 1 Regular Interest LT1C, 99% and
          1%, respectively, until the Uncertificated Principal Balance of REMIC
          1 Regular Interest LT1B is reduced to zero;

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

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

          On each Distribution Date, all amounts representing Prepayment Charges
in respect of the Mortgage Loans received during the related Prepayment Period
and any Master Servicer Prepayment Charge Payment Amounts paid by the Master
Servicer during the related Prepayment Period will be distributed by REMIC 1 to
the Holders of REMIC 1 Regular Interest LT1P. The payment of the foregoing
amounts to the Holders of REMIC 1 Regular Interest LT1P shall not reduce the
Uncertificated Principal Balance thereof.

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

          (i) first, to the extent of Available Funds, to the Holders of REMIC 2
     Regular Interest A-IOA, REMIC 2 Regular Interest A-IOB, REMIC 2 Regular
     Interest A-IOC, REMIC 2 Regular Interest A-IOD and REMIC 2 Regular Interest
     A-IOE, in an amount equal to (A) the Uncertificated Accrued Interest for
     such Distribution Date, plus (B) any amounts in respect thereof remaining
     unpaid from previous Distribution Dates and then to Holders of REMIC 2
     Regular Interest LT2A, REMIC 2 Regular Interest LT2B, REMIC 2 Regular
     Interest LT2C, REMIC 2 Regular Interest LT2D, REMIC 2 Regular Interest
     LT2E, REMIC 2 Regular Interest LT2F, REMIC 2 Regular Interest LT2G, REMIC 2
     Regular Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular
     Interest LT2J, REMIC 2 Regular Interest LT2K and REMIC 2 Regular Interest
     LT2L and REMIC 2 Regular Interest LT2P, PRO RATA, in an amount equal to (A)
     the Uncertificated Accrued Interest for such Distribution Date, plus (B)
     any amounts in respect thereof remaining unpaid from previous Distribution
     Dates. Amounts payable as Uncertificated Accrued Interest in respect of
     REMIC 2 Regular Interest LT2F and REMIC 2 Regular Interest LT2L shall be
     reduced when the REMIC 2 Overcollateralization Amount is less than the
     REMIC 2 Overcollateralization Target Amount, by the lesser of (x) the
     amount of such difference and (y) the Maximum Uncertificated Accrued
     Interest Deferral Amount, and such amount will be payable to the Holders of
     REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2
     Regular Interest LT2D, REMIC 2 Regular Interest LT2E, REMIC 2 Regular
     Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest LT2J
     and REMIC 2 Regular Interest LT2K in the same proportion as the
     Overcollateralization Increase Amount is allocated to the Corresponding
     Certificates;

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

               (a) with respect to the Group 1 Loans, to the Holders of REMIC 2
          Regular Interest LT2A, 98.00% of such remainder, until the
          Uncertificated Principal Balance of such Uncertificated REMIC 2
          Regular Interest is reduced to zero, and with respect to the Group 2
          Loans, to the Holders of REMIC 2 Regular Interest LT2G, 98% of such
          remainder, until the Uncertificated Principal Balance of such
          Uncertificated REMIC 2 Regular Interest is reduced to zero;

               (b) with respect to the Group 1 Loans, to the Holders of REMIC 2
          Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2 Regular
          Interest LT2D and REMIC 2 Regular Interest LT2E, 1.00% of such
          remainder, in the same proportion as principal payments are allocated
          to the Corresponding Certificates, until the Uncertificated Principal
          Balances of such REMIC 2 Regular Interests are reduced to zero; and
          with respect to the Group 2 Loans, to the Holders of REMIC 2 Regular
          Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest
          LT2J and REMIC 2 Regular Interest LT2K, 1.00% of such remainder, in
          the same proportion as principal payments are allocated to the
          Corresponding Certificates, until the Uncertificated Principal
          Balances of such REMIC 2 Regular Interests are reduced to zero;

               (c) with respect to the Group 1 Loans, to the Holders of REMIC 2
          Regular Interest LT2F, 1.00% of such remainder, until the
          Uncertificated Principal Balance of such REMIC 2 Regular Interest is
          reduced to zero, and with respect to the Group 2 Loans, to the Holders
          of REMIC 2 Regular Interest LT2L, 1.00% of such remainder, until the
          Uncertificated Principal Balance of such REMIC 2 Regular Interest is
          reduced to zero;

               (d) to the Holders of REMIC 2 Regular Interest LT2P, on the
          Distribution Date immediately following the expiration of the latest
          Prepayment Charge as identified on the Prepayment Charge Schedule or
          any Distribution Date thereafter until $100 has been distributed
          pursuant to this clause; then

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

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

provided, however, that with respect to the Group 1 Loans, 98.00% and 2.00% of
any principal payments that are attributable to an Overcollateralization Release
Amount shall be allocated to

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Holders of REMIC 2 Regular Interest LT2A and REMIC 2 Regular Interest LT2F,
respectively, to the extent the principal balance of the Group 1 Loans exceeds
the sum of the Uncertificated Principal Balances of REMIC 2 Regular Interest
LT2A, REMIC 2 Regular Interest LT2B, REMIC 2 Regular Interest LT2C, REMIC 2
Regular Interest LT2D, REMIC 2 Regular Interest LT2E and REMIC 2 Regular
Interest LT2F immediately following payments pursuant to (c) above but prior to
any payments pursuant to this proviso, and with respect to the Group 2 Loans,
98.00% and 2.00% of any principal payments that are attributable to an
Overcollateralization Release Amount shall be allocated to Holders of REMIC 2
Regular Interest LT2F and REMIC 2 Regular Interest LT2L, respectively, to the
extent the principal balance of the Group 2 Loans exceeds the sum of the
Uncertificated Principal Balances of REMIC 2 Regular Interest LT2G, REMIC 2
Regular Interest LT2H, REMIC 2 Regular Interest LT2I, REMIC 2 Regular Interest
LT2J, REMIC 2 Regular Interest LT2K and REMIC 2 Regular Interest LT2L
immediately following payments pursuant to (c) above but prior to any payments
pursuant to this proviso.

          SECTION 4.05. Allocation of Realized Losses.

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

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

          (b) All Realized Losses on the Mortgage Loans shall be allocated by
the Trustee on each Distribution Date as follows: with respect to Realized
Losses on the Group 1 Loans, to REMIC 1 Regular Interest LT1A and REMIC 1
Regular Interest LT1B, 99% and 1%, respectively, and with respect to Realized
Losses on the Group 2 Loans, to REMIC 1 Regular Interest LT1A and REMIC 1
Regular Interest LT1C, 99% and 1%, respectively, until the Uncertificated
Principal Balance has been reduced to zero and then to REMIC 1 Regular Interest
LT1D until the Uncertificated Principal Balance has been reduced to zero.

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          (c) All Realized Losses on the REMIC 1 Regular Interest LT1A, REMIC 1
Regular Interest LT1B, REMIC 1 Regular Interest LT1C and REMIC 1 Regular
Interest LT1D shall be deemed to have been allocated in the specified
percentages, as follows: with respect to Realized Losses on the Group 1 Loans,
first, to Uncertificated Accrued Interest payable to the REMIC 2 Regular
Interest LT2A and REMIC 2 Regular Interest LT2F up to an aggregate amount equal
to the REMIC 2 Group 1 Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2A and REMIC 2 Regular Interest LT2F up to an aggregate
amount equal to the REMIC 2 Group 1 Principal Loss Allocation Amount, 98% and
2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2A, REMIC 2 Regular Interest LT2E and REMIC 2 Regular
Interest LT2F, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2E has been reduced to zero; fourth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2A, REMIC 2
Regular Interest LT2D and REMIC 2 Regular Interest LT2F, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2D has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2A, REMIC 2 Regular Interest
LT2C and REMIC 2 Regular Interest LT2F, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2C has been
reduced to zero, and with respect to Realized Losses on the Group 2 Loans,
first, to Uncertificated Accrued Interest payable to the REMIC 2 Regular
Interest LT2G and REMIC 2 Regular Interest LT2L up to an aggregate amount equal
to the REMIC 2 Group 2 Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2G and REMIC 2 Regular Interest LT2L up to an aggregate
amount equal to the REMIC 2 Group 2 Principal Loss Allocation Amount, 98% and
2%, respectively; third, to the Uncertificated Principal Balances of REMIC 2
Regular Interest LT2G, REMIC 2 Regular Interest LT2K and REMIC 2 Regular
Interest LT2L, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC 2 Regular Interest LT2K has been reduced to zero; fourth, to
the Uncertificated Principal Balances of REMIC 2 Regular Interest LT2G, REMIC 2
Regular Interest LT2J and REMIC 2 Regular Interest LT2L, 98%, 1% and 1%,
respectively, until the Uncertificated Principal Balance of REMIC 2 Regular
Interest LT2J has been reduced to zero; and fifth, to the Uncertificated
Principal Balances of REMIC 2 Regular Interest LT2G, REMIC 2 Regular Interest
LT2I and REMIC 2 Regular Interest LT2L, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC 2 Regular Interest LT2I has been
reduced to zero.

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

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

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          SECTION 4.07. Compliance with Withholding Requirements.

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

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                                    ARTICLE V

                                THE CERTIFICATES

          SECTION 5.01. The Certificates.

          (a) The Certificates will be substantially in the respective forms
annexed hereto as Exhibits A-1 through A-9. The Certificates will be issuable in
registered form only. The Certificates (other than the Class P Certificates, the
Class C Certificates and the Class R Certificates) will be issued in minimum
denominations of $25,000 Initial Certificate Principal Balance or Initial
Notional Amount, as applicable, and integral multiples of $1 in excess thereof.
The Class C Certificates will be issued in minimum denominations of $10,000
Initial Notional Amount and integral multiples of $1 in excess thereof. The
Class P Certificates and the Class R Certificates will each be issuable in
minimum denominations of any Percentage Interest representing 20.00% and
multiples of 0.01% in excess thereof.

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

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

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Certificates of Certificate Owners it represents or of brokerage firms for which
it acts as agent in accordance with the Depository's normal procedures. The
Trustee shall not be required to monitor, determine or inquire as to compliance
with the transfer restrictions with respect to the Book-Entry Certificates, and
the Trustee shall have no liability for transfers of Ownership Interests in the
Book Entry Certificates made through the book-entry facilities of the Depositary
or between or among Depositary Participants or Certificate Owners, made in
violation of the applicable restrictions.

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

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

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

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          SECTION 5.02. Registration of Transfer and Exchange of Certificates.

          (a) The Trustee shall maintain a Certificate Register in which,
subject to such reasonable regulations as it may prescribe, the Trustee shall
provide for the registration of Certificates and of transfers and exchanges of
Certificates as herein provided.

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

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

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if the transfer is not so exempt or is not made in accordance with such
applicable federal and state laws.

          The Trustee shall require an Opinion of Counsel from a prospective
transferee prior to the transfer of any Class P Certificate, Class C Certificate
or Class R Certificate to any employee benefit plan or other retirement
arrangement, including individual retirement accounts and Keogh plans, that is
subject to Section 406 of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA") or Section 4975 of the Code (any of the foregoing, a
"Plan"), to a trustee or other Person acting on behalf of any Plan, or to any
other person who is using "plan assets" of any Plan to effect such acquisition
(including any insurance company using funds in its general or separate accounts
that may constitute "plan assets"). Such Opinion of Counsel must establish to
the satisfaction of the Trustee that such transfer is permissible under
applicable law, will not violate the prohibited transaction provisions of
Section 406 of ERISA and Section 4975 of the Code, will not cause the assets of
the Trust Fund to constitute "plan assets" within the meaning of 29 C.F.R.
ss.2510.3-101, and will not subject the Trustee, the Master Servicer or the
Company to any obligation in addition to those undertaken in this Agreement.
Neither the Company, the Master Servicer nor the Trustee will be required to
obtain such Opinion of Counsel on behalf of any prospective transferee.

          (d) [Reserved].

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

          (A) Each Person holding or acquiring any Ownership Interest in a Class
     R Certificate shall be a Permitted Transferee and shall promptly notify the
     Trustee of any change or impending change in its status as a Permitted
     Transferee.

          (B) In connection with any proposed Transfer of any Ownership Interest
     in a Class R Certificate, the Trustee shall require delivery to it, and
     shall not register the Transfer of any Class R Certificate until its
     receipt of (I) an affidavit and agreement (a "Transfer Affidavit and
     Agreement" in the form attached hereto as Exhibit G-5) from the proposed
     Transferee, in form and substance satisfactory to the Trustee representing
     and warranting, among other things, that it is a Permitted Transferee, that
     it is not acquiring its Ownership Interest in the Class R Certificate that
     is the subject of the proposed Transfer as a nominee, trustee or agent for
     any Person who is not a Permitted Transferee, that for so long as it
     retains its Ownership Interest in a Class R Certificate, it will endeavor
     to remain a Permitted Transferee, and that it has reviewed the provisions
     of this Section 5.02 and agrees to be bound by them, and (II)

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     a certificate, in the form attached hereto as Exhibit G-4, from the Holder
     wishing to transfer the Class R Certificate, in form and substance
     satisfactory to the Trustee representing and warranting, among other
     things, that no purpose of the proposed Transfer is to impede the
     assessment or collection of tax.

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

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

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

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

          (iii) (A) If any Person other than a Permitted Transferee shall become
a Holder of a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and obligations
as Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a Holder of
a Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such transfer of such Class R
Certificate. The prior Holder shall be entitled to recover from any purported
Holder of a Class R Certificate that was in fact not a Permitted Transferee
under this Section 5.05(b) at the time it became a Holder all payments made on
such Class R Certificate. Each Holder of a Class R

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Certificate, by acceptance thereof, shall be deemed for all purposes to have
consented to the provisions of this clause (b) and to any amendment of this
Agreement deemed necessary (whether as a result of new legislation or otherwise)
by counsel of the Company to ensure that the Class R Certificates are not
transferred to any Person who is not a Permitted Transferee and that any
transfer of such Class R Certificates will not cause the imposition of a tax
upon the Trust or cause any such REMIC to fail to qualify as a REMIC. The
Trustee shall be under no liability to any Person for any registration of
Transfer of a Class R Certificate that is in fact not permitted by this Section
5.02 or for making any payments due on such Certificate to the holder thereof or
for taking any other action with respect to such holder under the provisions of
this Agreement.

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

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

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

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designated transferee or transferees for the purpose of receiving distributions
pursuant to Section 4.01 by wire transfer, if any such transferee desires and is
eligible for distribution by wire transfer.

          (g) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of the same Class
of a like aggregate Percentage Interest, upon surrender of the Certificates to
be exchanged at the office of the Trustee. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute, authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for transfer or exchange
shall (if so required by the Trustee) be duly endorsed by, or be accompanied by
a written instrument of transfer in the form satisfactory to the Trustee duly
executed by, the Holder thereof or his attorney duly authorized in writing.

          (h) No service charge shall be made to the Certificateholders for any
transfer or exchange of Certificates, but the Trustee may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.

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

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

          If (i) any mutilated Certificate is surrendered to the Trustee and the
Trustee receives evidence to its satisfaction of the destruction, loss or theft
of any Certificate, and (ii) there is delivered to the Trustee such security or
indemnity as may be required by it to save it harmless, then, in the absence of
notice to the Trustee that such Certificate has been acquired by a bona fide
purchaser, the Trustee shall execute, authenticate and deliver, in exchange for
or in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of the same Class and Percentage Interest. Upon the issuance of any
new Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee) connected therewith. Any replacement Certificate issued pursuant to
this Section shall constitute complete and indefeasible evidence of ownership in
the Trust Fund, as if originally issued, whether or not the lost, stolen or
destroyed Certificate shall be found at any time.

          SECTION 5.04. Persons Deemed Owners.

          The Company, the Master Servicer, the Trustee and any agent of any of
them may treat the person in whose name any Certificate is registered as the
owner of such Certificate for the purpose of receiving distributions pursuant to
Section 4.01 and for all other purposes whatsoever, and neither the Company, the
Master Servicer, the Trustee nor any agent of any of them shall be affected by
notice to the contrary.

          SECTION 5.05. Rule 144A Information.

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

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                                   ARTICLE VI

                       THE COMPANY AND THE MASTER SERVICER

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

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

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

          The Company and the Master Servicer each will keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and each will obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.

          Any Person into which the Company or the Master Servicer may be
merged, consolidated or converted, or any corporation resulting from any merger
or consolidation to which the Company or the Master Servicer shall be a party,
or any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to sell mortgage loans to and service
mortgage loans for Fannie Mae or Freddie Mac.

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

          Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company or the Master Servicer (but this
provision shall protect the above described persons) against any breach of
warranties or representations made herein, or against any specific liability
imposed on the Master Servicer pursuant to Section 3.01 or any other Section
hereof; and provided further that this provision shall not protect the Company,
the Master Servicer or any such person, against any liability which would
otherwise be imposed by reason of willful

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

          Notwithstanding the foregoing, the Master Servicer shall not be liable
for any course of action taken by any Sub-Servicer with respect to loss
mitigation of defaulted Mortgage Loans taken by such Sub-Servicer at the
recommendation of the Loss Mitigation Advisor or the Class C Certificateholder
pursuant to any Loss Mitigation Advisory Agreement.

          SECTION 6.04. Limitation on Resignation of the Master Servicer.

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

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          SECTION 6.05. Sale and Assignment of Master Servicing.

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

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                                   ARTICLE VII

                                     DEFAULT

          SECTION 7.01. Events of Default.

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

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

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

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

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

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

          (vi) the Master Servicer shall fail to deposit in the Certificate
     Account on any Certificate Account Deposit Date an amount equal to any
     required Advance which continues

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     unremedied for the earlier of (a) a period of two (2) Business Days or (b)
     the Business Day immediately preceding the Distribution Date.

If an Event of Default described in clauses (i) - (v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, the Trustee or the Holders of Certificates
entitled to at least 51% of the Voting Rights, by notice in writing to the
Master Servicer (and to the Trustee if given by such Holders of Certificates),
with a copy to the Rating Agencies, may terminate all of the rights and
obligations (but not the liabilities) of the Master Servicer under this
Agreement and in and to the Trust Fund, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation or termination of the Master
Servicer. If an Event of Default described in clause (vi) hereof shall occur,
the Trustee shall, by notice to the Master Servicer, and the Company, terminate
all of the rights and obligations of the Master Servicer under this Agreement
and in and to the Trust Fund, other than its rights as a Certificateholder
hereunder; provided, however, that if the Trustee determines (in its sole
discretion) that the failure by the Master Servicer to make any required Advance
was due to circumstances beyond its control, and the required Advance was
otherwise made, the Trustee shall not terminate the Master Servicer. On or after
the receipt by the Master Servicer of such notice, all authority and power of
the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a holder thereof) or the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee pursuant to and under this
Section, and, without limitation, the Trustee is hereby authorized and empowered
to execute and deliver, on behalf of the Master Servicer, as attorney-in-fact or
otherwise, any and all documents and other instruments, and to do or accomplish
all other acts or things necessary or appropriate to effect the purposes of such
notice of termination, whether to complete the transfer and endorsement or
assignment of the Mortgage Loans and related documents, or otherwise at the
expense of the Master Servicer. The Master Servicer agrees to cooperate with
(and pay any related costs and expenses of) the Trustee in effecting the
termination of the Master Servicer's responsibilities and rights hereunder,
including, without limitation, the transfer to the Trustee or the successor
Master Servicer for administration by it of (i) the property and amounts which
are then or should be part of the Trust Fund or which thereafter become part of
the Trust Fund; (ii) originals or copies of all documents of the Master Servicer
reasonably requested by the Trustee to enable it to assume the Master Servicer's
duties thereunder; (iii) the rights and obligations of the Master Servicer under
the Sub-Servicing Agreements with respect to the Mortgage Loans; and (iv) all
cash amounts which shall at the time be deposited by the Master Servicer or
should have been deposited to the Custodial or the Certificate Account or
thereafter be received with respect to the Mortgage Loans. The Trustee shall not
be deemed to have breached any obligation hereunder as a result of a failure to
make or delay in making any distribution as and when required hereunder caused
by the failure of the Master Servicer to remit any amounts received by it or to
deliver any documents held by it with respect to the Mortgage Loans. For
purposes of this Section 7.01, the Trustee shall not be deemed to have knowledge
of an Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless notice of any event which is in fact such an Event
of Default is received by the Trustee as provided in Section 11.05 and such
notice references the Certificates, the Trust Fund or this Agreement.

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          SECTION 7.02. Trustee to Act; Appointment of Successor.

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

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

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

          SECTION 7.03. Notification to Certificateholders.

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

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

          SECTION 7.04. Waiver of Events of Default.

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

          SECTION 7.05. List of Certificateholders.

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

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                                  ARTICLE VIII

                             CONCERNING THE TRUSTEE

          SECTION 8.01. Duties of Trustee.

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

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

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

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

          No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:

               (i) Prior to the occurrence of an Event of Default, and after the
          curing or waiver of all such Events of Default which may have
          occurred, the duties and obligations of the Trustee shall be
          determined solely by the express provisions of this Agreement, the
          Trustee shall not be liable except for the performance of such duties

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          and obligations as are specifically set forth in this Agreement, no
          implied covenants or obligations shall be read into this Agreement
          against the Trustee and, in the absence of bad faith on the part of
          the Trustee, the Trustee may conclusively rely, as to the truth of the
          statements and the correctness of the opinions expressed therein, upon
          any certificates or opinions furnished to the Trustee and conforming
          to the requirements of this Agreement;

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

               (iii) The Trustee shall not be liable with respect to any action
          taken, suffered or omitted to be taken by it in good faith in
          accordance with the direction of the Holders of Certificates entitled
          to at least 25% of the Voting Rights relating to the time, method and
          place of conducting any proceeding for any remedy available to the
          Trustee, or exercising any trust or power conferred upon the Trustee,
          under this Agreement.

          SECTION 8.02. Certain Matters Affecting the Trustee.

                    Except as otherwise provided in Section 8.01:

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

          (b) The Trustee may consult with counsel and any Opinion of Counsel
     shall be full and complete authorization and protection in respect of any
     action taken or suffered or omitted by it hereunder in good faith and in
     accordance therewith;

          (c) The Trustee shall be under no obligation to exercise any of the
     trusts or powers vested in it by this Agreement, other than its obligation
     to give notice pursuant to this Agreement, or to institute, conduct or
     defend any litigation hereunder or in relation hereto at the request, order
     or direction of any of the Certificateholders, pursuant to the provisions
     of this Agreement, unless such Certificateholders shall have offered to the
     Trustee security or indemnity satisfactory to it against the costs,
     expenses and liabilities which may be incurred therein or thereby; nothing
     contained herein shall, however, relieve the Trustee of the obligation,
     upon the occurrence of an Event of Default of which a Responsible Office of
     the Trustee's corporate trust department has actual knowledge (which has
     not been waived or cured), to exercise such of the rights and powers vested
     in it by this Agreement, and to use the same degree of care and skill in
     their exercise as a prudent man would exercise or use under the
     circumstances in the conduct of his own affairs;

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          (d) The Trustee shall not be liable for any action taken, suffered or
     omitted by it in good faith and believed by it to be authorized or within
     the discretion or rights or powers conferred upon it by this Agreement;

          (e) Prior to the occurrence of an Event of Default hereunder and after
     the curing or waiver of all Events of Default which may have occurred, the
     Trustee shall not be bound to make any investigation into the facts or
     matters stated in any resolution, certificate, statement, instrument,
     opinion, report, notice, request, consent, order, approval, bond or other
     paper or document, unless requested in writing to do so by the Holders of
     Certificates entitled to at least 25% of the Voting Rights; provided,
     however, that if the payment within a reasonable time to the Trustee of the
     costs, expenses or liabilities likely to be incurred by it in the making of
     such investigation is, in the opinion of the Trustee, reasonably assured to
     the Trustee by the security afforded to it by the terms of this Agreement
     reasonable expense of every such examination shall be paid by the
     Certificateholders requesting the investigation;

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

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

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

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

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

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Company or the Master Servicer in respect of the Mortgage Loans or deposited in
or withdrawn from the Custodial Account by the Master Servicer.

          SECTION 8.04. Trustee May Own Certificates.

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

          SECTION 8.05. Trustee's Fees.

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

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

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

          SECTION 8.06. Eligibility Requirements for Trustee.

          The Trustee hereunder shall at all times be a corporation or a
national banking association organized and doing business under the laws of any
state or the United States of America or the District of Columbia, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000 and subject to supervision or examination by

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federal or state authority. In addition, the Trustee shall at all times be
acceptable to the Rating Agency rating the Certificates. If such corporation
publishes reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority, then for the
purposes of this Section the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set forth in its most
recent report of condition so published. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this Section, the
Trustee shall resign immediately in the manner and with the effect specified in
Section 8.07. The corporation or national banking association serving as Trustee
may have normal banking and trust relationships with the Seller and their
affiliates or the Master Servicer and its affiliates; provided, however, that
such corporation cannot be an affiliate of the Master Servicer other than the
Trustee in its role as successor to the Master Servicer.

          SECTION 8.07. Resignation and Removal of the Trustee.

          The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Master Servicer; with a
copy to the Rating Agencies; provided, that such resignation shall not be
effective until a successor trustee is appointed and accepts appointment in
accordance with the following provisions; provided, however, that the resigning
Trustee shall not resign and be discharged from the trusts hereby created until
such time as the Rating Agency rating the Certificates approves the successor
trustee. Upon receiving such notice of resignation, the Master Servicer shall
promptly appoint a successor trustee who meets the eligibility requirements of
Section 8.06 by written instrument, in triplicate, one copy of which instrument
shall be delivered to each of the resigning Trustee and to the successor
trustee. If no successor trustee shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition any court of competent jurisdiction for the
appointment of a successor trustee.

          If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Master Servicer, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, the
Master Servicer may remove the Trustee and appoint a successor trustee who meets
the eligibility requirements of Section 8.06 by written instrument, in
triplicate, which instrument shall be delivered to the Trustee so removed and to
the successor trustee.

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

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

          SECTION 8.08. Successor Trustee.

          Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Master Servicer and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee, without any further act, deed or conveyance, shall
become fully vested with all the rights, powers, duties and obligations of its
predecessor hereunder, with the like effect as if originally named as trustee
herein. The predecessor trustee shall after payment of its outstanding fees and
expenses, promptly deliver to the successor trustee all assets and records of
the Trust Fund held by it hereunder, and the Master Servicer and the predecessor
trustee shall execute and deliver all such instruments and do such other things
as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.

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

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

          SECTION 8.09. Merger or Consolidation of Trustee.

          Any state bank or trust company or corporation or national banking
association into which the Trustee may be merged or converted or with which it
may be consolidated or any state bank or trust company or national banking
association resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any state bank or trust company or corporation or
national banking association succeeding to all or substantially all of the
corporate trust business of the Trustee, shall be the successor of the Trustee
hereunder, provided such state bank or trust company or corporation or national
banking association shall be eligible under the provisions of Section 8.06
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.

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

          Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing

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

          In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee and required to be conferred or such
co-trustee shall be conferred or imposed upon and exercised or performed by the
Trustee and such separate trustee or co-trustee jointly, except to the extent
that under any law of any jurisdiction in which any particular act or acts are
to be performed (whether as Trustee hereunder or as successor to the Master
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the Trust Fund or any portion thereof in any
such jurisdiction) shall be exercised and performed by such separate trustee or
co-trustee at the direction of the Trustee.

          Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.

          Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.

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                                   ARTICLE IX

                                   TERMINATION

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

     (a) Subject to Section 9.03, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby (other than the obligations of the Master Servicer to the Trustee
pursuant to Section 8.05 and of the Master Servicer to provide for and the
Trustee to make payments to Certificateholders as hereafter set forth) shall
terminate upon payment to the Certificateholders of all amounts held by or on
behalf of the Trustee and required to be paid to them hereunder following the
earlier to occur of (i) the repurchase by the Holder of a 50.01% Percentage
Interest in the Class C Certificates (the "Majority Class C Certificateholders")
or its designee of all Mortgage Loans and each REO Property in respect thereof
remaining in the Trust Fund at a price equal to (a) 100% of the unpaid principal
balance of each Mortgage Loan (other than one as to which a REO Property was
acquired) on the day of repurchase together with accrued interest on such unpaid
principal balance at the Net Mortgage Rate to the first day of the month in
which the proceeds of such repurchase are to be distributed, plus (b) the
appraised value of any REO Property (but not more than the unpaid principal
balance of the related Mortgage Loan, together with accrued interest on that
balance at the Net Mortgage Rate to the first day of the month such repurchase
price is distributed), less the good faith estimate of the Majority Class C
Certificateholders of liquidation expenses to be incurred in connection with its
disposal thereof, such appraisal to be conducted by an appraiser mutually agreed
upon by the Majority Class C Certificateholders and the Trustee at the expense
of the Master Servicer, and (ii) the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the Trust
Fund (or the disposition of all REO Property in respect thereof); provided,
however, that in no event shall the trust created hereby continue beyond the
earlier of (i) the Distribution Date occurring in January 2031 and (ii) the
expiration of 21 years from the death of the last survivor of the descendants of
Joseph P. Kennedy, the late ambassador of the United States to the Court of St.
James, living on the date hereof, and provided further that the purchase price
set forth above shall be increased as is necessary, as determined by the
Majority Class C Certificateholders, to avoid disqualification of any of REMIC
1, REMIC 2 or REMIC 3 as a REMIC. In the case of any repurchase by the Majority
Class C Certificateholders pursuant to clause (i), shall exercise reasonable
efforts to cooperate fully with the Trustee in effecting such repurchase and the
transfer of the Mortgage Loans and related Mortgage Files and related records to
the Majority Class C Certificateholders.

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

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

          In the event that all of the Certificateholders shall not surrender
their Certificates for cancellation within six months after the time specified
in the above-mentioned notice, the Trustee shall give a second notice to the
remaining Certificateholders to surrender their Certificates for cancellation
and receive the final distribution with respect thereto. If within six months
after the second notice all of the Certificates shall not have been surrendered
for cancellation, the Trustee shall take reasonable steps as directed by the
Company in writing, or appoint an agent to take

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reasonable steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain subject hereto. If within nine months after
the second notice all the Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets which remain subject hereto.

          SECTION 9.02. Termination of REMIC 2 and REMIC 3.

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

          SECTION 9.03. Additional Termination Requirements.

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

          (i) The Trustee shall establish a 90-day liquidation period for REMIC
     1, REMIC 2 and REMIC 3, as the case may be, and specify the first day of
     such period in a statement attached to the Trust Fund's final Tax Return
     pursuant to Treasury regulations Section 1.860F-1. The Trustee also shall
     satisfy all of the requirements of a qualified liquidation for REMIC 1,
     REMIC 2 and REMIC 3, as the case may be, under Section 860F of the Code and
     regulations thereunder; and

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

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

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<PAGE>

                                    ARTICLE X

                                REMIC PROVISIONS

          SECTION 10.01. REMIC Administration.

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

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

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

          (d) The Trustee shall prepare, sign and file all of the Tax Returns
(including Form 8811, which must be filed within 30 days of the Closing Date) in
respect of the REMICs created hereunder. The expenses of preparing and filing
such returns shall be borne by the Trustee without any right of reimbursement
therefor. The Master Servicer shall provide on a timely basis to the Trustee or
its designee such information with respect to the assets of the REMICs as is in
its possession and reasonably required by the Trustee to enable it to perform
its obligations under this Article X.

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<PAGE>

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

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

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<PAGE>

of the REMICs created hereunder will consist of "qualified mortgages" as defined
in Section 860G(a)(3) of the Code and "permitted investments" as defined in
Section 860G(a)(5) of the Code.

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

          (h) On or before April 15 of each calendar year, commencing April 15,
2002, the Trustee shall deliver to the Master Servicer and the Rating Agency a
Certificate from a Responsible Officer of the Trustee stating the Trustee's
compliance with this Article X.

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

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

          (k) Neither the Trustee nor the Master Servicer shall enter into any
arrangement by which the REMICs will receive a fee or other compensation for
services nor permit the REMICs to receive any income from assets other than
"qualified mortgages" as defined in Section 860G(a)(3) of the Code or "permitted
investments" as defined in Section 860G(a)(5) of the Code.

          SECTION 10.02. Prohibited Transactions and Activities.

          None of the Company, the Master Servicer or the Trustee shall sell,
dispose of or substitute for any of the Mortgage Loans (except in connection
with (i) the foreclosure of a Mortgage Loan, including but not limited to, the
acquisition or sale of a Mortgaged Property acquired by deed in lieu of
foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the termination of
REMIC 1, REMIC 2 or REMIC 3 pursuant to Article IX of this Agreement, (iv) a
substitution pursuant to Article II of this Agreement or (v) a purchase of
Mortgage Loans pursuant to Article II or III of this

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<PAGE>

Agreement), nor acquire any assets for the Trust Fund (other than REO Property
acquired in respect of a defaulted Mortgage Loan), nor sell or dispose of any
investments in the Custodial Account or the Certificate Account for gain, nor
accept any contributions to the REMICs after the Closing Date (other than a
Qualified Substitute Mortgage Loan delivered in accordance with Section 2.03),
unless it has received an Opinion of Counsel, addressed to the Trustee (at the
expense of the party seeking to cause such sale, disposition, substitution,
acquisition or contribution but in no event at the expense of the Trustee) that
such sale, disposition, substitution, acquisition or contribution will not (a)
affect adversely the status of REMIC 1, REMIC 2 or REMIC 3 as REMICs or (b)
cause the Trust Fund to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions.

          SECTION 10.03. Master Servicer and Trustee Indemnification.

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

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

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<PAGE>

                                   ARTICLE XI

                            MISCELLANEOUS PROVISIONS

          SECTION 11.01. Amendment.

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

          This Agreement may also be amended from time to time by the Company,
the Master Servicer and the Trustee and Holders of Certificates entitled to at
least 66-2/3% of the Voting Rights for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or of modifying in any manner the rights of the Holders of Certificates;
provided, however, that no such amendment shall (i) reduce in any manner the
amount of, or delay the timing of, payments received on Mortgage Loans which are
required to be distributed on any Certificate without the consent of the Holder
of such Certificate, (ii) adversely affect in any material respect the interests
of the Holders of any Class of Certificates in a manner other than as described
in (i), without the consent of the Holders of Certificates of such Class
evidencing at least 66-2/3% of the Voting Rights of such Class, or (iii) reduce
the aforesaid percentage of Certificates the Holders of which are required to
consent to any such amendment, without the consent of the Holders of all
Certificates then outstanding. Notwithstanding any other provision of this
Agreement, for purposes of the giving or withholding of consents pursuant to
this Section 11.01, Certificates registered in the name of the Seller or the
Master Servicer or any affiliate thereof shall be entitled to Voting Rights with
respect to matters described in (i), (ii) and (iii) of this paragraph.

          Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (provided by the Person requesting such
amendment) to the effect that such amendment will not result in the imposition
of any tax on either REMIC 1, REMIC 2 or REMIC 3 pursuant to the

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<PAGE>

REMIC Provisions or cause either REMIC 1, REMIC 2 or REMIC 3 to fail to qualify
as a REMIC at any time that any Certificates are outstanding.

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

          It shall not be necessary for the consent of Certificateholders under
this Section 11.01 to approve the particular form of any proposed amendment, but
it shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.

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

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

          SECTION 11.02. Recordation of Agreement; Counterparts.

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

          For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.

          SECTION 11.03. Limitation on Rights of Certificateholders.

          The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.

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<PAGE>

          No Certificateholder shall have any right to vote (except as expressly
provided for herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third party by reason of any action taken by the parties to
this Agreement pursuant to any provision hereof.

          No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a notice of an Event of Default, or
of a default by the Seller or the Trustee in the performance of any obligation
hereunder, and of the continuance thereof, as hereinbefore provided, and unless
also the Holders of Certificates entitled to at least 51% of the Voting Rights
shall have made written request upon the Trustee to institute such action, suit
or proceeding in its own name as Trustee hereunder and shall have offered to the
Trustee such reasonable indemnity as it may require against the costs, expenses
and liabilities to be incurred therein or thereby, and the Trustee, for 60 days
after its receipt of such notice, request and offer of indemnity, shall have
neglected or refused to institute any such action, suit or proceeding. It is
understood and intended, and expressly covenanted by each Certificateholder with
every other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the equal,
ratable and common benefit of all Certificateholders. For the protection and
enforcement of the provisions of this Section, each and every Certificateholder
and the Trustee shall be entitled to such relief as can be given either at law
or in equity.

          SECTION 11.04. Governing Law.

          This Agreement and the Certificates shall be construed in accordance
with the laws of the State of New York and the obligations, rights and remedies
of the parties hereunder shall be determined in accordance with such laws.

          SECTION 11.05. Notices.

          All demands, notices and direction hereunder shall be in writing and
shall be deemed effective upon receipt when delivered to (a) in the case of the
Company, Impac Funding, 1401 Dove Street, Newport Beach, California 92660,
Attention: General Counsel, or such other address as may hereafter be furnished
to the other parties hereto in writing; (b) in the case of Impac Funding, 1401
Dove Avenue, Newport Beach, California 92660, Attention: General Counsel, or
such other address as may hereafter be furnished to the other parties hereto in
writing; (c) in the case of the Trustee, to its Corporate Trust Office, or such
other address as may hereafter be furnished to the other parties hereto in
writing; or (d) in the case of the Rating Agencies, Standard & Poor's, 55 Water
Street, 41st

                                       125

<PAGE>

Floor, New York, NY 10041 Attention: Residential Mortgage Surveillance Group;
Fitch, Fitch, Inc., One State Street, 30th Floor, New York, New York 10004,
Attention: Mortgage Backed Securities Department, Impac 2001-1; and Moody's,
Moody's Investors Service, Inc., ABS Monitoring Department, 99 Church Street,
New York, New York 10007. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such Holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.

          SECTION 11.06. Severability of Provisions.

          If any one or more of the covenants, agreements, provisions or terms
of this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.

          SECTION 11.07. Successors and Assigns.

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

          SECTION 11.08. Article and Section Headings.

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

          SECTION 11.09. Notice to Rating Agencies.

          The Trustee shall use its best efforts to promptly provide notice to
each Rating Agency referred to below with respect to each of the following of
which it has actual knowledge:

          1. Any material change or amendment to this Agreement;

          2. The occurrence of any Event of Default that has not been cured;

          3. The resignation or termination of the Master Servicer or the
             Trustee;

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

          5. The final payment to Certificateholders; and

          6. Any change in the location of the Custodial Account or the
             Certificate Account.

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<PAGE>

          In addition, the Trustee shall promptly furnish to the Rating Agency
copies of each report to Certificateholders described in Section 4.02; and the
Master Servicer shall promptly furnish to the Rating Agency copies of each
annual independent public accountants' servicing report received as described in
Section 3.20.

          Any such notice pursuant to this Section 11.09 shall be in writing and
shall be deemed to have been duly given if personally delivered or mailed by
first class mail, postage prepaid, or by express delivery service to (i) in the
case of Standard & Poor's, 55 Water Street, 41st Floor, New York, New York 10041
and (ii) in the case of Moody's, ABS Monitoring Department, 99 Church Street,
New York, New York 10007, or, in each case, such other address as either such
Rating Agency may designate in writing to the parties thereto.

                                       127

<PAGE>

          IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized all as of the day and year first above written.

                                       IMPAC SECURED ASSETS CORP.,
                                                 Company

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

                                       IMPAC FUNDING CORPORATION,
                                                 Master Servicer

                                       By:___________________________________
                                       Name:       Lisa A. Duehring
                                       Title:      Senior Vice President

                                       BANKERS TRUST COMPANY OF
                                       CALIFORNIA, N.A.
                                                 Trustee

                                       By:___________________________________
                                       Name:       Katherine M. Wannenmacher
                                       Title:      Vice President

                                       128

<PAGE>

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

          On the 30th day of January, 2001 before me, a notary public in and for
said State, personally appeared Richard J. Johnson, known to me to be the Chief
Financial Officer of Impac Secured Assets Corp., one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ___________________________________
                                                       Notary Public

[Notarial Seal]

<PAGE>

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

          On the 30th day of January, 2001, before me, a notary public in and
for said State, personally appeared Lisa A. Duehring, known to me to be a Senior
Vice President of Impac Funding Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ___________________________________
                                                       Notary Public

[Notarial Seal]

<PAGE>

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

          On the 30th day of January, 2001, before me, a notary public in and
for said State, personally appeared Katherine Wannenmacher, known to me to be an
Assistant Vice President of Bankers Trust Company of California, N.A., the
corporation that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.

          IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.

                                             ___________________________________
                                                       Notary Public

[Notarial Seal]

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